NZ’s Zuru countersues Lego, escalating toy war

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Kiwi toy company Zuru has recently been involved in two high profile intellectual property law cases in the United States. James & Wells Senior Associate, Sebastien Aymeric spoke to the Herald about the differences in the two cases. Here is an excerpt:

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“Sebastien Aymeric, a Senior Associate with James & Wells – a law firm that specialises in intellectual property issues – said that while superficially similar, the two cases hinge on quite different IP principles and laws (Aymeric does not act for Zuru or Lego).

In the Bunch o Balloons matter, Zuru alleged Telebrands had infringed its “utility” patent – equivalent to what is more traditionally known in New Zealand as just a patent, he told the Herald.

“Broadly speaking, a utility patent in the US protects the way a product works, regardless of that product’s look or feel. Zuru devised a novel and inventive method of filling up several balloons with water at once. The utility patent protects that method. The court found that Telebrands, by using a similar method in its product, infringed that patent.

The current Lego vs Zuru fight is about a different kind of patent; a “design” patent – equivalent to a design registration in New Zealand, he said.

“A design patent protects the appearance, the visual aesthetics of a product, not the way it works. Lego owns several design patents protecting its figurines and bricks of a certain shape – those that have been publicly available for less than 14 years.”

Lego also registered copyright to protect the appearance of the figurines and those bricks of a certain shape, Aymeric said.

“Copyright is very similar to a design patent in that it protects the appearance of a product. It is also of a similar duration.”

Unlike a design patent, however, copyright only protects against copying; that is, if a third party independently designs a similar product without copying, that won’t be copyright infringement (although that may be an infringement of the design patent), he said.

Lego also owns registered and unregistered shape trade marks in the US for the figurines, some bricks and even the cylindrical studs used to connect at the top of the bricks, Aymeric said.

“This gets a bit technical but owning a shape trade mark does not mean the owner can stop others from using that shape altogether.

“It means the owner can stop others from using the shape ‘as a trade mark’. That is. broadly speaking, use the shape to create a connection in the mind of consumers between the shape of a product and its source so the shape acts as a badge-of-origin.”

A trade mark does not expire provided it is renewed as required.

Could it backfire?

The bottom line: Lego could potentially have a much harder time winning its case against Zuru than Zuru did with Telebrands (itself a multi-year, multi-front fight).

“A shape trade mark is more difficult to enforce than a utility patent or design patent,” Aymeric said.

The legal action could even ultimately backfire on Lego, once the matter goes to a full hearing.

“It may also be that at trial, the court finds that the interim injunction should not have been granted because there is no infringement or because Lego’s patents, copyright and/or trade marks are invalid,” Aymeric said.

“The usual course would be for Zuru to counterclaim to revoke [and] invalidate those registered rights.”