94 replies to this topic

[Superkalle]

From Reuters

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Lego loses trademark challenge at top EU court

BRUSSELS, Sept 14 | Tue Sep 14, 2010 5:39am EDT

BRUSSELS, Sept 14 (Reuters) - Danish toymaker Lego failed on Tuesday to quash an EU agency's decision revoking trademark rights for its colourful snap-together plastic building blocks, after a top European court dismissed its appeal. The Luxembourg-based European Union Court of Justice (ECJ) upheld a 2008 ruling by the General Court, which dismissed Lego's challenge to the decision by trademark agency OHIM. "The Lego brick is not registrable as a Community trade mark. It is a sign consisting exclusively of the shape of goods necessary to obtain a technical result," the ECJ said.
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Read more here

Hm, it's going to be interesting to see what the consequences will be. Higher inflow of clone brands to EU? Lower LEGO prices in EU (down towards US level)?

[Sinner]

This is still going on?   I thought they gave up on all of this years ago and that was why they are stamping "LEGO" on everything these days.

[Baylego]

This is sad . Why would the EU do this? I hope this doesn't affect anything major with Lego across the world.

[Superkalle]

Baylego, on 14 September 2010 - 02:46 PM, said:

This is sad . Why would the EU do this? I hope this doesn't affect anything major with Lego across the world.

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.

[mostlytechnic]

The big thing TLG has going in the US over the clones is quality. None of the clones are nearly as good - both in actual brick quality (plastic that doesn't break, bricks that stay together well) and in set design (most of the clone stuff is "bucket of bricks" type stuff rather than specific vehicles). I don't see Lego really facing a big threat from clones any time soon.

[vexorian]

Just hoping they just stop it. All that money that is wasted on Lawyers could go to better designs, fixing the quality issues and reducing prices...

Edited by vexorian, 14 September 2010 - 03:18 PM.

[LegoFiend]

Superkalle, on 14 September 2010 - 03:05 PM, said:

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.

When you say Clone brands do you mean Brick Arms and Brick Forge, these companies are more expensive than TLG..

[Skalldyr]

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

[pinioncorp]

I think this will ultimately be a bad thing. With more competition will come less sales. With less sales there will be more pressure to make the items they do sell more profitable. Not by making them more expensive, as that would be counter intuitive, but they would need to make more sales from fewer SKUs to make up the difference. Therefore the sets would be cheaper, but there would be less to choose from, which would definately be bad for AFOLs. Large sets will be the first to take a hit.

Furthermore, it will increase pressure to squeeze more money out of the smaller markets, to make up the difference.

LegoFiend, on 14 September 2010 - 03:29 PM, said:

When you say Clone brands do you mean Brick Arms and Brick Forge...

Brick Arms and the like are to supplement your Lego collection, to fill the gaps in TLG's lineup of items. Clone brands are the companies that rip off the lego block designs, such as Mega Bloks and Enlighten, to the extent that they are hard to pick apart. They often copy the design of the sets down to the patterns of the stickers and graphics on the box.

Edited by pinioncorp, 14 September 2010 - 03:39 PM.

[Skalldyr]

pinioncorp, on 14 September 2010 - 03:33 PM, said:

I think this will ultimately be a bad thing. With more competition will come less sales. With less sales there will be more pressure to make the items they do sell more profitable. Not by making them more expensive, as that would be counter intuitive, but they would need to make more sales from fewer SKUs to make up the difference. Therefore the sets would be cheaper, but there would be less to choose from, which would definately be bad for AFOLs. Large sets will be the first to take a hit.

Furthermore, it will increase pressure to squeeze more money out of the smaller markets, to make up the difference.

This is exactly what I meant.

[tin7_creations]

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.

[LegoFiend]

Skalldyr, on 14 September 2010 - 03:36 PM, said:

This is exactly what I meant.

