Since 1958, the Danish toy-making company Lego has benefitted from huge world-wide success after developing their revolutionary studded toy bricks for children and as a result has become Europe's biggest toy manufacturer. However, last week the Office of Harmonisation in the Internal Market (OHIM) rejected the company's trade mark rights over the design of its brick after rival company, Mega Brands, successfully appealed.

Mega Brands, which is based in Canada and markets a similar looking brick called 'Mega Blok', argued that the shape of Lego bricks served a clearly functional purpose and therefore should not benefit from trade mark protection. However, Lego in its defence argued that the brick's famous shape displayed unique characteristics and was "highly distinctive" from any other product on the market due to the round studs on the top of the brick. It argued that this made its bricks eligible for trade mark protection.

Despite Lego's argument, OHIM concluded that the brick's design was purely for a "utilitarian function" and not "for identification purposes in the trade mark sense". Further, the presiding judge said that Lego's argument was rejected on the basis that having a trade mark on the brick would allow Lego to have a monopoly of the market due to it preventing competitors from reaching the same "technical solution".

The Court of First Instance commented that "In order for that absolute ground for refusal to apply, it is sufficient that the essential characteristics of the shape combine the characteristics which are technically causal of, and sufficient to obtain, the intended technical result, and are therefore attributable to the technical result." It went on to state "it follows that the Grand Board of Appeal did not err in considering that the term ‘necessary’ means that the shape is required to obtain a technical result, even if that result can be achieved by other shapes".

A Lego spokeswoman, Charlotte Simonsen, said the company was disappointed with the ruling, commenting "We at Lego are convinced in our belief that we are right in our views on trade mark legislation". Ms Simonsen also indicated that Lego plan to appeal at the European Court of Justice.

By way of background to the case, in 1999, Lego had successfully attempted to make the design of its brick a registered trade mark in Europe which was objected two days later by the rival company, Mega Brands. In 2004 however, OHIM, backed by the Court of First Instance cancelled Lego's trade mark registration, therefore removing one form of protection for Lego from rival companies replicating the design of the world famous brick.

The denial of Lego's trade mark registration has inevitably sparked debate within many legal circles as to what a trade mark defines and what is required in order to protect a trade mark being replicated by competitors. However, in practical terms, the ruling will perhaps provide encouragement to many of Lego's competitors who may now feel that they have a fighting chance to reverse Lego's domination in Europe.