Another “brick” in Lego’s modular systems design protection

 

By decision of 24 January 2024 (T-537/22), the General Court of the European Union (GC) confirmed the validity of the Registered Community Design (RCD) by Lego A/S (Lego) “Building blocks from a toy building set” by stating that an RCD is invalid only if all its features are excluded from protection. In the case at issue, some of the invalidity arguments filed by the company Delta Sport Handelskontor GmbH (Delta) concerned only one of the features relied on by the European Union Intellectual Property Office (EUIPO). Therefore, invalidity arguments should be dismissed as irrelevant. Delta also failed to demonstrate that the Lego design did not meet the requirements for the application of the exception of protection of modular systems, namely novelty and individual character.

Background

It is worth recalling the long history of this case.

On 2 February 2010 Lego obtained RCD No.  001664368-006 with description “Building blocks from a toy building set” with the following views:

In 2016, Delta filed an application for declaration of invalidity with the EUIPO relying on Article 25(1)(b) of Council Regulation (EC) No 6/2002 of 12 December 2001 on Community Designs (Regulation) in conjunction with Articles 4 to 9 of the same Regulation.

Delta claimed that all the features of appearance of the product concerned by the contested design were solely dictated by the technical function of the product and, for that reason, were excluded from protection under Article 8(1) of the Regulation.

The Invalidity Division of the EUIPO rejected the application by decision of 30 October 2017. Delta appealed.

By decision of 10 April 2019, the Board of Appeal of EUIPO declared the invalidity of the RCD on the ground that all the features of appearance of the product concerned by that design were solely dictated by the technical function of that product, within the meaning of Article 8(1) of the Regulation. Lego appealed.

By decision of 24 March 2021 (T-515/19), commented by the IPKat here, the GC annulled the decision. The GC found that the Board of Appeal infringed:

      a) Article 8(3) of Regulation No 6/2002 laying down an exception protecting modular systems, in that it had not assessed whether the contested design met the requirements of that article, which, moreover, the intervener had relied on before it;

b) Article 8(1) of Regulation No 6/2002 in that it had not identified all the features of appearance of the product concerned by the contested design, in particular the smooth surface of the upper face of the toy brick (“the smooth surface”), and, a fortiori, did not establish that all those features were solely dictated by the technical function of that product.

The case was then referred back to the Third Board of Appeal.

By decision of 30 May 2022 (R-1524/2021-3), the Board of Appeal dismissed the appeal on the ground that the application for invalidity was not substantiated. In particular, the Board of Appeal found that – even if all the features of appearance of the product concerned by the contested design, including “the smooth surface” – were solely dictated by the technical function of that product, within the meaning of Article 8(1) of the  Regulation, the contested design could not be declared invalid as it fell within the exception protecting modular systems referred to in Article 8(3) of the Regulation. That provision was applied by way of derogation from Article 8(2) of the Regulation, given that, as found by the Board of Appeal, all the characteristics of the appearance of the product covered by the contested design were covered not only by Article 8(1) of the Regulation, but also by Article 8(2) of the same Regulation.

Delta appealed the decision to the GC.

The General Court’s decision

The GC disagreed by upholding the Board of Appeal’s decision and ruled as follows.

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

Delta argued that the Board of Appeal infringed Article 8(2) of the Regulation since one of the seven characteristics identified by the Board of Appeal, “the smooth surface”, does not meet the requirements laid down in said article. The GC recalled that “a design is declared invalid, in accordance with the provisions of Article 8 of Regulation No 6/2002, only in the case where all of its characteristics are excluded from protection. If at least one of its characteristics is protected, in particular due to the application of the exception provided for in Article 8(3) of that regulation, the design remains valid” (para 37-38).

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

Delta claimed two errors of law since the Board of Appeal applied Article 8(3) of Regulation in relation to the contested design as a whole and not in relation to the features of interconnection only and secondly placed on Delta the burden of proof relating to the conditions of novelty and individual character.

