Sunday, 21 November 2010

Johnson & Johnson application dismissed in counterfeit goods case

Following a search and seizure under the Counterfeits Goods Act in RSA, the rights holder typically may lodge a criminal complaint with the State and/or proceed with a civil claim against the alleged counterfeiter. This recent case out of the North Gauteng High Court illustrates that a major advantage of the Counterfeit Goods legislation – namely the removal of the goods from the market - can be lost to the rights holder, if the State withdraws the charge while the civil claim is still running.

In this case Johnson and Johnson had lodged their complaint with the State and proceeded with its civil claim. The State then withdrew its charges and allowed the return of the goods to the market. It seems from the judgement that Johnson then took that decision on review and made an attempt to amend its claims in the civil case so that the goods could be returned pending the outcome of that review (see para 8). Without giving reasons but citing the respondent’s arguments, the acting Judge found that Johnson had not made out a case and dismissed the application.

It is not clear why the State withdrew the charges but the lesson, it seems, is that the State should remain persuaded throughout that a decent case has been made on the merits for the criminal complaint. The case also reminds attorneys of the need to ensure that accurate inventories are be made up during seizures.

Section 9 of the Counterfeit Goods Act provides that goods must be released if a criminal charge is not laid. It seems logical then that if a criminal charge is laid and then subsequently withdrawn that the goods are to be returned, notwithstanding that a civil claim may be ongoing. Comments welcome.

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