Industry news

The import and sale of fishing tackle and the law

Grey imports, or buying stock from someone besides the licensed distributor, is becoming a matter of grave concern in the fishing tackle industry. Manufacturers — local and international — are also concerned that their products are being copied and sold at a reduced rate. What are the legal implications?

Last year in April the Department of Trade and Industry effectively gave the green light to grey importers when their Consumer Affairs Committee ruled that parallel importation is legal — provided the consumer is informed that the product does not come from the licensed distributor.

A retailer who buys stock from someone who is not the official licensee must indicate clearly on warranty material and where appropriate, on sales receipts, that:

• The products may not be covered by a manufacturers guarantee, unless so negotiated by the retailer;
• A repair and back-up service may not be available, unless provided by the retailer;
• The consumer may not be entitled to any rights of replacement or repair against the licensed dealer or importer.

The retailer may also not lay claim to any sponsorship or official status negotiated by the official licensee. In effect, this would mean that where packaging states that a product is endorsed by a local organisation or celebrity in a deal negotiated by the local licensee, the product will have to be repackaged.

The retailer must also be able to show that the goods are in a form or state approved by the owner of the trade mark — in other words, that he is not selling counterfeit goods.

An infringement of these regulations can cost the retailer a fine of up to R200 000 or imprisonment for up to five years.

Despite these provisions, licensed distributors are not happy with the ruling because it often entails a costly and lengthy process to become a licensed distributor.

There are often stringent conditions attached to the agreement, e.g. the number of items imported, guarantees offered, sales targets, marketing campaigns and many other obligations. These contribute to costs — which the parallel importer can circumvent and thus offer his goods at a lower price. Besides, the grey importer benefits indirectly from all advertising spend by the licensee.

Copying of products

The copying of goods — whether by a local or international manufacturer — is illegal and cause for grave concern across the world. It is especially a problem at trade shows where buyers photograph and then copy products.

Apart from the obvious problem that the original creator loses out on sales, counterfeiting has the additional drawback that the copycat will more than likely not use the same quality raw material or pay as much attention to detail as the creator, and therefore market an inferior product that resembles the original. This also damages the good standing of the original brand.

In SA, the Designs Act protects both registered aesthetic and functional designs for 15 or 10 years respectively, provided registration fees are paid.

The Trade Marks Act protects brands and manufacturers against the unauthorized use of their intellectual property. In other words, someone may not copy a product and pass it off as the original.