Just today, the Shanghai Third Immediate People’s Court sentenced Li Haipeng, the owner of Meizhi Model and subsidiary Lepin, to six years of jail and fined CN¥ 90 million (USD 1.3 million) for copyright infringement.
There were eight other defendants who also were sentenced to fixed jail terms ranging from three years to four years and six months along with accompanying fines.
Since 2015, he has instructed Du Mouhao and others to purchase the above-mentioned Lego series toys, and through dismantling and research, proceed to copy. In January of the same year, Li Moupeng instructed Du Mouhao to register Lepin Toys Factory in his own name (later renamed Lihao Toys Factory and cancelled in July 2016), to carry out the 1:1 reproduction of Lego Toys in the factory and open Mold, produce, and pack and store elsewhere.
In the span of just two years, Li and his team produced and sold more than 4.24 million boxes of clone brick products that involved 634 models with an estimated value of CN¥300 million.
While this is definitely a step in the right direction for China by respecting intellectual property, there are still dozens of other clone brands out there which have already started to fill the void left by Lepin.
And some of these clone brick companies are not just ripping off LEGO, they are also profiteering from the MOCs that LEGO Fan builders upload to the internet.
This is just a first step in a long journey that I do not foresee ending anytime soon. From the looks of it, LEGO’s legal department have their work cut out for them with the 2912373686 other clone brick companies in existence.
The 47 series of 663 products including the “Great Wall of China” assembled toys are art works created by Lego. Lego produced and produced a series of assembled toys based on the works and sold them on the market.
Li Moupeng is the legal representative of Meizhi Company. Since 2015, he has instructed Du Mouhao and others to purchase the above-mentioned Lego series toys, and through dismantling and research, proceed to copy. In January of the same year, Li Moupeng instructed Du Mouhao to register Lepin Toys Factory in his own name (later renamed Lihao Toys Factory and cancelled in July 2016), to carry out the 1:1 reproduction of Lego Toys in the factory and open Mold, produce, and pack and store elsewhere.
Since 2016, under the instruction of Li Moupeng, Yan Moujun registered Longjun Toy Factory as the manufacturer of Lepin Toys for printing; Zhang Mou is responsible for the production and operation of Lihao Toy Factory; Wang Mouhe helped make Lepin Toys Bill of materials; Wang Mouzhen sells Lepin toys imitating Lego through online platforms such as Taobao; Lu Moufeng draws 3D drawings and molds for special pieces of Lego toys; Yu Moubin designs and applies for the “Lepin” trademark; Li A certain person is responsible for the management of finished toys out of the warehouse. In 2017, Du Mouhao left Lihao Toy Factory and began to engage in the distribution of Lepin Toys. He purchased goods from Lihao Toy Factory and sold the Lego Lego toys in Taobao online store for profit. A one-stop gang of “production, supply, and sales” counterfeiting Lego toys was born.
In April 2019, the East Window incident occurred. The Shanghai Municipal Public Security Bureau seized 88 injection molds for copying Lego toys, 68 spare parts for assembling molds, more than 280,000 packaging boxes for “Lepin” toys, and “Lego” in the factory leased by Li Moupeng. There are more than 170,000 pieces of manuals for various kinds of toys, more than 50,000 pieces of shipment orders from Lepin Toy Factory, and more than 600,000 pieces of “Lepin” toy products from the Lego series. After identification, Lepin’s toys and atlases are basically the same as Lego’s toys and atlases, which constitute a copying relationship.
According to judicial accounting, from September 11, 2017 to April 23, 2019, Li and others produced and sold more than 4.24 million boxes of infringing products, involving 634 models, totaling more than 300 million yuan. On April 23, 2019, more than 600,000 boxes of infringing products to be sold were seized in the warehouse, involving 344 models, with a total amount of more than 30.5 million yuan. From May 28, 2017 to April 23, 2019, Du Mouhao’s Taobao store sold Lego Lego toys for more than 6.21 million yuan.
In July 2020, the Shanghai Third Intermediate Court opened a court session to hear the case. During the trial, the prosecution and the defense debated “whether this case was a unit crime”, “the characterization of the defendant Du’s behavior and the amount involved” and so on.
