Apple takes aim at copycat fake retail stores with new lawsuit

Posted:
in General Discussion edited January 2014
After a number of fake Apple retail stores in China gained publicity online, Apple appears to have taken legal action, undoubtedly looking to shut down the counterfeit locations designed to look like its own operations.



Apple has gone on the offensive against a number of defendants, including 50 John Does and unnamed businesses, in a new trademark infringement suit. The lawsuit filed in U.S. District Court in the Eastern District of New York remains under a court seal, so the specifics of the complaint are not known.



However, one of the defendants in the case is "Apple Story Inc.," matching the name of a retail outlet that mimics Apple's own highly successful retail operation. "Apple Story" is located in the neighborhood of Flushing in Queens, New York; Apple's lawsuit was filed in Brooklyn.



A photo of the "Apple Story" store, submitted to BirdAbroad, shows accessories for Apple products held in displays designed to look like Apple's iPhone and iPad.



Based on the photo, the New York store does not appear to go to the same great lengths taken by some highly elaborate fake stores in China. A handful of locations in the city of Kunming look nearly identical to Apple's legitimate stores, and employees at the fake locations even wear signature blue t-shirts.



AppleInsider attempted Thursday afternoon to contact Samuel Joseph Chuang, the attorney representing defendants Apple Story Inc., Fun Zone Inc., and Janic Po Chiang, to confirm the exact nature of Apple's lawsuit. A request for comment was not returned as of the time of publication.



Because the lawsuit is sealed, it is unknown whether this particular complaint, filed on July 25, also targets the elaborate overseas operations. It's possible that Apple does not yet know who runs those stores, and could be included in the 50 anonymous John Does that are named as defendants with no attorney listed.



"Apple Story" store in Flushing, New York. Credit Greg Autry via BirdAbroad.



Also named as a defendant in the case are generic "XYZ Businesses," with no total number given. Finally, a person named Jimmy Kwok is also listed as a defendant with no attorney.



Apple is represented by New York-based attorneys Mark N. Mutterperl and Todd Ryan Hambridge of the firm Fulbright & Jawardi LLP.



The case's docket report reveals that Apple's legal team spoke with defense attorney Chuang on Tuesday of this week, and both gave the court consent that the case be unsealed, which is how its existence was discovered by AppleInsider. However, the documents will remain sealed with access only to counsel and the court, leaving the exact details unknown.



Fake Apple store in China. Credit: BirdAbroad



After the fake Apple Stores in China garnered attention around the world, city officials in Kunming began investigating the retail locations. Outraged customers duped by the operations also reportedly returned, demanding proof that their purchases were genuine Apple products and not cheap knock-offs.



Two of the fake retail locations were ordered to close by the government because they did not have official businesses permits. But those stores were allegedly not found guilty of any copyright infringement in China.
«1

Comments

  • Reply 1 of 37
    evilutionevilution Posts: 1,374member
    It makes me laugh that every time AI bring up the story of the fake Apple shops they can't help but mention the blue shirts.



    "even wear signature blue t-shirts."



    I doubt even Apple can stop retailers wearing blue shirts. I can just imagine the scenario...



    "Hey Steve, we've just found a fake Apple shop, take a look at these pictures"

    "OH MY GOD! They have even managed to get hold of our blue shirt technology"







    Jeez, even I can fake a blue shirt, the Chinese copycats are way ahead of copying clothing.
  • Reply 2 of 37
    lamewinglamewing Posts: 742member
    I have used Apple computers since 1985 and I have about had it with their strong-arm tactics the last few years. I am seriously considering giving up on Apple products entirely. That Apple Story store looks NOTHING like an Apple Store. Where do they get off on suing these guys. So no we need to add the word Apple (Not Apple Computers, not Apple, Inc.), just Apple...to the "hands-off" list. Disgusting. No, Apple is not loosing money, nor are the customers "confused" as to whether this is an official Apple Store or not. Nonetheless, I am sure that will be part of Apple's complaint.
  • Reply 3 of 37
    Quote:
    Originally Posted by lamewing View Post


    I have used Apple computers since 1985 and I have about had it with their strong-arm tactics the last few years. I am seriously considering giving up on Apple products entirely. That Apple Story store looks NOTHING like an Apple Store. Where do they get off on suing these guys. So no we need to add the word Apple (Not Apple Computers, not Apple, Inc.), just Apple...to the "hands-off" list. Disgusting. No, Apple is not loosing money, nor are the customers "confused" as to whether this is an official Apple Store or not. Nonetheless, I am sure that will be part of Apple's complaint.



