Jan-Harm Swanepoel | Partner | Anti-Counterfeiting Department | Adams and Adams | mail me |
Hashiem Logday | Associate | Anti-Counterfeiting Department | Adams and Adams | mail me |
We see it weekly in the news. Headlines like “South African National Anti-Counterfeit Task Force seizes counterfeit goods worth R100 million, suspects arrested” capture attention. However, what happens to these suspects after their arrests and charges?
The Counterfeit Goods Act No. 37 of 1997 (CGA) explicitly criminalises dealing in counterfeit goods. This includes selling, offering for sale, manufacturing, distributing, and importing counterfeit items.
Counterfeit crime sentencing
Counterfeiting refers to imitations of protected goods that are nearly identical to the originals. Such imitations are so similar that they are likely to confuse consumers or be mistaken as genuine.
Since dealing in counterfeit goods is a criminal offence under the CGA, the Act prescribes specific penalties.
These penalties include:
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First conviction
A fine of up to R5,000 per item, imprisonment for up to three years, or both.
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Subsequent convictions
A fine of up to R10,000 per item, imprisonment for up to five years, or both.
At first glance, these penalties seem adequate and reflect a firm stance against counterfeit offences. For example, a first-time offender with 100 counterfeit T-shirts could face a fine of R500,000. In practice, however, sentencing has been far more lenient.
Hard on crime, soft on sentencing
Past cases reveal that courts often adopt a softer approach to punishing contraventions of the CGA. Two recent cases highlight this pattern.
Matter 1
Police seized counterfeit cigarette paper rolls, sanitary towels, branded packaging, and industrial manufacturing machinery. The counterfeit goods were valued at R3.7 million.
The court issued the following sentence:
- A fine of R60,000.
- Three years of direct imprisonment, with half suspended for five years, conditional on no further contraventions of the CGA.
- Forfeiture of all seized goods to the state.
This resulted in a fine of R60,000 for goods worth R3.7 million. Does this outcome balance the scales of justice?
Matter 2
Police seized 14 drums of counterfeit engine oil, packaging materials, and machinery valued at R210,000.
The court issued this sentence:
- A fine of R67,000 or three years’ imprisonment, wholly suspended for five years if no further offences occur.
- A secondary fine of R3,000 or three years’ imprisonment, with an order to deliver seized goods to the intellectual property owner.
Does a R3,000 fine reflect the seriousness of goods valued at R210,000?
The dilemma of lenient counterfeit crime sentencing
These cases represent only a fraction of counterfeit crime sentencing. Many cases conclude with a quick admission of guilt and minimal fines.
This leniency suggests that counterfeiting may be viewed as a victimless crime, merely affecting corporate profits. However, counterfeit goods such as sanitary pads, engine oil, and consumables directly threaten public safety.
Are these lenient sentences justified? Do they fit the crimes committed? The answer appears to be a resounding no.
