LEGO wins lawsuit against Lepin in China

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From the LEGO press room:

The LEGO Group today received a favourable decision from the Guangzhou Yuexiu District Court against four companies who infringed multiple copyrights of the LEGO Group and conducted acts of unfair competition by producing and distributing LEPIN building sets. It is another significant legal victory in China for the LEGO Group in its battle against imitators over the past two years.

According to the decisions issued by the court, the four defendants, Shantou Meizhi Model Co., Ltd., et al, are liable for copying the 3-dimensional artworks of 18 LEGO sets, multiple LEGO Minifigures, as well as for carrying out unfair competition acts.

The court ordered, among other things, that the four defendants shall immediately cease producing, selling, exhibiting or in any way promoting the infringing products, and shall pay the LEGO Group approximately RMB 4.5 million as damages.

Continue reading at LEGO.com »

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It would be interesting to know which 18 products were cited in the case. Given Lepin rip-off hundreds of LEGO sets the ruling will probably make little difference...

 

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42 comments on this article

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By in United Kingdom,

Woohoo!

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By in Germany,

a first step in the right direction but there are many other rip-offs among the dragons...

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By in Germany,

4.5 million Chinese Yuan Renminbi are around EUR 570k (USD 650k ,GBP 497k )
So this ain't really that much. But it's something I suppose.

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By in Germany,

I wonder why it only applies to 18 specific sets. I have bought some Lepin sets in the past and it should be blatantly obvious to any non-blind person that all of Lepin's lineup, except for the ripped-off MOCs, are direct copies of the LEGO sets they are based on. I would have thought if the courts ruled against Lepin it would apply to either all of their clone sets or none of them. Not just 18 select ones. In any cases, which 18, and why those specifically?

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By in United Kingdom,

"significant victory" - yeah, right. Nothing will change. They'll just sell a bucket of bricks that you may or may not build into a specific set.
Lego issued take-down notices to various Lepin sellers due to artwork use. Listings were pulled for about 5 days and now everything back with non-Lego pics.

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By in United Kingdom,

It is probably to set a precedent that they have chosen a selection of models which they could take Lepin to court with - so that the court case did not take too long (and not too costly) to go through all the models. Now they have had this victory they can use judicial precedence to simply subsequent court cases if they wish to continue the litigation

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By in Australia,

@Nordbart yeah the compensation really is insignificant. The legal fees would most likely be more.

I guess the real win for LEGO is the cease of manufacturing for those certain sets, but we all know that these Chinese companies are known for finding legal loopholes.

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By in Canada,

It's a start, but it seems like there is still ways for Lepin to get around this. Sounds like if they change a certain percentage of the packaging and set as to not exactly mimic Lego's version then they are still OK.

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By in United States,

It's a start. Maybe it's a signal to Lepin that Chinese law is going to start enforcing these things, giving them a chance to clean up their act. They're most welcome to produce competing bricks with different set designs... they could be a real competitor who produces something actually interesting, or targeted to the Asian market!

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By in United States,

China rips everything off. You can’t even watch a movie today that’s not either kissing their butts to get released there or made with a Chinese movie company.

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By in United States,

Regardless of whether it is Lego or not , I'm extremely glad a Chinese company who's main business is copying and counterfeiting to actually lose this time. I'm hoping this will start a precedent for successful patent/copyright suits against China.

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By in United States,

Yeah. Take a that, counterfeiters! You can't mess with the real deal and get away with it!

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By in United States,

@AustinPowers: It's possible that it's just to help avoid unnecessarily prolonging or complicating the court decision by making them rule on Lepin's entire portfolio of products.

This decision might not seem like a whole lot but I expect it will help discourage counterfeiting to some extent (obviously, as long as LEGO remains popular, counterfeiting can't be expected to go away entirely). The fact that LEGO was able to win this case even based on just 18 products will make other counterfeiters aware that the courts could just as easily hold them liable for any counterfeit LEGO products they create if LEGO chose to pursue a case against them.

And even damages of 4.5 million dollars (not to mention the defendants' own legal fees and whatever costs have already been sunk into producing products that the court has now prohibited them from promoting or selling) will in the very least eat into these companies' profit margins and thus their competitive advantage against other low-priced toy products.

