Federal Court ends fight over shape of Lego toy brick

The three-dimensional (3D) trademark representing the well-known Lego toy brick has formed the subject of a series of court decisions in various countries. The last reported decision in Switzerland was the November 23 2011 decision of the Commercial Court of Zurich (HG030309). The court, following a time-consuming and extremely costly procedure, declared that the 3D mark for the shape of the toy brick was invalid. The Swiss Federal Court has now confirmed the judgment (Decision 4A_20/2012, July 3 2012).

At the EU level, the dispute ended two years ago with the same result (see Lego Juris A/S v OHIM (Case C-48/09)).

From the beginning of the litigation in Switzerland, the decisive question was whether the shape of the toy brick was technically necessary. The first instance court had gathered evidence on the question of whether at least one of the 50 alternative shapes listed by the trademark owner was “not less practical, not less solid and not more expensive to manufacture”. The opponent had presented a list of disadvantages concerning the alternative shapes. An opinion by three court-appointed experts (a university professor, a plastic moulding specialist and an expert for assessing the cost of production) found that none of the alternative shapes could have the same advantages at a reasonable cost. Therefore, the shape of the toy brick was considered to be technically necessary, and the trademark was held to be invalid.

An analysis of the Swiss Federal Court decision leads to the conclusion that, even in 2012, the court still sticks to a concept of validity for 3D marks which is based on the predominant Swiss doctrine. Unfortunately, this approach is in obvious contradiction with the principles of EU trademark law as interpreted by the jurisprudence of the Court of Justice of the European Union (ECJ) (see Lego v OHIM). As regards the wording of the law, the differences seem to be only formal (EU law: “the shape of goods which is necessary to obtain a technical result”; Swiss law: “shapes of goods that are technically necessary”). In Lego v OHIM, the ECJ denied that the existence of at least one other shape of the product with the same advantages excluded the ground of nullity of Article 7(1)(e)(ii) of the Community Trademark Regulation (207/2009). The court held that Article 7(1)(e)(ii), interpreted in the light of the public interest underlying the provision, serves to prevent trademark law from granting a "monopoly on technical solutions or functional characteristics of a product" (Lego v OHIM, Paragraph 43). In summary, the ECJ confirmed that Article 7(1)(e)(ii) precluded the registration of “any shape consisting exclusively, in its essential characteristics, of the shape of the goods which is technically causal of, and sufficient to obtain, the intended technical result, even if that result can be achieved by other shapes using the same or another technical solution” (Lego v OHIM, Paragraph 50).

Therefore, it would be unnecessary for a court in the European Union to initiate an evidentiary procedure such as that carried out by the Swiss court. The court could restrict itself to examining whether the shape is “technically causal of, and sufficient to obtain, the intended technical result”. Should the expert opinion of an engineer be needed, such an opinion should not cost more than a tenth of the costs incurred during the industrial and economic analysis undertaken by the Swiss court.

Had the result of the evidentiary procedure been different, and had there existed an alternative shape that was “not less practical, not less solid and not more expensive to manufacture”, the Swiss court would undoubtedly have found that the 3D mark for the Lego toy brick was valid. This, however, would have led to a very unsatisfying result for the competitors of the two parties. The trademark owner could continue to market its product, and the defendant could seemingly have chosen an alternative shape - or could it? The prevailing Swiss doctrine does not take into consideration whether the alternative shape(s) is/are free from third parties’ rights. In any case, further competitors would find the market closed.

Therefore, it seems inevitable that the Swiss courts will abandon the current practice and follow the European approach. This must not be a 180° turn - a slight amendment giving more freedom to operate might be sufficient. At the outset, the two concepts are virtually identical: the Swiss Federal Court started with the idea that trademark protection should be excluded if the shape in question must be kept free for use “in the interest of efficient competition” (Case 129 III 514, consideration 2.4.2). This is almost the same as saying that Article 7(1)(e)(ii) of the regulation “serves to prevent trademark law from granting a monopoly on technical solutions”. It is only when it comes to determining the number of competitors whose interests are to be considered that Swiss and EU practice divide. According to the Swiss Federal Court, the existence of one other alternative suffices, while at the EU level, the number of alternative solutions is irrelevant.

A compromise between the two concepts could perhaps be found in the number of alternative solutions. In cases where there exists a virtually unlimited number of possible shapes with the same or similar advantages, it seems adequate to grant protection to the 3D mark. In those cases, trademark law does not allow a monopoly on a technical solution.

Peter Heinrich, Streichenberg Attorneys at Law, Zurich