Indian multinational electrical equipment company Havells India has launched a high-stakes legal battle against a Kenyan trader and e-commerce platform Jiji Online Marketplace Kenya over the alleged sale of counterfeit electrical goods bearing its trademark.
The lawsuit filed in a Nairobi' court spotlights growing concerns about e-commerce platforms' liability in Kenya's booming digital marketplace, where counterfeit goods now account for 20 percent of online sales, according to official data.
The case comes as Kenya's e-commerce sector experiences explosive growth, with penetration projected to reach 53.6 percent by year's end, according to the Competition Authority of Kenya statistics.
This rapid digital expansion, influenced by factors such as increased internet penetration and rising consumer preferences for convenience in shopping, has created fertile ground for suspected counterfeiters, prompting multinationals like Havells to take aggressive legal action to protect their brands and consumers from potentially dangerous knockoffs.
In court documents, Havells accuses businessman Duncan Gathu of selling counterfeit electrical products, such as circuit breakers, under the Havells brand through Jiji.
The plaintiff alleges these counterfeit products – often indistinguishable from genuine items to unsuspecting consumers – pose serious safety risks including potential electrical fires due to substandard materials and manufacturing.
"These counterfeit goods not only infringe our intellectual property but endanger Kenyan households," stated Harsh Aggarwal, Havells' representative, in sworn court affidavits. A faulty circuit breaker could mean the difference between a minor electrical issue and a catastrophic house fire, he argues.
The plaintiff claims that Mr Gathu, operating under Dantrixx Electrical Merchants, has been advertising and selling counterfeit Havells circuit breakers and other electrical components on Jiji’s platform, misleading consumers and infringing on their intellectual property rights.
It further alleged that Jiji, despite being aware of the counterfeit listings, continues to facilitate the sales, profiting from the illegal trade. Havells argued that these substandard products pose serious safety risks, including potential electrical fires, and threaten the company’s reputation for quality.
It discovered the alleged counterfeits through covert test purchases.
Pending full hearing and determination of the case, the court has granted a temporary injunction barring the businessman and Jiji from importing, advertising, or selling any goods bearing the Havells trademark.
"Loss of goodwill, reputation, and customer trust is not readily quantifiable in monetary terms," said the court, signaling its recognition of brand protection as a critical business interest.
The court found that Havells hadestablished a strong case, noting that its trademarks were registered in Kenya as early as 2010, while Mr Gathu’s business only began operations in 2020.
But Mr Gathu maintained his innocence, claiming he only sells authentic Havells products sourced from ASL Limited, a Nairobi-based distributor. He further stated that he occasionally advertises his goods on Jiji to reach potential buyers.
His legal team argued Havells had not provided conclusive evidence proving the disputed goods are counterfeit, describing the businessman as a legitimate reseller of authorised products.
They presented purchase receipts from ASL dated between June 2023 and February 2024, asserting that this demonstrated the legitimacy of his stock.
However, Havells' legal team countered this defence, noting Mr Gathu's business only registered in 2020 – a decade after Havells trademarked its products in Kenya.
They also highlighted discrepancies in Mr Gathu's documentation, including a receipt generated days after the lawsuit was filed. They refuted his claim of having sourced the goods from ASL and stated that he had provided no proof of such purchase.
The court sided with Havells, stating that the balance of convenience favored protecting consumers from potentially hazardous products.
Jiji is yet to file its submissions in the court. The case's most consequential aspect may be its examination of Jiji's responsibilities as a digital marketplace. Havells alleged Jiji facilitates counterfeit listings.
Legal experts note this could establish precedent for holding Kenyan e-commerce platforms accountable for intellectual property violations occurring on their watch.
Global trends, including recent EU regulations requiring e-commerce sites to vet sellers and remove counterfeit listings proactively, could come into play in the dispute.
The case highlights growing concerns over counterfeit goods in Kenya’s e-commerce sector, where platforms like Jiji are now facing increased scrutiny over their role in facilitating the sale of counterfeit products.
A full hearing is expected to determine whether the businessman and Jiji will face permanent restrictions and potential damages for trademark infringement.
The lawsuit coincides with Kenya's Anti-Counterfeit Authority (ACA) developing partnership with e-commerce operators, with the goal being requiring platforms to verify sellers and remove bad actors.
The plan is to have the e-commerce platform owners evaluate their vendor base to ensure they meet certain requirements to weed out rogue sellers who trade in counterfeits.
The Authority has in the past conducted research to determine the level of online counterfeiting in the country. The studies found that the levels stood at 18 percent in 2017 and grew up to 20 percent in 2022.
With the temporary injunction in place, attention turns to the full trial where Havells must conclusively prove the disputed goods are counterfeit through expert technical analysis and that Jiji had actual knowledge of the infringements.
The increase was attributed to increased online business during the Covid-19 pandemic due to social distancing and fewer physical interactions, with perpetrators adjusting their business models by offering counterfeit products for sale through the online channels.
ACA warned that counterfeiters were using popular digital domains to distribute their products to unsuspecting consumers. According to the Authority, sale of counterfeit goods online is part of cyber-crimes and is similar to selling the same goods at a physical shop.
