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Chinese visitors enjoy a ride at the Happy Valley theme park in Beijing.

STR/AFP / Getty Images

As China moves from a culture of fakes to a culture of innovation, the copycats are also getting more creative - designing better and better knockoffs that pose an increasingly stiff challenge to foreign companies that do business there. From fake iPods to phoney Apple stores, Chinese pirates are moving up the value chain.



In the low green hills of eastern China near Changzhou, China may be pushing the boundaries of piracy even further with a theme park based on the global online gaming blockbuster, World of Warcraft -- a dream come true for gamers, in a country where addiction to the internet is so common that it is treated in hospital.

Dominating the Joyland park is a section called Mo Shou Da Lu, a World of Warcraft lookalike whose name incorporates a trademark registered in China by the WoW owners, Blizzard Entertainment, for use in connection with things such as amusement parks.

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The park has Taobao Street - which has stores whose staff say they are authorized Disney, Ultraman and Hello Kitty retailers. And in the World of Warcraft section - with its distinctive neo-medieval architecture and sombre colour scheme - visitors are greeted by a sweaty young man on stilts wearing a wolf's head.



"That's Wolfman!" says a passing youth, naming a popular World of Warcraft character.



Visitors can take a tour of World of Warcraft landscapes in the Journey of Dangers ride and buy a $250 WoW sword from a storekeeper who claims the merchandise is authorised by Blizzard.



Blizzard says it is "looking into the situation" at the park but did not license its intellectual property to the attraction. Huanqiu Dongman Xixi Gu, the company that operates the park, declined to comment.



One WoW fan says the park is "80 per cent" similar to the game: but 80 per cent may not be enough to make it a violation. Legal experts say determining when a fake violates the law is never an easy question in any country. In China, it is arguably even harder - and winning such cases is tough because courts often use the law as a tool of local favouritism.



Beijing says it wants to crack down on piracy, and has held a nine-month anti-piracy campaign closing down 12,000 factories making counterfeit products. But many foreign companies think it is useless to try to protect their intellectual property in China, says Horace Lam, an IP expert at the law firm Jones Day in Beijing. "A lot of U.S. companies complain about how bad the situation is in China", he says. "But their IP protection is a joke".



Starbucks, for example, failed to register its Chinese trademark, Xingbake, before a rival, which opened cafés bearing a lookalike Starbucks logo and the same Chinese name. Starbucks eventually won that case, partly because Xingbake has no meaning independent of its connection with the U.S. coffee company - but other businesses with less distinctive trademarks might not be so lucky, legal experts say.

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The Joyland park is arguably an example of a new kind of Chinese copying: "shanzhai": fakery, but with value added, such as taking a virtual world, and recreating it in the Chinese countryside. The head of the China National Copyright Administration, Liu Binjie, says "shanzhai shows the cultural creativity of the common people. It fits a market need, and people like it."



Elliot Papageorgiou, of the IP law firm Rouse in Shanghai, says some element of copying has always been part of innovation: "As Sir Isaac Newton said, 'If I have seen a little further it is by standing on the shoulders of giants' ". Making money from the intellectual property of others is permitted in China - so long as that use of the IP is not protected by law.



Joyland is where China's new culture of innovation meets the old culture of copying - in a no man's land where foreign companies will increasingly have to learn to operate.

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