On Tuesday, the General Court of the European Union overturned the EUIPO's decision to declare Lego's design of a brick in a toy building set invalid. The General Court claims the EUIPO did not adequately take into account all the appearance characteristics of the brick.
This follows from the public policy argument enshrined within Article 8(1) of the Council Regulation (EC) No 6/2002, namely that designs which are dictated by their technical function shall not subsist. The rationale behind this, and a key role of the Court, is to ensure that the field of competition is not closed down by patent monopolies and intellectual property rights generally.
Delta Sport, the German company seeking to invalidate Lego's design, argued exactly that. Delta Sport maintained that the Lego brick design was in fact merely a design necessary to obtain the technical result of the interlocking mechanism created via the stud and socket connectivity, rather than any creative design; the registrability of which would impose a monopoly over that technical solution.
This is not new battleground for Lego who are well-seasoned in this claim. Lego sat before the General Court in 2008 and the European Court of Justice in 2010 in the fight for a shape (trade) mark registration it applied for in 1996. The registration was sought over its traditional Lego brick for which it gained its first patent in 1958.
In this new community design ruling however, the brick concerned might not be quite as familiar to some of our more aged Lego enthusiasts. The brick in question, as registered in 2010, has arguably more design elements to it, with the studs only running down the centre of the plate with a smooth surface on either side of the studs and a smooth upper surface (if only to make them less excruciating to step on I presume). Naturally, Lego's aim is to make its own bricks as distinct as possible from others in order that they do not become interchangeable with other manufacturers, thereby diluting its exclusivity and brand. However, the EUIPO determined that the absence of the studs on the smoother surface was also a technical feature. For example, it meant that steps could be built using the bricks due to there no longer being an obstruction by the side studs.
The General Court on the other hand disagreed. In order for the design to be invalid on the grounds of technical function, all features of the appearance had to be dictated by that technical result. The General Court held that this was not the case and the smooth surface in particular was a feature and characteristic of the overall appearance of the product and not exclusively limited to its technical function. It ruled that the interconnection alone was not the only factor which determined the appearance of the Lego brick and the EUIPO hadn't effectively considered each feature.
The EUIPO correctly considered invalidity based on Article 8(1) and (2) of Regulation No 6/2002, however erred in law by cutting its assessment short there. The General Court determined that despite the contested applicability of Article 8(1) and (2) and the technical function of the design, denying consideration of the exception in 8(3) would rob Article 8 of its full and intended scope. Thus, the exception applied since the features of the brick are capable of benefiting from the protection of modular systems.
This decision is ground-breaking in its very nature since it will require the EUIPO to rethink its original belief that designs of a technical nature cannot be registered and will now have to consider that 'mechanical fittings of modular products may nevertheless constitute an important element of the innovative characteristics' and present 'major marketing assets', thus being eligible for protection.
The effects of this decision are undoubtedly huge, with a large number of smaller companies potentially being forced to stop manufacturing and selling products of this design, such as Delta Sport, Qman, Wange, Cobi and Blue Brixx. However, the fight doesn't end here, as Delta Sport has the right to appeal to the EU's highest Court, the European Court of Justice. As mentioned, the CJEU in 2010 ruled against Lego on the basis its brick was designed in such a way that was necessary to obtain a technical result, however this was in relation to a trade mark application with the current decision being based on a community design.
The question is: should Lego be barred from using its size and affluence to block competitors from entering its market, or should Lego's legacy and brand be protected by preventing the copying of its original design; how do we adequately strike that balance within the intellectual property regime?