By Javier Diez-Aguirre ‑ April 17, 2019
With the recent case of Lego's IP theft case against Longjun Toys, SVP Javier Diez-Aguirre investigates the value of protecting IP portfolios from copycat brands.
In 2018, the US estimated Chinese IP theft had reduced corporate earnings in the United States by $50 billion. Recently, globally renowned toymaker Lego was at the receiving end of IP theft when it discovered Chinese company Longjun Toys was producing a range of brick-based toys that bore more than a passing resemblance to its own iconic product range.
Taking its case to the UK’s Intellectual Property Office (IPO), Lego argued the toys – with the brand name ‘Lepin’ - were likely to confuse consumers who, due to the extreme similarity of the products, logo and packaging, would assume they were a Chinese version produced by Lego itself.
In an unusual line of defence, Lepin asked Lego to prove its own trademark dominance – something easily accomplished with the submission of five years of impressive sales figures.
Presented with clear-cut examples of copycat construction toys, the IPO agreed that Lepin’s mark was likely to confuse and it was cancelled.
China is no stranger to product and brand imitation. It is common to see items bearing names closely resembling international brand equivalents in the country, with imitations such as “HiPhone”, “NKIE” and “Adidos” found on the highstreets.
The fallout from a propensity to imitate is not just legal and financial, but political too. President Donald Trump has made the protection of US intellectual property a pivotal issue in his ongoing trade negotiations with China as US officials calculate the cost of IP theft could be as high as $600 billion.
Despite the country’s chequered history around respecting IP rights, Chinese authorities have come to recognise the central role it plays in fostering open innovation. There are now signs that the region is getting more serious about rights protection.
Today, the State Intellectual Property Office (SIPO) of the People’s Republic of China is the busiest in the world as President Xi Jinping’s “Made in China 2025” initiative aims to transform China into an innovation powerhouse. Entrepreneurs are encouraged to register their work so the country can build a portfolio of intellectual property on which to base its economic expansion.
Further advancing the framework for IP rights, the Chinese National Intellectual Property Administration (CNIPA) recently announced it was cutting patent and trademark review times and strengthening IP protection, including increased penalties for infringements.
As China continues to face international pressure to crack down on IP theft and recognises the importance of protecting its own valuable IP assets from infringements, the country’s approach will need to continue to evolve towards respect for the IP rights of others.
The value of an IP portfolio must be protected from erosion by copycat brands.
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