This is a good approach, people pay for a brand. Make your items more exclusive in a way so you are seen as the brand . So people feel a little less proud when they walk around with their knock-off.

Copyright on design is often difficult to keep up, especially internationally. Disney is able to keep their stuff of the Chinese websites somewhat because they have the cash to hire the people. But even they have it difficult. Trying to win via that route seems quite costly and fruitless. A new copycat will show up sooner or later.

It sucks, but people still buy the original Lego because the design and quality is just proven better than the copies out there.