    Should probably wait for full details of the lawsuit to come out before you get too worked up. Apple may be happy if 'Apple Story' simply changes the store name, but who knows?we'll see when we actually have some decent information to discuss.
  • Reply 4 of 37
    Quote:
    Originally Posted by lamewing View Post


    I have used Apple computers since 1985 and I have about had it with their strong-arm tactics the last few years.



    It's my understanding that if you hold a trademark on a given term, you must make some effort to defend the mark or you will risk losing the trademark protection, even if you "don't really care" that someone is using a similar name to your trademark. That may be why Apple is doing as they are in the case of the "Apple Story" business.



    It should be interesting to see how the whole "fake store" thing plays out.
  • Reply 5 of 37
    cloudgazercloudgazer Posts: 2,161member
    Quote:
    Originally Posted by lamewing View Post


    I have used Apple computers since 1985 and I have about had it with their strong-arm tactics the last few years. I am seriously considering giving up on Apple products entirely. That Apple Story store looks NOTHING like an Apple Store. Where do they get off on suing these guys. So no we need to add the word Apple (Not Apple Computers, not Apple, Inc.), just Apple...to the "hands-off" list. Disgusting. No, Apple is not loosing money, nor are the customers "confused" as to whether this is an official Apple Store or not. Nonetheless, I am sure that will be part of Apple's complaint.



    To you it looks completely different to an Apple store, to the hapless customers who hadn't been in a real store though it would look entirely convincing. The fact that customers freaked out when they found out it was a fake indicates at least some of them were misled.
  • Reply 6 of 37
    jkichlinejkichline Posts: 1,336member
    Quote:
    Originally Posted by lamewing View Post


    I have used Apple computers since 1985 and I have about had it with their strong-arm tactics the last few years. I am seriously considering giving up on Apple products entirely. That Apple Story store looks NOTHING like an Apple Store. Where do they get off on suing these guys. So no we need to add the word Apple (Not Apple Computers, not Apple, Inc.), just Apple...to the "hands-off" list. Disgusting. No, Apple is not loosing money, nor are the customers "confused" as to whether this is an official Apple Store or not. Nonetheless, I am sure that will be part of Apple's complaint.



    It is the responsibility of companies who own trademarks to defend them or risk losing them. They are doing what they are obligated to do as a corporation. Please try to calm down as this is business.
  • Reply 7 of 37
    newbeenewbee Posts: 2,055member
    Quote:
    Originally Posted by Evilution View Post


    It makes me laugh that every time AI bring up the story of the fake Apple shops they can't help but mention the blue shirts.



    "even wear signature blue t-shirts."



    I doubt even Apple can stop retailers wearing blue shirts. I can just imagine the scenario...



    "Hey Steve, we've just found a fake Apple shop, take a look at these pictures"

    "OH MY GOD! They have even managed to get hold of our blue shirt technology"







    Jeez, even I can fake a blue shirt, the Chinese copycats are way ahead of copying clothing.



    Apparently you didn't even bother to look at the photo of the "fake" blue shirt with a very prominent and realistic Apple Logo on the front. Now that you're armed with more accurate info ... do you still feel like laughing? Well, do you ?
  • Reply 8 of 37
    newbeenewbee Posts: 2,055member
    Quote:
    Originally Posted by lamewing View Post


    I have used Apple computers since 1985 and I have about had it with their strong-arm tactics the last few years. I am seriously considering giving up on Apple products entirely. That Apple Story store looks NOTHING like an Apple Store. Where do they get off on suing these guys. So no we need to add the word Apple (Not Apple Computers, not Apple, Inc.), just Apple...to the "hands-off" list. Disgusting. No, Apple is not loosing money, nor are the customers "confused" as to whether this is an official Apple Store or not. Nonetheless, I am sure that will be part of Apple's complaint.



    You're obviously not a lawyer or you would understand how trademark/copyright infringement works. If it was "your ox being gored" you might feel differently, I imagine.
  • Reply 9 of 37
    Quote:
    Originally Posted by newbee View Post


    Apparently you didn't even bother to look at the photo of the "fake" blue shirt with a very prominent and realistic Apple Logo on the front. Now that you're armed with more accurate info ... do you still feel like laughing? Well, do you ?





