HA Bricks in Legal Troubles

[dtomsen]

47 minutes ago, MAB said:

This was not a hobbyist individual. They were selling items, and using LEGO trademarks to sell them. Producing and selling the items makes them a company, not someone doing it as a hobby.

LEGO are perfectly fine with a hobbyist buying their items and adapting them for their own personal use.

We are "hobbyist individuals" and buy adapted items from HA Bricks so we don't have to ourselves.
So TLG did go after us indirectly as stated by the cited UltraViolet  

Edited May 30 by dtomsen

[Hod Carrier]

53 minutes ago, JopieK said:

You have some points there, but I don't agree. This is how it goes (at least how it worked in our case), we hated the old 12V trains having faded logo stickers, so we found a printer that allowed us to print replacements but as it is was an expensive machine we could only afford it on a loan and needed to pay of that loan before making money. Our printer broke down twice (3000 euro for a new printing head). Nowadays you can get Chinese UV printers that could do white but that was impossible a few years ago. We basically only used the small profit we had to go to events and buy LEGO for our hobby... For some people it evolves into a day job (as with Bricklink sellers) but for many others it stays a 'professionalized' side project.

But clearly the law makes a distinction.

It doesn't matter if you are running a business on the side "as a hobby", you are still running a business and are, therefore, subject to all the rules, regulations and legislation that applies to business dealings. What you choose to do with the proceeds of that business really has no bearing on it.

While I understand @UltraViolet and @dtomsen's view on the matter, I feel that it is based on a point of semantics rather than of law. As customers of HA Bricks, we are the "individual hobbyists", but HA Bricks is not. HA Bricks is a business that just happens to be run by a hobbyist.

Edited May 30 by Hod Carrier

[JopieK]

That depends on local laws. In the Netherlands it is not very clear cut. That is probably also the issue for them. They should have registered a Limited (BV same idea as the German GmbH) as they are then not personally accountable. But that is also more expensive so most small business and/or private persons selling a few things aren't often registered as Limiteds. I also didn't do the stickers under a formal company name b.t.w. even though I had one but that was for a different purpose.

I checked it and it is a one-person company indeed (with full personal responsibilities) : https://www.kvk.nl/bestellen/#/01134117000015162842

[dtomsen]

55 minutes ago, Hod Carrier said:

While I understand @UltraViolet and @dtomsen's view on the matter, I feel that it is based on a point of semantics rather than of law. As customers of HA Bricks, we are the "individual hobbyists", but HA Bricks is not. HA Bricks is a business that just happens to be run by a hobbyist.

Thanks, however I'm an individual and a hobbyist thus laying my sympathies in that direction whenever businesses fight in court.
What I think a lot of people have a very difficult time with is seperating our beloved hobby from the company regarding their own sympathies - and thus ignoring the fact that TLG's action and court victory in this case might actually hurt our hobby in both the short and long run. Because TLG can doesn't always mean that it should.

Edited May 30 by dtomsen

[MAB]

2 hours ago, JopieK said:

You have some points there, but I don't agree. This is how it goes (at least how it worked in our case), we hated the old 12V trains having faded logo stickers, so we found a printer that allowed us to print replacements but as it is was an expensive machine we could only afford it on a loan and needed to pay of that loan before making money. Our printer broke down twice (3000 euro for a new printing head). Nowadays you can get Chinese UV printers that could do white but that was impossible a few years ago. We basically only used the small profit we had to go to events and buy LEGO for our hobby... For some people it evolves into a day job (as with Bricklink sellers) but for many others it stays a 'professionalized' side project.

Here, the authorities do not class making stuff to sell for profit as a hobby, even if you enjoy it and use the proceeds to fund purchases for yourself. Buying equipment with a loan and selling stuff produced with the equipment to pay off the loan to fund its purchase is what many businesses do. Even if you don't ever make a profit, it is still a business. There may be no tax to pay if no profit is made, but that doesn't mean it is only a hobby. It is the production with the intention to sell that makes it a business, not whether profit is made.

