In many copyright infringement cases, there is a bit of gray area. Perhaps the accused did not realize they were infringing on another’s intellectual property. Or they believed that their usage was allowed due to parody or educational purposes.

This is not what happened a few months back in Shanghai.

Since August 2022, the Shanghai Public Security Bureau’s Economic Investigation Team has been investigating toys sold through an online store – toys they suspected were infringing on Lego’s copyright.

Recently, the team pounced, capturing “30 suspects, demolish[ing] 8 criminal dens, seiz[ing] more than 600 types of infringing toys, more than 1.2 million pieces in total, and more than 200 molds, involving 1.7 billion yuan.” 

Apparently, those responsible copied the Lego block mold, registered their own toy brand, and even created their own 1:1 design drawings. They profited by significantly underselling their version of Legos online. It was a bold, comprehensive criminal endeavor — and the perfect example of why we need to protect our intellectual property from infringers.

A Lot of Fake Legos Means a Lot of Potential Impact

Since the Shanghai Public Security Bureau tracked down the infringers and put them out of business, Lego never had to make a copyright infringement claim. However, this case illustrates a number of reasons why they might have wanted to file a claim if the police had not intervened:

Loss in profit. The criminal family behind the infringement made 1.7 billion yuan from this enterprise. Who knows how much of those profits Lego could have scooped up if the criminal enterprise had never existed?

Loss in reputation. In theory, those responsible made pretty perfect copies of Legos – but what if the toys in question were of shoddy quality? If consumers believed those products actually came from Lego, that could really harm the company’s reputation. Similarly, if they reached out for help over toy defects and received no response, that might also sour their opinion of Lego – despite the fact that the company had nothing to do with the counterfeit toys.

Marketplace confusion. There is some overlap here with loss of reputation, but, in general, it is quite common for fake products to result in consumer confusion – basically, people are not sure if they are actually buying the product they want. This can create a shakiness in transactions: “Am I buying from the real Lego or the fake Lego?”

This Is Not Just a Copyright Infringement Problem in Shanghai

China may be well known for knockoff products of established brands, but this kind of thing happens outside their borders, too. Amazon is infamous for poor quality control on the products allowed onto their site internationally, including imitation products that present themselves as the real thing.

All of this highlights why you should protect your intellectual property with vigilance. Consult an IP attorney to help you fight the creation of counterfeit products by establishing proper protections in place, and enlist their help to fight back when you discover counterfeit goods and/or copyright infringement.