July 25, 2011

UPDATE: ‘Fake’ Apple Stores Ordered Closed

Chinese counterfeiters are upping the ante in the gadget world by opening fake Apple Stores selling real Apple products in them, BBC News is reporting.

Five fake Apple Stores were found by Chinese officials to be selling Apple products and two of those stores were ordered closed, not for being a counterfeit store, but for operating without an official business permit.

An American blogger, writing on The BirdAbroad blog and living in Kunming China, recorded the find last week which resulted in a frenzy of media interest.

Inspections of around 300 shops in Kunming were carried out exposing a near-flawless fake Apple Store that was so convincing, even the staff was surprised they were not working for the iPhone and iPad maker.

The writer described the store as a "beautiful ripoff - a brilliant one - the best ripoff store we had ever seen". She describes how convincing the shop was at first glance because so much trouble had been taken to copy key elements of a real Apple store.

For instance, it has a winding staircase, upstairs seating area and employees wearing blue T-shirts and chunky ID lanyards.

Chang Puyun, spokesman of Kunming government's business bureau explained to Reuters: "China has taken great steps to enforce intellectual property rights and the stores weren't selling fake products."

Officials are investigating whether Apple had applied with the Chinese government to have its store design and layout protected by law, Chang told Reuters.

In addition to protecting trademarks, Chinese law prohibits companies from copying the "look and feel" of other companies' stores, but enforcement is often spotty.

The proliferation of the fake stores underlines the slow progress that China's government is making in countering a culture of a rampant piracy and widespread production of bogus goods that is a major irritant in relations with trading partners, AP reports.

"We hope that they will take continuous action against other Intellectual Property Rights violations," Ioana Kraft, general manager of the Shanghai chapter of the European Union Chamber of Commerce in China, said in an emailed comment to Reuters.

In May, China was listed for the seventh year by the US Trade Representative's office as a country with one of the worst records for preventing copyright theft.

Piracy and counterfeiting of US software and a wide range of other intellectual property in China cost US businesses alone an estimated $48 billion and 2.1 million jobs in 2009, the US International Trade Commission has said.


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