Counterfeit Goods and the Law in South Africa: Trader Guide
Counterfeit goods are goods carrying a trade mark applied without the rights holder's authority. Dealing in them is unlawful in South Africa under the Counterfeit Goods Act and can lead to seizure of stock and criminal liability. Unbranded generic goods are a different thing and are legitimate to trade. Claiming you did not know is a weak position.
What this guide covers
- Counterfeit, generic and lookalike are three different things
- How to place the stock in front of you
- What the law does, in general terms
- Why "I did not know" is a weak position
- Due diligence before you buy stock
- Unbranded generic stock is the safe route, and a good one
- What happens in a raid, and why records matter
- Electrical safety marks are a separate issue
- Buy stock you can account for
- Related guides
Counterfeit goods are goods that carry someone else’s trade mark, applied without that rights holder’s authority. That is the whole definition, and it is narrower than most traders think. A plain white T-shirt with no logo is not counterfeit. A cable that is not branded as anyone’s cable is not counterfeit. A shoe carrying a well-known sports brand’s name and logo, made by someone with no permission to use them, is.
Dealing in counterfeit goods is unlawful in South Africa under the Counterfeit Goods Act. The consequences are serious and they land on the trader holding the stock: goods can be seized and removed, the business can be exposed to a civil claim from the rights holder, and criminal liability is possible. “I bought it in good faith from a wholesaler” is a weaker position than most people assume, because buyers are expected to take reasonable care about where their stock comes from.
Below: how counterfeit differs from generic and lookalike goods, what the law broadly does, the due diligence worth doing before you buy, why unbranded stock is the safe and entirely legitimate route for a small trader, what happens if there is a raid, and why electrical safety marks are a separate issue altogether.
This article is general information about how counterfeit goods are treated in South Africa. It is not legal advice, and nothing here should be relied on to decide whether particular stock is lawful. Intellectual property questions turn on specific facts and on the rights registered by the rights holder. Confirm your own position with a qualified attorney, and note that trade marks are administered through the CIPC, that customs enforcement sits with SARS Customs, and that consumer complaints fall to the National Consumer Commission.
Counterfeit, generic and lookalike are three different things
Traders get into trouble because these three get lumped together in conversation. They are not the same, and the difference is what decides whether stock is a problem.
Counterfeit
Goods bearing a trade mark that the maker had no authority to apply. The point is the mark, not the quality. A well-made bag carrying a brand name without permission is counterfeit. So is packaging, a label, a swing tag or a logo on a box, because the mark is what is being copied. Goods described as “original quality”, “AAA”, “master copy” or “same as the brand” are being described as counterfeit in trade language, whatever the seller calls it.
Generic and unbranded
Goods that carry no brand at all, or carry the manufacturer’s own honest brand or the shop’s own name. A plain phone cable, an unbranded pot, a blank cap, a no-name school shoe. This is ordinary trade and it is the bulk of what wholesale centres sell. There is nothing legally doubtful about it, and it is what most successful small traders build on.
Lookalike
Goods in a similar style, shape or colourway to a popular product, but not carrying anyone else’s mark. Fashion runs on this and it is generally lawful, but it is the grey area of the three, because a design or a get-up can itself be protected, and a mark does not have to be identical to infringe. If a product is deliberately built to make a shopper think it is a particular brand, that is a risk worth taking advice on rather than guessing at.
How to place the stock in front of you
| What it is | Example | Position in general terms | What to check |
|---|---|---|---|
| Unbranded generic | Plain cable, no-name pot, blank cap | Ordinary lawful trade | Quality and safety marks only |
| Supplier’s own brand | A factory’s own name on its goods | Ordinary lawful trade | That the brand belongs to the supplier |
| Lookalike styling | Similar shape or colourway, no other party’s mark | Generally lawful, but a grey area worth advice | No logos, no borrowed get-up or packaging |
| Branded goods bought through the brand’s own channel | Stock from an authorised distributor | Lawful, with paperwork proving the chain | Invoices naming the authorised supplier |
| Counterfeit | Another party’s mark applied without authority | Unlawful under the Counterfeit Goods Act | Do not buy it, whatever the margin looks like |
What the law does, in general terms
The Counterfeit Goods Act is the main instrument. Without turning this into a legal seminar, it does a few things a trader should understand.