And if you are printing replacement stickers that are LEGO's copyright, then they could take action against you too. I know it has gone on for years with LEGO seemingly not taking notice, but maybe this step is the first indication that they are going to slowly stamp out the smaller scale production of reproductions / unauthorized copies / fakes (name depending on viewpoint).

2 hours ago, dtomsen said:

We are "hobbyist individuals" and buy adapted items from HA Bricks so we don't have to ourselves.
So TLG did go after us indirectly as stated by the cited UltraViolet  

They are not going after you, you are not in court for buying the disputed items. They went after the person making and selling the items. If you want to buy LEGO and adapt it, there is nothing stopping you. It is the point at which someone adapts LEGO parts and then sells them, especially calling them LEGO, that LEGO is disputing (and winning). It may have a knock on effect on you as you can no longer buy them but have to make them yourself, but LEGO are not targetting the buyers, they are targeting the person making and selling them.

[dtomsen]

24 minutes ago, MAB said:

They are not going after you, you are not in court for buying the disputed items. They went after the person making and selling the items. If you want to buy LEGO and adapt it, there is nothing stopping you. It is the point at which someone adapts LEGO parts and then sells them, especially calling them LEGO, that LEGO is disputing (and winning). It may have a knock on effect on you as you can no longer buy them but have to make them yourself, but LEGO are not targetting the buyers, they are targeting the person making and selling them.

You miss the point. TLG do target me (as the buyer) and our hobby (more correctly our train niche, not the wider LEGO audience as such) indirectly by making it next to impossible to buy modified LEGO parts commercially from small vensors be that custom painting, ball bearings or whatever TLG might fancy next.

Yeah, I can insert ball bearings into LEGO parts myself if I want to but I sure as hell don't have the necessary and expensive equipment to do proper custom painting on bricks myself.

Edited May 30 by dtomsen

[Phil B]

The problem I have with some of the responses/opinions here is that they frame TLG as actively trying to stop AFOLs from enjoying their hobby. I have outlined before that this is not the case, TLG is forced to pursue violations to keep their trademarks. And they are likely pursuing the "easy" cases first, because going after the "hard" cases (all those large brick manufacturers in China for example) is .... hard (and expensive and least likely to get results).

[dtomsen]

Well, Phil B, this is where our opinions differ even though I do understand both (articulated) sides of the argument.
As I wrote "because TLG can doesn't mean it should"
TLG could have acted differently but chose not to.
TLG could have picked a harder and more deserving target but chose not to.
TLG could have put the hobby aspect above business interest but chose not to.
This makes TLG the main villain in this particular case in my eyes.

Edited May 30 by dtomsen

[MAB]

40 minutes ago, dtomsen said:

You miss the point. TLG do target me (as the buyer) and our hobby (more correctly our train niche, not the wider LEGO audience as such) indirectly by making it next to impossible to buy modified LEGO parts commercially from small vensors be that custom painting, ball bearings or whatever TLG might fancy next.

Yeah, I can insert ball bearings into LEGO parts myself if I want to but I sure as hell don't have the necessary and expensive equipment to do proper custom painting on bricks myself.

No, I don't miss the point. They are not targeting you. You are not in court. They have not contacted you. They are targeting the person that is taking LEGO parts, modifying them and then selling them as LEGO parts. That might have an impact on you as you can no longer buy the parts the seller has modified, but they have not targeted you. It is the seller that they have dealt with. They are not doing it because they want you to be effected, they are doing it to protect their safety and standards reputation, as well as their trademark.

It wouldn't surprise me if they also continue to try to order him to contact his customers to say that the parts he sold where not genuine LEGO but modified in such a way that they no longer meet the strict standards that they were tested against and do a recall. Toy standards are incredibly strict within the EU. People buying LEGO products would know they have been tested so that they can be used by children. If that ball bearing can drop out then it could lead to a safety hazard if it found its way into the hands of a young child. It is similar to adding magnets where they are easily removed. Even if the seller says that he only sells to adults and customers are aware they are buying modified items, he was using the LEGO branding and its reputation to sell them. If you were to pass on the modified parts to someone else and their child choked on an untested part, they would probably try to sue LEGO for producing a dangerous part.

