1. Commerce
December 8, 2017

Lego has won a landmark legal battle against Chinese copycats

Lego has won a landmark copyright case against two companies producing knockoffs of its coloured toy bricks in China.

The victory marks the first time that the Danish toy maker has won an unfair competition case against Chinese copycats.

The Shantou Intermediate People’s Court ruled that the imitation goods sold by two Chinese companies and manufactured under the name Bela had infringed copyright law.

Peter Thorslund Kjær, vice president of legal affairs in the Lego Group, said that the latest ruling was “a strong indication of the continued focus on proper intellectual property protection and enforcement by the Chinese courts”.

“We think this is very important for the continued development of a favourable business environment for all companies operating in the Chinese market,” he added.

In July, the Beijing Higher Court ruled that Lego’s name and logo are well-known trademarks in China, putting the company in a better position to pursue copyright cases.

China’s wider problem with counterfeit goods

Lego is not the only company to come up against problems in China relating to copyright infringement.

Last month, Chinese police seized thousands of counterfeit Peppa Pig toiletries in the country’s eastern city of Yangzhou.

The fake products featuring the popular British cartoon character were produced by a manufacturer called Youlemei.

Youlemei issued an apology on November 18 and said it had launched an investigation, admitting to the “inappropriate use of Peppa Pig”.

Why does Lego want to expand its operations in China?

Lego has a 2.8 percent market share of China’s toys and games sector, which is worth an estimated $31bn, followed by Mattel, which has 2 percent of the market.

Although Lego is the biggest toy maker in China, the company is hoping to increase its slice of the market as its performance slides in Europe and the US.

In September, Lego announced plans to cut 8 percent of its global workforce after reporting a 5 percent fall in first-half revenues to £1.8bn.

The downturn is the worst hit the business has suffered since coming close to bankruptcy in 2002.

The brand name Lego is an abbreviation of the two Danish words “leg godt”, meaning “play well”.

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