- It makes dealing in counterfeit goods an offence, and dealing is broad. It is not only manufacturing. Possessing counterfeit goods in the course of business, storing them, exhibiting them for sale, distributing them and selling them all fall within its reach.
- It allows goods to be seized and detained, typically on the complaint of a rights holder, and removed to a counterfeit goods depot pending the outcome.
- It provides for inspection powers, exercised by inspectors, SAPS and customs officers, including entering premises used for trade.
- It carries penalties, which are set in the legislation and are revised over time, so no article should state a current amount or sentence. Take it as serious rather than nominal, and rising for repeat conduct.
- It sits alongside civil remedies. A rights holder can pursue you separately for infringement, and that claim is not affected by whether anyone is prosecuted.
Enforcement in practice involves several bodies. Trade marks are registered and administered through the CIPC. Goods entering the country are dealt with by SARS Customs, which can stop suspected counterfeit consignments at the border. SAPS and appointed inspectors carry out searches and seizures inland. Where consumers are misled about what they bought, the National Consumer Commission and the CGSO deal with the consumer-protection side.
Why “I did not know” is a weak position
The honest belief that stock was genuine is not the shield traders imagine. A person in business is expected to take reasonable care about what they buy and sell, and the question that gets asked afterwards is not only what you knew but what you should reasonably have known. Stock bought without an invoice, from a supplier whose business name you cannot give, at a price far below any legitimate wholesale level, carrying a famous logo, does not look like an innocent purchase from the outside.
The protection is boring and effective: buy in a way that leaves a paper trail you would be comfortable handing to an inspector. That is the same paper trail that protects you against short deliveries, faulty stock and disputes with customers, so it earns its keep either way.
Due diligence before you buy stock
None of this requires a lawyer at the counter. It requires asking ordinary commercial questions and paying attention to the answers.
- Get a proper invoice, every time. The supplier’s registered business name, address, contact number, VAT number if they are registered, a description of the goods, quantities and prices. An invoice that describes goods vaguely is worth very little.
- Know who you are buying from. A fixed trading address you could return to, a landline or a business number, a business name you can look up. Sellers who exist only on a phone number and meet you in a parking area are a risk in every direction.
- Treat a startling price as a warning, not a win. Branded goods offered at a fraction of any plausible wholesale level are usually cheap for a reason, and the reason is rarely to your advantage.
- Look at the branding closely. Misspelled brand names, slightly wrong logos, mismatched fonts, wrong colours, tags stitched on crooked, and packaging that does not match the product inside are the classic signs.
- Look at the packaging and the batch. Photocopied-looking boxes, no barcode or a barcode that does not scan, missing importer or manufacturer details, no batch or model number, sealed goods where the seal looks reapplied.
- Ask directly whether the goods are branded and who the brand belongs to. A legitimate supplier answers this without discomfort. Evasion is an answer in itself.
- Be wary of trade language for copies. Phrases such as “master copy”, “AAA grade”, “original quality” or “same factory” are describing what the goods are. Believe them.
- Walk away when something feels wrong. There is always other stock. There is not always another business.
Our guide on spotting quality versus cheap stock covers the same inspection habits from the quality angle, and much of it overlaps.
File supplier invoices by date and photograph each one the day you get it, because thermal slips fade to blank within a year. If your stock is ever questioned, the ability to produce an invoice naming a real supplier for a specific carton is the single most useful thing you can hand over. It is also what you need for SARS, for insurance claims and for returning faulty goods.
Unbranded generic stock is the safe route, and a good one
There is a persistent idea among new traders that branded stock is where the money is. For a small trader it is usually the opposite. Branded goods bought legitimately come through authorised channels at controlled margins, and branded goods bought any other way are a risk to the whole business.
Unbranded stock has real commercial advantages. Nobody can compare your price against a national retailer’s advertised price for the identical item. You are not tied to a distributor’s terms or minimums. Your margin is yours to set, based on what you paid and what your customers will pay. And you can build your own name on it: your own labels, your own packaging, your own shop brand, which is an asset that grows instead of a permission that can be withdrawn.
Plenty of successful small businesses run entirely on generic stock, from cleaning products to phone accessories to kitchenware. Our guide on buying wholesale, minimums and trade prices covers how to buy it properly, and our guide on buying local versus importing from China compares the two routes.
What happens in a raid, and why records matter
Enforcement action usually starts with a complaint from a rights holder rather than a random inspection. What follows generally involves officers attending the premises, examining stock, and detaining and removing goods they suspect are counterfeit, with an inventory of what was taken. Goods are held pending the process, and the trader is left without the stock in the meantime whatever the eventual outcome.
