Spin Master: wins a major victory in patent dispute

Global children’s entertainment company has won a major victory in a long-running patent dispute against one of the most prominent toy producers in China

 

  • Leading global children’s entertainment company receives landmark double litigation win with further victory in first-ever successful private prosecution for IP infringement in China
  • Patent and trade mark victories “send very clear signal infringement of IP rights will not be tolerated in China”
  • Spin Master were advised throughout both cases by Rouse Network firm Lusheng

Leading global children’s entertainment company, Spin Master has won a major victory in a long-running patent dispute against one of the most prominent toy producers in China, resulting in the largest damages ever awarded to a foreign patent owner.

In a first instance judgment handed down on 25 March 2020, the Suzhou Intermediate Peoples’ Court found the defendant Guangzhou Lingdong Creative Culture Technology Ltd had infringed Spin Master’s patents covering its globally popular Bakugan® children’s toy line.

In a rare outcome, the Court awarded Spin Master damages of RMB 15.5million (US$2.2million / CAD$3.1million / GBP£1.8million) – the largest ever for a foreign plaintiff according to public data for patent infringement cases in China.

Spin Master claimed that Lindong’s ‘Eonster Hunter’ products infringed several aspects of Spin Master’s Bakugan patent, including its rollable shape, interior structure and magnetic properties.

The verdict is Spin Master’s second major IP victory in China in recent months. In November 2019, the Shenzhen Longgang District People’s Court ruled in favour of Spin Master in a milestone criminal prosecution for trade mark infringement where defendants Shenzhen SHEN PENG HUI Technologies Co., Ltd. and Shenzhen AKALI Network Technologies Co. Ltd. were convicted of selling counterfeit versions of Spin Master’s Hatchimals® products on Alibaba and other ecommerce platforms.

Notably, the ruling came after Chinese prosecutors had declined to file formal charges against the infringers, forcing Spin Master to bring the first successful private criminal prosecution in Chinese IP history. Three individuals were sentenced to three years’ imprisonment and the companies were fined.

Douglas Clark, Global Head of Dispute Resolution with Rouse, commented:

“We’re delighted for Spin Master. The high damages awarded and successful private prosecution are both extremely rare and send a clear message to IP rights holders globally and to potential infringers in China that infringement of IP rights will not be tolerated. If ever there is a time when the courts in China might err on the side of local protectionism you would be forgiven for thinking it is now, just as the economy recovers from Covid-19. The fact that they have ruled so emphatically in favour of protecting the legitimate rights of the IP owner is a clear and bold statement.”

Chris Harrs, Executive Vice-President at Spin Master, commented:

“We are very pleased with the outcome and are thankful to Lusheng and Rouse for their guidance throughout both litigations. Spin Master will continue to steadfastly protect and enforce its intellectual property rights in all jurisdictions globally.”

The rulings represent another key breakthrough in China’s continued crackdown on IP infringement. Over the past decade China has made significant strides in developing and enforcing a robust IP rights regime, bringing its domestic IP landscape in line with developed systems in the US and Europe.

The rulings in favour of Spin Master signals China’s determination to provide – and be seen to provide – a reliable IP legal framework in which foreign brands can operate with confidence.