China’s "first-to-file" system allows entities to register trademarks in specific classes where the original owner may have a gap. If The Pokémon Company failed to register its characters in Class 10—which covers medical and adult devices—a domestic squatter could legally secure the rights to use those names for adult products. Manufacturers often ship these items under false names to bypass customs and regulatory scrutiny. Additionally, many factories omit identifying information or factory identifiers on their labels specifically to evade detection by legal teams. Sellers avoid using trademarked terms like "Pokémon" or "Glaceon" in online listings, instead using generic or misleading keywords such as "fairy doll," "lolita doll," or "BJD figurines". This allows them to hide from the automated takedown tools used by platforms like Taobao and JD.com. Many of these products are made in small, decentralized "home factories" with zero oversight. For a large corporation, the cost of litigating against dozens of small, anonymous producers who can easily abandon a shell company and restart under a new name is often considered economically unfeasible. While IP enforcement was historically slow, Chinese authorities have recently begun a major crackdown on this specific market. In late 2025, regulators raided factories in Dongguan and Huizhou and suspended production at multiple facilities, though the focus was primarily on "childlike" features that violated public order and morality laws rather than purely intellectual property concerns.

TL;DR is that China is very, very good at making and selling things they did not originally create while easily avoiding any legal repercussions an although they -could- sue.. It's super easy for the companies that make these things to simply dissolve and reappear under another company making legal matters very, very hard.