Sale of Lego-compatible bricks does not constitute unfair competition
Legal updates: case law analysis and intelligence
The Italian Supreme Court has issued a final decision in a case involving the sale of Lego-compatible bricks (Case 5437/2008, January 9 2008, only recently released).
The court held that the manufacture and sale of toy bricks that are similar to those of Lego System A/S (whose patent for the bricks has expired) does not constitute unfair competition, even where the bricks cannot be differentiated by consumers. Once a patent has expired, the invention falls within the public domain and the patent holder cannot prevent competitors - in this case Canadian company Mega Blok Inc - from manufacturing, using or selling the invention.
The Supreme Court held that the diversion of consumers by competitors does not constitute an "unfair commercial practice" where:
- such diversion provides additional benefits or advantages to the public; and
- the patent for the original product has expired.
Therefore, it is lawful for competitors to manufacture, distribute and sell toy bricks that are interchangeable with Lego bricks in Italy.
In addition, the court emphasized that industrial property rights must be protected in order to promote research and development. However, the protection afforded to patented products must also be limited in time. Therefore, once the patent for a product has expired, the product may be reproduced freely by competitors, which is profitable for both manufacturers and consumers.
The decision of the Supreme Court appears to contradict an earlier decision issued by the Milan Court of Appeal in 2003. The Court of Appeal had held that competitors must introduce changes to such modular products in order to prevent confusion among consumers.
Margherita Bariè and Pietro Pouchè, Carnelutti Studio Legale Associato, Milan
Copyright © Law Business ResearchCompany Number: 03281866 VAT: GB 160 7529 10