A week ago, the Danish toy company Lego lost yet another court case in its long, futile and wrongheaded battle to protect itself from competition.
The European Union’s Court of First Instance affirmed an EU decision made in 2004 to reject the Lego company’s claim that the little studs on the top of their famous Lego brick amount to a company trademark, and that anybody duplicating those studs is therefore violating its trademark rights.
One of the companies supposedly guilty of this trademark violation, as it happens, is a Canadian one, Mega Brands, which produces plastic blocks that are fully interchangeable with Lego’s product, because they feature exactly the same little studs on top, and the same three little tubes underneath.
Though they are called Mega Bloks, not Lego bricks, they are, in fact, distinguishable from Lego’s product only in that they are of a lower physical quality.
And Mega Brands has a perfect right to do make them, under Canadian law, because Lego’s last patent relating to Lego bricks expired 20 years ago.
By trying to redefine the bricks as trademark items rather than as commercial product, though, Lego is seeking to dodge that problem — and to escape its obligations.
They had some 20 years of protection under US, Canadian and European patent laws; now that it is over, they want to welsh on the public payback that was an inherent part of the deal.
Though they are hardly devoid of follies, inconsistencies and injustices, patent laws around the world are all founded on one very sound motive: To reward and encourage innovators while protecting the interests of society and technological progress.
Most countries offer pretty much the same deal: You get monopoly rights on your invention for a period of 20 years from the date of the filing of your patent.
This gives you 20 years to earn back your costs and, if you are lucky, make your bundle.
After those 20 years, though, your intellectual property goes into the public domain, so that other companies can begin to compete with you — and, perhaps, add new innovations to your product to gain a competitive advantage.
If you want society to protect your interests for the first 20 years, you have to agree to let society’s interests in free competition rule thereafter.
Lego is seeking to avoid this payback by changing the question from being about patents (which expire) to one about trademarks (which can be endlessly renewed).
They have not gotten away with it anywhere, so far, and they are not likely to get away with it anywhere in the future, either, because, put simply, their argument is pure BS.
The modern Lego brick (based on an earlier, patented design by a British child psychologist) was first patented in 1958.
That patent’s innovation was not the little studs on top (those were featured in the original British patent) but the three little tubes in the base of the brick.
Those tubes constituted the simple, ingenious idea that made the Lego brick the hot property it became
Cast just in right the right place to provide join-points for the studs, the tubes allowed for a tight-but-still-breakable grip between the blocks
This, in turn, allowed users to build some quite amazingly complex structures — even whole micro-cities, like the ones found in Legoland amusement parks in Denmark, Britain, USA and Germany.
The last main innovation relevant to the Lego bricks was the patenting of the Duplo brick — a larger, but still compatible brick, targeted for younger children — in 1968.
That was the patent that expired in 1988.
Given the enormous popularity of Lego sets, it is in fact a little astonishing that it took other companies so long to get around to trying to move into their market.
After all, the technology behind the idea is a simple matter of plastic moulding.
So far, the most successful competitor has been Canada’s Mega Brands (which was originally called Mega Bloks, like their main product).
Mega Brands introduced its first Mega Blok in 1985.
It was a block in a very large format, suitable for very young children, not compatible with any Lego bricks, and therefore off Lego’s radar.
Mega Brands introduced its Maxi size block (the same size, and fully compatible with, the Duplo brick) in 1988 — right in time for the expiry of the Lego patent.
It did not move into direct competition with Lego on the normal-sized bricks until 1991, which was when the dust-up with Lego began in earnest.
The payoff to Mega Brands and Canada for this competition has not been small potatoes — probably in excess of $80 million in profits each year.
Pretty big change for such a small toy.
Predictably, Lego started suing Mega Brands in the early going, and continued filing unsuccessful suits until the Canadian Supreme Court finding of 2005, which stated the final judgment very forcefully:
“[T]he monopoly on the bricks is over, and Mega Bloks and Lego bricks may be interchangeable in the bins of the playrooms of the nation — dragons, castles and knights may be designed with them, without any distinction.”
On the subject of using the “trademark” appearance of the bricks, they were also pungently dismissive:
““Trademark law should not be used to perpetuate monopoly rights enjoyed under now-expired patents.”
Given the brusqueness and finality of this finding, it is a little astonishing that the company would try the same failed gambit before the European court — and with the same, predictable result: another loss.
Still undeterred by almost uninterrupted failure, the Lego company has announced that it intends to appeal this ruling, too
While it might argue that they are just going the last mile to protect the interests of their investors and employees, it now seems clear that Lego is just frittering away on lawyers money they could more profitably invest in creating new, patentable product that might make it a reputable company again.
Give it up, Lego. Slap one of those annoying Lego-man smiles on your face and get back to work building something new.
Rick Steele is a technology junkie who lives in Whitehorse.