Fake Apple Stores Show the Weakness of Chinese IP Laws
China’s ongoing difficulties with the protection of intellectual property took a bizarre turn last week, as international news sources discovered a major distributor of fake Apple products. While knock-off electronics being sold in China is hardly news, what makes this incident unique is the way in which the fraud artists went about selling them: they created an entire imitation Apple Store. The Property Rights Alliance has detailed China’s ongoing problems in our annual Intellectual Property Rights Index.
The fake Apple store included the signature logo, décor, and uniforms for employees. Indeed, even many employees of the business thought that they were employed by the real Apple and that they were selling actual iPhones and iPads. It was only after an American blogger living in China visited the store and notices some discrepancies that the scam came to light. While Apple refused to comment on the fake store, it appears to be an attempt to exploit the ongoing sales success of the company in China, which has recently yielded record sales figures.
While the idea of creating an entire fraudulent storefront may seem amusing to some, it highlights real problems with Chinese intellectual property enforcement. Apple has invested billions of dollars in building a reputation for innovative products and helpful customer service. When fraud artists appropriate that brand for themselves and sell low-quality imitation products from a bogus store-front, they are both stealing the work of others and undermining that hard-earned reputation. Those who innovate and create value should therefore be concerned about the ongoing lax enforcement of China’s international IP obligations.