Shanghai Fengman Yunyou Entertainment Co Ltd, operating the Fengyun Amusement Club – located in the Putuo district of East China's Shanghai – was inspected by the local market supervision bureau on Feb 22, 2023, following a tip-off from Disney Enterprises Inc.

The inspection uncovered numerous Disney-branded toys including StellaLou and LinaBell dolls – all unauthorized and infringing on Disney's registered trademarks.

The infringing products, intended for use in claw machines in arcades and other places, lacked legitimate purchase documentation. This led to an immediate removal of all the infringing goods from the venue.

Subsequent investigations triggered further actions against seven other venues, leading to the seizure of 1,084 Disney-infringing items like plush toys, backpacks and wallets.

The eight businesses involved were found to violate Article 57, Clause 3 of China's Trademark Law, which deals with the sale of goods that infringe on registered trademark rights. Subsequently, the businesses faced penalties under Article 60, Clause 2 of the same law, resulting in the confiscation and destruction of the infringing merchandise and the imposition of fines totaling 47,000 yuan ($6,521).

This enforcement action is deemed to underscore the strict application of intellectual property rights in China and highlights the serious consequences of trademark infringement.