Lego lost trademark challenge of usage of red 3D 2x4 rendering

[squiz]

I don't get what this legal dispute was about - clone brands such as Megablocks already exist in the UK and sit on the shelf alongside genuine LEGO. So what can the clone brands do now that they couldn't do before ?!

Dr. D.

yeah im not really sure whats going to change.

Surprised this hasnt been mentioned already, but it seems like lego is a very healthy company at the moment. Its profits have soared this year

[BearHeart]

I think LEGO needs to really focus on becoming the "luxury" brick, meaning high quality plastic with the inevidable high price. It really needs to differeciate itself and standout from the competitors and high quality is the best was to do that.

Its other choice is to cut quality and cut prices but then it would just become another member of the pack and loose its name brand appeal.

I really hope that LEGO takes the first route because for the last few years, the quality of the plastic has been pretty dissappointing and thats a shame because the actual sets and designs have been really good.

[fred67]

I think LEGO needs to really focus on becoming the "luxury" brick, meaning high quality plastic with the inevidable high price. It really needs to differeciate itself and standout from the competitors and high quality is the best was to do that.

Its other choice is to cut quality and cut prices but then it would just become another member of the pack and loose its name brand appeal.

I really hope that LEGO takes the first route because for the last few years, the quality of the plastic has been pretty dissappointing and thats a shame because the actual sets and designs have been really good.

I realize TLG has experimented with cheaper production, but overall, how are they NOT already the "luxury" brick of building bricks?

[CMP]

It's really not that much of a deal. Clone brands are found all the time in the US, but only in cheesy dollar stores. Real Legos still sell like crazy. Plus, does any other building block brand have the Star Wars liscense?

[Superkalle]

It's all basic economics really.

New competition = lower price = poorer quality = decrease in quantity (set-wise, not production-wise).

While price-wise it would benefit the consumer, the lowering of quality and quantity will not.

Hopefully LEGO has a big enough market, and a mass of loyal consumers, and the clone brands won't sell as well.

Well, there are other ways to save. Plastic is one of the costs. Then there is labour cost, taxes, property/factories.

And with labour cost it doesn't have to mean cut down on staff - it can mean work more efficient.

Also, please note - TLG has always scared the general public with "chinese plastic is toxic". This is simply not the case. All goods imported to EU, US and other regions are subject to the health regulations there. So no worries there.

[jackdaw]

Ooops, I am afraid that one consequence can be a lower price of TLG products in the future, but this will affect the quality as well...

[BearHeart]

I realize TLG has experimented with cheaper production, but overall, how are they NOT already the "luxury" brick of building bricks?

Yes, they are the 'luxury' brick but they need to focus even more now on staying there. That means a high quality product and no "experimenting" with cheaper plastic and production methods.

[Aanchir]

This is the epitome of short-term thinking. In a couple of years a garage-based company could drastically increase its scale and end up producing competing bricks.

Only problem with that is that Brickarms and Brickforge never intend to supplant LEGO. Their intent is to complement the existing LEGO selection. Moreover (as far as I know) both Brickarms and Brickforge are US-based companies. So if they were planning to go into production of actual "sets", they'd have already been free to do so.

Meanwhile, I'm kind of ambivalent about this. LEGO's position was pretty much indefensible, given how prevalent brands like Mega-Bloks already are. I feel it is a shame that every clone brand under the sun has practically copied the proportions of the LEGO brick for their own plastic brick products. But now that such is common practice, it would be practically impossible for a plastic-brick product to be competitive without following that trend. Otherwise, they're the only incompatible product in a sea of competitors who have compatibility on their side.

The most regrettable clone brand I know of has already happened-- those abominable K'nex bricks. And the only problem I have with those, besides the "follow-the-leader" adherence to compatibility with LEGO and its clone brands, which as I said is pretty much inescapable in a world where that's already the norm, is that K'nex only seems to use them to produce sets with lower-quality designs, as opposed to the advanced rod-and-socket models which I knew the building system for in my youth.

Overall, I think that LEGO should still be able to stop "bootleg companies" that directly copy LEGO part designs. All the ruling really means is that LEGO can no longer take legal action against any and every clone brand company. And EU nations obviously still have the decency to distinguish between imitation and out-and-out plagiarism.

