Chinese Apple Counterfeits Stores Popping Up

Local officials from Kunming, the capitol city of the province of Yunnan, China, have begun to crack down on the much-publicized “fake” apple stores that came to light last week. Two of the five stores have been shut down by the local industry and commerce administration. According to China Daily’s U.S. edition, the remaining 3 stores are awaiting a response from Apple as to whether or not they may continue operating.  Apparently, so far the products sold in the store have not been alleged to be counterfeit products.  But the store itself is unauthorized, thus selling gray marketing goods.


This is interesting news since foreign businesses have been skeptical about China’s responsibility to intellectual property. Patent trolls, knockoff brands, and gray markets have hurt China’s IP reputation. But this response from the local government could be a sign things are headed in the right direction. Granted, the news comes from China Daily, and Chinese news sources aren’t known for objective reporting. But the fact that certain of the stores have been closed down means that China didn’t simply turn a blind eye to the situation, as it has done in the past. Perhaps this was due to the extensive news coverage of the fake Apple stores, whose own employees didn’t even know they weren’t working for Apple.

However, it also appears that the reason the two stores were closed was the lack of a proper business license, not because of their intellectual property infringements. The remaining three stores (that have a business license) are awaiting a response from Apple.
Currently Apple only has four authorized stores, in Beijing and Shanghai. Maybe Apple should be expanding its Chinese market more quickly.

CNBC's Crime Inc: Counterfeit Goods

An excellent episode discussing the world of counterfeit goods will show on CNBC's Crime Inc., on Wednesday, July 14 at 9p ET/PT. I will definitely watch. Here is the description below:

Sneak Peek: http://bit.ly/9iR23d

Fake handbags, watches, and perfumes are a way of the past. The largest underground industry in the world, Counterfeit Goods bring in hundreds of billions, while sapping the economy, putting lives in jeopardy, and funding organized crime in the process.

CNBC presents "Crime Inc.: Counterfeit Goods," a CNBC Original reported by CNBC's Carl Quintanilla takes viewers inside where the goods are produced and confiscated in a world of high-risk and high-reward.

The one-hour special brings you on raids with the LAPD anti-counterfeiting unit, inspections at ports, and back-room factories where counterfeits are produced. Meet a couple who was paralyzed by counterfeit Botox, a company whose whole brand was copied, and the story of a defense contractor who counterfeit defense parts that found their way into weapons depots in Iraq.

At around 7% of all global trade, Counterfeit Goods are a big business with low overhead. It makes too much money to go away any time soon.

Ebay Trademark Infringment of Tiffany

New York based jeweler Tiffany & Co. have been hard hit by a ruling from last week, in a case against Ebay for trademark infringement. A district appellate court ruled that Ebay “did not engage in trademark infringement, false advertising or trademark dilution.” Apparently, Tiffany conducted research that indicated around 70% of Tiffany’s merchandise on Ebay was fake. This led to the current legal dispute, and Tiffany & Co. wants Ebay to assume responsibility for selling counterfeit merchandise.

But Ebay says they’re doing all they reasonably can to deter the sale of counterfeit goods. Selling counterfeit merchandise on Ebay is officially against the rules, but enforcing the rules is mainly up to Ebay buyers who can report suspected counterfeits. And, according to last week’s decision, it’s the individual sellers who are guilty of trademark infringement, not Ebay itself. For the last few years, rulings have been back and forth on the issue. For example, France ruled against Ebay in a similar suit last year.

Tiffany & Co chairman and chief executive officer Michael Kowalski commented:
“As an e-commerce leader, eBay has a responsibility to protect consumers and promote trust in its marketplace. eBay knew that counterfeit merchandise was being sold on its site – and eBay took no effective steps to stop it. eBay deliberately misled consumers for profit, and unfortunately, the court has justified its actions. The consumer is the real loser today."

However, Lake Forest, California-based National Trademark Investigations (NTI), offers a practical solution for consumers affected by trademark infringement. NTI recently launched the Web site “isitfake.org” as a collaborative tool for buyers to combat counterfeits. Visitors to the site can report suspected counterfeit goods anonymously on the “fake finder” and view a gallery of reported fakes.

According to Mike Santoni, president of NTI,
“Isitfake.org has been created to help combat the problem of counterfeiting in three ways. First, consumers can reach out for help determining whether an item they have purchased is legitimate branded merchandise, or a knock-off. Secondly, each time isitfake.org is able to conclusively identify and report on a counterfeit, it adds to the searchable gallery on the site as a resource for the public. And finally, it provides brand owners with a new source of information about knock-offs that they can use in their anti-counterfeiting efforts.”