America’s best-selling doll is being counterfeited
L.A-based company MGA Entertainment is looking into bogus L.O.L. Surprise! products
LOS ANGELES— Earlier this year, attorney Jennifer Marrow visited TomTop.com, an online marketplace, to buy one of the most popular toys in America.
The site based in China claimed it had a deal on the priciest version: the limitededition L.O.L Surprise! Big Surprise, a rose-gold case with 50 small toys, including dolls, miniature outfits, accessories and stickers. The price was only $79.99 (U.S.), a steal for the hard-to-find item, which sold on some third-party websites for multiple times its list price.
But Marrow wasn’t buying a gift. She was ordering evidence.
What TomTop didn’t know was that it mailed the package to Marrow’s office at MGA Entertainment, the Los Angeles company that has created, patented and trademarked L.O.L Surprise! dolls. Inside, Marrow found a product claiming to be a Big Surprise, but with clear indications it was counterfeit: the colour was off, the label had mistakes and the materials were inferior, according to court records.
The real surprise would come later, when MGA filed a lawsuit in March in U.S. District Court in Los Angeles, arguing that TomTop knowingly sold the bogus dolls to unsuspecting customers.
“Once a toy becomes hot, the Chinese counterfeiters focus on that, and they quickly knock it off and bring it to the market,” said MGA founder and chief executive Isaac Larian. “What I haven’t seen until now is how openly blatant they are about it.”
Established in 2004, TomTop is a wholesale and retail online shopping site, headquartered in the southern Chinese city of Shenzhen.
Neither TomTop nor its attorneys re- sponded to multiple emails and calls requesting comment.
However, in response to MGA’s lawsuit, TomTop has argued in court records that it “has never sold, offered for sale, used, imported, distributed or marketed any product or work” of MGA.
MGA says their case highlights an issue many U.S. toy companies are facing: China-based websites that advertise discounted versions of sought-after toys, when the sites are really schlepping cheaply-made counterfeits or knockoffs, slightly altered versions that still amount to intellectual property theft.
Last September, customs officers seized 3,004 counterfeit Barbie dolls at the Canadian border in Minnesota, and made a similar bust in June, netting knock-off mermaid and fashion dolls.
In December, the Lego Group won its suit against two Chinese companies making and selling counterfeit Bela blocks.
At this year’s American International Toy Fair in New York, the largest annual industry gathering in the Western Hemisphere, two issues were on the minds of many companies: the looming closure of Toys “R” Us and the sale of counterfeit toys.
“People were managing their concerns about Toys “R” Us, but there was huge, huge outcry that we all have to come together against counterfeiting,” said Steve Pasierb, chief executive of the Toy Association, which organizes the event.
Figures from U.S. Customs and Border Protection show toy seizures fluctuate each year.
In 2011, the agency seized 495 shipments of counterfeits, with a list-price value of $26 million. Two years later, agents made 175 seizures, the lowest number in about a decade. Since then, though, seizures have climbed back up, with agents making 449 seizures, valued at $12 million, in 2017.
But it’s likely that the number of bogus toys that make it to the U.S. is much higher than that.
As trade between the U.S. and China has risen sharply — imports soared 60 per cent to nearly half a trillion dollars in the 10 years leading up to 2016 — counterfeiters have taken advantage of an overloaded system.
Counterfeiters send their products through in multiple shipments, sometimes filling a container with both legitimate and counterfeit products. Last July, officers at the Charleston, S.C., seaport found counterfeit Power Rangers and James Bond characters in a shipment from China, destined for a North Carolina-based importer. Of the 284 cartons of toys in the shipment, 27 contained 34,690 counterfeits.
The counterfeiters leverage the fact that customs officers don’t have the capacity to stop every shipment entering a U.S. port of entry.
“If we stop every single container, the economy would collapse tomorrow,” said customs spokesperson Jaime Ruiz.
To get customs officers to check a specific container suspected of containing counterfeits, companies typically must hire private investigators to ferret out the tracking number.
“It’s very difficult for the company to successfully get that information unless they can really infiltrate into the counter- feiting chain, which is really hard to do,” said Daniel Chow, an Ohio State University professor who has testified before the U.S. International Trade Commission about intellectual-property infringements.
Instead, many companies take the legal route like MGA, which has been aggressive in trying to protect the sales of its L.O.L. Surprise! dolls — but so far with limited success.
Premiering in October 2016, the toy line has been an unexpected hit for MGA, which also makes the popular line of sassy, pouty-lipped Bratz dolls.
L.O.L. Surprise! dolls are ballshaped toys with five to nine layers to unwrap. Each layer comes with its own surprise, and inside the ball, there’s a small, wide-eyed plastic doll.
The doll was the top-selling toy of 2017 in the U.S., U.K., Canada and continues to be a top seller this year, according to market research company NPD Group. (Neither NPD nor privately held MGA release units sold.)
Online, the dolls have a substantial following, with the L.O.L. Surprise! YouTube channel amassing more than 500,000 followers and almost 162 million views since late 2016.
Even Larian, whose Bratz dolls ate into Barbie sales when they premiered in the early 2000s, says he has been surprised at its success.
“In 40 years, I’ve literally never seen something like this,” he said.
That has led to loads of counterfeits and MGA’s aggressive pursuit of them.
In April, MGA was granted a default judgment of $1.2 million and a permanent injunction against 81 sellers hawking fake dolls online, including on Alibaba, AliExpress and DHGate, China-based online retail plat- forms. A court ordered that PayPal and Alipay turn over money from the sellers’ accounts to MGA. TomTop was MGA’s next target.
The online retailer has been sued by other manufactures, including in 2016 for selling cables with counterfeit trademarked HDMI logos and another time that year by Cree, an LED light manufacturer, for selling “pirated and counterfeit” versions of its products, court records show. Cree won a permanent injunction against TomTop, while the HDMI case entered into settlement talks, according to court records.
For the past six months, MGA has taken to social media to remind customers of how to spot a fake L.O.L. Surprise! doll.
Using hashtags on Instagram like #BlockOutTheFakers and #nocopycats, MGA has created videos featuring child actors Tahani and Mykal-Michelle. “Now, here are the real L.O.L. Surprise! balls,” Tahani, 15, says, moving her hands. “Here are the fake ones. Can you tell the difference?” Mykal-Michelle, 6, is quick to respond: “Uh, duh.”
Earlier this year, the European Commission, an arm of the European Union, sent out a safety alert about knock-off L.O.L. Surprise! dolls shipped from China that Czech Republic officials found at the border.
The plastic dolls contained a chemical — bis(2-ethylhexyl) phthalate, or DEHP — a phthalate that “may harm the health of children, causing possible damage to the reproductive system,” the notice read.
Benjamin Johnson, an attorney at MGA, said the company is on a mission to find out who is making the dolls.
“If it’s not TomTop themselves manufacturing, we can find out who it is, and hopefully rip the snake’s head off at the source,” he said.