Viral success can create tremendous growth opportunities for a business. When a product suddenly captures widespread attention and gets shared across social media and other channels, it can lead to spikes in sales and revenue, brand recognition, free advertising, and media coverage. Having an IP protection and enforcement plan in place can help a business translate this viral success into long-term growth. 

Labubu toys, sold by Pop Mart, are the most recent collectible toy to go viral. As a result, the designer toy has become a prime target for counterfeiters. Pop Mart’s approach to infringement has been aggressive and comprehensive. They have taken steps to secure IP protection in multiple countries. This investment has paid off and has helped them to enforce their IP rights. Pop Mart recently filed a lawsuit in California against 7-Eleven and seven of its franchisees for selling counterfeit Labubu plush toys, alleging trademark, trade dress, and copyright infringement.

Labubu’s Success Story

The success of Labubu toys was not necessarily predictable, but viral success is hardly ever foreseeable. Sales of these toys have skyrocketed 1,200% over the last couple of years, since the Labubu character went viral in 2023. While they primarily sold their goods in China just a few years ago, this year nearly half of their sales are estimated to come from outside of China. The viral nature of the toys has caused them to become high in demand, further propelling sales and the value of each hard-to-find collectible. Traditional marketing campaigns cannot compete with viral success.

IP Infringement and Counterfeiters

Along with the benefits of going viral, Pop Mart has had to fend off multiple counterfeiters in multiple countries.

Pop Mart’s lawsuit against 7-Eleven and eight California franchisees illustrates how sophisticated counterfeiters’ operations have become. According to the complaint filed in the U.S. District Court for the Central District of California, the alleged counterfeit LABUBU figures are “virtually indistinguishable” from authentic products, complete with mimicked packaging. Pop Mart cites instances of actual customer confusion of the toys purchased from 7-Eleven that were posted on social media. 

This level of sophistication represents a significant evolution in counterfeit operations. Unlike the fake knockoffs of the past, today’s counterfeiters invest considerable resources in replicating not just the product but the entire brand experience. The result is a marketplace where consumers may unknowingly purchase inferior-quality fakes while believing they’re acquiring authentic collectibles. For products like Labubu toys, whose value may be largely based on supply and demand, this can significantly impact sales and growth.

5,000 counterfeit Labubu toys, worth 1.7 million dollars, were seized in China this month. There is an entire market of knock-offs called “Lafufus” in social media channels. Without aggressive enforcement actions by Pop Mart, Labubu’s viral success may not translate into long-term sales and growth.

The Importance of a Robust IP Protection Strategy

Pop Mart’s legal strategy reveals the comprehensive approach necessary to protect viral intellectual property in the modern marketplace. 

The first step is to identify and secure IP protection in global markets properly. In most cases, a product going viral is a global event. Once it has gone viral, in some markets, it can be too late to secure protection before copycats and bad actors enter the market. This leaves a business facing an uphill battle in enforcing its IP rights.

Proper identification of all IP rights that should be protected is key. Businesses should ask the right questions to identify what should be included in their IP portfolio. For example, a Labubu toy has distinctive features that may be claimed as trade dress. Trade dress rights are not automatic; they are obtained by acquiring secondary meaning in the marketplace. For Pop Mart, this means the market recognizes the distinctive features of a Labubu toy as a product sold by Pop Mart. US consumers may not have recognized a Labubu toy as early as 3 years ago. Going viral can help demonstrate that secondary meaning has been acquired in a relatively short time frame. Claims of trade dress will be key to enforcing Pop Mart’s rights against counterfeiters who are selling nearly identical toys.

Immediate action should be taken to enforce IP rights against counterfeiters in a digital marketplace. A delay in action may make it much more difficult to combat the sale of counterfeit products, which can directly impact sales and demand, and remove the tremendous potential benefits of a product going viral. 

Social media and the digital marketplace have changed the rules on IP protection. Going viral comes with the potential for exponential success and growth. However, without an IP protection and enforcement plan in place, it can significantly harm a business. 

Proactive IP strategies in an era of viral success are essential. Traditional approaches to intellectual property protection, developed for slower-moving markets, may prove inadequate for brands that achieve global recognition in months rather than years.