A Leading IP Case: Lego® and Mega Bloks®: Doctrine of Functionality in Trade-mark Law

In Kirkbi AG v Ritvik Holdings Inc, 2005 SCC 65, the Supreme Court of Canada unanimously confirmed (1) that the protection of unregistered trade-marks in Federal legislation was valid constitutionally and (2) that a purely functional feature cannot be protected as an unregistered trade-mark. The Court held that the maker of Lego® toy blocks could not have trade-mark protection for the shape of its product. For many years, Kirkbi AG (Kirkbi) had patent protection in Canada for the interlocking stud and tube features appearing on its Lego® toy blocks, until the last of its Canadian patents expired in 1988. Since 1988, Ritvik Holdings Inc (Ritvik) had been making Mega Bloks®, a similar product. There was evidence that customers had bought Mega Bloks® product believing it to be Lego® product. In the present litigation, Kirkbi sued Ritvik for violation of subsection 7(b) of the Trade-marks Act, which codifies the common law tort of passing off, asserting secondary meaning in the well-known pattern of studs on the top surface of the toy block. The defendant asserted that subsection 7(b) of the Act was unconstitutional because passing off was within provincial jurisdiction. The Court held that the subsection was valid, as it was a legitimate exercise of the federal trade and commerce power. The Court also held that there could be no trade-mark protection for a purely functional feature, and denied Kirkbi protection for its mark on the basis that it consisted solely of the technical or functional features formerly protected by its patents. The Court further held that Kirkbi’s action must fail for lack of distinctiveness on the basis that the mark’s features consisted precisely of the process and techniques common to the trade since the expiry of the patents. The Court also noted that its findings on functionality were consistent with decisions reached in parallel litigation in Great Britain and France, and declared that “the doctrine of functionality appears to be a logical principle of trade-marks law. It reflects the purpose of a trade-mark, which is the protection of the distinctiveness of the product, not a monopoly on the product.” As the Court stated, “the monopoly on the bricks is over, and MEGA BLOKS and LEGO bricks may be interchangeable in the bins of the playrooms of the nation — dragons, castles and knights may be designed with them, without any distinction”. Gervas Wall notes: “The ‘Lego case’ ended the constitutional arguments over subsection 7(b) of the Trade-marks Act, which had been made since it was enacted in the 1950s. It was also a milestone in the continuing battle to extend protection for functional items beyond the term of patent protection. We saw the use of copyright in this battle limited by amendments to the Copyright Act, and this case limited the use of trade-mark rights. Of course, what exactly is functional in an article is open to argument.” Summary by: Darren Hall