Lego A/S v EUIPO: Lego retains design registration for its iconic Lego brick as General Court annuls invalidity decision

The Second Chamber of the General Court in Lego A/S v EUIPO (Case T-515/19) has annulled a decision of the EU Intellectual Property Office (“EUIPO”) to declare invalid the design of a Lego brick. The General Court held that EUIPO’s Third Board of Appeal (the “Board”) had failed to consider whether Lego had a defence under Article 8(3) Regulation (EC) 6/20002/EC (the “Community Designs Regulation”) which exempts modular products from the general “must fit” exclusion from design protection under Article 8(2). It also failed to identify all relevant features of Lego’s design for proper consideration of the “technical function” exclusion under Article 8(1).

Background

• Article 8(1) of the Community Designs Regulation denies protection for designs which are “solely dictated by technical function”, that is to say, design features whose shape is determined solely by technical considerations and not even partly due to other factors, such as visual appearance.
• Article 8(2) further provides that Community design rights will not protect features of a product which “must necessarily be reproduced in their exact form and dimensions” in order to allow that product to connect with another product to perform a function (the so-called “must fit” exclusion).
• That said, Article 8(3) recognises that products that are modular in nature – that is, allowing for multiple assembly or interchangeability of parts – merit protection as designs and are therefore exempt from the “must fit” exclusion under Article 8(2).

On 2 February 2010, Lego applied for registration of a Community design represented by the following views:

The intervener in this case, Delta Sport Handelskontor GmbH, applied for a declaration of invalidity of Lego’s design, claiming that all features of the design were solely dictated by the technical function of the product and so were excluded from protection under Article 8(1). EUIPO’s Cancellation Division rejected the invalidity application, noting that the intervener had not established that fulfilling a technical function was the only factor determining the appearance of the Lego brick. However, on appeal, the Board sided with the intervener, annulled the Cancellation Division’s decision and declared Lego’s design invalid.

The Board’s Decision

In its (now annulled) decision, the Board cited the following features of the Lego brick for consideration:

1. the row of studs on the upper face of the brick;
2. the row of smaller circles on the lower face of the brick;
3. the two rows of bigger circles on the lower face of the brick;
4. the rectangular shape of the brick;
5. the thickness of the walls of the brick; and
6. the cylindrical shape of the studs.

It found that all of the features referenced above were dictated solely by the technical function of the brick, namely the assembly with, and disassembly from, other bricks in the set. On that basis, the Board declared Lego’s design invalid. Lego further appealed against the Board’s ruling and the case was considered by the Second Chamber of the General Court.

General Court’s Decision

Failure by the Board to consider modular system defence

The first main issue addressed by the General Court was the Board’s failure to consider Article 8(3), which exempts modular products from the “must fit” exclusion under Article 8(2). More specifically, while Article 8(2) states that Community design right will not subsist in features required to be reproduced in their exact form and dimensions to allow for the product to be mechanically connected to another in order for either product to perform its function, Article 8(3) provides an exception where the design facilitates the connection of mutually interchangeable products within a modular system.

The modularity exception was not considered in the initial proceedings. This was because, in its original appeal to the Cancellation Division, the intervener relied only on the “technical function” exclusion under Article 8(1), stating that the Lego design was solely dictated by technical considerations. It did not argue that Lego’s design was invalid because it fell under the Article 8(2) “must fit” exclusion, which would have allowed Lego to plead the modularity exemption. Accordingly, the Cancellation Division did not assess the conditions or requirements of the “must-fit” exclusion under Article 8(2), nor the modularity exemption under Article 8(3). Nonetheless, the Cancellation Division found that Lego’s product constituted an element of a “modular system”, an argument which Lego subsequently relied upon at the Board of Appeal hearing.

Despite Lego’s express reliance on the modularity defence on appeal, the Board in turn did not actually examine the relevance of Article 8(3). In the subsequent appeal before the General Court, the EUIPO argued that Lego could not rely on the modularity defence under Article 8(3) for the first time at the Board hearing when it had not done so at the Cancellation Division, which in the EUIPO’s view meant that the Board’s approach in failing to consider Article 8(3) was correct. The General Court disagreed, stating that no provision of the Community Designs Regulation precluded Article 8(3) from being relied upon by a party for the first time before the Board.

It is important to note that, on the face of Article 8(3), the modularity exemption only applies to designs which would otherwise be excluded from protection under the “must fit” provision of Article 8(2). Article 8(3) does not assist a design owner whose design is only alleged to be invalid on the grounds that it is “solely dictated by technical function” under Article 8(1). However, in considering the interplay between the various provisions of Article 8, the General Court acknowledged that that there is a degree of overlap between the “technical function” and “must fit” exclusions, and that a design can fall within both provisions. In such cases, there was potential for injustice if the courts were to allow invalidity applicants to tactically base their attack only on the Article 8(1) “technical function” exclusion (and not plead the Article 8(2) “must fit” exclusion even where it is equally applicable) solely in order to prevent the design owner from relying on the modularity defence to Article 8(2).

It went on to contend that, where a product’s features fall within both the “technical function” and “must fit” exclusions, the Court should assess whether such features can benefit from the modular system exclusion, whether or not the applicant for a declaration of invalidity has actually relied on the Article 8(2) “must fit” exclusion as the basis for cancellation.

Accordingly, the General Court held that the Board should have considered the applicability of Article 8(3) regardless of the basis on which the intervener’s case was pleaded, where the contested design features fell within both the “technical function” and “must fit” exclusions. As it had failed to do so, the General Court upheld Lego’s appeal and annulled the Board’s decision.

Failure to consider all features of Lego’s design

The second main issue addressed by the General Court related to the exclusion under Article 8(1) on the basis of technical function. Lego argued, among other things, that the Board had failed to consider the creative aspects of its design, such as the smooth surface on either side of the row of four studs on the upper side. The General Court, citing the Court of Justice’s decision in Doceram (C-395/16), stated that the features of a design’s appearance must be solely dictated by the technical function of the product to fall within Article 8(1). The General Court argued that if at least one of the design’s features was not solely dictated by technical function, the design could not be declared invalid under Article 8(1). The General Court held, referencing the Board’s six features highlighted above, that the Board had not included all relevant features of the design in its analysis. It agreed with Lego that the smooth surface on the upper face of the design was a feature that should have been, but was not, considered by the Board. Accordingly, the General Court upheld Lego’s appeal and annulled the Board’s decision in its entirety.

Comment

This case provides an interesting dissection of the interacting provisions in Article 8 of the Community Designs Regulation. It firmly shuts the door on tactically-motivated applications for a declaration of invalidity whereby the applicant seeks to base the invalidity case only on the “technical function” exclusion under Article 8(1), and avoid raising the “must-fit” exception under Article 8(2) even where it is equally applicable, in an effort to stop the design holder being able to rely on the Article 8(3) modularity exemption. The General Court has made it clear that, regardless of the basis on which the invalidity case is pleaded in such circumstances, the court is required to consider all provisions of Article 8 and determine which of them should be applied, including whether application of the modularity defence is warranted. The case also highlights that a relatively minor feature of a design will often be sufficient to fight off any claims of invalidity on the ground of the design being “solely dictated by technical function” under Article 8(1).

Co-authored by Jack Rigelsford