Apple guns for local company accused of trading in fake iPhones
Global technology giant Apple is gunning for a shadowy local company in a bid to find the source of what it says are counterfeit iPhones and packaging that were seized at OR Tambo International Airport in March.
The tech company has approached the Johannesburg high court in its bid to determine the legal status of the products, stop the locally registered company “HHHH Tradings” from dealing in them and ultimately have the goods handed over to Apple.
It is also seeking an order compelling HHHH Tradings to disclose where the goods came from and who was involved.
A company search reveals that HHHH Tradings has two listed directors, Fatima Toheed and Muhammad Toheed, and operates from Fordsburg in Johannesburg. The Sunday Times visited the address and found a small computer shop called JK Computer Repairs. An employee said they did not know a Fatima or Muhammad Toheed.
A security guard at the small centre said police had visited the premises in recent weeks and that the people operating the shop appeared to have changed since then. “Police came here to one of the shops and took some stuff, and after that I saw different people operating at the shop,” he said.
Fatima Toheed did not respond to calls and messages sent to her listed cellphone number. No details could be traced for Muhammad Toheed.
The company wants information about the source of the goods, the people involved and documents relating to how the products were imported, manufactured, distributed or sold
South Africa’s economy is hard hit by counterfeit goods. In a presentation to parliament earlier this year, the former commissioner of the South African Revenue Service (Sars), Edward Kieswetter, estimated that South Africa’s bootleg economy could be worth between R800bn and R1.2-trillion. He said that over the past 15-20 years, the illicit economy had grown faster than the formal economy — from about 5% of GDP to 12%-15%. This translated into about R200bn-R300bn in taxes not collected.
According to Apple’s particulars of claim, the goods were detained at the airport by Sars officials on March 17 and later formally seized on July 27.
Apple alleges that HHHH Tradings imported mobile phones and packaging bearing Apple and iPhone trademarks without its authority. The company says the products were not manufactured by Apple or with its permission, and refers to them in the court papers as the “offending goods”.
“From a date unknown to Apple, HHHH Tradings imported mobile phones, including packaging for mobile phones, into South Africa for the purposes of trade bearing one or more of Apple’s trademarks and/or marks confusingly similar thereto … but which had not been manufactured by or with the authority of Apple.”
Apple’s legal action seeks to protect its registered trademarks, including the Apple and iPhone marks. The company wants information about the source of the goods, the people involved and documents relating to how the products were imported, manufactured, distributed or sold.
It is also asking the court to formally declare the products counterfeit and wants an interdict preventing HHHH Tradings from dealing in goods like those seized by customs. It has also asked for an inquiry into damages or, alternatively, a reasonable royalty.
Where the samples are confirmed to be counterfeit, in terms of the Counterfeit Goods Act, customs requires that the IP rights-holder provide confirmation of the counterfeit nature of the samples in the form of an affidavit of complaint— Michael Lamont, Spoor & Fisher legal expert
If Apple obtains the disclosure order it is seeking, HHHH Tradings could be required to provide information that may shed light on the source of the products and the wider network involved in getting them into South Africa.
Spoor & Fisher legal expert Michael Lamont said the process of tracing fake goods begins when customs officials identify such items at a port of entry. “Following this, customs will notify the relevant intellectual property [IP} rights holder or its legal representative.”
The rights holder is then given samples of the detained goods to establish whether they are counterfeit.
“Where the samples are confirmed to be counterfeit, in terms of the Counterfeit Goods Act, customs requires that the IP rights-holder provide confirmation of the counterfeit nature of the samples in the form of an affidavit of complaint,” he said.
Lamont said this affidavit then allows customs to investigate further and seek a warrant. Once the warrant has been issued, the goods are formally seized and the importer’s details are released to the rights holder.
In Gqeberha, a cellphone shop manager was fined R87,000 in May last year after admitting to selling counterfeit Apple products, with 145 Apple-branded items seized during a search of the store.
Internationally, Apple has also taken steps to tackle illicit trade in iPhones, including working with law enforcement and tightening its exchange policies in major trade hubs.
The company did not respond to questions from the Sunday Times.