Kenya – Anti-Counterfeiting Recordals, six months in

As outlined in previous news articles on this topic, a new law was recently implemented that requires any IP rights holder who imports their goods into Kenya to record their trade mark with the Kenyan Anti-Counterfeiting Authority (“ACA”).

But six months on from the recordal deadline of 1st January 2023, what progress has been made?  In this article, we explore the current situation on the ground, the challenges being faced by the ACA, and what it all means for confused brand owners who are keen to protect their rights, but also their pockets.

Background 

The Kenyan ACA estimates that one in every five products sold on the local market is counterfeit.  Whilst this represents a reduction since 2015, the continued risk that fake products pose to health, security and the economy means that more work is required. 

The premise behind the new law is simple: engage closely with those importing genuine products so that counterfeit goods can be easily recognised and dealt with.  Recordal will provide officials with the relevant information to enable them to exercise their powers where they suspect goods are counterfeit.

However, mandating a compulsory recordal system places a considerable burden on brand owners and those responsible for its enforcement alike.  Furthermore, with serious sanctions for those who do not register, the punishments focus more on legitimate businesses rather than counterfeiters.  As we understand it, Kenya is the only country worldwide that has implemented a mandatory customs recordal system.  It is questionable whether this approach has created the desired uptake through fear of reprisal or whether brand owners are simply more sceptical of its permanence. 

Challenges

The first deadline for recordal was 31st July 2022, announced only three months prior.  This deadline was pretty quickly extended to 1st January 2023 - a sensible move based on feedback from stakeholders wary of the short lead-in time.

Moreover, the technological practicalities of creating such a register have appeared to be more difficult than initially thought.  With a “one-size-fits-all” deadline, officials have been inundated with a bottle-neck of urgent applications, which also fell during the festive period.

The law requires an application to be approved within 30 days of filing, but due to the volume of new recordal applications filed in such a short window, this timeframe quickly became 45 days, then 60 days.

News followed in March 2023 that the ACA online system was inaccessible.  Without access to the online portal, ACA staff could not process or approve pending applications, nor could new applications be filed.  At the time of writing, the portal is still down, though intermittent access has been possible and system developers are optimistic that all issues will be resolved soon.

Developments

Checking goods without a comprehensive register is difficult, as more often than not the goods will still be genuine but the trade marks will simply be missing from the register.  Until a large enough database of recorded marks has been compiled, the ACA relies on enforcing recordal as part of the pre-import approval process, with a nominal fee payable for marks that have not been recorded. 

Despite the delays being faced, the ACA has pressed on with increasing the type of goods that are required to be recorded.  Phase 1 contained 89 “HS codes” (not linked in any way to the International classification system), mostly covering electrical machinery. From 1st May 2023, further goods – ranging from alcoholic beverages to cosmetics and clothing – were added.

The ACA has remained engaged with stakeholders, and proposals to amend the system have been submitted and improvements made.  At one stage, for example, foreign applicants basing their recordal on a foreign trade mark registration certificate were being asked to provide a verified English translation of the document, legalised to the Kenyan Embassy in that country.  This requirement has been removed, at least temporarily.

Whilst the current practice requires annual renewal, rights holders are instead calling for recordal to be valid for the term of the base registration.  Such a change would require legislative amendment, but the ACA has demonstrated openness to all discussions. 

Summary

So, what should concerned rights holders make of all this?  The recordal of IP rights aims to reduce the number of counterfeit imports into Kenya, which should protect both owners and consumers.  This should be supported in principle, but how do applicants feel about being forced to record their rights, especially if it doesn’t align with their enforcement strategy?

Many will read of the sanctions – seizure and destruction of imported goods, fines and even imprisonment – and not take the risk; over 1500 applications have been made to date and many more will be filed once the online platform is back up and running.  Of the applications filed, we understand that over 50% have now been approved, showing steady progress.

Others will naturally be more sceptical and adopt more of a “wait and see” approach.  Will compliance decrease the risk of counterfeit imports?  Can the recordal system be relied upon?  There is no guarantee of either at this stage, but you might expect a counterfeit-conscious brand owner to be buoyed by the support of the ACA in enforcing their rights.

Certainly, without an exhaustive register (or at least one consisting of trade marks that cover, for example, 90% of all legitimately marked goods), the heavy sanctions legislated for non-compliant brand owners cannot be enforced.  So then, does recordal simply become a voluntary service like in many other countries?  It is not surprising to hear that this too is a recommendation amongst a large number of interested parties.

Let’s see what the next six months bring.

In the meantime, if brand owners want to record their rights with the ACA, here are some of our top tips:

1.       Record your house mark.  If your house mark is prominent on all packaging, it may not be necessary to also record sub-brands.

2.       Base the recordal on the broadest available registration.  Recordal applications can be multi-class if the base registration is likewise.

3.       Pick a base registration with electronic certified copies, in English.  Basing a recordal on, for example, an EU trade mark registration, will save a range of administrative costs.

4.       Register your trade mark in Kenya.  Whilst not a requisite for recordal, trade mark protection is strongly advised if your goods are being sold in the country.