Unless they decide to expand and not downsize. If they are smart they would seize the opportunity to expand their horizons. They could make a Zoo theme with a bunch of animals or a military theme and take on mega blocks/ brick arms.. I think they will continue to make their pieces in China. At a lower cost, but the quality is actually higher. Look at the amount of detail the new imperial soldiers have being printed on the front and back, compare to the older pirates imperial soldiers from the 90's. Lego has actually put more detail into their figures rather than take away, like other companies have in the past. Look at the old G.I. Joe's that Hasbro came out with in the 80's. the plastic was better then and the level of detail in the figures where a lot better. Now the toys look very generic..
I think Lego is on the right track.. They are instead adding more detail to their pieces, which costs more, but since it is being made cheaper they can keep their costs down.
They need to continue this trend and will need to make a wider selection of themes and Accessories since this ruling makes it possible for smaller companies Like brick forge and brick arms to become  major competitors for them. they will need to continue their quest for higher standards and lower prices if they want to stay competitive .

tin7, on 14 September 2010 - 03:42 PM, said:

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.

How many brick forge and brick arms pieces do you own??

[KimT]

Baylego, on 14 September 2010 - 02:46 PM, said:

This is sad . Why would the EU do this? I hope this doesn't affect anything major with Lego across the world.

Do what?
Allow the Free Market and thus the competition that follows?
LEGO is double the US price in the EU.
I welcome this competition and loss of patent.
LEGO's quality has already been slipping the past few years and I think it's more a question of the Chinese factory using poorer plastic and the fact that TLG is testing out new plastic mixes.
It's been years since ABS was LEGO's only plastic.

Free Market ON! Now we just need the EU to skip the toll wall around Europe and open the borders for international trade.

Lower prices

[fred67]

Superkalle, on 14 September 2010 - 03:05 PM, said:

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 agree with Superkalle 100%... it's really a legal ploy to get around copyright and patent expirations... claiming the brick shape is a trademark, because trademarks don't expire.

I do think the presentation of the classic 2x4 brick in advertising in the manner that TLG has traditionally done it should be protected, but not the brick itself.

I don't know much about international law, but there's a reason the founding fathers of the U.S. saw fit to have limited copyrights and patents.

Edit: I want to add a few things here, for people who are worried about LEGO cutting costs by reducing quality... the reason they have weathered the world wide recession despite increasing prices is because they offer a quality product that, while more expensive than competitors, is not so much more expensive that they price themselves out of the market.  For example, the other day somebody compared Megablocks/LEGO to Yugo/Lexus.  But the comparison is invalid... Yugo couldn't even make it in the U.S., I don't know if the company is still around at all, but it's not here, but if it had, the comparison would be more like between a Yugo and a Honda or Totota... not necessarily that much more expensive to get the better quality, something accessible by most people, unlike a Lexus.

For several years now, TLG's profits have outpaced increased sales.  Let that sink in for a minute, and then decide if TLG needs to cut quality to stay competitive.

Edited by fred67, 14 September 2010 - 04:08 PM.

[Corvus]

I'm not sure what to think... we've had this in the US for a while, but how will this affect lego's quality? If they aren't able to maintain their high quality, then this just narrows the gap between the clone brands, who can start attracting customers because the jump between qualities isn't there anymore.

Although if they want to save money, they can just start making their boxes smaller and lowering shipping costs.

LegoFiend, on 14 September 2010 - 03:51 PM, said:

They need to continue this trend and will need to make a wider selection of themes and Accessories since this ruling makes it possible for smaller companies Like brick forge and brick arms to become major competitors for them. they will need to continue their quest for higher standards and lower prices if they want to stay competitive .

How many brick forge and brick arms pieces do you own??

Again, Brickforge and Brickarms are not competitors to Lego. All the pieces they make are to supplement serious lego builders like us. I believe Will from BA still molds out of his garage. How does this seem like competition to you?

[CP5670]

tin7, on 14 September 2010 - 03:42 PM, said:

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.

This doesn't make any sense. Having more sets in production does not necessarily reduce profits. It depends on a lot of other factors and will in many cases increase them. Any quality reductions in set designs or parts will only occur as long as consumers at large don't notice them, and those can happen equally well without any competition present.

If there were no clone brands or comparable construction toys out there, you can bet that TLG would be charging us double the prices on everything. Competition from clone brands is good for us.

[vexorian]

Hey, doesn't the EU already have enough clone brands around? I think LEGO's legal attempt was to cause a change, but now with the ruling, there won't be a change.

Ultimately, competition may be good or bad for LEGO but it is good for us. Anyway, it is not like Clone Brands stopped selling until the ruling was made. So it is unlikely we'll see more clones because of the ruling. It is also a major statement to say that LEGO will be forced to compete with lower prices = worse quality. TLG's way to compete against megabloks in the US does not indicate that it is the way they compete...