[CP5670]

It should be kept in mind that TLG doesn't compete with clones on price only, but rather on overall value. If Lego sets are more expensive than clones but also have better designs or higher quality bricks (in the eyes of consumers), then that increases their value and keeps them competitive.

Ultimately, competition may be good or bad for LEGO but it is good for us.

Exactly. What the company wants is not necessarily what we, the consumers, want. Lego in 2003 is a good example of this. This was financially TLG's worst year, but we got high quality bricks and exceptionally low prices on many large sets that year, the likes of which we have never seen since then.

Free market is competing brick systems, not other companies capitalizing on a brick system that TLG has developed. TLG shouldn't suffer just because no one wants to use MegaBlocks.

By that logic, cars or PCs should only be produced by a single company today. The brick patents were established by TLG in the early 80s and are no longer in effect. There are very good reasons why patents eventually expire.

[Stegoceras]

I really can't see how this can be considered bad news, a bit of competition has never hurt. TLG is a company that has it's roots deeply nested in the market and I won't expect the prices to drop immediately, but just a bit is never a bad thing. As for the quality decrease when they supposedly drop their prices, I severely doubt such a situation, they would simply cut their own fingers if they do. Besides lower prices might actually boost their sales by cutting in on market of other toy categories and eventually boost their own profit in the end.

Edited September 14, 2010 by Stegoceras

[Front]

This thread is based on a misunderstanding about what the EU court has decided on.

The trial was a dispute about whether the 3D representation of a red 2x4 brick (the rendering in 2D of a brick from an isometric viewpoint) is a trademark of the LEGO company, and thereby something that other companies can't use in their marketing or any other material. The EU court does not recognize this image of a red 2x4 as a trade mark of the LEGO company.

It has absolutely nothing to do about whether the LEGO company can avoid other companies making bricks of any sort.

cheers

Erland, Part Design

Edited September 14, 2010 by Front

[gingerling1980]

I was in B & M today (a cheap horrible uk shop) and they have loads of knock off Lego stuff in.

The prices compared to Lego were unbelievable.

So so cheap but nasty at the same time.

[legolandia]

What do you mean sad. In what way? In the US TLG has not had the same right to prevent clone brands which could help explain the lower prices there. I think the decision is a victory for consumers in general - competition is always good, but is a victory for AFOLs? I don't know.

I fully agree. Competition is always good for customers. I am glad that Lego's domination has ended. The appearance of the clones in the future means that those who can't afford Lego's prices or don't want to splash a large sum for a toy which their kids will probably destroy etc can buy the cheaper brands. And also hopefully Lego's prices will fall down too, although I doubt that will happen with exclusive licences such as Star Wars.

[Legononymous]

The problem that I see is, if TLG will be under pricing pressure they probably make cheaper plastic, to decrease costs.

That was the only major thing stopping them from being like the clones here in the US. I will say, the clones have been tempting me with military themes.

[Clone OPatra]

Uh, guys, how about you stop and actually read Front's post just four back. He clearly explains that you are all misguided in what you are talking about, and he should know, since he actually works at LEGO.

[gotoAndLego]

By that logic, cars or PCs should only be produced by a single company today.

Both cars and computers are excellent examples, but unfortunately they do nothing to prove your point.

Windows OS is licensed which is why many companies produce Windows computers. Mac OS is only available from one company which is why no one else can make Macs, and back in the 90s Apple tried licensing their OS and that was one of the things that almost bankrupted them. There is nothing stopping a new company from creating a new computer using components and an OS that are available for sale/license much in the same way that there is nothing stopping a new company from producing a new brick toy using plastics which are widely available for sale. In regards to cars, anyone can develop a car (new brick toy), but they can't use proprietary components (Legos' specific system).

Uh, guys, how about you stop and actually read Front's post just four back. He clearly explains that you are all misguided in what you are talking about, and he should know, since he actually works at LEGO.

You are correct, but we've moved on and are discussing theoretical trademark and copyright issues. :D

Edited September 14, 2010 by gotoAndLego

[The Green Brick Giant]

So in Europe MegaBloks aren't sold?

LEGO really thought they would win this? They are insane!

[Peppermint_M]

I was in B & M today (a cheap horrible uk shop) and they have loads of knock off Lego stuff in.

The prices compared to Lego were unbelievable.

So so cheap but nasty at the same time.

