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.