Beyond Trademark Infringement: Bold Government Plan to Switch off Fake Phones

The Communications Commission of Kenya (CCK) has announced a two step approach to phase out counterfeit phones in Kenya. In the first phase, mobile operators are supposed to stop activating new SIM cards used on counterfeit handsets with effect from the end of this month. The second phase is to de-activate all counterfeit phones starting from December 31, 2011.

The Anti Counterfeit Agency (ACA) estimates that Sh3.2 billion is lost annually through tax evasion and sale of counterfeit phones. One of the main problems that the ACA faces in enforcing the Anti Counterfeit Act has been lack of complaints from mobile phone manufacturers whose products are being counterfeited. According to the Act, the ACA can only exercise its enforcement and prosecutorial powers once a complainant comes forward. Hence the ACA works closely with both the Kenya Police and Customs Agents from the Kenya Revenue Authority to ensure that counterfeit products entering the country or circulating within the country are inspected and seized. However the ACA has for a long time complained that mobile phone manufacturers (through their licensed distributors in Kenya) do not come forward and complain or even share information in their possession regarding counterfeits and counterfeiters at large. The ACA reckons that most of the mobile phone manufacturers are afraid that reporting counterfeiters to the police will negatively affect their market share and erode the goodwill associated with their trademarks.

Continue reading