Fight counterfeits to boost local industries

By Peter Nyanzi

If the ongoing court battle between two local battery manufacturers in Uganda over trademark infringement is anything to go by, then issues of product imitations, counterfeits and trademark violation still pose a serious challenge to Uganda's private sector.

Following a suit by Uganda Batteries Ltd (UBL), the Commercial Division of the High Court recently issued a temporary injunction against a company based in eastern Uganda, restraining it from manufacturing, distributing and selling batteries marked ‘NBL.'

UBL successfully argued that the impugned batteries had physical features that were identical to UBL's registered trademarks and were thus causing confusion in the market.

This conflict once again brings to the fore an important issue that Ugandan manufacturers and the public have been complaining about for decades - counterfeiting and infringement of trademarks.

Trademark protection is crucial to trade as it does not safeguard a manufacturer who has invested a great deal of resources in producing a quality product but also the consumers who face risks and loss associated with hazardous and poor quality products.

Private Sector players in Uganda have for a long time called for a stringent law to fight the vice of counterfeiting and trademark infringement as the existing legal and institutional frameworks are very weak.

A few years ago following pressure from manufacturers, the Anti-Counterfeiting Good Bill 2015 was finally tabled in Parliament.

The Bill sought to criminalise counterfeiting and infringement on intellectual property and trademarks. However early last year, the Government made a dramatic U-turn and withdrew the Bill saying it was not necessary.

Yet the UNBS Act and the Trademarks Act 2010 have been criticized as weak, too lenient and incapable of offering deterrent punitive sanctions to deal with the vice.

For example, the Trademarks Act largely makes such issues a civil matter, which is clearly a disadvantage as such cases are not only a big cost to the company but also take long to dispose of.

Just across the border in Kenya, they have taken the bull of counterfeits by the horns.

Ten years ago, Kenya passed the Anti-Counterfeit Act 2008 which created the Anti-Counterfeit Authority as an autonomous State body to fight counterfeits and trademark infringement.

Its other important role is educating the public and providing information on matters relating to counterfeits, fake and substandard products. The Authority's mandate includes having Police powers to inspect, impound, arrest and prosecute offenders.

In other developed countries such as the USA, trademark counterfeiting is a very serious criminal offence under the Trademark Counterfeiting Act of 1984. Offenders face extremely tough penalties of up to $1m (sh3.7b), and/or imprisonment of up to five years.

Globally, counterfeiting and trademark infringement are looked at as a threat to national development, international trade and public health.

Global coalitions such as the Anti-Counterfeit Agency (ACA) and Global Anti-Counterfeiting Group (GACG) have been formed to deal with the vice. Indeed, June 26th has been commemorated as the World Anti-Counterfeiting Day since 1998.

It is unfortunate that Uganda is not picking interest in these efforts yet the problem is very serious.

The production and sale of counterfeits rob not just genuine manufacturers and innocent consumers but also threatens jobs and revenue collection.

Why should our excessively lenient legal framework continue to make vice profitable at the expense of genuine manufacturers?

Ironically, both the Government's Small, Micro and Medium Enterprises (MSME) Policy and the National Strategy for Private Sector Development do highlight the fact that competition from fake, substandard and counterfeit products is a key bottleneck to private sector development, industrialisation and market efficiency in both local and regional markets.

To address the matter, we could start with strengthening and consolidating the Trademarks Act 2010 (Ministry of Justice and Constitutional Affairs) and the UNBS Act (Ministry of Trade and Industry) by putting their mandate under one Authority and giving that body more powers.

Furthermore, there's a need for the EAC Partner States to expedite the harmonization of their anti-counterfeit legal regimes.

The writer is a journalist

petersnyz@gmail.com