Ice Watch Packaging Is Unfair Competition but no Infringement of Lego Brick Trade Mark

In a judgment of 5 December 2011, the Commercial Court of Brussels (the “Court”) rejected claims brought by Lego Juris AS (“Lego”) that the packaging of watches sold by TKS SA (“TKS”) infringed the shape trade mark of its Lego bricks. However, the Court still prohibited the packaging on the basis of unfair competition law.

The Belgian company TKS sells watches under the trade mark Ice Watch. The watches are sold in cuboid boxes with four pegs on the top side (as well as a slot so the box can be used as a money-box).

Lego claimed that the box infringed the shape of its Lego bricks which it had registered as a trade mark. Importantly, Lego did not rely on the registration of the shape for toys and games, which was (partially) annulled with respect to construction toys by the Court of Justice of the European Union (See, this Newsletter, Volume 2010, No. 9, p. 10). Instead, Lego relied on its shape marks for (i) watches and other chronometrical instruments; (ii) plastic packaging; (iii) movable objects; and (iv) household containers, lunch boxes or key chains.

TKS contested the validity of Lego’s shape marks arguing the shape is necessary to obtain a technical result. The Court held that this may be the case for construction toys, but was not the case for the goods for which the shape marks at hand were registered.

In an attempt to demonstrate that the Ice Watch boxes are confusingly similar to Lego’s shape marks, and therefore prohibited under Article 9 §1, b) of Regulation 207/2009 on the Community Trade Mark (the “CTM Regulation”), Lego submitted a market survey. The survey showed that an important number of the people in the survey answered “LEGO” when asked about any direct or indirect confusion caused by the Ice Watch box.

The Court held that this survey only showed that consumers associated the box with Lego’s word mark and its toy bricks (some survey responses mentioned “LEGO bricks”). According to the Court, the survey failed to prove that the relevant public perceived the identical shape of the box as an indication that the products at hand originated with Lego or a company commercially linked with Lego as a shape trade mark consisting of a toy brick registered for the above-mentioned categories of products. In other words, the Court held that Lego failed to demonstrate confusion between the Ice Watch Box and the registered shape mark.

In addition to the claims under trade mark law, Lego contended that the use of the boxes with four pegs by TKS constituted a form of unfair competition prohibited under the Law of 6 April 2010 on market practices and the protection of the consumer (Wet van 6 april 2010 betreffende marktpraktijken en consumentenbescherming / Loi du 6 avril 2010 relative aux pratiques du marché et à la protection du consommateur – the “Law on Market Practices”).

The Court sided with Lego on this point, finding infringement of Article 88 of the Law on Market Practices by declaring TKS guilty of “misleading commercial practices”. Under Article 88, 2° of the Law on Market Practices, a commercial practice is misleading if it incites the consumer to take a commercial decision which it would not have taken if it was not deceived on one of various elements, including the presentation or the commercial origin of the product (even if the information presented is factually correct). In addition, the Court found infringement of Article 88, 3° of the Law on Market Practices which states that the deceiving element causing a misleading commercial practice can consist of any sign raising the impression that the company or the product benefits from sponsoring or direct or indirect support.

In this regard, the Court held that there was confusion on the commercial origin of the product, caused by the use of the recognizable shape of Lego’s products. According to the Court, this also caused a risk that consumers would perceive this as a direct or indirect support by Lego. The Court corroborated its finding by relying on the results of the survey conducted by Lego which established that 31% of the participants of the survey believed that TKS’ product is made with the consent of Lego and 21% of the participants thought that the products originated directly with Lego.

The Court therefore prohibited the use of the Ice Watch boxes with pegs under penalty of a daily fine.

The judgment is surprising for at least two reasons. First, the Court did not find confusion between the Ice Watch packaging and the almost identical shape mark. The Court appears to be of the opinion that consumers do not perceive the shape of the Lego brick as a trade mark with respect to products such as lunchboxes and boxes for storing toys, and that therefore there was no confusion between the Ice Watch packaging and the registered trade mark. Possibly, this could have been remedied by including relevant questions in the market survey.

Second, the Court nevertheless prohibited the practice at hand on the basis of unfair competition principles. The Court applied a broad interpretation of “misleading commercial practices” which protects companies and their products well beyond the scope of protection granted against free-riders under trade mark law. This could create serious problems for so-called “look-alike” or “me-too” products.