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Department of LawGothenburg School of Economics and Commercial LawGöteborg UniversityLL.M. ProgrammeTHE LEGO BRICKIN THE BORDERZONE BETWEEN FORMS OFPROTECTIONMaster ThesisByJenny Lundahl20 CreditsSupervisor: Lars AnderssonField: Intellectual Property LawSpring 2005

Executive SummaryThis thesis is a case study on the attempts of the LEGO 1 Group to achieve legalprotection of the Basic LEGO Brick, i.e. the LEGO Group’s standard toy building brickwith eight bosses on the upper surface. The objective is to illustrate the legal reasoning ofdifferent courts in a global perspective and find out how a company such as LEGO usesthe courts and intellectual property rights for the purpose of attaining a certain desirableposition on the market.The Basic LEGO Brick has a fascinating legal record. Apparently, it is possible to obtainexclusive rights for the shape of the brick under several intellectual property law regimes.The brick has been considered to be able to obtain exclusive rights as it provides atechnical solution for a technical problem and simultaneously as it has a certain design.Consequently, the Basic LEGO Brick is in the borderzone between various forms ofprotection and this area of law can be somewhat grey and complex.The standard bricks and the basic building sets have been subject matter for world widepatents. However, in order to maintain market dominance, patents are rarely sufficient. Apatent is limited in time and only protects the technical idea. Once the patent expires themarket is open for competition. Strong brand loyalty might help the company to keep themarket dominance it had due to the patent protection. Never the less, since the LEGOGroup’s major patent on the Basic LEGO Brick expired, LEGO has persistently tried toblock its competitors by claiming that other forms of protection are available for theshape of the bricks. The LEGO Group has argued before courts and decision-makingbodies that the features which were claimed in patents to solve a technical problemshould be protected by trademark law, copyright law and unfair competition law.The legal battles have cost the LEGO Group and its major competitors on the market lotsof financial resources. LEGO has won a lot of lawsuits but so has its competitors. LEGOseems to have lost most of the lawsuits concerning trademark rights. Some of the LEGOGroup’s major competitors have challenged the trademark rights LEGO claims that it hasby invoking that the LEGO trademark is “functional “. However, in most cases the LEGOGroup has initiated the court proceedings. LEGO each year handles hundreds of incidentsrelating to what the Group considers constitute infringements of its IPRs.A case study allows one to enter deeply into a certain company’s product in order tounderstand all aspects of that product in a legal perspective. In the thesis, the reader willbe able to see the on-going dialogue between the LEGO Group and the courts and otherdecision-making bodies. The laws of different countries have different approaches to thefunctionality doctrine under trademark law and unfair competition law respectively. Eventhough there are great disparities between the law regimes in some cases, it is possible todiscover similarities as well as differences in how the courts have reasoned and whichinterests the courts have found to weigh the most. Mostly, the core of the potentiality ofprotection is whether the shape of the LEGO Brick is too functional.1LEGO is a registered trademark that belongs to the LEGO Group.2

Accordingly, we will follow the LEGO Group in its strategic thinking as well as thearguments of those courts that have considered the LEGO Bricks. From the actions andargumentation it is possible to identify the management strategy the LEGO Group hasadopted with a view to strengthen its competitive position and maintain marketdominance.In the thesis the LEGO Brick will also serve as a subject matter for discussion aboutpossible implications on overlapping intellectual property rights. As the LEGO Group hassucceeded in protecting it with different intellectual property rights the LEGO Brick isthe ideal subject matter for such a discussion.3

Table of ContentsAbbreviations . 71 Introduction. 81.1 Background . 81.2 Definitions. 81.3 Purpose of the Thesis . 91.4 Delimitations. 91.5 Method and References. 101.6 Disposition . 112 Product Background. 122.1 The LEGO Brick Building System . 122.2 Design of the Basic LEGO Brick. 122.3 Development and Release of Series. 132.4 Manufacturing LEGO Bricks. 142.5 Position on the Market . 152.5.1 Company Structure . 152.5.2 Market Position. 152.5.3 Competitors. 173 The Technical Solution of the LEGO Bricks. 193.1 Basic Information on Patents . 193.2 Patents Relating to the Basic LEGO Brick . 193.2.1 Patent Specification No. 529,580. 203.2.2 Patent Specification No. 587,206. 203.2.3 Patent Specification No. 866,557. 213.2.4 The DUPLO Bricks. 234 Non-technical Elements of the Basic LEGO Brick . 244.1 Company Name . 244.2 Trademarks . 254.3 Other Forms of Protection . 264.3.1 Design Protection. 264.3.2 Copyright . 275 The Legal Battles. 295.1 The LEGO Group’s Position on Protecting Its IPRs . 295.2 Trademark Actions. 305.2.1 Paris Convention. 305.2.2 Community Trademark Law. 305.2.3 Community Trademark Registration . 335.2.4 Sweden. 365.2.5 France. 395.2.6 Switzerland . 405.2.7 Canada. 435.2.8 United States of America . 465.3 Actions aiming at Copyright Protection . 485.3.1 Bern Convention . 485.3.2 China . 494

5.3.3 Australia. 505.4 Actions against Unfair Competition . 535.4.1 Paris Convention. 535.4.2 Community Law . 535.4.3 Sweden. 545.4.4 Finland . 565.4.5 Denmark. 585.4.6 Germany. 605.4.7 France. 615.4.8 Italy . 625.4.9 Austria. 646 Analysis of the Legal Actions . 666.1 Technical Elements of the Basic LEGO Brick . 666.1.1 Patents . 666.1.2 Functionality and Technical Considerations. 676.2 Fighting a Legal Battle. 696.2.1 Summary of Cases . 706.2.2 Trademark Protection. 726.2.2.1 Interpretation of the TM Directive. 736.2.2.2 Community Trademark. 746.2.2.3 Sweden. 756.2.2.4 France. 776.2.2.5 Switzerland . 776.2.2.6 Canada. 786.2.2.7 United States of America . 796.2.2.8 Final Remarks . 806.2.3 Copyright Protection. 806.2.3.1 China . 806.2.3.2 Australia. 816.2.4 Unfair Competition . 816.2.4.1 Preliminary Rulings under Article 234 EC. 826.2.4.2 Sweden. 826.2.4.3 Finland . 846.2.4.4 Denmark. 846.2.4.5 Germany. 856.2.4.6 France. 866.2.4.7 Italy . 866.2.4.8 Austria. 876.2.4.9 Packaging Issues and the Variation Criterion.

In the thesis the LEGO Brick will also serve as a subject matter for discussion about possible implications on overlapping intellectual property rights. As the LEGO Group has succeeded in protecting it with different intellectual property rights the LEGO Brick is the ideal subject matter for such a discussion. 3. Table of Contents Abbreviations . 7 1 Introduction. 8 1.1 Background .