A Court Decision in Shanghai Offers A New Perspective on China’s Protection of I.P.

On December 29, 2020 the Shanghai Higher People’s Court issued a final judgment in a case involving counterfeit Lego toy products in which it sent the defendants to jail with sentences as high as six years and fines of up to 14 million dollars. The defendants sold nearly $50,000,000 worth of counterfeit Lego products. In rendering its decision the court ruled that the infringement caused serious financial, social and cultural damage.

These fines were the highest yet in a case involving copyright infringement involving counterfeit product sales in China. The Shanghai Higher Court found that the Lego sets embody expressions of unique aesthetic appeal and originality. It held that they were independent creations of the Lego company and the complete assembled models fall into the category of artworks, which are protected by Chinese copyright law. 

In addition, the court ordered the confiscation of all illegal income earned from the criminal enterprise and the seizure of all infringing products as well as any personal property used by the defendants in furtherance of the counterfeiting.

The case began when in April 2019 the Shanghai Police seized tools for duplicating Lego’s toys and toy products as well as toy packaging and instruction manuals that were basically identical to similar items sold by Lego.

On December 26, 2020, just three days before the final judgment in this case, the China’s National People’s Congress passed the Eleventh Amendment to the PRC’s criminal law, which, after March 1st, raised the maximum term of imprisonment for criminal infringement of intellectual property rights from seven years to ten years.


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