A European court recently rejected Lego’s attempt to have its red brick registered as a Community trade-mark. In Lego Juris A/S vs. Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM), the Court of First Instance of the European Communities upheld a ruling of the OHIM Grand Board of Appeal that Lego’s trade-mark, a red three-dimensional rectangular construction brick, was unregistrable under Article 7(1)(e)(ii) of Council Regulation (EC) No 40/94, in respect of "construction toys" in Class 28 goods.

In 1996, Lego applied to the OHIM (the EU’s trade-mark office) to have its red construction brick registered as a Community trade-mark. In 1999, the trade-mark office registered the applied-for mark. Two days later, Lego’s competitor, Mega Brands, applied to have the registration invalidated. In 2004, the OHIM cancelled the registration on the basis of Article 7(1)(e)(ii), finding that the mark "consisted exclusively … of the shape of goods which was necessary to obtain a technical result." The OHIM’s Grand Board of Appeal dismissed Lego’s appeal and upheld the cancellation.

Lego asked the Court of First Instance to annul the board’s decision, arguing that the board had misinterpreted Article 7(1)(e)(ii) and incorrectly assessed the subject-matter of the mark. Lego also argued that the board had wrongly taken into account a Supreme Court of Canada decision.

1. Interpretation of Article 7(1)(e)(ii)

Article 7(1)(e)(ii) provides that "signs which consist exclusively of...the shape of goods which is necessary to obtain a technical result...shall not be registered." This provision is intended to prevent the creation of a monopoly on shapes that serve a technical function, under the guise of trade-mark protection. If such shapes were registrable, competitors would be unable to freely sell products with that function.

Lego argued that the board had misinterpreted the meaning of the words "exclusively" and "necessary." Article 7(1)(e)(ii) was "not intended to exclude functional shapes per se from registration as a technical result," Lego asserted. Rather, it claimed that the shape "must have no non-functional features and its external appearance must not be capable of being altered in its distinctive characteristics in such a way that it would lose its functionality."

The court found that the board had correctly interpreted the word "exclusively," concluding that the addition of non-essential characteristics that have no technical function does not prevent a shape from being caught by Article 7(1)(e)(ii) if all the essential characteristics of that shape perform a technical function.

The court also agreed with the board’s interpretation of the term "necessary" as meaning that the shape is required to obtain a technical result. It accepted that Article 7(1)(e)(ii) would apply even if that result could be achieved by other shapes. As a result, the court concluded that Article 7(1)(e)(ii) "precludes registration of any shape consisting exclusively, in its essential characteristics, of the shape of the goods which is technically causal of, and sufficient to obtain, the intended technical result, even if that result can be achieved by other shapes using the same or another technical solution."

2. Assessment of the Subject-Matter of the Mark

Lego complained that the board had failed to identify the essential characteristics of its mark and erred in assessing the functional nature of the essential characteristics of the mark. Lego asserted that the essential characteristics of the shape must be determined from the consumer’s point of view and that the board’s analysis should have taken into account consumer surveys.

The court rejected Lego’s argument, finding that the essential characteristics of a trade-mark must be determined objectively for the purposes of Article 7(1)(e)(ii), based on its graphic representation and descriptions filed at the time of application. Consumer opinions are, therefore, irrelevant to the analysis of the functionality of the essential characteristics of a shape.

Lego also argued unsuccessfully that the board had erred in examining the construction brick as a whole, including invisible features such as the hollow underside and the secondary projections. The court found that that the board had correctly identified all the essential characteristics of the shape — the fact that the Board also took into account other characteristics was irrelevant.

Lego further asserted that its expert opinions proved that the essential characteristics of the shape were non-functional, and that the Board had erred in not referring to those opinions. Since the shape of the Lego brick is not the only shape that could achieve the intended technical result, Lego asserted that the shape is not technically necessary and its essential characteristics are non-functional. The court determined that the functionality of a shape must be assessed independently of whether other shapes exist. Therefore, the court concluded that the board was not required to consider those expert opinions.

The court also found that the board’s reference to the Lego patents was proper. The board recognized that patent protection of a technical solution does not prevent trade-mark protection of a shape incorporating that solution. Its reference to the patents was only to emphasize that the essential characteristics of the Lego brick are functional.

Based on its analysis, the court agreed with the board’s finding that the shape of the brick is functional.

3. Consideration of Foreign Court Decisions

The court concluded that the board’s decision was not based on the Supreme Court of Canada decision. Rather, the board merely observed that its analysis was consistent with the case law of other jurisdictions (including the Canadian decision), after it had found the Lego brick to be functional.

Based on the foregoing, the court dismissed Lego’s appeal.

McCarthy Tétrault Notes:

  • The Supreme Court of Canada provided a similar interpretation of the Canadian trade-marks regime in Kirkbi AG v. Ritvik Holdings Inc. In that case, the court dismissed Lego’s claim of infringement of unregistered trade-mark rights in its Lego brick, on the basis that purely functional trade-marks are not protectable under the Trade-marks Act.
  • Even if alternative designs are possible, a functional shape is most likely not registrable as a Community trade-mark. However, functional characteristics may be the subject of patent protection.