Pile up enough potential inconveniences and drawbacks, even ones that won't bankrupt a company, and manufacturers will see less and less incentive to copy specific LEGO sets and more to either create their own products that have fewer potential liabilities (as we've already seen some brands like Enlighten begin doing), or at least start knocking off other brands that they don't expect to result in litigation.

In the meantime, LEGO sales in Asia have been able to expand rapidly even WITH companies like Lepin in the picture. A lot of people seem to talk about them as if they're some kind of existential threat to LEGO, but I haven't seen any kind of evidence beyond anecdotes to support the idea that they're any greater threat than past counterfeiters have been to LEGO. Frankly, the main reason that AFOLs seem to have paid much attention to Lepin in the first place is that they're some of the first brands to specifically copy products that were aimed at the AFOL demographic, instead of just LEGO's more popular kid-targeted lines like Bionicle, City, Ninjago, and Friends.

But who knows? Maybe AFOLs really DO know more about this sort of thing than LEGO, the same as they so often seem to think they know more about everything than LEGO. After all, we've all read about the complexities of Chinese counterfeiting on the Internet. How likely is it really that the legal departments of all the biggest toy companies in the world would ever think of reading about things on the Internet before deciding to engage in expensive, lengthy legal battles?

Look at all the other companies that have been the targets of Chinese counterfeiting: Apple, Gucci, Rolex, Microsoft, Rayban, Louis Vuitton, Hasbro, Mattel, Nike, Nintendo, Sony, etc. Do we really want to see LEGO go bankrupt like all those companies did? Wait, no, never mind, turns out all those companies are still massively successful. Guess it's somehow only LEGO that is somehow in danger of being eclipsed by knock-offs. Seems strange, but it's not like AFOLs' cataclysmic predictions have ever been wrong before…

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By in United States,

Finally! We're killing the knock offs!

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By in France,

The important point is about IP theft... this can't continue. It's not about a particuliar country, or even about certain companies... it relates to IP theft... and this has commercial implications around the world.

These judgements won't stop IP theft haemorrhaging... that it stops a part of this has to be welcomed.

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By in United Kingdom,

LEGO should target the numerous sponsored ads for fakes on Facebook.

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By in New Zealand,

Aw man, No Streetview set?

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By in Finland,

I do not see the competition between brick toy companies necessarily a bad thing, but as these companies directly steal sets, themes and ideas which Lego designers or AFOLs have spent immeasurable amounts of time and work to produce, they must also face consequences, as any content stealers should. Some of these Chinese competitors have actually shown to be capable of creating pretty solid sets of their own, so hopefully this will lead to some original set designs for their part, instead of more Star Wnrs or Nick Knights.

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By in United States,

Yay! It's a start atleast.

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By in Germany,

@drbaggy
"Now they have had this victory they can use judicial precedence to simply subsequent court cases if they wish to continue the litigation"

Are you sure it works like this in China? Rulings based on legal precedent are binding mostly in Anglo-Saxon countries, in other countries they only play an advisory role. No idea how it works in China, though.

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By in United States,

I suspect how this works is they have to cite specific violations when they file suit. Once the first suit is on the docket, you wait to see how it goes, and respond accordingly with your next round. If they keep doing it, they'll keep losing, and it'll probably go faster the next time. If they just say "stop copying sets", Lepin can keep claiming ignorance on any specific set. By getting court orders against specific sets, it's very obvious if Lepin decides to step over the line. Also, they probably picked the 18 top movers so they could kill the biggest sources of revenue right off the top.

What will be interesting to see is how this affects their choices on rereleasing sets. They reissued the Taj Mahal, and by all accounts it was to give them grounds to sue Lepin in China. If the court order has no expiration date, they have little incentive to rerelease anything on that list.

