After a 12-year battle before various Swiss courts, it is now final: the shape of Lego bricks does not enjoy trademark protection in Switzerland. On July 3 2012 (Decision 4A_20/2012) the Federal Supreme Court ruled that the shape of Lego bricks is technically necessary and therefore is excluded from trademark protection, regardless of whether the shape has acquired distinctiveness.
The history of the case goes back to a decision of the Federal Supreme Court of July 2 2003 (Decision 129 III 514), in which the court clarified the requirements of Article 2(b) of the Trademark Act. According to this provision, shapes that constitute the essential nature of goods and shapes of goods or packaging that are technically necessary are entirely excluded from trademark protection. The court held that a shape is technically necessary if there are no alternative shapes or if there are no alternative shapes that are economically reasonable in the interests of functioning competition. In light of this, an alternative shape is not economically reasonable if it is either less solid or triggers higher production costs.
In its earlier decision, the court did not define 'higher production costs'. Before the cantonal courts, Lego provided approximately 50 alternative shapes, all of which triggered higher production costs of between 1.326% and 4.927%. Lego argued that such higher costs were not unreasonable. Both the Commercial Court of the Canton of Zurich and the Federal Supreme Court rejected this argument. The Federal Supreme Court argued that, in view of the trademark owner's monopoly, which is unlimited in time, a strict approach must be taken. The monopoly should be granted only if competitors, in view of the existing equivalent alternatives, suffer no disadvantage. Hence, even very small differences in the production costs must be regarded as economically unreasonable. The court further held that specific circumstances such as the competition situation and the turnovers and margins involved are irrelevant, as they lack justiciability and create legal uncertainty.
This decision is fully in line with the strict approach taken recently by both the Institute for Intellectual Property and the Swiss courts towards three-dimensional marks.
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