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.

Stanley FuBar Utility Bar Not Fubar According to U.S. Federal Circuit

This time it is not about Crocs, but the plaintiff is fubar. The U.S. Court of Appeals for the Federal Circuit issued an opinion yesterday March 9, 2010, in Richardson v. Stanley Works, Inc., upholding a lower court's decision that Stanley's FuBar tools do not infringe a design patent for a combination hammer-crowbar-stud climbing tool. The design patent is U.S. D507,167 for a Stepclaw tool.
Stanley has 5 version of its FuBar tool. The basic FuBar product is illustrated above. (Stanley also obtained U.S. D562,101 for the design, but it is not related to the case.)

Although considering the design as a whole in accordance with Egyptian Goddess, the district court distinguished and separated out those elements of the design that were primarily functional during claim construction of the patent. After discounting the functional elements of the design, the district court analyzed the accused products in view of the ornamental aspects of the claimed design. The district court cited differences in the ornamental designs, and concluded that an ordinary observer would not be deceived into thinking that any of the Stanley FuBar tools were the same as the claimed design.

The Federal Circuit upheld the claim construction, quoting that "[w]here a design contains both functional and non-functional elements, the scope of the claim must be construed in order to identify the non-functional aspects of the design as shown in the patent." See OddzOn Prods., Inc. v. Just Toys, Inc., 122 F.3d 1396, 1456 (Fed. Cir. 1998)(en banc). The Federal Circuit explained that when a design contains both functional and ornamental aspects, the scope of the design patent is limited to the ornamental aspects alone and "does not extend to any functional elements of the claimed article." The Federal Circuit pointed out "several elements that are driven purely by utility" and that "elements such as the handle, the hammer-head, the jaw, and the crowbar are dictated by their functional purpose."

The Federal Circuit also upheld the infringement analysis applied by the district court. Just as applied at the district court, the Federal Circuit considered whether an ordinary observer would be deceived into thinking that any of the Stanley FuBar tool designs were the same as the patented design. The Federal Circuit concluded that, "ignoring the functional elements of the tools, the two designs are indeed different" and that "the overall effect" of the accused products is "significantly different" than the patented design.

While the underlying law set forth by the decision appears sound and infringement may properly have not been found, the decision may cause problems for future cases. The decision uses several different words to describe how functional elements are treated (e.g., "discounting," "separating," "limited," and "ignoring"). Each of these treatments of functional elements may lead to different infringement analyses. Further, when considering the functional elements, the Federal Circuit identifies elements "driven purely by utility" and that are "dictated by their functional purpose," and concludes that these elements are "purely functional elements." And it seems the Federal Circuit treats "element" in the physical sense of a piece of the product, rather than a design feature. As a result no aspect of these functional elements appear to be considered in the infringement analysis, which seems an overly-narrow construction of designs with both functional and non-functional features. While this may not be the intended result, the decision may be interpreted to preclude consideration of non-functional ornamental aspects applied to a functional (useful) physical element, but with a design that is not solely or primarily dictated by function. For example, while a handle may be purely function, the design or ornamentation of a handle seems appropriate to consider. Both the claimed design and the Stanley FuBar tools have handles (driven purely by utility) and that perform the same function, but the handles have different designs. The district court's statement of "discounting" functional elements may be a more appropriate characterization than "ignoring" functional elements. The prior case law of OddzOn does not state that functional elements are ignored, but instead that "the scope of the claim must be construed in order to identify the non-functional aspects of the design as shown in the patent." Thus, rather than identifying and entirely ignore functional elements, a more accurate claim construction may instead seek to identify the non-functional aspects of the design, which may include non-functional aspects of the design applied to a functional element. Under such an analysis, a functional element will only be ignored if the design of the functional element is dictated by function, in which case the design would be functional and appropriate to ignore.

Even discounting (or ignoring) possible different interpretations and applications of the decision, additional cases to construe design case law, such as the Egyptian Goddess decision, are welcome guidance for counseling clients, preparing applications, and litigating design patents. Each provides additional examples for interpretation and application of the prior decisions.

Functional designs at OHIM again

Alicante News reports another OHIM Board of Appeal case R 1114/2007-3 on functional designs, following their earlier "Chaff cutters" decision in requiring the presence of some feature "chosen for the purpose of enhancing the product’s visual appearance" to avoid rejection as being dictated by technical function. We shall see whether the Court of First Instance follows the same line in the Chaff cutters appeal.

This case is a little unusual on the facts in that the design, RCD No. 273644-0001, is a single, sketchy, line drawing (apparently done freehand with a ruler) showing nothing much over the voluminous cited prior art - with such a minimal design, there was perhaps little prospect of validity, even though by citing so many close prior documents the opponent might otherwise have shot themselves in the foot by showing a "crowded field".

There was also an interesting finding on the "informed user". As the indication of product was directed to "packaging for foodstuffs", the Board found that the informed user was a trade user not an end-consumer:

"The informed user in this case is likely to be a production manager in a company that makes food products that are packaged in pouch-like containers, rather than an ordinary consumer who buys pre-packaged food products. The design represents ‘packaging for foodstuffs’, not finished products for sale to the end user."

OHIM Board of Appeal rules on functional designs

According to Alicante News, OHIM's Board of Appeal has invalidated a design on the basis that it is dictated by technical function (Decision of the Third Board of Appeal of 22 October 2009 in case R 690/2007-3). This is unsurprising - but what certainly is surprising is that the Board has not followed the Opinion of the Advocate General in the Philips case, nor that of the UK Court of Appeal in Landor & Hawa v Azure (which followed the A-G in Philips) but has gone its own way. To quote:

“That provision [i.e. CDR 8(1)] denies protection to features of a product's appearance that are ‘solely dictated by its technical function'. Those words do not, on their natural meaning, imply that the feature in question must be the only means by which the product's technical function can be achieved. On the contrary, they imply that the need to achieve the product's technical function was the only relevant factor when the feature in question was selected.”

To UK ears, this sounds much like the House of Lords in Amp v Utilux. It is also, of course, consistent with the treatment of trade marks by the ECJ in Philips, as suggested by the Dutch courts.

The complete decision is not yet available on the website. In the meantime, here is a link to the first instance decision. Will this be appealed to the CFI? Will the ECJ follow OHIM, or its own A-G? We await these answers (and your thoughts, dear readers) with bated breath.