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By in United Kingdom,

The sets in question are all Nexo Knights or Chima sets (so Lego's own IP).
List with Lepin product numbers:
14012 Nexus Knights Rumble Blade
14008 Nexo Knights King's Mecha
06025 Ninja Bike Chase
06024 Cole's Dragon
06027 Elemental Dragon
06026 Sky Shark
14005 Evil Mobile
14006 Fortrex
14011 Queen Capture
14007 Merlok Library
04009 Fire Lion
06020 Final Flight of Destiny's Bounty
06019 Titan Mechs
14004 Chaos Chariot
14003 Lava Smasher
14002 Mecha Horse
04024 King Rescue
04022 Rumble Bear

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By in Australia,

And ninjago. This is because Lego entirely own the IP for these sets. Stopping Star Wars sets from being copied would probably require Disney to take legal action with Lego which woukd have added an extra layer if complexity to the proceedings if they started with this. The themes chosen aren't generic like City where Lepin might have argued that anyone can copy real world objects. I suspect that this is just the beginning of legal proceedings. Because of this ruling I'd suspect that there's a good chance that this means Lepin won't produce Lego Movie 2 sets.

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By in Australia,

If only western governments had the guts (and political will/ability) to impose sanctions and other economic hurt on China that was actually strong enough to force the Chinese government to stamp out the IP theft in their country. Donald Trump claims one of the big reasons for the sanctions against China is because of Chinese IP theft yet the sanctions neither go far enough nor target the right products to actually cause the hurt to China that would be necessary to get China to change its attitude on IP theft.

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By in United Kingdom,

Though it would be an perhaps-impractical pipedream, I'd like to see a compromise struck between LEGO and Lepin that could be amicable to both: Lepin would only produce LEGO's out-of-production, non-current range, and LEGO would allow them to do so.

If such an agreement limited Lepin's distribution of those sets so as to keep them out of view of LEGO's core market of casual consumers (just as they are now), AFOLs would have access to LEGO's back-catalogue of sets, and LEGO's sales & current IP would be protected.

Some details may need to be ironed-out, and there is the theory that a small-but-significant proportion of LEGO's sales of current sets is by speculators (the scalpers whom I'm sure many would like to see affected by such an agreement), but it would meet a market need; the only Lepin sets I've considered buying are old Star Wars sets which command eye-watering prices.

Could it work?

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By in United Kingdom,

I was just in China recently and saw some of these for sale. Lepin have already produced and stocked shops with exact copies of Hogwarts Castle and Voltron, which are only a few months old

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By in United Kingdom,

I'm honestly surprised that the 18 sets aren't Star Wars, as I suspect that these would be the most profitable to the Lego Group and Disney.

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By in United Kingdom,

@Grimlock The case was about IP violation and that one has to be lodged by the IP holder. TLG is only a licensee for Star Wars; the case would need to be lodged by Disney.
While they could sue for the design copy, there are easy ways around it. No box, no printed manual. In which case the shipment is just a bunch of bricks.

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By in United Kingdom,

Honestly I don't see this as much of a victory for us as the consumer. Things like Lepin exist because Lego is overpriced. The real victory would be if Lego responded by also adjusting their set sizes and prices so they were affordable to more and more people.

I don't get this idea of brand loyalty where you attach yourself to a brand and see their legal victories as your victories. Lepin has little bearing on me or any other Lego fan.

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By in United Kingdom,

By zmarkella in United Kingdom. "significant victory" - yeah, right. Nothing will change. They'll just sell a bucket of bricks that you may or may not build into a specific set.
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And lower postage costs when they tell you to download the instructions from lego.com instead of sending out booklets.

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By in United States,

@lizaia the stronger the Lego group is doing economically, the stronger it does in other areas.

One of the reasons Lego started going down the tubes at the turn off the century is that its copyright wore off and other brands started cutting in on their profits. This in turn caused them to release sets more quickly, which they had less time for peer-review, and therefore were mostly terrible quality sets.

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By in United States,

@lizaia
Lego is very affordable. They offer prices ranges about $3.99 all the way up to $800usd.
$20 sets, $40 sets and so on. All ranges for everyone's budget. You can even purchase individual bricks to make your own creations.
All high quality packaging/graphics as well as THE industry standard bricks.
The line is incredibly affordable.

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By in United States,

@hewman:
To shut down LEGO Movie clones, they'd need to get WB to co-file the lawsuit with them, because WB shares the rights to The LEGO Movie and will surely share the rights to the sequel.

