Do the copycat Apple stores in China harm Apple?

News of fake Apple stores in China sparked a media frenzy last month, with calls of massive intellectual property infringement. Of the five fake stores in Kunming, two were shut down, but for lacking official business licenses, not for who they were pretending to be. More interestingly, according to reports, the Apple products sold at these stores were the real deal. That these stores were and are selling real Apple products complicates the question of whether there are legal claims to be had for copyright infringement.

When it comes to the typical pirating case, there needs to be a loss of some kind for there to be a case. The damages the rights holder receives is generally calculated based on the losses to the rights holder that the pirated goods caused. For instance, a customer buying a fake Louis Vuitton handbag would mean Louis Vuitton loses out on the profits had the customer purchased a real handbag.  If caught and condemned in court, the pirator would generally have to compensate Louis Vuitton for the losses he/she/they caused. In the Apple case, however, with fake stores selling real products, exactly what harm was caused to Apple?

There are legitimate channels through which Apple products can be acquired wholesale for re-selling. In such cases, what is really unauthorized is the store, not the products themselves.

Indeed, many of the most successful brands have invested millions in building images which encapsulate ideals, values and aspirations, which in turn creates valuable and loyal customer bases that, at times, can even turn into fandom. That a small entrepreneur would want to get a piece of that marketing gold without paying its dues seems to be frowned upon. But the purpose of having a modern, sleek and recognized store set-up isn’t just to look modern and sleek, but ultimately, to sell their products. So again, if copying Apple’s store format helps sell legitimate Apple products, what harm does Apple suffer?

The real concern, with such acts of mimicry, is that brands have no control over how customers experience their brands while in the store. A poorly-made spiral staircase or inadequately trained staff, for instance, may cheapen Apple’s image to the customers who visit. If that is the case, then Apple has reason to step in. But IF the copycat store is done well, and the products sold are genuine, though my gut reaction says it is still wrong, I can’t think of what harm Apple may suffer in that case.