Local trade marks v genuine imports: SCA ruling clarifies 'counterfeit' and 'infringement'

Image source: Freepik

Setting the scene

How the brand began – Italian designer Enrico Coveri turned his colourful style into a global fashion label in the 1980s. When he passed away in 1990, his sister Silvana Anna Maria Coveri stepped in as general manager of Enrico Coveri S.r.l., which still licenses the mark internationally.

The South African twist – The 'Enrico Coveri' trade mark was first registered here between 1985 and 1988, but the registration lapsed after renewal fees went unpaid in the wake of the designer’s death. In the 2000s, local footwear manufacturer Yossi Barel registered the mark in his own name (including for footwear) and began selling shoes made in China and Turkey under the label.

Parallel imports arrive – KwaZulu-Natal-based Popular Trading has brought in Enrico Coveri footwear for more than two decades. After an early stint with non-authentic stock from China, it has, since 2010, imported authentic Italian-made shoes supplied by the brand’s licensed manufacturers.

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How the case unfolded

Believing the imports infringed his South African registration, Yossi Barel obtained a search-and-seizure warrant under the Counterfeit Goods Act (CGA) in December 2021. Popular Trading persuaded the High Court to set the warrant aside; Yossi Barel appealed, sending the matter to the Supreme Court of Appeal (SCA).

A three-judge majority dismissed the appeal, stressing that:

• the seized shoes were genuine products from the Italian rights-holder; and
• counterfeiting under the CGA requires proof of an intent to deceive, not merely an unauthorised use of a registered mark.

Two judges dissented, favouring the view that any unauthorised use of Barel’s registration should count as counterfeiting.

Why does it matter?

1. Intent is now central. The majority read the word “calculated” in the CGA as importing mens rea: you must prove the alleged counterfeiter meant consumers to think the goods came from the trade mark owner. Simply showing the mark was used without consent is no longer enough.
2. Authenticity defeats a “counterfeit” claim. The court emphasised that genuine goods, even if they bear a trade mark registered by another party, do not constitute counterfeit goods if there is no intent to deceive.

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3. Trade mark infringement and counterfeiting are distinct. Brand owners can still sue for civil infringement, but seizure-and-destruction remedies under the CGA demand proof of deliberate copying. The court held that not all acts of trade mark infringement amount to counterfeiting, as counterfeiting involves a high standard of deliberate and fraudulent infringement.
4. Importers gain clarity. Businesses that buy directly from authorised foreign suppliers can rely on documentation of authenticity to fend off counterfeit raids.

Ultimately, the SCA has drawn a bright line: the Counterfeit Goods Act is a weapon against deliberate fakes, not a shortcut for brand owners to stop genuine parallel imports.

Rights holders who want CGA relief must now arrive with hard evidence that the alleged infringer intended to deceive, while importers can shield themselves by keeping airtight documentation of their products’ authentic, licensed origin.

By insisting on proof of fraudulent intent, the Court rebalances the playing field - encouraging trade mark owners to keep their registrations current and their enforcement strategies proportionate and giving compliant distributors greater confidence that legitimate goods will not be swept up in “counterfeit” raids.