@legoDad42:
You can still buy LEGO sets at $0.10/pc, which is about what you'd pay for them back 40 years ago. The two main differences are the sets are larger, and there are at least ten times as many of them. Back 40 years ago, you'd see one really big set that would range between $50-100. Now there are themes that get one of each twice a year, plus at least one actually-expensive-by-modern-standards set. Some themes get as many releases in a single year as most themes used to get across their entire run. People perceive them as being more expensive because of how much more they spend on them, without really paying attention to the fact that most of them are buying more in one year than they ever had in their entire childhood.

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By in United States,

@Purple Dave
Right on. People are and continue to think they need to buy EVERY set with more and more produced each year like you said. It's so tempting and addictive seeing all those juicy new sets.
That's why they range the prices though. I'd love to buy all of them myself, but once you budget and do some comparative shopping on Amazon and used sets on eBay can make the hobby very affordable and enjoyable. Oh, and patience, don't have to buy exactly when it comes out too.
On all my hobbies from comics to toys, I've given up the mantle of trying to be a completist. I buy what I most want, save for the bigger ones, look for sales and have enjoyed the hobby a helluva' lot more than years back. Plus got to spend more time on making small moc's and enjoying moding alot of the kits I have too. More focus and happy ;)

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By in Australia,

Definitely a great victory of copyright! The whole world LEGO fans would like to see this result of course included China LEGO fans! Some ppl said the punishment is not enough but this is a good start of copyright protection and will be a good example of other similar legal issues of copyright!

But somebody of US said they have to kiss butt? I don’t understand whose butt they have to kiss? I think everyone who has basic history knowledge should know the whole world have to kiss US butt, have to kiss Wall Street butt and have to kiss US military butt from last 100 years to now and definitely will continue to do the same thing to the future as US wish. Just see your majesty Trump’s policies if somebody doesn’t believe.

Well, here is a forum of LEGO fans but not for some bullshit. Have to remind somebody of US that China court supported LEGO group on this case and also glad to see LEGO Group has a positive participation and a great exhibition on China International Import Expo on this two weeks. Win-Win!!

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By in Australia,

I do not agree at any costs that Lepin have the right to copy anything of Lego products. In my eyes Lego have done the ground work right from the beginning of designing, producing, marketing, you name it. It has been a family company since the beginning and although people might complain about the prices of Lego, look at what they produce it has always looked beautifully presented they have a wonderful philosophy they look after their staff and have created a large work force now throughout the world. I'm not saying they get everything right, but they strive to do the best they can. I will always support Lego, the product is fantastic and it can out last our life time onto the next few generations. I will always hope to see Lego win each and every court case, due to the fact it's their product and these other companies should come up with their own ideas and create their own lines to sell. It's called running a legitimate company.

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By in Canada,

@bananaworld the only way something like this would work is if A: Lepin paid a large royalty to LEGO (and others) for use of copyright, trademark, and intellectual rights, and B: that quality wwould be consistent to LEGO quality. Of course, once the cost of both A & B were paid, the retail cost of these sets would be higher than when the sets were originally issued by LEGO.

Simply put, I doubt it will ever happen.

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By in China,

As a Chinese. I'm really happy to hear the news.

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By in Thailand,

Only Thing lego can do with lepin is Sue and C&D set that their own IP.
Without help from IP Holder Lego can’t do anything with license set.
Also i don't think lego can shutdown factory since make bricks is Legal.

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By in United Kingdom,

LEGO really should be more careful with their language in the press release, 3D artworks is very vague and sounds like they are trying to convince people they have claim to more than they do. This case is about the package art, sticker/brick print designs, and mini-figure printing which is the extent of copyright contained in a set (also the instruction manual but Lepin didn't generally copy those).

This will stop Lepin sets looking deceptively like LEGO sets which is a good thing, but it won't stop them selling the same sets with their own packaging designs. I hope they don't pursue after-market sticker makers because if LEGO keep insisting on using stickers people are going to need replacements, and they can't seem to be bothered to sell these themselves.

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By in United Kingdom,

I guess the court saw the new china exclusive sets then!

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By in United States,

@curious:
The "3-D artwork" is the actual LEGO model itself. It's an aesthetic design, not a mechanism, so the set falls under copyright and not patent. The basic look of the minifig falls under trademark, and the actual design of individual LEGO elements falls under patent. And it sounds like you don't think they have a right to sue for copying their models? If that was true, they wouldn't have to make people sign over the rights to their MOCs when they enter certain contests or submit them to Ideas.

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