You can build a lot with LEGO – But also your own design law?

Designs are meant to protect the appearance of the whole or a part of a product. In order to minimize the overlap with technical IP rights, no protection is granted for designs whose appearance is solely dictated by their technical function (Art. 8(1) Community Design Regulation (‘CDR’)) or where the appearance is necessary to connect two products (Art. 8(2) CDR). Art. 8(3) CDR makes an exception from Art. 8(2) CDR for connecting elements of modular systems, meaning that they can be protected as Community designs.

One of the most famous modular system is the LEGO blocks, which is why the modular exception in Art. 8(3) CDR is also called the ‘LEGO exception’. A Hungarian court referred several questions to the Court of Justice of the EU (‘CJEU’, case C-211/24) regarding the interpretation of the LEGO exception and its consequences in infringement proceedings.

Background

LEGO A/S (‘LEGO’) owns the following registered Community designs (‘RCD’) for ‘building blocks from a toy building set’ in Locarno class 21.01:

– RCD no. 001950981-0001 containing, inter alia, the following view:

– RCD no. 002137190-0002 containing, inter alia, the following views:

The defendant, Pozitív Energiaforrás Kft. (‘Pozitív Energiaforrás’), sought to import toy building sets into Hungary, which contained, among others, the following parts:

The National Tax and Customs Administration of Hungary seized the sets because of a potential infringement of LEGO’s design rights. LEGO brought an infringement action against Pozitív Energiaforrás before a Hungarian court.

The reference for a preliminary ruling

The Hungarian court noted that LEGO owned expired patents (such as US patent no. 3005282) for the protection of modular toy building sets and that the purpose of one of these inventions was essentially identical to that of LEGO’s RCDs depicted above.

The referring court also noted that the protection under Art. 8(3) CDR does not require the design to serve an aesthetic purpose. It is rather akin to the protection of technical characteristics afforded by a patent. The Hungarian court considered the creation of such designs to be no more than a routine engineering and design activity, which serves to extend with ever more additional alternative elements the toy building set system, which is in the public domain following the expiry of LEGO’s patent protection.

The Hungarian court was unsure about the legal or political objective of Art. 8(3) CDR, in particular whether it grants the holder a right similar to that of a patent. The judges deemed this question important because of the court’s obligation under Art. 3(2) Enforcement Directive to ensure that its ruling does not create barriers to legitimate trade.

The referring court also wondered how the designer’s degree of freedom is to be determined in the comparison of the designs. Is it relevant that there are, in general, alternative shapes for building blocks (as LEGO argues) or can only such alternative shapes be considered that fulfil the same technical function? In the latter case, the designer’s freedom would be considerably limited.

Against this background, the Hungarian court referred several questions to the CJEU.

1. The first question, which is divided into three sub-questions, seeks clarification of the concept of the informed user:

a. The court considered that the essence of a design protected by virtue of Art. 8(3) CDR is not the overall impression created by the appearance but the technical objective of the design. The judges wondered whether the informed user is a sectoral expert with an analytical and methodical eye and technical knowledge.

b. Second, the referring court would like to know whether the level of attention of the informed user is higher when comparing an RCD registered under Art. 8(3) CDR. Does the user conduct a comparison of the ‘rough overall impression’ of the designs or do they make an analytical and detailed assessment because of their specialist knowledge?

c. The third sub-question concerns the assessment of the overall impression. May it be conducted solely by reference to the visual perception or may the technical opinion of a sectoral expert on the functional characteristics of the design also be taken into account?

2. The second question relates to the interpretation of the term ‘special reasons’ for not ordering measures against the infringement in Art. 89 CDR. The potentially design infringing building blocks of Pozitív Energiaforrás were part of sets with other non-infringing blocks. Enforcement measures must be fair, equitable, proportionate and avoid the creation of legitimate barriers to trade (Art. 3 Enforcement Directive). Therefore, the referring court wondered whether it may dismiss the infringement claim in part or even entirely, in particular regarding LEGO’s request to prohibit Pozitív Energiaforrás from importing the toy building sets into Hungary.

Comment

1. For answering the first set of questions, it is helpful to see what the legislator’s intention behind Art. 8(2) and (3) CDR was. According the Commission’s proposal for the CDR, the purpose of Art. 8(2) CDR (Art. 9 of the proposal) is

to enhance the interoperability of products of different make and to prevent manufacturers of design products from creating captive markets, for example for peripherals, by monopolizing the shape and dimensions of interconnections. Thus, for example, the dimensions of the fitting of an exhaust pipe, dictated by the necessity of fitting the exhaust pipe to a specific car model cannot constitute a protectable design element since the dimensions are dictated by those of the underside of the car.

The Commission’s rationale for Art. 8(3) CDR was the following:

An exception from die provision in paragraph 2 needs to be made for the interconnections of modular products provided, of course, that the interconnections comply with die requirements for protection, in particular die requirement as to individual character […]. Thus, for example, fittings which permit a chair of a specific make to be fitted in rows to other chairs of the same make or permit the chairs to be stacked or the interconnecting elements of toys designed with a view to being assembled would, in principle, be eligible for protection. Otherwise, it would be possible for competitors to make a short cut to a special market where the innovative character of the design in question often consists in – albeit not exclusively – the design of interconnecting elements permitting indefinite interconnection within a given system.

It appears to follow from these rationales and the wording of the law that connecting elements of modular systems are to be protected like any other design and that the same rules apply.

a. The somewhat technical nature of connecting elements does not warrant applying different standards to the assessment of novelty, individual character or infringement. The peculiarity about a modular system is its interconnectedness with itself and, in principle, not with other elements outside the system. Granting design protection for elements of the modular system, including connecting elements, does not stifle innovation because competitors are free to create elements for the modular system or other modular systems with a different overall impression for the duration of the design protection. After the expiry of design protection, competitors are free to use the design of the formerly protected modular system (subject, of course, to other IP rights and unfair competition law rules).

b. The referring court was right to state that the protection under Art. 8(3) CDR does not require the design to serve an aesthetic function. But that is true for all designs. The only conditions for design protection are novelty (Art. 5 CDR) and individual character (Art. 6 CDR), meaning that the design must produce a different overall impression from any other earlier design properly disclosed (Art. 7 CDR) in order to enjoy protection. Art. 8(3) CDR specifically refers to these provisions.

There is no requirement that a design must have an aesthetic function. Unlike in copyright law, there is no need for any creative expression of the designer’s personality. Even rather banal product designs (that may be the result of a routine engineering and design activity) can be protected, as long as their overall impression is sufficiently different from the prior design corpus.

For these reasons the referring court’s premise, the essence of design protection under Art. 8(3) CDR is not the overall impression but the technical objective of the design, is questionable.

c. As a consequence, it appears reasonable to respond to the first set of questions that the established concepts of the informed user, the decisiveness of the overall visual impression and the existence or lack of a déjà-vu apply to designs protected by virtue of Art. 8(3) CDR.

2. As regards the second question, the proportionality principle seems to be decisive. If the infringing parts are part of a package containing other blocks that are not infringing, it seems obvious that the infringing parts may not be imported and may be destroyed (Art. 10(1)(c) Enforcement Directive). Infringers should not be able to avoid liability for IP infringement by adding non-infringing products to infringing products, selling them in a bundle and arguing that it would be disproportionate to prohibit the import, sale etc. of the bundle. However, the destruction of non-infringing parts that are easily separable from the infringing parts seems unjustified.