    The store with the blue shirts is not part of the lawsuit. They are in China. The Eastern District of New York has no more jurisdiction over the blue shirted store than the Chinese government has over Apple's United States stores.



    Now that you are armed with more accurate info...
  • Reply 10 of 37
    Quote:
    Originally Posted by Evilution View Post


    It makes me laugh that every time AI bring up the story of the fake Apple shops they can't help but mention the blue shirts.



    "even wear signature blue t-shirts."



    I doubt even Apple can stop retailers wearing blue shirts. I can just imagine the scenario...



    "Hey Steve, we've just found a fake Apple shop, take a look at these pictures"

    "OH MY GOD! They have even managed to get hold of our blue shirt technology"







    Jeez, even I can fake a blue shirt, the Chinese copycats are way ahead of copying clothing.



    I never thought of it in such a way, that is hilarious



    My only problem with the fake stores is that they are not as good as the apple ones ie. they mentioned how some of the nock off iconic stuff shows flaws. That and the training is not the same. Not to mention that they do not say "official apple re-seller" because any mistakes these businesses make can have a negative impact on their clients. I'm positive no business would let a mistaken look alike potentially damage their image.
  • Reply 11 of 37
    charlitunacharlituna Posts: 7,215member
    Quote:
    Originally Posted by lamewing View Post


    I have used Apple computers since 1985 and I have about had it with their strong-arm tactics the last few years. I am seriously considering giving up on Apple products entirely. That Apple Story store looks NOTHING like an Apple Store. Where do they get off on suing these guys. So no we need to add the word Apple (Not Apple Computers, not Apple, Inc.), just Apple...to the "hands-off" list. Disgusting. No, Apple is not loosing money, nor are the customers "confused" as to whether this is an official Apple Store or not. Nonetheless, I am sure that will be part of Apple's complaint.



    You may think it lame but Apple does have a trademark for the name Apple when associated with this type of product. They also have a trade look and feel trademark on the store design.



    Aside from these issues there is the preception that a store selling iPods etc with the term Apple in the name must be authorized. When in fact they might not. And things bought from a non authorized shop are not covered under warranty
  • Reply 12 of 37
    Quote:
    Originally Posted by AppleLover2 View Post


    The store with the blue shirts is not part of the lawsuit. They are in China. The Eastern District of New York has no more jurisdiction over the blue shirted store than the Chinese government has over Apple's United States stores.



    Now that you are armed with more accurate info...



    Strawman argument.
  • Reply 13 of 37
    Quote:
    Originally Posted by charlituna View Post


    You may think it lame but Apple does have a trademark for the name Apple when associated with this type of product. They also have a trade look and feel trademark on the store design.



    Aside from these issues there is the preception that a store selling iPods etc with the term Apple in the name must be authorized. When in fact they might not. And things bought from a non authorized shop are not covered under warranty







    It is perfectly legal to use the name Apple, even "associated with this type of product". For example, any retail store can put up a sign saying "Apple products for sale" if such a claim is truthful. Just like anybody can ask "Want to buy my used iPod?"



    And if "Apple Country Farmstand" also sells iPods beside their produce, they should not have any problems.



    Finally, if I buy a brand new unopened Apple product, it should be covered under warranty, even if Apple de-authorized the reseller the prior day.
  • Reply 14 of 37
    Quote:
    Originally Posted by Doctor David View Post


    Strawman argument.



    How so?
  • Reply 15 of 37
    newbeenewbee Posts: 2,055member
    Quote:
    Originally Posted by AppleLover2 View Post


    The store with the blue shirts is not part of the lawsuit. They are in China. The Eastern District of New York has no more jurisdiction over the blue shirted store than the Chinese government has over Apple's United States stores.



    Now that you are armed with more accurate info...



    If you take the time to read all the lines .... you might find this:



    Because the lawsuit is sealed, it is unknown whether this particular complaint, filed on July 25, also targets the elaborate overseas operations. It's possible that Apple does not yet know who runs those stores, and could be included in the 50 anonymous John Does that are named as defendants with no attorney listed.





    Now that you are armed with more accurate info..
  • Reply 16 of 37
    tleviertlevier Posts: 104member
    It was my understanding that the fake store in China was selling authentic Apple products.



    The obvious questions that don't seem to be answered are:



    1) Are they an Authorized Re-seller

    2) If not, how do they obtain the products

    3) Did I read somewhere that their prices match Apple's listed online prices?

    4) If so, how do they obtain the products at a low enough cost to earn a profit?



