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China's craziest counterfeits

Credit: Taobao, Alibaba Group

Following the launch of the hotly-anticipated Apple Watch, you might be surprised to learn that versions were already on sale… in China.

Shortly after the Apple Watch was formally announced, fake "Apple" watches were selling for between $40 and $80 – a fraction of Apple's asking price of at least $349 – on Taobao, a Chinese e-commerce website owned by online retail giant Alibaba.

From copycat cars to a duplicate Disneyland, China has long been home of some extravagant counterfeits. Here, with the help of trademark attorney Tina Rees-Pedlar, and brand protection experts, OpSec Security's Bill Patterson, and BrandProtect's Greg Mancusi-Ungaro, CNBC has compiled a list of some the craziest.

Written By Alexandra Gibbs, CNBC.com

Duplicate Disneyland?

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The "Beijing Shijingshan Amusement Park" opened its doors in 1986 with the tagline: "Disneyland is too far."

With a castle reminiscent of Sleeping Beauty's, and roaming characters almost identical to Donald Duck and Snow White's dwarves, you'd be forgiven for thinking you were in the original Disneyland.

In 2007, Disney caught on and began negotiations with the park about removing its trademarks due to copyright infringement. China Daily reported in 2011, that instead of closing, the amusement park had taken on "a massive overhaul and expansion" with a recent visitor saying there seemed to be no sign of Disney-themed mascots' roaming the park.

"The similarities between the characters in Shijingshan and the well-known Disney characters are striking," Tina Rees-Pedlar, trade mark attorney at Marks & Clerk, an intellectual property firm, told CNBC.

"However, the example shows that not everything needs to result in a messy legal battle. Sometimes negotiation can be more constructive for commercial reasons than taking legal action."

Is this really an Apple Store?

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When U.S. blogger Jessica Angelson wrote about a handful of "Apple stores" that had appeared in Kunming City, China in 2011, it's unlikely she knew the future impact of her writing.

The stores looked almost identical to Apple's official ones, with similarities across everything from the staff's uniform to interior design; perhaps unsurprisingly, China's State Administration for Industry and Commerce (SAIC) was keen to investigate.

The officials found that 22 stores in Kunming were using the Apple trademark without permission. It was reported in Angelson's "BirdAbroad" blog, that even the staff didn't know the stores were acting unlawfully.

"This highlights how ambitious the 'fakes' market can be in China," Rees-Pedlar said. "However, it also shows there are processes in place to protect rights holders. With the assistance of local SAIC, the unauthorised Apple stores were removed from trading."

Doppelganger drinks

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Perhaps one of the most worrying copycat trends in China is that of premium alcohol.

In November 2014, there was a string of raids in China, designed to crack down on the sale of counterfeit alcohol, according to the China Daily news website. Officials discovered more than 100,000 bottles of fake alcohol – complete with forged labels – imitating brands including Johnnie Walker, Hennessy and Remy.

With ingredients such as as nail polish remover, cleaning fluids and Methanol, these drinks can sometimes be lethal. Side effects can vomiting, dizziness and nausea, and methanol can even cause permanent blindness and irreversible harm to the kidneys and liver.

Greg Mancusi-Ungaro, Chief Marketing Officer at BrandProtect, says that "frauds like these depend on the creation of a trusted relationship – in this case, the iconic brands of these premium spirits generate much of the trust. Coupled with what we can assume to be an unbeatable price, make this a very believable scheme.

In terms of businesses, OpSec Security's Bill Patterson, says "retailers and establishments should buy only from reputable distributors or the manufacturer itself. Manufacturers should also take brand protection measures such as marking bottles with unique identifiers that allows for easy tracking of the supply chain."

Copycat cars

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At the Shanghai Auto show in 2009, Geely, a Chinese automotive manufacturer, revealed its latest car: the Geely GE. The launch raised a lot of eyebrows because the vehicle looked remarkably similar to the Rolls Royce Phantom.

Alongside the car body's structure and appearance, the Geely Ge even had the "flying lady" on its bonnet – usually thought to be a defining feature of a Rolls Royce. There was one main difference, however: the price. The Geely Ge cost only $44,550, compared to the Rolls Royce Phantom's retail price of $371,260.

Similarly, in 2014, Chinese car makers, Changan Auto and Jiangling Motors Corporations, created the LandWind X7 ($20,700) which had striking similarities to Jaguar Land Rover's Range Rover Evoque ($59,000+).

The British car maker's Chief Executive, Ralf Speth, told Autocar magazine that this type of copying in China was "very disappointing."

BrandProtect's Greg Mancusi-Ungaro, says "This scheme moves far beyond mass-market scams and into the realm of the long con - 'If you like this car, could I interest you in some Florida real estate, or perhaps you could provide some assistance to my uncle in Nigeria?' -- Both in terms of the number of people who are likely to be taken in, and in the effort it takes to successfully conclude the fraudulent transaction, the copycat Rolls-Royce is more humorous than threatening."