The public prosecution agency believed that the defendant Li Moupeng, in cooperation with Du Mohao and others, copied and distributed the copyrighted works of art by Lego without the permission of the copyright owner for the purpose of profit. The circumstances were particularly serious and their actions had constituted copyright infringement. Among them, the defendant Li Moupeng was the principal offender, and the defendant Du Mohao and the other 8 were accomplices.
Du Mouhao’s defender proposed that the case was committed by a unit of Meizhi Company. Li Moupeng was the person in charge of Meizhi Company. The personnel of Meizhi Company and Lihao Toy Factory were confused. The account of Meizhi Company showed that it was useful Paying wages, receiving and paying money, and the warehouse involved also stored Meizhi Company’s products, whether from the perspective of personnel, financial or civil tort litigation, Meizhi Company is the subject of unit crime. Li Moupeng’s defender believes that this case is a crime committed by a unit with Lihao Toy Factory or Longjun Toy Factory as the main body and has nothing to do with Meizhi Company.
Du Mouhao’s defender also proposed that before the end of 2016, Du Mouhao’s purchase of Lego toys and lease of factories were all normal performance behaviors, and although he registered with Lihao Toy Factory, he cancelled it after discovering possible problems. , Subjectively suspend copyright infringement crimes. After resigning at the end of 2016, Du Mouhao obtained goods from Lihao Toy Factory for sale. During this period, he did not participate in the production and operation of Li Moupeng and others. Therefore, it does not constitute a crime of copyright infringement, but constitutes a crime of selling infringing copies, and the amount involved should be More than 6.21 million yuan.
Upon trial, the Shanghai No. 3 Intermediate People’s Court believes that a unit’s crime needs to meet three conditions, in the name of the unit, the will of the unit, and the illegal proceeds of the crime are mainly attributable to the unit. In this case, Li Moupeng served as the main person in charge of Meizhi Company. The re-engraving of Lego bricks was decided by Li Moupeng, which reflects the will of the unit to a certain extent. However, from the perspective of production and sales, Meizhi Company has its own brand building blocks. It produces and sells building block toys under the Lepin brand. Lepin toys are mainly produced by Lihao Toy Factory and sold under the name of Longjun Toy Factory, not under the name of Meizhi Company. Secondly, from the bank account details, Meizhi Company has a separate company account, and Lepin Toys income and expenditure are all in and out of the personal accounts of Du and Xie outside the case, and the account funds are used for payment to individuals and cash withdrawals. There is no capital relationship with Meizhi Company, so the illegal income from operating Lepin Toys does not belong to Meizhi Company, and Meizhi Company is not the subject of the crime in this case.
In addition, the court also pointed out that after the establishment of Lihao Toy Factory and Longjun Toy Factory, they mainly produced and sold Lepin toys involved in the case. According to the relevant provisions of the Supreme People’s Court, individuals set up companies, enterprises, and institutions for criminal activities to commit crimes. If it is established or its main activity is to commit a crime, it shall not be treated as a unit crime. Moreover, Lihao Toy Factory was cancelled on July 26, 2016, and it no longer has the qualifications of the entity. In addition, according to the “Individual Business Machine Readable File Registration Information”, Longjun Toy Factory is an individual industrial and commercial household and does not belong to a company, enterprise, or institution with legal personality. Therefore, Lihao Toy Factory and Longjun Toy Factory cannot be the units in this case. The subject of the crime.
Regarding the characterization of Du’s behavior and the amount involved, the court held that, according to relevant regulations, the “copying and distribution” in the crime of copyright infringement includes copying, distributing, or both copying and distributing. The promotion of infringing products in other ways is classified as “issuance”, and “issuance” includes general distribution, wholesale, retail, dissemination through information networks, rental, exhibition and other activities. Although Du Mouhao left Lihao Toy Factory before 2017 and did not participate in production and operation, he sold Lepin toys as a distributor for profit, and actively learned about the production situation from the sales staff and customized them during the sales process. The required related models of toys are also promoted through Taobao stores, and their behavior is the issuance behavior of the crime of copyright infringement and meets the constitutive elements of the crime of copyright infringement.
In addition, considering that Du Mouhao did not participate in the production and operation of Lihao Toy Factory from September 2017 to April 2019, the court determined that Du Mouhao’s illegal business amount was the amount of copying Lego toys sold through Taobao stores, namely 621 Ten thousand yuan.