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A win for LEGO in obtaining design protection before the EU General Court

Date: 13 April 2021

On the decision of the General Court of 24 March 2021 (T-515/19)

 

LEGO has achieved a surprising victory before the General Court of the European Union. On 24 March 2021, the court annulled the previous decision of the Third Board of Appeal of the EUIPO of 10 April 2019 (Ref: R 31/2018-3) on the invalidity of a Community design for a certain toy brick of the Danish toy manufacturer LEGO (see T-515/19, 24 March 2021).

 

The Board of Appeal, which had found the Community Design invalid, erred in law by not taking into account the exceptions of Article 8(2) and (3) of the Community Design Regulation (CDR). Furthermore, the Board of Appeal failed to examine all relevant features of the toy brick at issue.

 

I. Background

 

LEGO's play bricks, which can be assembled by means of plug-in connections, have been well-known and popular for many years. LEGO has therefore repeatedly sought to protect its toy bricks against imitation by means of intellectual property rights.

 

In 1996, LEGO's legal predecessor sought to register a three-dimensional trademark for a play brick. Such trademark protection would have been particularly attractive, as a trademark could have been renewed as often as desired and the owner of such a trademark could thus have prohibited competitors from using confusable play bricks for an indefinite period of time. However, an application for revocation of the trademark filed later was granted by the Cancellation Division of the European Office. An action against this before the General Court was unsuccessful. The judgement of the General Court was finally confirmed by the European Court of Justice (ECJ). According to the ECJ, LEGO's play brick was excluded from trade mark protection under Art. 7(1)(e)(ii), as it consisted exclusively of the shape of the product which was necessary to obtain a technical result. The most important element of the LEGO toy brick was the rows of studs on the top of the brick. This was deemed to achieve the technical effect of the assembly of the toy bricks. In its decision, the ECJ emphasised that technical features may not be monopolised by means of trade mark law (see ECJ, judgment of 14.09.2010 - C-48/09 P (GC)).

 

Although the present case is about design protection rather than trade mark protection, design law also prohibits the protection of designs that are exclusively technical, cf. Art. 8 (1) CDR.

 

In 2010, LEGO applied for Community Design No. 1664368-0006 for a toy brick which has a row of four knobs in the middle of the upper side and otherwise has a smooth surface.

 

A registered design grants its owner a monopoly on the claimed design for a total of 25 years. While most products are not successfully sold with the same design for a quarter of a century, LEGO toy bricks are a relatively timeless product, so design protection in this case grants a strong market position.

 

A registered design is an unexamined property right. This has the advantage that a designer can have his design protected quickly. However, a third party can also file an application for a declaration of invalidity of the design in order to have examined whether it is wrongly registered. This would be the case if, contrary to the provision of Art. 8 (1) CDR, according to which "features of appearance of a product which are exclusively due to its technical function" are not eligible for protection.

 

With reference to this ground for exclusion, the German company Delta Sport Handelskontor GmbH ("Delta Sport") had applied to the EUIPO for a declaration of invalidity of the above-mentioned Community design.

 

II. The current case

 

On 8 December 2016, Delta Sport had filed an application for a declaration of invalidity with the EUIPO in respect of LEGO's Community design. This was based on the argument that the appearance of the product was only due to its technical function and that the LEGO play brick could therefore not enjoy design protection under the exclusion ground in Art. 8(1) CDR. After the EUIPO had initially rejected this request, the Board of Appeal followed Delta Sport's view. The Board essentially found that all the appearance features of the product covered by the contested design were exclusively determined by the technical function of the product, namely to enable assembly and disassembly with the other bricks of a set.

 

The General Court now overturned this decision. Specifically, it criticised two legal errors by the EUIPO. Firstly, it had failed to observe the exception in Article 8(3) CDR. Secondly, it had not sufficiently taken into account all the essential features of the appearance of the contested design.

 

(1) The exception under Article 8(3) CDR

 

With regard to the non-observance of Art. 8 (3) CDR, it is necessary to take a closer look at the requirements for protection and the grounds for exclusion of protection for (Community) designs.

 

The CDR, just like the German Design Act, mentions two requirements for protection of a design: Novelty and individual character. Excluded from design protection, however, are features of appearance of products which, according to Art. 8 (1) CDR, are "exclusively due to their technical function". 

 

Furthermore, Art. 8 (2) CDR excludes from protection features of appearance which "must necessarily be reproduced in their exact form and dimensions in order that the product in which the design is incorporated [...] may be mechanically combined [...] with another product so that both products may fulfil their function". 

 

This excludes so-called "must-fit" parts from design protection in order to ensure the interoperability of different components and not to affect trade and competition in this field. The term "must-fit" stands for a classification of parts whose form is predetermined in all elements for purely technical reasons in order to be inserted into a complex product. Art. 8 (2) CDR only covers function-ensuring connecting parts and thus does not overlap with the scope of Art. 8 (1) CDR, which concerns appearance features with a technical function. 

 

A counter-exception to Art. 8(2) CDR is contained in Art. 8(3) CDR: "Notwithstanding paragraph 2, a Community design [...] exists in a design which serves the purpose of permitting the assembly or connection of a plurality of interchangeable products within a modular system".  

 

Recital 11 of the Community Design Regulation contains a justification for this retroactive exception granting design protection, according to which the mechanical connecting elements of combination parts may form an important element of the innovative features of combination parts and constitute an essential factor for marketing and should therefore be eligible for protection.

 

There are different opinions in the legal literature on the systematic relationship between Art. 8 (3) and Art. 8 (1) or (2). In any case, the CFI found the exception of Art. 8(3) CDR applicable in the present case and criticised the EUIPO for not having examined this exception to Art. 8(1) CDR. It was irrelevant that LEGO had invoked this exception for the first time in the appeal proceedings.

 

(2) Failure to take into account all essential characteristics of appearance

 

The second error of law concerns the disregard of the appearance feature of the smooth surface next to the row of studs. While the studs themselves fulfil a technical function by enabling the connection between the play bricks, there would have been scope for design for the smooth surface, according to the General Court. The decision to design this surface in the form applied for was thus at the creative discretion of the designer. The EUIPO had not taken this into account by not considering the smooth surface at all.

 

III. Conclusion

 

The decision of the General Court is particularly interesting in view of the ECJ's earlier decision on the LEGO Community trademark. In that case, the shape of the LEGO brick had meant that LEGO was denied trademark protection. The General Court, on the other hand, has now opened the way for LEGO to obtain protection of the well-known building block under design law, thus strengthening LEGO's position on the market for play bricks.

 

However, it should be noted that the General Court only criticised legal errors of the EUIPO and did not itself rule on the merits of the case. Moreover, the decision is not yet final. It remains to be seen how the ECJ will rule on this matter, should it have to rule on it.

 

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