Me-too business: How to guard against dangers posed by copycats


How to guard against dangers posed by business copycats. FILE PHOTO | SHUTTERSTOCK

A me-too business is an imitator or a copycat that imitates the goods and services offered by other businesses.

Think of them as parasites who feed on the host and depend on them for survival. The host in this case is the genuine business and the parasite is the me-too business.

The me-too business depends on the creativity and innovativeness of the genuine business to survive.

Me too businesses lack creativity and innovativeness. Me-too businesses remain very dangerous to genuine businesses as they can eat into the market share of genuine businesses.

This may put a high risk on investment spent on research and development. The investment spent on product or market development can be lost with the entry of the me-too businesses.

A second danger genuine businesses face from imitators is reputational risk. If the me-too engages in counterfeiting and produces sub-standard goods or services, then this can be risky to the genuine business.

Counterfeiting is the fraudulent imitation of goods or services such that it is difficult to tell the difference between the original and the fake.

If the me-too produces substandard goods or services, then the market perception of the genuine goods and services will go down as the market will think that the sub-standard goods have been produced by the genuine business.

Substandard goods and services pose great harm to consumers and can negatively affect the reputation of the genuine business.

Here are some tips on how to guard against dangers caused by the me-too businesses.

One thing a genuine business can do is enhance consumer awareness of their goods and services vis a vis the me-too ones.

This can be done through advertisements or promotional campaigns aimed at educating the consumer on the dangers of consuming the imitators’ goods or services.

This is especially so if the imitator engages in counterfeiting.

It is not a crime to copy a concept. However, it is illegal to misrepresent. If the imitator tries to “steal your identity” or brand or passes himself as you then this is actionable.

You can educate aggrieved consumers on the remedies they have from the Consumer Act. Consumers have statutory protection from imitators who engage in the tort of passing off.

Use trade secrets to protect your information. The biggest source of leakage can be exiting staff therefore it is important to sign confidentiality agreements with them to avoid unauthorised third-party disclosures.

Protect all your goods and services through intellectual property rights. Doing so will give you a foundation from which you can take legal action.

Some forms of legal action include getting court orders to stop the infringement (injunctions) and general damages where the imitator pays you for the loss suffered.

Other orders include accounting for profits and delivery up. All these cannot be done unless you have intellectual property rights protection.

Engage in continuous innovation and development as a strategy to have an edge over imitators. The imitators will run out of breath trying to keep up with your product and service development and may give up altogether.

Involve the regulatory authorities like the Anti-Counterfeit Agency, Kenya Bureau Of Standards and the Competition Tribunal in controlling imitators.

If the complaints meet the thresholds provided for in the laws then claims can be filed.

As a general rule, the me too businesses are not illegal unless they breach the law. As a genuine business owner you can use strategy and legal tools to protect your rightful market share.

Ms Mputhia is the founder of C Mputhia Advocates | [email protected]