Thanks for the tip! Off to B&M! (does anyone else hear the Buy 'n' Large jingle?).

Loss of the Red Brick as a trademark? Not too much of a loss considering they have used the Read Square with LEGO written in it for a looong time.

[Brickdoctor]

This is still going on? I thought this whole legal challenge ended some time ago when the country of Denmark determined that LEGO bricks were patents, and thus after so many years the monopoly on bricks had expired.

Either way, it doesn't really affect US consumers, since MegaBloks are made in legally in Canada.

[prateek]

I don't think this matters. Now, Lego won't have to spend all that money to hunt down the bootlegs, and will have to lower prices to compete.

[CP5670]

Both cars and computers are excellent examples, but unfortunately they do nothing to prove your point.

Windows OS is licensed which is why many companies produce Windows computers. Mac OS is only available from one company which is why no one else can make Macs, and back in the 90s Apple tried licensing their OS and that was one of the things that almost bankrupted them. There is nothing stopping a new company from creating a new computer using components and an OS that are available for sale/license much in the same way that there is nothing stopping a new company from producing a new brick toy using plastics which are widely available for sale. In regards to cars, anyone can develop a car (new brick toy), but they can't use proprietary components (Legos' specific system).

In the case of computers, there are plenty of far more basic technologies that are used by all the companies today. For example, imagine what PCs would be like today if Xerox had gotten patents on the mouse and GUI that never expired, and they chose to keep those things proprietary.

The point here is that the basic Lego shapes and dimensions are a technical concept, not an actual product. TLG can profit from their idea for a certain period (which it has) but can't do so forever, and courts around the world have seen it that way too. There is also the fact that the original "proprietary components" were not actually created by TLG, although they did acquire the patents later on.

Anyway, as Front said I think the issue in this case is the 2x4 brick trademark, rather than the brick as a functional standard.

Edited September 14, 2010 by CP5670

[charlieboy]

So in Europe MegaBloks aren't sold?

Yes they are,many toy shops sell them in the UK

[Front]

This thread is based on a misunderstanding about what the EU court has decided on.

The trial was a dispute about whether the 3D representation of a red 2x4 brick (the rendering in 2D of a brick from an isometric viewpoint) is a trademark of the LEGO company, and thereby something that other companies can't use in their marketing or any other material. The EU court does not recognize this image of a red 2x4 as a trade mark of the LEGO company.

It has absolutely nothing to do about whether the LEGO company can avoid other companies making bricks of any sort.

cheers

Erland, Part Design

Please allow me to repeat my statement from above.

A brand like MEGA BRAND can legally sell 2x4 bricks that is interchangeable with LEGO bricks, four years ago, a year ago, two days ago, today, and a year from now. Worldwide. EU has zero to do with this, they have only looked at the usage of a trademark (3d image of the 2x4 brick), a trademark that they don't recognize. So now other companies can use a similar image within the EU, without violating the properties of the LEGO company. Will it mke the bricks you buy less expensive ? Hardly, I would say.

[Norro]

Please allow me to repeat my statement from above.

A brand like MEGA BRAND can legally sell 2x4 bricks that is interchangeable with LEGO bricks, four years ago, a year ago, two days ago, today, and a year from now. Worldwide. EU has zero to do with this, they have only looked at the usage of a trademark (3d image of the 2x4 brick), a trademark that they don't recognize. So now other companies can use a similar image within the EU, without violating the properties of the LEGO company. Will it mke the bricks you buy less expensive ? Hardly, I would say.

Keep trying mate! This seems to be a hard thread to rein in And, yes the Bloomberg version of the story I read, made that fairly clear...

God Bless,

Nathan

[Toth]

in France too. But Mega Block doesn't have succes here!

always finishing in the 3 euros soldes! :D

People always have to prefer quality! People have not to fall in the trap of the Cheapest...even if it looks attractive, at the end you don't have more than what you pay for.

I prefer to pay more and have a little less than to have an enormous set with poor plastic and ugly design.

I agree with the fact that concurrency is not always a good thing.

the quality products have to be protected to stay quality products. savage concurrency can attrack everybody to the lowest quality, as we can see what happens with discount products lately

The worst is that with time, lower quality products become as expensives as what quality products were before disapearing! :S ...Sad ultra liberal world.

I hope people will wake up soon.

Edited September 14, 2010 by Toth