Three things help you and none of them can be arranged afterwards.
- Invoices matching your stock, so that you can show where each line came from and what you paid.
- A stock record that reflects what is on your shelves, so your account of the business is consistent.
- Contactable suppliers, because a supplier who can be identified is a supplier the process can follow up on.
Practical conduct matters too. Stay calm and co-operate, do not obstruct officers, ask for and keep the inventory of what is removed and the details of who removed it, and contact an attorney promptly. Do not attempt to move or hide stock. That behaviour is treated far more seriously than the original question about the goods.
Electrical safety marks are a separate issue
Do not confuse the counterfeit question with the safety question. They are enforced by different bodies, for different reasons, and stock can be entirely genuine and unbranded while still failing on safety.
Certain electrical and electronic products sold in South Africa must meet compulsory specifications administered by the NRCS, and approved products carry an approval mark. Plugs, adaptors, multiplugs, chargers, cables, lights and appliances are the categories a small trader is most likely to touch. The requirements and the list of controlled products are set by the NRCS and do change, so confirm the current position with them rather than assuming.
When you buy electrical stock, ask the supplier whether the goods carry the required approval and get the answer on the invoice where you can. It matters for your customers’ safety, and selling unsafe goods also raises obligations under consumer protection law. Our guide on phone accessories and electronics covers what to look at before buying a carton.
Frequently asked questions
What counts as counterfeit goods in South Africa?
Counterfeit goods are goods carrying a trade mark that was applied without the authority of the rights holder. It is about the mark rather than the quality, so packaging, labels, tags and logos count too. Unbranded generic goods carrying nobody else’s mark are a different thing and are ordinary lawful trade.
Is it illegal to sell counterfeit goods in South Africa?
Yes. Dealing in counterfeit goods is unlawful under the Counterfeit Goods Act, and dealing is broad: possessing them in the course of business, storing them, displaying them for sale and selling them all fall within it. Stock can be seized, a rights holder can bring a civil claim, and criminal liability is possible. Take legal advice on any specific situation.
Are unbranded generic goods legal to sell?
Yes. Goods that carry no other party’s trade mark are ordinary lawful trade, and they are what most wholesale centres sell. Generic stock also lets you set your own margin and build your own shop brand instead of competing against a national retailer’s advertised price on an identical branded item.
I did not know the stock was fake. Am I protected?
Not reliably. A person in business is expected to take reasonable care about what they buy and sell, so the question becomes what you should reasonably have known. Buying without invoices, from a supplier you cannot name, at a price far below any plausible wholesale level does not look like an innocent purchase afterwards.
How can I tell if stock is counterfeit before I buy it?
Look at the mark and the paperwork. Misspelled brand names, slightly wrong logos, mismatched fonts and colours, crooked tags, photocopied-looking boxes, missing batch or importer details, and prices far below any plausible wholesale level are the usual signs. Ask the supplier directly who owns the brand, and treat evasion as an answer.
What happens if counterfeit stock is found in my shop?
Enforcement usually follows a rights holder’s complaint. Officers may attend, examine stock and detain and remove suspected goods with an inventory, and the goods are held pending the process. Keep the inventory and the officers’ details, do not obstruct or move stock, and contact an attorney promptly. Invoices matching your stock are your most useful record.
Do electrical goods need an approval mark in South Africa?
Certain electrical and electronic products must meet compulsory specifications administered by the NRCS, and approved goods carry an approval mark. Plugs, adaptors, multiplugs, chargers and lights are common examples. The controlled list and requirements change, so confirm the current position with the NRCS and ask your supplier to confirm approval on the invoice.
Buy stock you can account for
The rule that keeps a small trading business out of this entirely is short. Buy unbranded or honestly branded goods, from suppliers with a real name and a real address, with an invoice for every carton, and keep the paperwork. Do that and the counterfeit question never becomes your problem, because there is nothing in your storeroom that anybody has a claim on.
Durban China City is at 269 Inanda Road, Springfield Park, open 09:00 to 17:00 seven days a week with on-site parking. Ask for an invoice on every purchase, keep it filed, and check electrical goods for the required approval mark before you buy a carton.
Related guides
Tagged: buying stock, counterfeit goods, counterfeit goods act, nrcs, south africa, trade marks
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