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Counterfeit Goods Rampant

Hefty fines for US and Candadian counterfeiters – but it’s a slap on the wrist for SA fraudsters.





The importation or manufacture and sale of counterfeit goods is one of the single biggest risks facing legitimate businesses on the African continent at present. Cheap, low quality goods, which more often than not do not meet local safety or health requirements, are flooding African markets, including South Africa. Such goods range from pharmaceutical products, to shoes and clothing to electronic goods and foodstuffs, to name but a few.

Annually, counterfeit goods worth an estimated $600 billion (6% of world trade) are traded around the world and, unfortunately, Africa has become a popular dumping ground for such goods.

According to the executive director of the Kenyan Anti-Counterfeit Agency, Gregory Munyao, Kenya loses revenue and taxes to the value of KES19 billion ($211 million) annually. It is also estimated that the private sector in Kenya is losing approximately KES50 billion ($556 million) annually.

Counterfeiting in Africa

Steven Yeates, Trade Mark partner at internationally recognised IP law firm Adams & Adams who battles with the issue of counterfeiting on an ongoing basis, is all too familiar with the problem – particularly in Africa.

“Despite the risks to local economies, civil court orders and criminal convictions in Africa pale in comparison to those being granted against counterfeiters in Europe and North America. In South Africa, the Counterfeit Goods Act prescribes a maximum sentence of R5 000 per item, and/or three years imprisonment in the case of a first offence, or R10 000 and/or five years imprisonment in the case of a second conviction.

“While these penalties are steep,” says Yeates, “the maximum sentences are hardly ever applied. However, in the USA and Canada two recent decisions have highlighted just how serious dealing in counterfeit goods is considered to be in those jurisdictions.

“In New York, the Federal Court ordered online counterfeiters to pay damages to Tory Burch, a luxury fashion brand, in the amount of $164 million. This is believed to be the largest damages award in the fashion industry ever. The counterfeiters had created 232 professional looking websites through which to sell counterfeit goods bearing the trade marks of Tory Burch.

“More recently, in June this year, the Federal Court in Canada issued the highest damages and costs award to date in Canada against counterfeiters dealing in Louis Vuitton and Burberry goods. Damages in the amount of $2.48 million, excluding legal fees, were awarded. Previously the highest order for damages was in the amount of $980 000, also in favour of Louis Vuitton,” comments Yeates.

Several recent successful seizures of large quantities of counterfeit goods have again put the spotlight on the efforts of our enforcement agencies to stem the flow of these products onto South African markets. In January this year, the Hawks seized five containers full of counterfeit goods at Durban harbour.

The goods, which included sunglasses, watches, shoes and clothing, were estimated to be valued at R120 million. In operations conducted in the first week of July this year, officials seized hundreds of thousands of counterfeit goods at buildings in the Johannesburg CBD. These included razor blades, children’s toys, clothing, shoes and personal hygiene products. Similar operations have taken place in November and now in December.

Difficult to convict fraudsters

Yeates explains the difficulties of convicting trademark fraudsters: “One potential drawback to the South African legal framework, particularly insofar as it relates to trade mark infringement and counterfeit goods, is that it does not provide a cost-effective and practical basis on which to claim damages against counterfeiters.”

According to Yeates, to be awarded damages in South Africa the Plaintiff has to prove its loss, which is often impossible in the counterfeiting scenario. Counterfeiters hardly ever keep accurate financial records and more often than not operate under false names and aliases.

It is for this very reason that African countries, including South Africa, are such easy targets for counterfeiters. “While the South African Criminal Procedure Act does make provision for compensation to be awarded to parties who have suffered damage to, or loss of, property resulting from offences, such compensation can only be applied for once a conviction is obtained. Even then, the trade mark proprietor has to prove the value of his loss – a virtually impossible task in the circumstances,” says Yeates.

Protecting your rights

The obvious question is thus what companies can do in South Africa to best protect their rights (as much as possible within the current legal framework). First and foremost Yeates says it is imperative that companies register their trade marks. Once a company’s trade marks are registered, the next step is to arrange for recordal of its trade marks with Customs.

Customs keeps a central database of all qualifying trade marks (i.e. registered or well known trade marks), and copyright which can be accessed by its officials on the ground. Customs officials use this database to determine whether certain trade marks are protected and, if so, who to contact in order to have samples of suspected counterfeit goods examined and checked.

“Once goods are seized by customs the proprietor of the relevant trade mark will have the option of taking either criminal or civil action, or both, against the importer, manufacturer or seller of the goods. While such action will not lead to massive damages being awarded to the trade mark proprietor, the actions will, if successful, lead to the destruction of the goods and, hopefully, the imprisonment of the counterfeiter.

