Lego loses trademark fight to Mega Brands

Danish toy giant Lego has lost a final trademark ruling in European Court against Canada's Mega Brands over the plastic building blocks they both manufacture.

The European Court of Justice in Luxembourg validated a lower-court ruling that Lego's bricks can't be legally protected by trademark law because their two rows of interlocking studs are a functional, technical shape that cannot become the property of any one company.

The ruling, which cannot be appealed, ends a long-standing dispute between the two toy companies.

The court's ruling says companies can't use trademark law to indefinitely perpetuate exclusive rights relating to technical solutions.

Lego's patents, which protected its toy, expired long ago.

Montreal-based Mega Brands said the ruling doesn't have an impact on its operations in Europe because it upholds a registration decision that has been applicable since 2004.

Lego said it has no option but accept the court's ruling that its iconic blocks are functional.

But the privately held company said its desire to register the brick as a three-dimensional trademark is not for marketing reasons alone. It claimed consumers are misled by the similarities in the two products manufactured by the two rivals.

The trademark registered by Lego in 1996 came into effect throughout the European Union in October 1999. The Canadian toy manufacturer then known as Mega Bloks Inc. applied to have the registration annulled, arguing it contravened legislation.

The plastic blocks were the first toy manufactured by Mega Brands in 1984. Mega Brands shares gained two cents, or 4.17 per cent, at 50 cents in morning trading on the Toronto Stock Exchange.