Lego hit a brick wall - shape mark blocked by the ECJ

Another chapter in the longrunning Lego saga closes, with the ECJ today upholding OHIM in finding the distinctive red interlocking bricks invalid as a Community Trade Mark (Case C‑48/09 P, Lego Juris A/S v OHIM (Mega Brands Inc., intervening)).

The bricks were rejected as functional.  The ECJ followed their earlier reasoning in Case C-299/99 Philips v Remington and Case C-371/06 Benetton Group in rejecting the "multiple shapes" approach and finding invalidity based on, amongst other things, Lego's own earlier patents.  According to the ECJ, "the legislature has laid down with particular strictness that shapes necessary to obtain a technical result are unsuitable for registration as trade marks".  However, interestingly, although they ruled out trade mark protection they left the door open elsewhere - the matter "can, where appropriate, be examined in the light of rules on unfair competition" - over which the ECJ currently has no competence and Europe has no harmonisation.

Since trade marks are out and unfair competition is in, where does that leave designs?  The particular kind of "functionality" involved in Lego bricks is that usually called "must fit", which is specifically excluded from design protection in Europe.  However, there is an exclusion-from-the-exclusion for modular products such as Lego bricks.  The legislature would therefore seem to have taken a narrower view of the functionality exclusion for designs, as the A-G commented in the Philips case.

The narrower functionality exclusion proposed by the A-G would only bite where a design could be made in only a single shape, and the ECJ point out, in Lego, the time-honoured fear that problems arise "if various purely functional shapes of goods were registered at the same time, which might completely prevent other undertakings from manufacturing and marketing certain goods having a particular technical function."  These concerns were also recently voiced by OHIM in the "Chaff Cutters" case R 690/2007-3, and by the UK court in Dyson v Vax.

Aside, however, from "must-fit" situations (which are specifically dealt with in European design law) I am hard-put to envisage any situation where a design could consist of a simple shape for which there were only a few discreet alternatives - I am not sure it is a realistic prospect. 

Is the A-G right?  Or is unfair competition the only hope for even mildly functional designs?  A pretty threadbare hope if so.