October 12, 2023
The High Court has recently released a judgment in the high-profile trade mark litigation involving the Danish toy manufacturer the LEGO Group and its competitor ZURU. Member Kevin Glover represented the LEGO Group.
ZURU used the wording “LEGO Brick Compatible” on the packaging of its Max products that compete against those of the LEGO Group. The LEGO Group objected, based on its rights in relation to the LEGO word trade mark. ZURU withdrew the relevant products from sale but applied to the Court for declarations that its use of that wording would not in the future:
a) infringe the LEGO Group’s registered trade marks;
b) breach the Fair Trading Act 1986; or
c) amount to passing off.
The LEGO Group opposed the orders being granted, and counterclaimed for infringement of its IP rights based on ZURU’s previous brief use of the wording.
Justice Lang determined the claims and counterclaims in relation to past usage of the compatibility statements only, having found that declaratory relief was inappropriate for potential instances of future use which could not be precisely or sufficiently defined.
After careful analysis, the Judge held that use of the LEGO trade mark on ZURU’s packaging constituted an infringement of s 89(1) of the Trade Marks Act, because potential purchasers would likely understand the use of the word to be use of the LEGO trade mark. The word was prominently featured, in bold colours and text, and the LEGO trade mark had no meaning beyond its association with the LEGO brand. Further, ZURU was using the word to distinguish itself from competitors, rather than in a purely descriptive sense. Because the Judge went on to find that use of the LEGO trade mark was not in accordance with honest commercial practices, the protections available under ss 94 and 95 of the Trade Marks Act did not apply.
However, Justice Lang did not consider that the previous use of the LEGO trade mark constituted passing off. While there was no dispute that LEGO Group had acquired very strong commercial goodwill in the field, based on the overall packaging the Judge did not consider that a significant number of potential purchasers would have been confused or deceived into believing that ZURU’s products were manufactured or endorsed by LEGO, or produced as part of a joint initiative between the two companies.
For similar reasons, the Judge declined to find that the previous conduct constituted a breach of the Fair Trading Act (under ss 9, 10, 13, or 16). In short, the Court was not satisfied that use of the LEGO trade mark in this context was likely to have confused or deceived potential purchasers, or to have induced a belief that ZURU’s products were made or endorsed by the LEGO Group.
ZURU’s claim therefore failed in its entirety.
While the LEGO Group was the successful party, Justice Lang declined to grant injunctive relief against ZURU (restraining it from using the LEGO trade mark) because ZURU gave assurances to the Court and the LEGO Group during the trial that it would not make use of the LEGO trade mark in the absence of the declarations it sought.
ZURU is permitted to continue to use the statement “Compatible with Major Brands” on product packaging.
The case is on appeal to the Court of Appeal.