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Ignorance fuels counterfeits

By | April 30th 2012

Lack of awareness on intellectual property rights continues to cost small businesses dearly, writes MACHARIA KAMAU

Josep Kim was posted to Kenya four months ago to look after LG’s interests in the country and 15 other markets in East and Central Africa region.

To get a feel of the electronic retail market in the country, Mr Kim took a tour of Nairobi. He visited upmarket Nairobi where different brands of electronics goods neatly arranged on isles in retail chains run by supermarket chains and other retailers impressed were impressive.

He thought with such a retail industry, his major challenge would be to position the LG brand in the country as superior to others and would easily beat competition.

That was until he visited downtown Nairobi, in parts where retail trade electronics thrives, and got what can be described as a rude shock. A retail trader had stacks of chicken egg incubators – equipment used in chicken hatcheries – that were branded LG.

The twist to it is that the South Korean consumer electronics manufacturer does not manufacture egg incubators. The incubators are said to have been imported from China.

Kim had never seen such a product in any other market in all years of his working LG. He had expected counterfeit TV sets, mobile handsets and other LG consumer brands but an egg incubator, was a bit of an over board even for a fake.

"An LG branded TV or fridge might take a while to determine whether it is genuine or fake. But LG does not manufacture egg incubators and such a product is clearly a breach of intellectual property laws," he said.

"On the one hand, it was disheartening because it shows the length that manufacturers of counterfeits will go to but on the other hand, it is flattering and amusing that they could use LG’s brand to market because that means it is a trusted and popular brand."

He noted while the Anti Counterfeit Agency (ACA) had been trying to sensitise people and work with intellectual property owners in fighting the illicit trade, there was still a lot that the Government could do to reduce the counterfeit levels.

"Government can reduce tax on electronics to bring down the retail prices to affordable levels as well as increase surveillance at the ports of entry and locally areas that produce counterfeit products," he said.

Reduce tax

Kim added that while reduction in taxes might seem defeatist, as it would reduce tax collection, he noted that when the fakes grow market share, they deny Government revenue.

"After sales service is part of the strategy we have adopted to ensure that customers by genuine products," he said.

"We offer free services for LG products but not the counterfeits. There, however, needs to be a change in the mind of customers," he said.

Computing firm HP noted that Kenya is among the countries where the manufacture and distribution of fake printing supplies and other illicit merchandise is widespread.

Over the last year, HP’s cooperation with officials in different African countries has eliminated nearly 150,000 illegal printing consumable items, including ready-for-sale laser and inkjet print cartridges, boxes and security labels.

"There is need to create greater awareness and increase defence of intellectual property in all its forms, whether it’s to protect a musician’s lyrics, a scientist’s patents or in the case of HP, proprietary printer cartridge technology," said Tina Rose, Anti Counterfeit Programme Manager for Europe, Middle East and Africa (EMEA), Printing and Personal Systems Group (PPS).

"This can make Kenya an even better place to do business while also protecting society from the criminal elements that appropriate the IP of others to defraud innocent consumers."

HP is one of the biggest owners of intellectual property, with a portfolio of over 37,000 patents. Many of these are held by PPS, which manufactures not just printers and scanners but the ink and toner to supply them.

Autodesk Africa – which makes 3D design and engineering software like AutoCAD – noted that one way of fighting piracy is increasing product availability.

"The key to changing a region’s mindset about software piracy is to make the legitimate product more accessible and affordable to local businesses," explains Eric Mule, the Managing Director of Autodesk’s distribution partner in East Africa, WorldsView Technologies.

Local designers

Autodesk is running an amnesty campaign in the region — a step it expects will move local designers who have been using its products illegally to its fold of customers.

The Communications Commission of Kenya is also playing a role in cracking down on counterfeiting. Its visible campaigns have been in fighting fake mobile handsets.

The telecommunications industry regulator has been in consultation with the mobile phone operators planning to switch off counterfeit handsets.

Though the process has been postponed severally, having been slated to take place initially on January, CCK is intent on undertaking this exercise that would see the SIM cards of subscribers holding counterfeit handsets deactivated as efforts in a bid to stem out use of counterfeit phones.

It has set a tentative date of August 1 and CCK Director General Francis Wangusi said the regulator has already put up basic facilities in place and will undertake a three-month consumer awareness campaign.

Though details are scanty on the pervasiveness of counterfeiting in mobile handsets, modest estimates put the number of subscribers using fake phones at over 2.3 million.

Lack of awareness on intellectual property rights continues to cause small businesses benefits from their enterprises.

Henry Mutahi, Managing Director, Kenya Industrial Property Institute (KIPI) said agencies in-charge of protecting property rights such as the Kenya Anti-counterfeit agency, Kenya Copyright Board, KEPHIS among others suffer from low budgets limiting information dissemination to the public.

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