Lego vs Lepin: Acting upon counterfeiting in China

Lepin has been selling imitations of Lego products under the LEPIN brand since 2015 (as well as having this trademark registered everywhere). Not only the products are exact imitations, the packaging as well. In two years approximately 4.25 million products were sold worldwide at a quarter of Lego’s price. Lego has been combatting counterfeit for years. When the LEPIN trademark got cancelled in England in 2019, a ban was issued in China on production of the counterfeit products.

 

At a police raid of Lepin's factory, 88 molds and 290,000 boxes were seized. In the following lawsuit, 9 people are sentenced to imprisonment. The main suspect was sentenced to 6 years in prison, as well as a receiving a fine of approximately 14 million US dollars.


The Shanghai Court recently confirmed this decision, stating that copyright infringements are also harmful to the socialist market. In practice, enforcement of IP rights is on the rise in China.


Courts can, by law, impose a fine of 100-500% of the profit gained or 50-100% of the total turnover (depending on the extent of the infringement/loss of the owner). Anticipate this and register your most important IP rights in China, especially if part of the production is placed there.

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IP quiz Trademarks

Puma is one of the bigger sports and lifestyle brands in the world. The core-business is the design, development and sale of (sports) shoes, (sports) clothing and accessories. In 1960, Puma registered an international trademark for a device designed in 1958: the formstrip. Since then, Puma has registered approximately 90 formstrip trademarks with validity in the Benelux or the European Union. Puma claims that this is a serial mark. Monshoe is a wholesaler of women's shoes and related products. The company designs and develops Monshoe shoes which it largely markets itself. Monshoe sells its women's shoes under the brands Shoecolate and Pearlz. The shoe Shoecolate is offered in various colour combinations. Puma claims that Monshoe infringes its well-known formstrip trademark. Monshoe contradicts this and states that the average consumer will not perceive the device of Monshoe on the sneakers as a trademark. And if the public will recognize a trademark in the decoration, it will not make the connection to Puma. According to Monshoe, the formstrip logo is not a well-known trademark within the meaning of the BVIE and the UMVo. There is no likelihood of confusion because the sign does not or hardly evoke any association with Puma among the public. In light of the above, who is right? Does this constitute decorative use or linking to a well-known trademark?