In our previous post, LEGO Tries New Angle To Guard Its IP Against Upstart MEGA BLOKS, we wrote about LEGO’s efforts to protect its IP against alleged knock-off brick makers.  LEGO has now scored a victory in its ongoing efforts in its war against knock-offs.  In a ruling handed down on June 16th by the General Court of the European Union, the court rejected a bid by Best-Lock, a competitor of LEGO, to invalidate LEGO’s registration of a European Union trademark based upon the shape of its LEGO minifigs.

Back in 2000, LEGO obtained a trademark registration for the shape of its classic miniature person figurines, affectionately known among LEGO fans as “minifigs.”  That European Union trademark registration, termed a Community Trade Mark (CTM), was granted by the European Union’s Office for Harmonization in the Internal Market (Trade Marks and Designs) or “OHIM.”  In 2011, Best-Lock filed an application with OHIM seeking a declaration of invalidity of LEGO’s minifig trademark.  LEGO intervened in the case to defend its trademark registration.  After the application was rejected and that rejection was upheld by an OHIM appeal board, Best-Lock appealed the case to the General Court of the European Union.

The European Court considered whether LEGO’s trademark was invalid under regulations governing CTM registrations that bar registration where the trademark consists exclusively of a shape determined by the nature of the goods themselves or consists exclusively of the shape of goods necessary to obtain a technical result.

Best-Lock argued that LEGO’s minifigs have connectors on their heads and holes on their feet and other characteristics that allow them to interconnect with building blocks, hence rendering their shape functionally necessary to obtain a technical result.  An earlier LEGO CTM registration for its LEGO brick had been rejected for that very same reason.

This time, the Court sided with LEGO.

The Court observed that the first question was what were the “essential characteristics” of the contested mark.  Those essential characteristics were described by the Court as the shape of the head, body, arms and legs necessary to have the appearance of a human figure.  Those shapes are not dictated by any technical function.

Even if the parts of the minifig that allow for connections to LEGO’s brick system (like the stud on the top of the head) could be described as having a technical function, the Court reasoned that those characteristics were secondary to the essential characteristics of the mark and the overall impression conveyed by the mark, its human figure shape.  The toy’s overall shape that constitutes the trademark is not directly related to any technical function that the toy is designed to achieve.

As the Court explained, “[Best-Lock] neglected to mention what technical result a toy figure might be supposed to achieve” and that “…the fact that the figure in question ‘represents a manikin’ and may be used by a child in a play context was not a technical result.”  See Best-Lock (Europe) Ltd. v. Office for Harmonization in the Internal Market (Trade Marks and Designs (OHIM) (2016) Judgment of the General Court, June 16, 2015, Case No. T-396/14.

With the huge popularity of last year’s LEGO movie and record breaking profits—LEGO has now eclipsed Mattel as the world’s largest toy company—you might think that there are few threats to LEGO and its IP on the horizon and that “Everything Is Awesome” for the toy maker.

But a trip through the aisles in your local Toys R Us paints another picture.  LEGO’s traditional dominance of the toy brick building world is under assault from competitors looking to cash-in on the lucrative toy brick market.  Perhaps you have heard of Best-Lock? Nanoblocks?  Or perhaps MEGA BLOKS?

MEGA BLOKS in particular has been stealing LEGO’s thunder of late with hit products based on licensed IP such as Microsoft’s Halo universe.  Since the early 1990s, the Canadian company Mega Brands, Inc. has manufactured its MEGA BLOKS toy bricks, which some would say are knock-offs of LEGO’s own brick building system.

LEGO’s legal battles with MEGA have spanned the globe, as LEGO has fought to guard its IP from incursions by the upstart brick manufacturer.  Thus far, LEGO’s efforts have met with little success.  Many of LEGO’s patents have long since expired.

Recently, LEGO has turned to a more focused attack on MEGA BLOKS.  In February of this year, LEGO filed a complaint against Mega Brands before the United States International Trade Commission in In the Matter of Certain Toy Figurines, et al. (ITC Docket No. 3054).  LEGO contends that MEGA (and other manufacturers) have infringed on several of its patents for the toy figurines in its “Friends” line of building sets.  This line of LEGO building sets features newer figurine designs that are still under patent protection, unlike the designs for LEGO’s basic building bricks.  LEGO contends that MEGA is violating Section 337 of the federal Tariff Act of 1930 by the importation of its toys infringing on LEGO’s patents.

However, MEGA denies the allegations and has staked its ground in this latest maneuver by LEGO, contending that LEGO is overreaching and that MEGA and other companies have long introduced girl-themed toy sets figuring highly detailed figurines.  According to MEGA, “[i]n numerous disputes between LEGO and MEGA Brands over the past 20 years, courts throughout the world have consistently found that LEGO’s IP rights do not extend as far as LEGO would like to believe.”  MEGA distinguishes LEGO’s “long history with construction toys” from its late entry into “the detailed and articulated figurine space.”  LEGO’s complaint is currently set for trial in November 2015.

Interestingly, last year Mega Brands, Inc. was acquired by Mattel.  In addition to the LEGO Movie’s classic “1980-Something Space Guy,” you may recall another 1980s phenomenon, the 1984 hit movie Red Dawn starring Patrick Swayze.  I am reminded of a line in the movie describing the showdown between the two superpowers:  “Two toughest kids on the block, I guess. Sooner or later, they’re gonna fight.”  LEGO appears intent on escalating and looking for new avenues of attack in its legal battle against MEGA, especially now that Mattel is on the other side.