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June 29, 2017

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Angry Birds sweet-talk pirates in booming mainland market

The firm is planning to unleash a blitz of retail stores and Angry Birds "activity parks" in China starting next month.

Paul Chen, Rovio's General Manager, China, says the company is concerned about infringement on its intellectual property and does go after some pirates, especially those found to produce harmful goods.

But, he adds: "We tend to want to collaborate."

Rovio says it is recruiting some IP infringers to be partners, and even offering some of them free ad space on the Angry Birds app.

It also now sells officially licensed Angry Birds balloons after Vesterbacka saw a pirated one for sale in Beijing earlier this year and liked the idea. He calls it "pirating the pirates."

"This actually can be a successful model," said Xiang Wang, an IP lawyer with the firm Orrick. Makers of shoes, integrated circuit chips and laminated flooring are among those that have successfully co-opted counterfeiters in China, he said.

The alternative — attacking pirates in court — can be a morass. "You can win on paper, but paper means nothing. When you go to enforce it, local companies pay the judges, they pay the local government officials, so enforcement will take years," Wang said.

Initial Strategy

Mayer Brown's Wong likens Rovio's enthusiasm about knockoffs to the way new stars court media attention: Early on, there is no such thing as bad press, but that eventually changes.

"Once you reach a certain level you don't want the paparazzi to be around all the time," he said.

"I think probably it's an initial strategy."

Eventually, Rovio may have to change tack, because companies can only license so many counterfeiters, Orrick's Wang said. But the counterfeiters-turned-licensees could at least be enlisted to help take on the remaining pirates, he said.

Rovio's retail strategy — going from zero to about 100 stores in the next year or so, starting in Shanghai next month — is another element of its strategy against fakes.

The shops will sell unique goods, and purchases of official gear will unlock "digital rewards" in the game, Chen said.

But the challenge goes beyond hoodies and key chains.

Last year, reports emerged that an entirely fake Angry Birds theme park had opened in the southern Chinese city of Changsha, in Hunan province, replete with a giant slingshot.

Could this eventually become a real Angry Birds park?

"It's not out of the question," said Vesterbacka.

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