The building blocks of Lego’s registered Community design remain strong

In a decision likely to be appreciated by design rights holders, the General Court of the European Union (“GC”) confirmed the Lego toy brick’s status as a registered Community design (“RCD”) in its judgment of 24 January 2024 - despite some aspects of the design being dictated by technical function.

Background

In 2010, Lego registered an RCD for “Building blocks from a toy building set”.

In 2016, relying on Article 25(1)(b) of Council Regulation (EC) No 6/2002 of 12 December 2001 on Community designs (the “Regulation”), German toy company Delta Sport Handelskontor (“Delta”) sought to invalidate Lego’s RCD on the basis that all the features of the product were solely dictated by their technical function and should therefore be excluded from protection under Article 8(1) of the Regulation. The Invalidity Division of the EUIPO rejected the application in 2017 and Delta appealed the following year.

In 2019, the Third Board of Appeal of the EUIPO upheld the action for annulment of the decision of the Invalidity Division and declared that the RCD was invalid on the basis that all the features of the appearance of the product were solely dictated by their technical function. This was appealed by Lego and the decision was subsequently annulled by the GC in March, 2021, on the basis that (1) the exception for modular systems in Article 8(3) of the Regulation had not been considered and (2) the Court had not identified all the features of the product covered by the RCD.

The case was then referred to the Board of Appeal, which dismissed the appeal and found in favour of Lego. It found that even if all the features of appearance of the product were solely dictated by their technical function within the meaning of Article 8(1), the contested design could not be declared invalid as it fell within the exception protecting modular systems. The modular designs exception applies to designs which would otherwise be excluded from protection under Article 8(1) (being dictated by technical function) but also by Article 8(2) (required to be reproduced in their exact form and dimensions in order to connect to another product so that either product may perform its function, i.e. the “must fit” exclusion) and both of those exemptions were applied in this case.

Undeterred by the court’s findings, Delta appealed the decision to the GC.

The 2024 GC decision

The GC upheld the Board of Appeal’s decision and placed emphasis on the below:

(1)     Alleged violation of Article 8(2) of the Regulation

Delta had claimed that the design should not have been eligible for the “modular systems” exception because it did not fall under Article 8(2) – namely, because the smooth surface of the Lego brick was not a feature covered by the “must fit” exception under Article 8(2). That argument was rejected, as the modular exception was still capable of applying to those characteristics of the design which did fall under Article 8(2). Whilst it is true that a design is only invalid in its entirety in accordance with Article 8(2) of the Regulation where all of its characteristics are excluded from protection under the “must fit” exclusion, this does not mean that the modular systems exception cannot apply to those characteristics of a design which do amount to ‘must fit’ features, even if it has other characteristics which do not. It is also the case that is at least one characteristic of the design can be protected, even where this is solely due to the application of the ”modular systems” exception, then the design remains valid.

(2)       Alleged infringement of Article 8(3) of the Regulation

Delta alleged that the Board of Appeal erred in law by applying the modular systems exception to the contested design as a whole, rather than in relation to the features of interconnection only. For a design to fall within the modular systems exception, it must meet the conditions of Articles 5 (novelty) and 6 (individual character) and serve the purpose of allowing the multiple assembly or connection of mutually interchangeable products within a modular system. Curiously, however, Delta focused its argument on questions of novelty and individual character.

Delta argued that it was for the holder of the contested design to prove that all the requirements for the application of Article 8(3) of the Regulation were met. However, the GC confirmed that it would contradict the logic of the Community designs system to require the holder of a registered design to prove compliance with the conditions of novelty and individual character.

The Board of Appeal agreed that it was not necessary to assess novelty or individual character as Delta had no established that there has been disclosure of any earlier design which would have negated these. It was not for the design holder to “prove” the absence of such disclosures. The question of prior art was, to that extent, deemed irrelevant to the assessment of whether the design benefited from the modular system exception.

(3)     Alleged violation of Article 63(1) of the Regulation

Delta alleged that the Board of Appeal infringed Article 63(1) of the Regulation by not properly considering the disclosure of earlier designs.  The Board of Appeal had stated that Delta should have supplemented the claimed disclosures with additional evidence. The GC agreed and noted that the court could not simply take disclosures of an earlier design as established “facts” within the meaning of Article 63(1) of the Regulation, but they were the ‘result of a factual assessment’ which the court had to carry out by reference to evidence. Even if those earlier designs were ‘generally well known’ to the public (and even if not contested by the design holder), this was insufficient if not proven by “solid and objective evidence” demonstrating an effective disclosure on the market.

It was concluded that Delta’s arguments were baseless and the Board of Appeal could not be criticised for not having taken into account prior disclosures which Delta had not properly set out in its evidence. Accordingly, there was no error of assessment which would have breached Article 63(1) of the Regulation.

Comments

The decision serves as an effective example of how modular systems may be protected under the Regulation by what has now been dubbed the “Lego Exception”. For designers of functional products in particular, the decision is likely to be a welcome reminder that functional products can still benefit from registered design protection (particularly following historic ECJ decisions denying the Lego brick trade mark protection) - provided they incorporate at least some aesthetic features. It also sounds a caution to design invalidity applicants against relying on “common knowledge” as evidence of prior design disclosures and serves as a reminder of the importance of well documented and correctly pleaded prior art evidence.

The case is currently open to appeal to the ECJ by Delta Sport Handelskontor.

Co-authored by Anna Ghataure, CMS Trainee Solicitor