In simple terms, a counterfeit is a product that imitates the genuine one and constitutes an infringement of IP rights. This vice is a global concern that denies IP owners their deserved benefits, the result of their resilience, innovation, and financial effort.
Due to its geographical position, bordering Somalia, Uganda, and Tanzania, and its proximity to the Asian sea, Kenya may be deemed as an appealing key distribution point for counterfeit products.
According to the Kenyan Anti-Counterfeit Authority ( ACA), the practice of counterfeiting has been a thorny issue for entrepreneurs and consumers in Kenya for a long time.
The ACA estimates that the most counterfeited products in Kenya are fast-moving consumable goods including soap and detergents, food products, alcoholic beverages, dry cell batteries, pens, cosmetics, electrical and electronic equipment, vehicle spare parts, common medicine, shoe polish, seeds and fertilisers, apparel and software, among others.
Further, the ACA estimates that one in five goods sold in Kenya are counterfeit, which poses not only a huge risk to the country’s economy, but to the safety and health of the nation.
"After realising that the existence of a specific anti-counterfeiting legislation and a proactive anti-counterfeiting body did not suffice in the struggle against counterfeiting, the Kenyan authorities concluded that more practical measures were needed, namely, to identify counterfeit goods at the country’s borders, intercept and destroy it (...)"
Acting against counterfeiting manufacturers and distributors can be highly challenging and, in such a scenario, Kenya has been outstandingly proactive in combating this scourge. Most notably it has (i) passed specific anti-counterfeiting legislation, the Anti-Counterfeit Act No. 13 of 2008 (the AC Act); (ii) created an anti-counterfeiting body, the Anti-Counterfeit Authority (ACA); and (iii) introduced an ACA recordation process. Our analysis explores the third development.
After realising that the existence of a specific anti-counterfeiting legislation and a proactive anti-counterfeiting body did not suffice in the struggle against counterfeiting, the Kenyan authorities concluded that more practical measures were needed, namely, to identify counterfeit goods at the country’s borders, intercept and destroy it—and from these needs the IP rights recordation system was created.
Recordation refers to the process of “collecting from IP right owners’ information regarding their registered IP rights (trademarks, patents, utility models, industrial designs, copyrights, or any other registered intellectual property right), irrespective of their place of registration, for all goods to be imported into Kenya”.
The information shall include images of products trading under these registered rights, the manufacturer's details and contact information. This data is subsequently used by border protection offices to verify the recordation status of the goods to be imported.
In light of the above, IP owners with Kenya Industrial Property Institute (KIPI) or any other international registering authority (regardless of the jurisdiction of registration) shall record these rights, if valid, with the ACA in order to prevent importation into Kenya of infringing foreign goods.
The recordation system was due to come into operation on July 1, 2022 (ACA Public Notice No. 1/2022) and was subsequently extended until January 1, 2023 (ACA Public Notice No. 2/2022).
Below, we are providing our analysis on some major points that shall be taken into consideration by applicants in what concerns the ACA IPR recordation system.
"The implementation of the IP rights recordation system is a laudable measure that places Kenya one step ahead in the continuous struggle against counterfeiting."
The legal basis for the recordation of IPR in Kenya is provided under the following sections:
(i) Section 34B of the Anti-Counterfeit Act, No.13 of 2008
This act was enacted to prohibit trade in counterfeit goods. Organisations and regulatory bodies came together to consolidate efforts and promote inter-agency corporations to fight this thriving trade through the formation of the ACA.
(ii) The Anti-Counterfeit (Recordation) Regulations 2021, LN 118 of 2021
These regulations require IP owners who import goods into Kenya to record their IP with the ACA.
(iii) The Anti-Counterfeit (Amendment) Regulations 2021, LN 117 of 2021
The amendment to these regulations prescribes the procedure to be followed in appointing and de-registering agents selected by IP owners to act on their behalf.
Briefly put, the recording of an IP right consists of the following steps:
The responsible body for carrying out the recordation system and its surveillance is the ACA. Further, the ACA Integrated Management System (AIMS) was created to administer the whole recordation system and its correspondent acts (ie, maintenance, appointment of agents, request of copies of documents, and official search of the IPR database, among others).
The recordation shall remain valid for a period of 12 months subject to annual renewal at the cost of $50. The onus to provide proof of renewal falls on the IPR owner. In the event this maintenance fee is not paid, it is implied the ACA surveillance shall not take further effect.
Limits of the recordation
According to the regulations, the recordation is mandatory if a company wishes to import goods into Kenya; and it is unlawful to import goods for which there is no recordal. It is implicit that goods exported from Kenya do not fall into this scope.
Additionally, no recordation is required for a trademark that is used for raw materials (as these are defined as items used as ingredients in the manufacture of goods: an offence is only committed if goods are imported during trade), or a trademark that is used simply for services.
Although the regulations refer to “intellectual property rights” it does seem that the focus is trademarks, as counterfeiting is far more closely associated with trademarks than any other type of IP right.
The recordation system aims to prevent importation of counterfeit goods into Kenya, proactively protecting brand owners and consumers from harmful counterfeit goods. The surveillance process shall be rolled out by the ACA in phases starting with the compilation of statistics and demanding IP owners to file for recordation. Further, the ACA efforts will involve enforcement in the sense of identifying, intercepting, and destroying counterfeits.
Consequences of not recording
It is fundamental for applicants to be aware that, from January 1, 2023, it shall be an offence for any person to import into Kenya any goods or items bearing an IP right that has not been recorded with the ACA.
Furthermore, as per Section 32 of the Anti-Counterfeit Act, No.13 of 2008, it is an offence to:
IP registration and recordation are distinct notions. The IP recordation system is additional to, and separate from, any international or Kenyan registrations. An IP registration corresponds to a territorial right filed at, and granted by, the national official administrative entity (PTO). On the other hand, IP recordation is the process of submitting information regarding these registered rights (irrespective of their place of registration) to the ACA to intercept counterfeits of the company’s products.
Although the regulations refer to “intellectual property rights”, the focus seems to fall on trademarks, as counterfeiting is far more closely associated with trademark rights than any other IPR and tends to be easier to identify and handle.
The regulations clarify that: “it shall not be mandatory for an IP rights owner to record all the registered IPRs relating to one product”. Consequently, we believe that trademark recordation should be limited to the major or most important trademarks, eg, the house mark.
The implementation of the IP rights recordation system is a laudable measure that places Kenya one step ahead in the continuous struggle against counterfeiting.
Noting the upward trend for online counterfeiting following the COVID-19 pandemic, the ACA, together with Kenya’s Digital Markets, is developing a partnership plan consisting of an assessment of sellers to ensure they meet a series of requirements to exclude disreputable sellers.
This partnership plan was revealed at a meeting attended by major Kenyan digital marketplaces due to the increase in counterfeiting cases on online platforms, social media, and instant messaging services. According to a study conducted by the ACA, counterfeiting levels in Kenya reached 18% in 2017 and 20% in 2022. This increase is mostly due to social distancing, and fewer physical interactions owing to the COVID-19 pandemic.
The Nairobi Region head of enforcement, Martin Lurther, declared at the meeting that “online counterfeiting is a crime just like physical counterfeiting” and “online counterfeiting is a form of cyber-crime in the country. It is the responsibility of e-commerce platform operators to sanctify their trade to avoid criminal liability”.
Lastly, to counter this IP crime, collaboration was established between the participants of the meeting and the entities responsible for policing these activities through awareness-raising, law enforcement, and sharing of information.
This is a co-published article, which was originally published in the World Intelectual Property Review (WIPR).