LEGO Wins Lawsuit for Trademark Infringement and Unfair Competition – Intellectual Property

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China: LEGO wins lawsuit for trademark infringement and unfair competition

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“乐高”遭商标侵权及不正当竞争,二审获赔3000万元

On April 1, 2021, the Guangdong Higher People’s Court announced that LEGO had been awarded 30 million RMB in damages for trademark infringement and unfair competition against Guangdong Meizhi Zhijiao Technology Co., Ltd. and a related entity, Shantou Zhilepin Toys Co., Ltd. and Guangzhou Zhiwan Trading Co., Ltd. (“Zhiwan Trade“) (collectively, the
“Defendants“) in the second instance.

LEGO filed a lawsuit in the Guangdong Higher People’s Court for trademark infringement and unfair competition against the defendants, who were involved in the manufacture and sale of “Lepin” or “乐拼” brand toys. LEGO claimed that the trademarks “Lepin” and “乐拼” were similar to its trademarks “LEGO”, “乐高” and “CHIMA”. Defendants’ products were also found to be similar to its own products in general design and assembly, which can easily confuse the relevant public that Defendants’ products were related to LEGO. A total of 30 million RMB was claimed for economic loss and reasonable expenses.

The trial court held that the defendants’ use of the infringing marks was sufficient to cause confusion and misunderstanding among the relevant public and infringed LEGO’s exclusive right to use its trademarks, constituting unfair competition. Regarding the determination of the amount of compensation, the trial court held that the evidence provided by LEGO could not prove that the defendants’ profits from the infringement reached RMB 30 million or that their profits from of the offense clearly exceeded 3 million RMB. Finally, the court considered the reputation of LEGO’s trademarks and the defendants’ subjective fault in the infringement, and held that the defendants are jointly and severally liable to compensate LEGO for the economic loss of RMB 3 million, for which Zhiwan Trading was jointly responsible. for 300,000 RMB.

After the first instance judgment, both sides appealed to the Guangdong Higher People’s Court. In the second instance, the Guangdong Higher People’s Court established the defendants’ offenses. In terms of determining the amount of damages awarded, according to the relevant decision, the revenue from the manufacture and sale of the infringing products by the defendants was RMB 330 million from September 11, 2017 to April 23, 2019. In addition , based on the “Lepin” product sales data provided by Zhejiang Taobao Network Co., Ltd., it can be reasonably assumed that the sales amount of counterfeit products exceeded RMB 500 million. Based on reasonable estimates with reference to the profit margin of related industries, the overall profit of the counterfeit products involved is expected to exceed RMB 160 million.

Ultimately, the court found that there had been malicious wrongdoing on the part of the defendants. The Guangdong Higher People’s Court upheld LEGO’s claim for damages and compensated LEGO 30 million RMB for economic loss.

Source: https://mp.weixin.qq.com/s/o7TF9Fd4xX8ZhirQJ3ga3w

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