Shape Marks and Technical Results: Lego loses the Final Battle in the European War of the Toy Bricks

28 June 2011

Audrey Horton

The registration of shapes as trade marks has been possible in Europe since the coming into force of the Trade Marks Directive and the Community Trade mark Regulation.  The propensity for three-dimensional shape marks to impose restrictions of competition beyond those arising from conventional trade marks has lead to the close scrutiny and interpretation of this area of law by the Court of Justice of the European Union (CJEU).  The latest high profile case to be considered is Lego Juris A/S v OHIM and Mega Brands, Inc. (CJEU (Grand Chamber); C 48/09; 14 September 2010).

Lego applied for a CTM in 1996 for the shape of a red three-dimensional toy brick in its 2 x 4 studded form, as pictured below.  Lego’s main competitor Mega Brands Inc, the manufacturer of a comparable product Mega Bloks, applied to OHIM for a declaration that the registration was invalid under Article 7(1)(e)(ii) on the ground that the mark was exclusively the shape of the goods necessary to achieve a technical result.  In 2004 the Cancellation Division of OHIM and then the Grand Board of Appeal declared the registration invalid for ‘construction toys’ in Class 28 on the basis that the shape of the Lego brick performed a technical function.  Lego appealed unsuccessfully to the CFI now the General Court (GC), and in a final last-ditch attempt appealed to the CJEU.


The CJEU dismissed Lego’s appeal against the decision of the GC that its trade mark registration for the shape of a red three-dimensional toy brick for ‘construction toys’ in Class 28 was invalid under Article 7(1)(e)(ii).  The Court stated the ground for refusal in Article 7(1)(e)(ii) must be interpreted in the light of the underlying public interest which is to prevent trade mark law granting a monopoly on technical solutions or functional characteristics of a product.

The prohibition on the registration of trade marks which consist exclusively of the shape of goods which is necessary to obtain a technical result reflects the balancing of two considerations.  On the one hand, it ensures that undertakings may not use trade mark law in order to perpetuate, indefinitely, exclusive rights relating to technical solutions.  When the shape of a product merely incorporates the technical solution developed and patented by the manufacturer, protection of the shape as a trade mark once the patent has expired would permanently reduce the opportunity for other undertakings to use that technical solution.  Even if a shape of goods which is necessary to obtain a technical result has become distinctive through use, it is still prohibited from registration as a trade mark.

On the other hand, by restricting the ground for refusal in Article 7(1)(e)(ii) to signs which consist “exclusively” of the shape of goods which is “necessary” to obtain a technical result, it is taken into account that any shape of goods is to some extent functional and it would be inappropriate to refuse to register a shape solely on the ground that it has functional characteristics. 

The GC had held that a sign would consist ‘exclusively’ of the shape of goods which is necessary to obtain a technical result when all the essential characteristics of a shape perform a technical function, the presence of non-essential characteristics with no technical function being irrelevant in that context.  The CJEU agreed and confirmed:

  • the presence of one or more minor arbitrary elements in a three-dimensional sign, all of whose essential characteristics are dictated by the technical solution to which that sign gives effect, does not alter the conclusion that the sign consists exclusively of the shape of goods which is necessary to obtain a technical result

  • a sign cannot be refused registration as a trade mark if the shape of goods incorporates a major non-functional element, such as a decorative or imaginative element which plays an important role in the shape.

The CJEU held that the GC had correctly found that the condition for refusal of registration under Article 7(1)(e)(ii) that the shape must be ‘necessary’ to obtain the technical result intended, did not mean that the shape at issue must be the only one capable of obtaining that result.  The fact that there may be alternative shapes, with other dimensions or another design, capable of achieving the same technical result, did not of itself mean that registering the shape as trade mark would have no effect on the availability, to other economic operators, of the technical solution which it incorporates.

Lego had submitted that its competitors did not need to market toy bricks whose shape and dimensions were in all respects identical to those of the Lego brick in order to use the same technical solution.  The CJEU held, however, that the shape of the Lego brick was the technically preferable solution for the category of goods concerned and therefore, were the shape to be registered as a trade mark, it would be difficult for competitors to place on the market shapes constituting a real alternative, i.e. not similar and yet attractive to the consumer from a functional perspective.  

The CJEU held that the expression “essential characteristics” must be understood as referring to the most important elements of the sign and must be identified on a case-by-case basis.  Identification of the essential characteristics of a three-dimensional sign can be made by a simple visual analysis, or by a detailed examination taking into account assessment criteria such as surveys, expert opinions, or data re IP rights conferred previously in respect of the goods concerned.

Once the essential characteristics are identified, it is still necessary to ascertain whether they all perform the technical function of the goods in issue.  The OHIM Grand Board of Appeal had found that the most important element of the Lego brick sign consisted of the two rows of studs on the upper surface of the brick and placed particular emphasis on the inclusion of that element in Lego’s prior patents.  As a result it had found that element was necessary to obtain the intended technical result of the product, i.e. the assembly of toy bricks, and that, with the sole exception of its colour, all the other elements of the sign constituted by the brick were also functional.

The CJEU did not provide any detailed guidance on the definition of “essential” and “non-essential characteristics”, and the precise meaning and application of this is likely to be the subject of further references.  In addition the CJEU did not address the issue of what might be termed hybrid marks which have both functional and non-functional characteristics because the Lego brick was found to be entirely functional in all its characteristics, essential or otherwise. 
The public policy rationale running through the CJEU’s decision-making is that competition should not be stifled by extending the time-limited monopolies of patent, design or copyright laws into the potentially infinite protection conferred by trade mark protection.  There are several references to Lego’s expired patents which Lego had admitted described the functional elements of the Lego brick. 
Although registered trade mark protection might not be available, the CJEU said that where competitors put on the market ‘slavish copies’ of the product shape incorporating exactly the same technical solution, the position could, where appropriate, be examined in the light of unfair competition rules, although that was outside the scope of those proceedings, and indeed such laws are not harmonised in Europe. 

The Max Planck Institute published its ‘Study on the Overall Functioning of the European Trade Mark System’ in February 2011.  One of the proposals made in the Study is that shape of product marks should only be registered upon a showing of acquired distinctiveness (or ‘secondary meaning’).  If adopted, this would bring EU trade mark law more in line with jurisdictions such as the USA and Japan.  The rationale for the proposed change is the propensity for shape marks to restrict competition in goods and services as such; thus preventing others from making or selling the same article but without the finite duration of industrial design law protection.