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14 November 2008

The Deputy Minister of Trade and Industry (the dti), Dr Rob Davies, cautioned South Africans on the reputation risks posed by the influx of imitation goods, particularly given the government's emphasis on promoting genuine, locally-produced products during the 2010 Fifa World Cup, to boost the country's economic growth.

Davies addressed delegates last night, at the gala dinner of the first South African Exclusive Judicial Conference for Judges on the Adjudication of Intellectual Property (IP) cases, at the Riverside Sun Hotel in Vanderbijl Park, Gauteng. The conference, which runs from 13 to 15 November 2008, is hosted by the dti's Office of Company and Intellectual Property Enforcement (OCIPE), in collaboration with the US Departments of Justice, States and Commerce.

"I have argued that counterfeit goods-trading produces no real benefits for our economy, and in fact imposes considerable costs on workers and the community. Indeed, the losses incurred are estimated as running to R26 million a year. Moreover, we need, to recognise that laxity in the enforcement of intellectual property laws could have considerable reputational consequences, particularly as we prepare ourselves for the hosting of the 2010 FIFA World Cup," said Davies.

Davies added that the decision on granting recognition for particular marks and names, in connection with the 2010 World Cup, was a product of considerable negotiation between the South African government and Fifa.

"The legislation on protected events, moreover, requires that there is space created to allow for the participation of Small, Medium and Micro Enterprises, and the promotion of Broad-Based Black Economic Empowerment. But once we have agreed to the rules of the game in relation to the hosting of the 2010 World Cup or other major events, we must act vigilantly against individuals or groups that attempt to circumvent those rules. Our stance ahead of and during the 2010 World Cup in this regard, will have important consequences in terms of our reputation, which will impact on our ability to bid for and host similar events in the future. We simply cannot afford to allow an influx of counterfeit goods and related activities ahead of and during our hosting of the 2010 FIFA Soccer World Cup," explained Davies.

He acknowledged that the dti's OCIPE faces an ongoing and serious challenge in fighting the ever-increasing number of counterfeit products in the country. Between April and October this year, the Office has already received an overwhelming 80 intellectual property complaints, with 44 search and seizure operations having been conducted during this period, resulting in the impoundment of several products, mostly relating to the entertainment industry.

In a period of just eight months, the local entertainment industry has lost R1,7 million in revenue, and a further R1,1 million through the sale of other counterfeit products, such as cigarettes and cosmetics. These figures refer only to operations conducted by the OCIPE and exclude seizures made by other law enforcement agencies, including the National Prosecutions Authority, South African Revenue Service, and Police Service.

"The counterfeit industry in South Africa is growing at an alarming rate, with most products now being manufactured here in South Africa. About 80% of cases investigated by the OCIPE were resolved between perpetrators and brand owners through out-of-court settlements. It is for this reason, ladies and gentlemen, that the dti, in 2007, decided to approach the Magistrates' Commission and the Office of the Chief Justice for an intellectual property information-sharing session and/or conference with the judiciary, in order to bring to its attention our concerns about the scourge of counterfeiting and the impact it has on undermining the economy, as well as contributing to the creation of an underworld of contraband products," concluded Davies.

Enquiries:
Bongani Blukhele
Cell: 078 526 8572
E-mail:blukhele@thedti.gov.za

Issued by: Department of Trade Industry
14 November 2008