Lego hails nation's IP protection achievements

The Lego Group said the country's growing focus on intellectual property protection is strengthening business confidence as the Danish toymaker wrestles with new challenges from artificial intelligence-driven infringement and the rapid expansion of digital platforms.

Robin Smith, vice-president and general counsel for China and Asia Pacific at Lego Group, said the company has seen significant progress in the country's IP protection environment, including stronger legislation, greater specialization among enforcement authorities and improved understanding of companies' practical challenges.

"We've already seen remarkable progress — not only in legislation, but also in the level of professionalization," Smith said. "Prosecutors, judges, police officers and administrative enforcement personnel are becoming increasingly specialized, and their understanding of the practical challenges we face continues to deepen."

Smith highlighted the company's long-running IP infringement case as an example of the serious legal consequences of violating IP rights in China.

On April 22, 2024, the Shanghai No 3 Intermediate People's Court upheld a lower court ruling in a criminal copyright infringement case involving counterfeit Lego sets. The court fined the defendant company, Longteng, 600 million yuan ($89 million), while sentencing the company's principal defendants to nine years and eight years in prison and imposing fines of 20 million yuan and 15 million yuan, respectively.

Following the criminal verdict, the Lego Group and the defendant reached a civil settlement, under which the defendant company paid 36 million yuan in damages and surrendered 320 sets of infringing molds.

For Lego China, IP protection goes beyond recovering financial losses. The company views trademark protection as essential to maintaining consumer trust and supporting a healthier business environment.

"When consumers see the Lego logo, they should be able to trust that they are choosing genuine products from the Lego Group," Smith said. "Trademark protection is not only about safeguarding the brand's long-accumulated assets; it is also about ensuring that consumers can clearly identify the source of products and receive trustworthy products and experiences."

The company said stronger enforcement has also increased confidence among foreign companies operating in China, encouraging businesses to continue investing, localizing products and developing new innovations.

"Effective enforcement protects our business and legitimate commercial interests, but the value goes much broader," Smith said. "It helps establish a fair environment where genuine innovation can thrive."

During the first half, the company launched more than 330 new products. Its best-selling themes included Speed Champions, Botanicals, Technic, Icons and Star Wars.

The Lego Group has said it will continue investing in China. The company is betting that a broader product portfolio and immersive brand experiences will drive long-term growth by appealing not only to children, but also to a rapidly expanding base of adult consumers.

That strategy helped the world's largest toymaker deliver another record first half, outperforming the global toy market and continuing to gain market share.

Revenue rose 21 percent to 41.9 billion Danish kroner ($6.5 billion) in the six months ending June, while operating profit increased 22 percent to 10.9 billion kroner. Net profit climbed 32 percent to 8.6 billion kroner, and consumer sales advanced 22 percent, significantly outpacing the broader toy industry.

"The growth potential in China is significant," CEO Niels B. Christiansen said. "There are a lot of children and tremendous excitement around the Lego brand, so we're very confident."

As consumers increasingly engage with digital platforms, Smith said companies need more specialized expertise and stronger collaboration to address new forms of infringement.

She said the rise of AI and generative technologies is creating new challenges for brand protection, making infringement easier while complicating enforcement efforts.

"The online environment, especially with AI and today's generative technologies, is something we need to think about seriously," she said. "How can we work effectively in such an environment while continuing to protect our brand?"

The comments came as Lego Group expands its public education efforts around trademark and IP protection in China. On Aug 22, the company opened the "Build It. Protect It." exhibition at SPURS Gallery in the 798 art district of Beijing, marking the first time the company has used a themed exhibition format to promote public awareness of trademark protection.

The exhibition showcased the history behind the Lego brand, from the company's patented brick coupling principle introduced in 1958 to its product innovation and quality standards.

The company also hosted interactive activities at its Wangfujing store in Beijing, where children learned about trademark protection through games and creative experiences.

Smith said the goal is to make IP concepts more accessible by connecting trademark protection with creativity.

"Creativity needs to be protected, and protection fosters further innovation," she said.