The National Prosecuting Authority (NPA) has successfully prosecuted Musica for dealing in counterfeit goods. However, it was found not guilty of intent to sell counterfeit goods.
In a judgment welcomed by the State, the Pretoria Specialised Commercial Crime Court ruled that the New Clicks Holdings subsidiary was negligent and failed to take "all reasonable steps" to ensure its supplier was selling it legal goods.
This followed the company's decision to stop buying from Ster-Kinekor in 2005 and start buying from Dolphin Enterprises.
New Clicks CEO David Kneale says he initially thought products bought from Dolphin were legitimate. However, in March last year, Sony PlayStation 2 controllers and memory cards in its Menlyn and Centurion stores were found to be counterfeit, he explains.
He adds that Musica is disappointed by the judgement.
The NPA's Tlali Tlali said: "The judgment of the court is welcomed by the State, and we strongly believe it will send a strong message to other stores engaging in selling counterfeit goods and to the public at large."
The South African Federation Against Copyright Theft (Safact) initially picked up that Musica was selling fake goods. The body's spokesman, James Lennox, also welcomes the judgment, saying it vindicates the organisation's actions.
"We were shocked initially that Musica was selling counterfeit goods, and it clearly did not apply a vigorous enough test of its supplier," he says.
Lennox notes that counterfeit goods are so widespread that they will increasingly find their way into legitimate supply chains, increasing the need for buyers to be vigilant.
According to Lennox, as much as 40% of the gaming console market - "if not more" - is traded in the grey market.
Sentencing in the New Clicks case has been scheduled for 6 August.
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