Shape of Lego toy brick held to be “technically necessary”

Switzerland

The registration of the Lego toy brick as a three-dimensional (3D) trademark has given rise to a number of court decisions in various countries. At the European level, the battle seems to be over (see the judgment of the Court of Justice of the European Union (ECJ) in Lego Juris A/S v OHIM (Case C-48/09)), but at the national level, there is still some movement. The Commercial Court of Zurich has now issued its second,long-awaited decision in this respect (HG030309, not yet final).

The first decision of the Commercial Court (December 17 2002), in which the 3D mark had been declared invalid, was overturned by the Swiss Federal Court on July 2 2003.

According to the 2003 decision of the Federal Court, the main issue was whether the shape of the product was "technically necessary". It held that the shape of a product is not technically necessary - and, therefore, can be protected as a 3D mark - if there are reasonably feasible alternatives. An alternative is not reasonably feasible if it is less practical, less solid or more expensive. A sub-issue was which shapes were “eligible” as alternatives to the Lego toy brick (taking into account their cuboid form, the presence of clamping studs, their ability to be combined, their compatibility with the standard Lego bricks and the risk of confusion with the Lego bricks). 

Upon motion by the trademark owner, the Federal Court rendered an interim decision stating that:

  • the cuboid shape was essential; and
  • alternative shapes did not need to be compatible with the standard Lego bricks.

Between 2004 and 2011, the Zurich Commercial Court prepared and conducted an extremely lengthy and costly (about Sfr1 million) evidentiary procedure. The aim was to find out whether at least one of the 50 alternative shapes named by the trademark owner was not less practical, less solid and more expensive to manufacture.

The plaintiff (opponent) referred to a list of 17 disadvantages concerning one or more of the 50 alternative shapes. At the core of the evidence was an opinion by three court-appointed experts (a university professor, a plastic moulding specialist and an expert for assessing production costs). The experts had ordered the manufacture - under the supervision of the parties - of samples of the 50 brick shapes, and had even established an appropriate measuring system. The cost of the experts' opinion alone was Sfr345,000.

On the merits, the Commercial Court had to determine whether the shape of the Lego toy brick was technically necessary and, if not, whether it had at least acquired distinctiveness through use.

The decision dealt extensively with the production costs of the 50 alternative shapes. The tooling cost (cost of the mould) was 11 to 54% higher for the alternative shapes. Since the production costs of the Lego brick were seemingly very low (0.64 cents) in comparison with the retail price (21 cents), that is 3%, the issue was whether it was the cost of the mould, or the aggregate amount of the cost of the mould plus the cost of the material used in the whole lifespan of the mould, that really mattered. The Commercial Court left this question open since it found that the small differences in the cost of the material were essential.

The result was that all of the 50 alternative shapes were found to be more expensive to produce. Therefore, the court did not have to examine whether the alternative shapes were also less practical and/or less solid. Hence, the court found that the shape of the Lego toy brick was technically necessary. For that reason, the court held that the 3D mark was invalid.

How does this judgment sit with the decisions of the ECJ on 3D marks? In principle, the ECJ applies virtually the same wording (EU law: “the shape of goods which is necessary to obtain a technical result“; Swiss law: “shapes of goods that are technically necessary“). However, it interpreted the European provision as meaning that technical necessity does not mean that the shape claimed as a trademark must be the only one with the same advantages. In other words, the existence of other shapes with the same advantages does not exclude the ground of refusal under Article 7(1)(e)(ii) of the Community Trademark Regulation (40/94). As regards 3D marks, there is thus a considerable difference in the application of a particular provision of trademark law between the EU and Swiss highest courts. Such difference would lead to the division of the continent into a (large) area where an alternative product could be legally sold and a (small) area or country where the trademark owner could enforce its trademark rights. It is questionable whether this was the intention of the legislature when Switzerland enacted the present Trademark Act (1992).

Further, it must be borne in mind that the European courts, applying the concept of "technical necessity" of the ECJ, can normally avoid costly and time-consuming evidentiary procedures. In a case like the present one, it would not be necessary to examine whether the alternative forms have certain disadvantages. The existence of legal alternative forms in the European Union does not affect the validity of a 3D trademark. If the shape of the product in question merely reflects a technical function, it cannot be registered as a trademark.

Peter Heinrich, Streichenberg Attorneys at Law, Zurich

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