Journal of Intellectual Property Law & Practice, first published online 11 January 2011
Lego Juris A/S v Office for Harmonisation in the Internal Market, Mega Brands Inc. Case C 48/09 P, 14 September 2010
The Court of Justice of the European Union held that the iconic Lego brick shape cannot be registered as a Community trade mark since that shape is necessary to obtain a technical result.
In 1996 Danish toy manufacturer Lego filed a Community trade mark application for the shape of its toy brick. OHIM registered the trade mark on 19 October 1999. Two days later Mega Brands, a competitor of Lego, applied to invalidate the trade mark which, it argued, should not have been registered since it was absolutely barred from registration. Among other things, Mega Brands argued that the Lego brick shape consisted exclusively of a shape which was necessary to obtain a technical result (Article 7(1)(e)(ii)).
During the subsequent 10 years the ECJ provided some clarification as to the registrability of shape marks (Case C-299/99 Philips  ECR I-5475) by stating that a sign consisting exclusively of the shape of a product would be unregistrable where the essential functional features of that shape were attributable only to the technical result.
In 2004 Lego's brick shape was declared invalid by the Cancellation Division on the basis that the mark consisted exclusively of the shape of goods which was necessary to obtain a technical result (Article 7(1)(e)(ii)). Lego unsuccessfully appealed to the Grand Board of Appeal and the Court of First Instance (now the General Court) which in 2008 held that the addition of non-essential characteristics having no technical function was not sufficient to remove a shape mark from the ambit of Article 7(1)(e)(ii) where all the essential characteristics of that shape performed a technical function. Article 7(1)(e)(ii) also applied where there was more than one shape to achieve the same technical result.
Lego appealed to the Court of Justice (CJ), arguing that the General Court had:
* misinterpreted the scope of Article 7(1)(e)(ii) and departed from guidance set out in Philips;The analysis below focuses on Lego's first argument which concerned the scope of Article 7(1)(e)(ii).
* used the wrong criteria to ascertain the essential characteristics of three-dimensional shapes in failing to take into account the target consumer; and
* used incorrect criteria to determine the functionality of the characteristics of the shape.
The CJ considered Lego's argument that Article 7(1)(e)(ii) did not preclude the registration of any shapes which performed a technical function, but precluded only those shapes which created a monopoly on technical solutions or functional considerations. It also looked at Lego's submission that guidance given in Philips was disregarded when the General Court held that the availability of alternative shapes to perform the same technical function was irrelevant.
The CJ considered the balance between competition in the European Union and monopoly rights granted under intellectual property law: the purpose of Article 7(1)(e)(ii) was to prevent shape marks being used to create a monopoly on technical solutions or functional characteristics of a product. There were similar provisions in Community Design Regulation 6/2002. The condition of the shape ‘exclusively’ performing a technical function was satisfied where all essential characteristics of the sign performed a technical function. The fact that a shape may have additional non-essential characteristics would not take it outside the scope of Article 7(1)(e)(ii) if all the essential characteristics performed a technical function.
Rejecting Lego's argument that, where several shapes could achieve the same technical result there was no risk of creating a monopoly on technical solutions or functional considerations, the CJ followed Philips and confirmed that the expression ‘necessary to obtain a technical result’ did not mean that Article 7(1)(e)(ii) applied only if the shape was the only one which could achieve the intended technical effect. Since trade mark law prevents competitors using both identical and similar shapes, the registration of functional product shapes performing a technical function would make it difficult for competitors to market dissimilar shapes that were still functional.
This judgment supports the reasoning in Philips and illustrates the practical difficulty of registering shape marks that do not incorporate a major non-functional element, such as the brand name.
In following Philips, this judgment makes clear that the existence of other shapes which could achieve the same technical result does not preclude the application of Article 7(1)(e)(ii). It does however leave open the question of what amounts to the ‘essential characteristics’ of a sign and when those characteristics will be functional. This question may well be the subject of future litigation before the CJ.
It may seem unfair that an innovative, distinctive and ubiquitous toy shape (it was estimated that there were 62 Lego bricks for every one of the world's 6 billion inhabitants) cannot be protected. However, Lego had previously enjoyed patent protection for the brick shape.
At first sight the judgment might appear to offer a glimmer of hope to Lego in dealing with competitors who market ‘slavish copies’ of the Lego brick shape, suggesting that the company may be able to rely on unfair competition rules. In the authors' view this suggestion is hollow, since unfair competition rules are outside the CJ's remit.