“While massive damages claims against the manufacturers, importers and sellers of counterfeit goods are not yet on the horizon, local companies should protect their trade marks (and their businesses), by making use of the tools at their disposal. Failure to do so will result in our markets being overrun with counterfeit products, a scenario no developing country can afford,” concludes Yeates.

Entrepreneur Magazine is South Africa's top read business publication with the highest readership per month according to AMPS. The title has won seven major publishing excellence awards since it's launch in 2006. Entrepreneur Magazine is the "how-to" handbook for growing companies. Find us on Google+ here.

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Entrepreneur Today

FNB Sets Its Sights On Growing Female Entrepreneurs In South Africa

First National Bank looks to grow women entrepreneurship in South Africa.





FNB has set its sights on growing women owned and led businesses in South Africa, a commitment that has seen the bank enter into partnerships to facilitate mentorship for some of the most promising enterprises.

The bank has a good foundation to build on, as 38% of all new business accounts opened with FNB Business are either led or owned by women, highlighting an already established entrepreneurial momentum.

“We are cognisant of the fact that neither government nor corporate South Africa are going to be the sole sources of job creation. We therefore have an obligation to support and grow entrepreneurship. Partnerships such as the one entered into with International Finance Corporation (IFC) enables us to assist in developing women owned business,” says Michelle Geraghty, Head of Women in Business at FNB Business.

Over the last few years, FNB has, through a partnership with the Vumela Fund, assisted businesses such asSAIL, a leading skills and training institute that offers a range of qualifications to the public sector, and Toni Glass who produce a collection of world class tea, to not only scale effectively, but to bolster each of the business’s offering to market.

Related: Watch List: 50 Black African Women Entrepreneurs To Watch

“Our approach is to, much like we have done with the likes of Sail and Tony Glass, enable qualifying women owned businesses in their growth curve by offering help that includes transact, lending, investing and insuring solutions. This will include facilitating the registration of the business online via the FNB registrations system which links to CIPC, to Instant accounting and payroll solutions aimed at reducing operating costs for the business. This will also extend to support in the incubation stage of selected businesses through Vumela. We will carry this right through to private equity funding,” explains Geraghty.

Vumela was established as an innovative model that is aimed at filling the gaps in the current SME funding and support landscape. While Vumela is an SME growth fund, it also functions as the bank’s primary Enterprise Development and Supply Development vehicle, able to fulfil both SME funding and growth needs, and corporate ESD requirements, avenues that FNB will be making use of.

FNB also intends on tracking jobs created through these initiatives to ensure a trickledown effect that not only benefits the business owner but also increases the overall number of women participating in business in South Africa.

“The need to grow the number of women in business is one that if done correctly, can address many of the disparities and anguish that women continuously face. Access to fair opportunities to grow their businesses and in turn make a real impact on the South African economy,” concludes Geraghty.

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Entrepreneur Today

Great Bunch Of Entrepreneurs Make Top 10 In The Workspace/MiWay Competition

The top 10 in The Workspace/MiWay entrepreneur competition have been selected.





After an intense four-month process, the top 10 contenders in The Workspace/MiWay Entrepreneur competition have been notified that they’re through to the next round. These entrepreneurs will pitch their businesses to the judges, who will then whittle down the number of contenders to five, from which the winner will be chosen.

“There has been great excitement over the past four months. As every single new entry came in, we would clap our hands and cheer,” said Mari Schourie, CEO of The Workspace. It was a tough job judging all the entries to reach the top 20 submissions, she said, before having to find the top 10.

“We’ve had really strong entries submitted by people with good business knowledge,” said Schourie. “You can see the willingness to work hard and the great amount of effort they have put into their initiatives.”

Schourie said judges saw “wonderful ideas and fabulous business minds and quality people with big dreams shine through the entries”.

The top 10 are:

  1. Loyal 1
  2. Dwyka Mining Services
  3. Minatlou Trading 251
  4. Sindis Best for all
  5. Convergence Three
  6. Zinde Zinde
  7. Matla Risk Management
  8. Artsort Trading
  9. Iconic Talent Agency
  10. Nthedikgwadi Transport Services

Related: How to Name (Or In Some Cases, Rename) Your Company

Schourie said she wished she could tell President Cyril Ramaphosa, who supports the growth of small business as an economic driver, “the ideas and the passion that these business owners have is inspiring and should be focused on more”.

The prize on offer – worth over R350 000 – will help set-up the winning entrepreneur for a period of 12 months, giving them a boost to help build their business.

Morné Stoltz, Head of Business Insurance at MiWay, said the theme that ran throughout the entries was that entrepreneurs wanted to make a difference and contribute to positive change in South Africa. “Many of the submissions focused on technical and developmental fields,” he said.

“Entrepreneurs recognise gaps in the market and see the potential for growth. Getting into the top 10 was not at all easy.”