Counterfeit microchips

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In 2011, the U.S. Senate Armed Services Committee identified large swathes of counterfeit electronics parts in the Department of Defense's supply chain, most of which were suspected to come from China. Defense contractors identified 1,800 cases of suspected counterfeit parts, covering a total of 1 million individual parts.

"Of those 1,800 cases, we selected about 100 to track backwards through the supply chain. So where did the trails ultimately lead? The overwhelming majority, more than 70 percent, led to China," the committee said in its report.

The report adds that these fake electronic parts were found in a number of weapon systems, including the Air Force's C-17 and C-130J aircrafts.

"If the U.S. military had protected their patents and design, they could utilise these to enforce protection both in China and with imports into the USA," Rees-Pedlar said. "If the products had been branded this would also assist with the recognition of counterfeit electronics and enforcement against counterfeits."

Cheap Christian Louboutin heels

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Christian Louboutin is no stranger to legal battles. Between 2011 and 2012, the luxury shoemaker sued Yves Saint Laurent over the trademark of its red-soled high heel. In the end, Christian Louboutin won trademark protection over the red sole, meaning that anyone who now uses this style is expected to pay a lot of cash.

In July 2012, the U.S. Customs and Border Protection seized a number of shipments from China containing more than 20,400 pairs of Christian Louboutin fakes.

The shoes had a domestic value of $57,490, according to the agency, and an estimated retail price of a whopping $18 million.

"Often available on illegitimate websites and underground outlets, counterfeit high fashion commodities multiply the illegal profits of smugglers and traffickers," the U.S. Customs and Border Protection said in a statement at the time.

"The public is misguided into believing they are buying an original product at a significant discount."

BrandProtect's Greg Mancusi-Ungaro, says that these are "powerful and very believable scams."

"The online components of these scams will no doubt use photography and designs ripped off of genuine Christian Louboutin websites. Social media, including Twitter and Facebook posts, plus email-based promotions would drive traffic to these sites, and consumers would be tricked into believing that they were buying these shows a steeply discounted prices," Mancusi-Unguro concludes.


Counterfeit Medicine

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Counterfeit medicine is still a problem in China today. In April 2014, Radio France Internationale (RFI) reported that 10 tonnes of counterfeit drugs that were supposed to be used to aid erectile dysfunction and diarrhoea had been confiscated by French Customs. According to the RFI and Reuters, the ingredient found inside the fake aspirin and anti-diarrhoea drugs were actually sugar, and was worth 1 million euros.

China finds that cracking down on counterfeit medicine is a top priority and works with both local governments and international organizations, to clamp down on this issue. With the introduction of the internet, 50 percent of drugs sold online are counterfeit and some of the drugs even had toxic substances, therefore an inter-ministerial cooperative taskforce was introduced in April 2009 to investigate online trading of fake drugs, according to the World Health Organization.

"Leaving aside the fact that providing counterfeit medicine is dangerous and immoral, the actions underline the importance of utilising custom systems in the EU by registering trademarks," Rees-Pedlar said.

OpSec Security's Bill Patterson, comments that "the sad truth is that one of the biggest reasons for pharmaceutical counterfeiting is that the legal penalties for counterfeit drugs are far less stringent than illegal drugs, making counterfeiting an attractive business proposition."

iPed

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Sound familiar? Released in 2010, the iPed is a tablet computer with many similarities to Apple's iPad.

The iPed sold for around $105, and was available in China before the U.S. tech giant's best-seller was allowed to be sold in the country. By comparison, an Apple iPad Air 2 currently sells for around £399 ($590).

"The iPed may have pre-dated the iPad in China, but it is still important to ensure design protection of products before they are launched," Rees-Pedlar said. "This will secure enforceable rights before the release of a product and protect your brand and sales performance."

Greg Mancusi-Ungaro, Chief Marketing Officer at BrandProtect, says "this scammer is taking a hot product, a product from a trusted manufacturer, an expensive, status-laden product, and preparing counterfeits to dupe unsuspecting customers."

"Apple is a particularly susceptible brand for these schemes, because their graphical and advertising identity is recognized globally. The simple, elegant Apple designs are relatively easy to mimic, which lends an air of authenticity to these counterfeiters schemes."

Counterfeit Restaurant Branding

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The word "shanzhai," which means the imitation of brands, or pirated goods, is so popular in China that in 2008 a property developer made the decision to create "Shanzhai Street" in Nanjing.

The area featured a series of copycat stores, including fast food chains, with restaurants called "Pizza Huh," "Bucksstar coffee" and "McDnoald's," according to the Wall Street Journal.

But it's not the only place in China where the restaurant logos look familiar. Beijing's popular fast food chain, Wei Jia Liang Pi, looks very similar to that of U.S. fast food giant, McDonald's – and its logo looks remarkably like an upside-down M.

But those in search of a Big Mac might be disappointed – the chain sells shredded meat burgers, cold noodles and Chinese noodle dishes.