On September 2, 2020, just 6 months after the Shanghai People’s Procuratorate announced the criminal copyright prosecution of Lego infringers, the Shanghai Third Intermediate Court has announced the sentencing of the same 9 people to up to 6 years in jail and a 90 million RMB (~$13 million USD) fine. The group of 9 had sold over 300 million RMB of infringing products under the Lepin (乐拼) brand and had over 30 million RMB of infringing products stored ready for sale.
From 2015 to April 2019 the defendants manufactured and sold the infringing products in Shantou, China. On April 23, 2019, the Shanghai Municipal Public Security Bureau seized injection molds used to replicate Lego toys, spare parts for assembling molds, various packaging boxes and manuals for Lepin toys from a factory rented by the defendant Li.
The Copyright Appraisal Committee of the China Copyright Protection Center determined that the Lepin toys were basically the same as the Lego toys, an example of which can be seen above.
The Court stated, “Most of the counterfeit toys involved in the case have entered into the market, not only infringing intellectual property rights, but also causing the right holders to lose goodwill. It caused heavy losses and hurt economic interests and it also severely disrupted the order of the socialist market economy. The circumstances of the crime were particularly serious and the effect on society was extremely harmful.”
The Shanghai Intermediate People’s Court held that the 9 defendants manufactured infringing toys for commercial purposes without the permission of the copyright holder. There was a huge amount of illegal business and is particularly serious constituting the crime of copyright infringement. At the same time, according to the different roles of the defendants in the joint crime, the court determined that the defendant Li was the principal offender, and was punished in accordance with all the crimes he participated in, organized, and directed; the remaining eight defendants were accomplices and were given lighter punishments.
Specifically, Defendant Li was sentenced to six years’ imprisonment for copyright infringement and a fine of RMB 90 million; the remaining 8 defendants were sentenced to fixed-term imprisonment ranging from three years to four years and six months and were fined accordingly.
The presiding judge stated, “This case is a typical case of infringement of the intellectual property rights of an internationally renowned brand that has been investigated and punished in recent years. The amount involved is extremely large and should be severely punished in accordance with the law. ” Also earlier this year, the Shanghai Public Security Bureau announced the arrest of Transformers copyright infringers perhaps indicating Shanghai might be becoming a preferred venue for bringing criminal prosecution of IP infringement cases regardless of where the manufacturing is taking place in China.