Stoltz said South Africa had a “great bunch of entrepreneurs” and that standing together to give them a platform to launch was an exciting opportunity. “To grow our economy we need to help with skills development and give whatever assistance we can,” he said.

Part of the finalists’ road to the top includes a skills development programme for the top 10 entrants ahead of their important date to pitch their business plans to the judges.

As Schourie pointed out, it is vital to encourage South African citizens to act on their dreams and passions because “it can be a great success; they just need make that leap”.

Dates to watch:

  • 21 June: Top 10 skills development programme
  • 3 July: Top 10 pitches
  • 6 July: Top 5 announcement
  • 20 July: Final five workshops
  • 10 August: Final five pitches
  • 13 September: Winner announced

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Entrepreneur Today

Top 22 Start-ups Chosen For Final Selection Days – Startupbootcamp Africa

After receiving 1,004 applications from all over the world, the SBC team in conjunction with the programme’s corporate sponsors have narrowed the applicants down to 22 top-tier tech start-ups that will be invited to the Final Selection Days on July 11th and 12th at PwC’s headquarters in Cape Town.





SBC Africa received 1,004 total applications from 77 countries on 5 continents. The start-ups that applied were exceptionally impressive and have gained more traction in the market than the applicants for the 2017 cohort. The talent in Africa is phenomenal and the corporate sponsors and SBC team dedicated 2 weeks to narrow it down to the Top 22 to be invited to Final Selection Days.

“It’s been an intense process due to the exceptionally high calibre of start-ups applying to the programme from across the continent,” states Philip Kiracofe, co-founder and CEO of Startupbootcamp Africa. “From 1,004 applications we have managed to narrow down to 22 of the most creative teams tackling daunting African problems. One of the key differentiators for start-ups that participate in the SBC Accelerator is the opportunity to secure commercial contracts with our sponsors. In order to make it onto our Top 22, each start-up has been chosen by at least 2 sponsors for potential proof of concept projects. The 2018 cohort is already shaping up to be a milestone moment for Africa.”

Related: How to Name (Or In Some Cases, Rename) Your Company

Zachariah George, co-founder and Chief Investment Officer of Startupbootcamp Africa added, “The investment community across Africa is taking note of the significant traction and access to market that being an alumni of a global accelerator programme like ours provides. We are excited to further galvanize venture capital funding into tech startups through significant de-risking of business models and customer validation with our corporate partners globally.”

From the 22 teams that have been invited to the SBC Africa Final Selection Days, 10 will be selected to join the 2018 cohort. Over the span of the two Final Selection Days, the startups in attendance will have the opportunity to present their pitches to high-profile corporate sponsors, investors, thought leaders and industry experts and will have the chance to sit down with mentors and sponsors alike. At the end of Day Two, the Top 10 will be announced and will be welcomed to the Cape Town-based Accelerator that kicks off in August. During the 3-month period, they will have the opportunity to scale at an incredible pace and seal pilot and proof of concept deals with the corporate sponsors to the programme.

The SBC Africa Accelerator is anchored and endorsed by heavyweight corporate sponsors RCS, BNP Paribas Personal Finance, Nedbank, Old Mutual and PwC.

“We’ve seen an increase in the quality of start-ups applying to the programme. The awareness of the value of the programme has increased and the success of the first year of the bootcamp speaks for itself. More mature start-ups are also seeing the benefits of participating in Startupbootcamp Africa,” comments Stanley Gabriel, Head of Innovation at Old Mutual.

The Top 22 start-ups invited to the Final Selection Days come from 7 different countries. The numbers are as follows: 8 from Nigeria, 5 from South Africa, 3 from Uganda, 2 from the Ivory Coast, 2 from Kenya, 1 from Ghana and 1 from Ireland.

Related: Entrepreneurship Is All About Overcoming Obstacles

The names of the start-ups invited to Final Selection Days by country:

  • Nigeria: Bankly Technologies, Biyabot, CredPal, FriendsVow, Kudimoney Bank, Medikal HMS, NebulaPay, and ZEEZZ Planet Solutions.
  • South Africa: Brandbookalytics Big Data, ifileme, LÜLA, Prospa, and Akiba Digital
  • Uganda: CoinPesa Ltd, RoundBob Uganda, and Swipe 2 Pay
  • Ivory Coast: Digitech Group, and DISTRICASH
  • Kenya: Kakbima, and MPost
  • Ghana: Inclusive Financial Technologies
  • Ireland: Pago Payments

It has been an incredible 3-month scouting journey for SBC Africa and now that the Top 22 have been announced, the Final Selection Days is the only hurdle left before the Accelerator officially kicks off on 13 August 2018.

There are high expectations for the Top 10 of 2018 and if the quality of the start-ups at this stage is any indication, 2018 is set to be a great success for the African tech and innovation ecosystem.

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