Inside the Temple of Heaven, one of the Chinese capital's key tourist attractions, vendors sell unlicensed Olympic hats for as little as 70 cents each.

Even in regions far from where the 2008 Olympics will be staged, entrepreneurs have slapped Olympic symbols on anything that sells. At one produce stand in central China's Henan Province, five potatoes were deliberately laid out in the Olympic formation — three in the top row, two centered on the bottom. When one was sold, another was put in its place.

Less than 6 months after the International Olympic Committee voted to give China the hosting duties for the 2008 Summer Games, the nation's merchants are hard at work — violating the copyright of anything even remotely related to it.

But it's just a symptom of one of China's biggest challenges leading up to its most prestigious international moment: Can a nation where piracy and copyright infringements are rampant protect the trademarks of the IOC and the sponsors who will pay millions to be associated with the 2008 Olympics?

"Beijing will not want to make fools of themselves. They will want to get this right," says Rob Deans, an attorney who handles sports-related copyright cases for the Hong Kong-based firm Bird & Bird.

To get it right requires altering the nation's collective conscience on intellectual property rights, an enormous task because local authorities often protect and defend copyright violators as entrepreneurs who are providing precious jobs for local people.

"In China, this is a very difficult job," admits Gong Xiao Jie, an official with the Beijing Olympic Bidding Committee who is working on the marketing plan for the 2008 games. "I think this situation will get better because the economy of China now is growing bigger and bigger and becoming more modern. And this country does not want to offend the IOC."

IOC officials say they are confident China can get its act together in time for the Olympics. IOC marketing director Michael Payne points to new laws put in place in the past month to beef up trademark restrictions and enforcement, including one by the Beijing municipal government protecting terms such as "Olympics," "Olympiad" and "Beijing 2008."

Beijing also promised to give the IOC control over outdoor advertising in the city for the 2 months surrounding the games and TV advertising on state-owned China Central Television for 3 weeks.

But the city itself has misused Olympic symbols, too. Even before the IOC's mid-July decision to pick Beijing, the city planted hundreds of trees along major thoroughfares and covered their roots with metal gratings engraved with the five-ring logo.

Payne shrugs off such incidents, insisting that the IOC wouldn't object to using its symbol in conjunction with efforts to beautify the city anyway. And he noted that most of the Beijing Olympic imagery now in use involves the city's official bid logo. The official host-city logo won't be picked at least until next year.

"I am well aware of the recent track record of trademark protection issues in China, but I'm also very encouraged by discussions so far about what needs to be done," says Payne, who met with Gong and others in October to discuss trademark protection. "There are high expectations and hopes that the Olympics will be an important catalyst for China's trademark protection, just as it was in Korea."

Indeed, Payne and others frequently draw comparisons between today's China and the South Korea of the early 1980s, when the IOC picked Seoul to host the 1988 games. Both were developing nations weak on intellectual property rights protections but motivated to shape up. Payne says he was able to go into South Korea in 1983 and "literally write the trademark laws for that country."

That analogy makes IOC executive board member Un Yong Kim cringe. Kim, president of the Korean Olympic Committee and a key player in the 1988 games, says the similarities are limited because South Korea was farther along on intellectual property rights protections when selected.

"Korea was already far more integrated into the world economy, far more involved," Kim says. "The Olympics were the most important event for Seoul, as it will be for China, but I don't think you can compare a country of 20 years ago to a country of now."

Still, Westerners who own businesses in China are anxious to see if the country can progress as well. Many are encouraged by early signs, including the enactment this month of laws to provide more efficient ways to prosecute those who make and sell counterfeit products.

"It's almost a different country now than it was 6 years ago, and I think it will be a different country when the Olympics come," says Emory Williams, an American Chamber of Commerce in China board member. He says the Olympics, for which the government pays the bill and will want a return on investment, may make enforcement a priority. Some observers think the Olympics will serve as proof of whether China meets the intellectual property protections that had to be in place before it joined the World Trade Organization this year.

"I see more laws being put into place for the Olympics and the WTO," Deans says. "Beijing will get there. If I were a sponsor, I would consider intellectual property rights an issue, but I wouldn't look at the situation now. I'd look at what it will be like by 2008."

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