"Sue American companies" — Shark Tank investor Kevin O'Leary reveals Chinese firms exploit the US legal system after copying products

Kevin O’Leary, entrepreneur and Shark Tank investor, responded to a concern raised by Beth Benakie, founder and CEO of Busy Baby, who warned that small businesses face serious risks when Chinese manufacturers copy their products.

In a clip from his interview on The Megyn Kelly Show posted on Instagram on April 22, 2025, O’Leary confirmed the issue, explaining,

"As soon as it gets to 5 million in sales domestically, the same factories that are making it there knock it off." He added, "The crazy thing, Megyn, is Chinese companies use the American legal system to sue American companies after they've knocked them off. Why is that okay?"

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Shark Tank's Kevin O'Leary outlines legal and trade concerns over Chinese product duplication

Kevin O’Leary explained that several U.S. companies have faced the same issue after choosing to manufacture their products in China. Once the product proves successful in the U.S. market, factories that originally produced the items begin selling nearly identical versions at lower prices.

"The same factories that are making it there knock it off and sell it at a 40% discount because they never have to recoup the R&D that the company put into making the product in the first place," he said.

According to O’Leary, this practice leads to the original company being "wiped out a different way." The problem extends beyond replication. O’Leary stated that Chinese firms have taken legal action against companies whose products they duplicated.

"They just totally ignore the IP and they can’t go back and litigate," he said.

The Shark Tank investor underscored that these legal tactics complicate matters for U.S. businesses, especially when they face lawsuits in the same system that is supposed to protect them.

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Systemic challenges with IP enforcement

O’Leary noted that the issue reflects a broader failure in global intellectual property enforcement. The Shark Tank investor said,

"They don’t play by the rules of the World Trade Organization, and they haven’t since 2000. They just don't give a sh*t."

According to him, Chinese firms are not held accountable when they use U.S. capital markets or operate in global trade frameworks without honoring the same rules.

He said that Chinese companies try to get ahead by taking intellectual property (IP) from others, including American businesses. This has been happening for years, with many companies seeing their products copied and sold, but unable to take legal action.

Although this issue has been around for a long time, O’Leary mentioned that the U.S. government has recently started taking steps to deal with it.

"This administration has decided there are consequences to stealing IP and not playing by the rules and not giving access to markets," he explained.

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Economic pressure and long-term effects

O’Leary said the situation is reaching a breaking point, describing it as an "economic war" with China and framing the ongoing disputes as part of a broader competition between the two economies. The Shark Tank investor added,

"China can’t afford not to have access to the world’s largest economy...Otherwise everybody, you know, unemployed there."

In closing, O’Leary reflected on his own experience, noting that he has done business in China and experienced similar setbacks.

"I do business in China and I've been royally screwed. And I'm tired of it. I'm just sick of it." he said.

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Shark Tank airs every Friday at 8 PM ET on ABC.