Everyone has played, at least once, with LEGO bricks. Likewise, everyone has seen, at least once, one of the many LEGO knockoffs. As the owner of the (now expired) patented invention behind the famous bricks, LEGO A/S (“LEGO”) has been fighting competitors in the courts for a long time, trying to make them stop manufacturing and marketing their brick sets by enforcing trademark rights—though most of the time unsuccessfully[1].
However, on March 24, 2021,[2] a decision came down in favor of LEGO and the protection of its bricks. The Second Chamber of the European General Court overruled the European Union Intellectual Property Office (EUIPO) Board of Appeal’s decision and declared that LEGO’s brick is, in fact, worthy of protection under Regulation 6/2002 (Community Design Regulation, “CDR”).[3] The proceedings originated from the following application for registration of a Community design, filed with the EUIPO in February 2010 and later challenged by the German toy company Delta Sport Handelskontor GmbH (“Delta”).
After the EUIPO Invalidity Division rejected Delta’s application for a declaration of invalidity,[4] dismissing it as unfounded, Delta argued before the EUIPO Board of Appeal that the design filed by LEGO could not be registered as it did not meet the requirements set out in Art. 8 CDR. Art. 8(1) CDR prevents companies from protecting designs consisting of “features of appearance of a product which are solely dictated by its technical function.” Art. 8(2) CDR adds further to Art. 8(1) CDR to specify that interconnecting products cannot be protected if their features of appearance “must necessarily be reproduced in their exact form and dimensions in order to permit the product in which the design is incorporated […] so that either product may perform its function.” The rationale of these provisions is to prevent technological innovation from being hampered by granting design protection to features dictated solely by the technical function of a product. According to the EUIPO Board of Appeal, conferring the design protection to the LEGO brick could have had such a result.
The decision of the General Court
After the EUIPO Board of Appeal sided with Delta, LEGO appealed the decision before the General Court, which upheld the challenges put forward by the Danish toy company. First, the General Court found that the EUIPO erred in the law, since it failed to consider Art. 8(3) CDR, a potential defense to both Art. 8(1) and Art. 8(2) CDR in certain circumstances. The provision sets out that, by way of exception, the mechanical fittings of modular products may constitute a relevant element of the innovative characteristics of modular products and present a major marketing asset, and therefore should be eligible for protection. Thus, as a first step the EUIPO should have analyzed whether the challenged design could benefit from the protection of modular systems for the purposes of Art. 8(3) CDR.
Second, the General Court held that a design must be considered invalid under Art. 8(1) CDR only if all the features of its appearance are solely dictated by the technical function of the product it concerns. It follows that if at least one of those features is not imposed by technical reasons, the design at issue cannot be declared invalid. In the case at stake, the EUIPO Board of Appeal considered several elements of the design (the row of studs on the top of the brick, the row of smaller circles on the bottom of the brick, the two rows of bigger circles on the bottom of the brick, the rectangular shape of the brick, the thickness of the walls of the brick, the cylindrical shape of the studs) and found that all of those features were dictated solely by the technical function of the product, namely to allow assembly with and disassembly from the rest of the bricks in the set. However, according to the General Court, it failed to consider certain creative aspects of the contested design, in particular the smooth surface on either side of the row of four studs on the top. Since the EUIPO Board of Appeal failed to identify (and consider) all the features of the appearance of the product, a fortiori, it did not establish that all the features were solely dictated by the technical function and that Art. 8(1) CDR was breached.
On those grounds, the General Court annulled the decision of the Third Board of Appeal of the EUIPO and sided with LEGO with a first-of-its-kind decision.
Comment
The judgment marks a significant step towards the protection of interconnecting and modular designs, as a case precedent admitting they can be protected (under EU law) in situations where they satisfy the defense under Art. 8(3) CDR. As for the case at stake, some further issues must be considered regarding the possible consequences of the decision: though LEGO could make good use of it to protect its intellectual property, competition could be unjustifiably hindered. An aggressive enforcement strategy may ultimately prevent any sale in the European Union of products similar to the brick design whose validity has just been acknowledged by the General Court, effectively allowing LEGO to build a wall against competitors. Such conduct may raise concerns, as the exercise of IP rights in the EU is limited by the Treaty’s rules on competition and the freedom of movement of goods.
Delta now has the right to appeal the decision (only on points of law) in comment before the European Court of Justice, which may then be asked to give the final word on the matter.
[1] However, LEGO recently obtained a favorable decision from the Guangzhou Intellectual Property Court in an intellectual property infringement case against the Chinese company Shantou Meizhi Model Co., Ltd.
[2] General Court of the European Union, Judgment in Case T-515/19, March 24, 2021.
[3] Council Regulation (EC) No. 6/2002 of 12 December 2001 on Community designs.
[4] EUIPO Third Board of Appeal, decision in Case R 31/2018-3, April 10, 2019.