Clearly, not all costumers want just lower prices. Else we would all be just happy with the clones already.

Edited by vexorian, 14 September 2010 - 04:36 PM.

[Marckeyh]

We'll have to wait and see what's gonna happen. Maybe we'll get a statement from TLG concerning this matter?

I hope the prices in Europe will drop, it's getting a bit silly now to be honest. I doubt TLG will reduce the quality of the bricks at all to make it cheaper, loads of people will start buying clone brands, as I believe the high quality is the reason why people stick with real LEGO.

[fred67]

vexorian, on 14 September 2010 - 04:35 PM, said:

It is also a major statement to say that LEGO will be forced to compete with lower prices = worse quality. TLG's way to compete against megabloks in the US does not indicate that it is the way they compete...

Another good post that I completely agree with... there is room for high end - this is true in every market.  Barbie's cost more than most competitors, some car brands, some electronics brands... they all somehow manage, and so has, and so will, TLG.

IF, IF, IF they took the low road and tried to compete at a price point against Megablocks, that would be the end of TLG, and it's obvious to me (and vexorian, apparently), that TLG wouldn't take that route.

[Flare]

Well that sucks for the LEGO company.

[gotoAndLego]

KimT, on 14 September 2010 - 04:02 PM, said:

Do what?
Allow the Free Market and thus the competition that follows?
LEGO is double the US price in the EU.
I welcome this competition and loss of patent.
LEGO's quality has already been slipping the past few years and I think it's more a question of the Chinese factory using poorer plastic and the fact that TLG is testing out new plastic mixes.
It's been years since ABS was LEGO's only plastic.

Free Market ON! Now we just need the EU to skip the toll wall around Europe and open the borders for international trade.

Lower prices

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. As far as opening borders to free trade. Everyone wants lower prices, but Ask the Southwest United States how awesome NAFTA has been.

Mr. Mandalorian, on 14 September 2010 - 04:11 PM, said:

Again, Brickforge and Brickarms are not competitors to Lego. All the pieces they make are to supplement serious lego builders like us. I believe Will from BA still molds out of his garage. How does this seem like competition to you?

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.

Edited by gotoAndLego, 14 September 2010 - 05:23 PM.

[fff]

I will not buy LEGO clones. But of course this will affect LEGO. I know many people who will only say: Compatible? Lower Price? And of course they will do...

LEGO will low prices? That's good. Here you can find 2 or 3 offers 50% per Xmas, and forget the rest.
Quality lows?... Then we have a problem...

or back to the Past...

[Optimus]

This could be a good or bad thing, depending on how you look at it.

LEGO is already outrageously expensive, especially in Europe. Considering what you get with the average LEGO set compared to other toys, you're really getting a lot less for the price. Yeah, I know LEGO is a high-quality product, but it is a toy, and it's really just too expensive for most people. To make things worse, LEGO is actually INCREASING prices year after year, with sets becoming more expensive (similar to how they used to be in the late 80's to early 90's, only worse).

It could be a bad thing because it could lead to LEGO using more cheap Chinese plastic in their pieces, which would really ruin the LEGO brand for me (just look at the cheaper plastic used in the Collectible minifigures, really disappointing on LEGOs part for not using their higher quality plastic).

The good news is more competition = lower prices for consumers. Hopefully that will be without a loss in quality.

[Peppermint_M]

Just a quick FYI:

Competitor brands include: Cobi, Megablocks, Bestlock, Oxford and FIA.

"Brands" such as Enlighten, Shifty and Brick are bootlegs of Lego and other competitor brands. Sluban is a bootleg of Oxford.

Competitor brands are legal and design their own products. Bootlegs steal designs and graphics to create vastly inferior products.

There are some grey area "brands" out there including MY, that import generic sets that are of decent quality but can be found under a variety of brand names.

Brick Arms and other such custom creators are another grey area, they compliment Lego and (at the moment) do not compete with Lego. Like burger relish adds a little extra to a hamburger, BA, BF and other such "homebrew" add flavour to a MOC.

_________________________________


Now that that's out the way: This ruling means that other brands now have an opportunity to expand to markets without threat of a big "Cease and Disist" (or whathaveyou) chopping them off just when risks start making returns. I hope it means I can get hold of Cobi, Bestlock and FIA in more places. At the moment I have trouble tracking it down and the selection is always limited.

[drdavewatford]

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.