The modern Lego brick appeared in the 1950s and has become a worldwide phenomenon. The modern style of brick was the subject of patents dating from 1958, but these have long expired. Lego has since, not unnaturally, sought alternative ways to deter competition.

Changes in European trademark law in the mid-90s allowed three-dimensional shapes to be registered as trademarks in perpetuity providing they fulfilled normal criteria. They have to be distinctive but the law also states, inter alia, that marks which consist exclusively of shapes necessary for technical function of the goods should be refused. The interpretation of this wording has not unexpectedly given rise to numerous legal proceedings in relation to a variety of articles from exotic bottle shapes (e.g. Coca Cola) to soap tablets.

In April 1996, Lego applied for a European Community trade mark for a representation of one of their toy bricks. The mark covered ‘games and playthings.' It was registered in October 1999, but almost immediately afterwards, the predecessor of Mega Brands, Inc. formally alleged that the registration was invalid in relation to ‘construction toys’, as falling within the grounds for refusal mentioned above.

Following a European Court of Justice (ECJ) decision in a leading case (the Philips electric razor case), the Community Trademark Office reviewed and then declared the Lego registration invalid with respect to ‘construction toys’, finding that the mark consisted exclusively of the shape of goods necessary to obtain a technical result.

Lego appealed to the Grand Board of Appeal without success. They then took their case into the European Courts.

Lego's view was that the shape of their brick was not 'exclusively' necessary for technical function, as other shapes could be devised to fulfill the same function (Lego claimed to have produced over 20 such designs).

In 2008, the Court of First Instance rejected this argument, ruling that Community law prevents registration of any shape consisting exclusively, "in its essential characteristics, of the shape of the goods which is technically causal of, and sufficient to obtain, the intended technical result, even if that result can be achieved by other shapes using the same or another technical solution."  

Lego appealed to the ECJ. They justified their attempt to register the brick as a trademark by saying that use of a similar brick by others would dilute what they considered as their trademark. They believed that consumers would be misled, their surveys apparently showing that half of shoppers believed they were buying a Lego product when in fact they were purchasing a competitor product.

This could happen in any field that opens up when a patent monopoly expires. In recently rejecting Lego's Appeal, the ECJ was at pains to discourage manufacturers from seeking to perpetuate essentially technical monopolies via the trademark route, commenting: "When the shape of a product merely incorporates the technical solution developed by the manufacturer of that product and patented by it, protection of that shape as a trade mark once the patent has expired would considerably and permanently reduce the opportunity for other undertakings to use that technical solution. In the system of intellectual property rights developed in the European Union, technical solutions are capable of protection only for a limited period, so that subsequently they may be freely used by all economic operators."

They also stated that so far as the ground for refusal covers any sign consisting ‘exclusively’ of the shape of goods which is necessary to obtain a technical result, the condition is fulfilled when all the essential characteristics of a shape perform a technical function, the presence of non-essential characteristics with no technical function being irrelevant.

This implies that refusal should occur only where all the essential characteristics of the 3-D sign are functional. It suggests such a sign cannot be refused registration as a trademark if the shape incorporates another major non-functional element, such as a decorative or imaginative element which plays an important or distinctive role. The door for 3-D registrations where the article has some distinctive embellishment is still open therefore, though perhaps not quite as wide as before.