The GC recalled that “for a design to fall within the exception protecting modular systems provided for in that article, it must meet two conditions: first, meet the conditions of Articles 5 (novelty) and 6 (individual character) of that regulation and, secondly, serve the purpose of allowing the multiple assembly or connection of mutually interchangeable products within a modular system” (para 47). In addition, novelty and individual character of an RCD are presumed during the registration procedure (para 57) and “it would be contrary to the very logic of the system of Community designs to require, as the applicant proposes, the holder of a registered design wishing to rely on the exception provided for in Article 8(3) of Regulation No 6/2002 to prove compliance with the conditions of novelty and individual character provided for in Articles 5 and 6 of that regulation” (para 61). In fact, that would constitute a negative proof (probatio diabolica) (para 65). Therefore, since Delta failed to prove any disclosure, the Board of Appeal had correctly concluded that there was no need to carry out the assessment of the novelty and individual character of the contested design (para 78).

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

Delta argued that the Board of Appeal did not consider, in the context of the assessment of the disclosure of earlier designs, certain well-known and/or undisputed facts as well as some information provided by screenshots of a website and by a reference to a judgment of the Court of Justice of the European Union in a related case.

The GC replied that “The disclosure of an earlier design within the meaning of Article 7(1) of Regulation No 6/2002 does not, as such, constitute a fact within the meaning of Article 63(1) of Regulation No 6/2002, but the ‘result of a factual assessment’, EUIPO being required to examine all evidence submitted in order to establish whether it actually proves disclosure of the earlier design” (para 87) and that “the disclosure of an earlier design cannot be considered to be a well-known fact which is not required to be demonstrated, even in the event that the products in which that design is incorporated or to which it applies would have been present on the market for a long time and would be generally known to the public” (para 88).

Comment

The original patent on the Lego brick expired a long time ago. Since then, Lego has been trying to find other means of protection for its brick, whether as trade mark, design or copyright. In the meantime many competitors have entered the market with their “bricks” that perfectly combine with Lego’s bricks. In this context, Lego filed design registrations related to modular systems composed by its bricks.

As set out in the EU Design Directive, the basic idea behind Article 8(1) of the Regulation is to prevent technological innovation from being hampered by design protection. Such innovations should instead be protected by patents, which are time-limited and subject to prior substantive examination. Additionally, it specifies that the design must not consist of features whose “exact form and dimensions” are required for the product “to be mechanically connected to or placed in, around or against another product so that either product may perform its function” according to Article 8(2) of the Regulation. This allows free competition on products which fit to other products.

However, the situation becomes a little more complicated when we consider modular products that can be assembled in different ways. An important aspect of the design of such products naturally relates to how they can be fitted together. Therefore, Article 8(3) of the Regulation states that the design must consist of a "design intended to enable the assembly or connection of multiple compatible products within a modular system". During these years of disputes, the application of this provision to the modular systems by Lego has been dubbed the "Lego exception".

Even if the present decision of the GC can be appealed to the Court of Justice of the European Union, it appears that the “Lego exception” will continue to serve as a good example, and it will be interesting to see what other modular systems will also be covered or considered to fall within its scope.  

From a broader perspective, this decision also seems consistent with the objective set out in Article 8(3) of the Regulation because, indeed, it looks reasonable and justified that the designers of intelligent and complex interconnected systems should be rewarded fairly.

On a final note, the present decision confirms that the burden of proof of invalidity of a registered design (lack of novelty and of individual character) lies with the applicant for invalidity and it cannot be “reversed” on the owner of the design or to EUIPO at the time of the application for design registration, thus confirming a certain presumption of validity of registered designs. A further clarification is then brought by the GC on the quality of evidence of prior disclosure, especially with regard to possible prior products displayed on websites (an issue often debated in proceedings). The GC stress that a mere “link” to a website is not sufficient, but that at least prints or screenshots of said websites are necessary, without prejudice to the burden of proof related to the exact date of the prior disclosure and its extent to the relevant public, so to allow a “factual assessment” in the event that the products incorporating the design  have been present and well known to the public from a long time, as are the Lego’s bricks.

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