Lego block's look cannot function as a trademark
In Lego Canada Inc v Ritvik Holdings Inc, the Federal Court of Appeal has followed the lead of courts in other jurisdictions, finding that Lego has no valid trademark in the look of its toy blocks because the look is a primarily functional feature of the toy.
Lego Canada Inc manufactures the familiar toy construction block characterized by cylindrical studs on its upper surface. A competitor, Ritvik Holdings Inc, sells a substantially similar block in Canada under the mark MEGA BLOKS that can be used interchangeably with the LEGO product. Lego commenced an action against Ritvik under Section 7(b) of the Canadian Trademarks Act. Lego claimed that it had acquired common law trademark rights in the look of the upper surface of its toy block (which it referred to as the LEGO indicia) and that Ritvik was passing off its blocks as Lego's.
Following previous jurisprudence indicating that a trademark on a product cannot be a primarily functional feature of that product, the trial judge dismissed Lego's case.
On appeal, the majority upheld the decision of the trial judge, finding that functional elements of wares, such as the LEGO indicia, cannot act as trademarks if the combination of elements is "an integral part of the operating process of the wares". In contrast, peripheral or secondary functionality is permissible in a trademark. As an example of the latter, the court cited a case where a functioning phone number was held to be a valid trademark because it served only to direct attention to the existence of certain wares and was not a functional part of the wares themselves. The policy consideration behind the prohibition on functionality is "to ensure that no one directly or indirectly achieves the status of patent holder through the guise of a trademark". Lego had managed to maintain a monopoly on its toy blocks for a period of approximately 50 years through a series of successive patents, with the last Canadian patent having expired in 1988.
The dissenting judge, Justice Pelletier, accepted Lego's argument that the functionality prohibition need only apply to registered, and not unregistered, trademarks. He would have allowed Lego's action for passing off, finding that the LEGO indicia was a valid trademark. The majority disagreed and noted that a distinction between registered and unregistered trademarks would lead to the illogical result of parties electing not to register trademarks where their marks have functional elements.
The decision confirms that a primarily functional element of a product cannot be a valid trademark in Canada. It is not known whether Lego intends to appeal the decision.
For a discussion of the registrability of the shape of LEGO blocks as a trademark, see No form mark protection for LEGO.
Brad T Cran, Blake Cassels & Graydon LLP, Toronto
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