    5) If the answers above lead to buying and selling stolen goods, where is the investigation into criminal activity?



    6) Let's assume you are an Authorized Re-seller. Would you be able to design your store any way you like? What requirements would Apple put on the appearance of your store? Beyond requiring a clear sign that says "Authorized Re-seller" - would Apple dictate that you not use wood tables, not display the products and encourage you to sell other things that Apple doesn't approve of?



    7) Let's assume another Authorized Re-seller. Have a po-dunk small store as the official "Front" of your operations. Get enough product to stock 3 stores. Your other 2 stores you copy cat Apple and that's where you really sell your product, while the 1st and only official re-seller store is where you maintain your Apple relationship. Is that possible?
  • Reply 17 of 37
    flaneurflaneur Posts: 4,521member
    Quote:
    Originally Posted by newbee View Post


    If you take the time to read all the lines .... you might find this:



    Because the lawsuit is sealed, it is unknown whether this particular complaint, filed on July 25, also targets the elaborate overseas operations. It's possible that Apple does not yet know who runs those stores, and could be included in the 50 anonymous John Does that are named as defendants with no attorney listed.





    Now that you are armed with more accurate info..



    In his job to get out 10 posts a day, he hardly has time to read the article or the thread. See his post in yesterday's thread on QuickTime for Windows and Leopard.
  • Reply 18 of 37
    bjojadebjojade Posts: 91member
    Quote:
    Originally Posted by tlevier View Post


    It was my understanding that the fake store in China was selling authentic Apple products.



    The obvious questions that don't seem to be answered are:



    1) Are they an Authorized Re-seller

    2) If not, how do they obtain the products

    3) Did I read somewhere that their prices match Apple's listed online prices?

    4) If so, how do they obtain the products at a low enough cost to earn a profit?



    5) If the answers above lead to buying and selling stolen goods, where is the investigation into criminal activity?



    6) Let's assume you are an Authorized Re-seller. Would you be able to design your store any way you like? What requirements would Apple put on the appearance of your store? Beyond requiring a clear sign that says "Authorized Re-seller" - would Apple dictate that you not use wood tables, not display the products and encourage you to sell other things that Apple doesn't approve of?



    7) Let's assume another Authorized Re-seller. Have a po-dunk small store as the official "Front" of your operations. Get enough product to stock 3 stores. Your other 2 stores you copy cat Apple and that's where you really sell your product, while the 1st and only official re-seller store is where you maintain your Apple relationship. Is that possible?



    1. No, they are not authorized resellers.



    2. They likely obtain their machines from another (or multiple other) resellers that will sell at a discount to them, risking their own authorizations



    3. Most likely they would price their products similarly to Apple. If you priced higher, you wouldn't get many sales.



    4. They either obtained products from another reseller at a slight discount. The other reseller is risking their authorization by doing so. They may also be obtaining 'grey market' products that are destined for other countries. Using exchange rates to their advantage, they could undercut Apple pricing depending on where they came from.



    5. They very well might be dealing with stolen or counterfeit goods, especially on accessories. Accessories are way easier to counterfeit than computers.



    6. Yes, Apple DOES dictate that resellers have their own designs. They are very clear that you cannot match the look and feel of an Apple store. Tables looking like Apple's are forbidden.



    7. Apple exhibits amazing control of their reseller channel. If suddenly they saw you moving a ton of merchandise through some po-dunk store, you can be sure they would investigate. Any time there are sales anomalies, they will ask questions. If you don't have a legit answer, you can say goodbye to your authorization.
  • Reply 19 of 37
    kreshkresh Posts: 379member
    Steve believes in Eastern Mysticism and it looks like there may be something to it. The more wacky Apple gets the more he looks like death warmed over.





    Steve, don't look now but it looks like Karma's catching up with ya. Keep it up and you will be pushing up daisies!
  • Reply 20 of 37
    lyrradlyrrad Posts: 3member
    Under US Trademark/Competition law, a business can protect the aspects of their business that make it unique.



    At the most basic level, the law comes down to a likelihood of confusion test, looking at whether a normal consumer would make an incorrect assumption about the source of the competing goods or service.



    So, while it wouldn't be actionable for a business to sell Apple computers while wearing blue shirts, the overall look and feel of the store can be protected under US law.



    Competition law differs a lot between countries, and in the US is covered by both state and federal laws, so what is protectable in one jurisdiction may not be in another.
Sign In or Register to comment.