28 minutes ago, dtomsen said:

Well, Phil B, this is where our opinions differ even though I do understand both (articulated) sides of the argument.
As I wrote "because TLG can doesn't mean it should"
TLG could have acted differently but chose not to.
TLG could have picked a harder and more deserving target but chose not to.
TLG could have put the hobby aspect above business interest but chose not to.
This makes TLG the main villain in this particular case in my eyes.

So if TLG know that someone is modifying their toys and selling them without certification, you think they should just continue to allow that to happen? We don't know if TLG had contacted this seller first to tell him to cease and desist. It seems likely that they would have, as that is usually the first step to stop what one side sees as illegal activity. But we don't know. If they have done this then they have acted differently to what it appears, and if the seller ignored it and continued to sell then LEGO have taken the right action trying to get him to stop first. We don't know if they have gone for "harder" targets first. I imagine they go after all sorts of targets. It wouldn't surprise me if they targeted this seller as he was modifying the parts but still claiming they were genuine LEGO, meaning that it is not just a trademark issue but also a safety issue. As for the hobby aspect, just because some people want the modifications for their hobby does not mean that a seller should be able to produce them without permission or certification. If they allow it as end-users want it for hobby use, then anyone could set up a company producing substandard toys based on LEGO, call it LEGO and sell it. 

[UltraViolet]

It would be easily demonstrable that a printed or modified part did not originate with LEGO in that form.  LEGO is not responsible for enforcing EU toy safety standards.  I cannot see how LEGO have incurred any real direct injury by a legal standard, only theoretical.  In fact, they actually made money by the existence of that re-seller business, even if it were only a drop in the bucket.  It also doesn't make any sense that a non-business person can alter LEGO bricks in any way they see fit and somehow this would never result in the same asserted theoretical legal injury LEGO is crying about.  Why do they get do say the sky is falling based on theoretical technicalities, but I'm accused of semantics?  LEGO won on shaky arguments.  They are well within their rights to protect their trademarks and copyrights, but junk science has no place in the courtroom.

Is there a single instance ever of a consumer suing LEGO over a cracked brick?  I couldn't even tell you how many of my "genuine direct-from-LEGO" bricks have broken due to faulty ABS plastic batches or design flaws.  Many of these parts are out of product and costly to replace through the resale market, and if I do replace them it's most likely through Bricklink where LEGO again takes a cut of the sale.  I've had to throw away many pieces even this week due to "Brittle Blue Syndrome", "Brittle Dark Red Syndrome", "Brittle Reddish Brown Syndrome", and a new one for me this week, "Brittle Dark Brown Syndrome".  I've also had to trash hundreds of cracked 1x1 bricks, headlight bricks, and cheese slopes.

BTW, when I use the term "Hobbyist", I implied that this small business would not have existed had it not originated as a hobbyist passion project by one person serving hobbyists.  I am not implying that "Hobbyists" should be immune from business laws.  It is clear that killing an ant with a sledgehammer was not a necessary outcome.  LEGO has no business dictating to me how I may or may not use their bricks once I've paid for them.  If they want to put a leash on every re-seller in the world, maybe they would be best advised to only sell through their own stores.  You can imagine what that would do to their annual sales.

[dtomsen]

1 hour ago, MAB said:

We don't know if TLG had contacted this seller first to tell him to cease and desist. It seems likely that they would have, as that is usually the first step to stop what one side sees as illegal activity. But we don't know. If they have done this then they have acted differently to what it appears, and if the seller ignored it and continued to sell then LEGO have taken the right action trying to get him to stop first. We don't know if they have gone for "harder" targets first. I imagine they go after all sorts of targets. It wouldn't surprise me if they targeted this seller as he was modifying the parts but still claiming they were genuine LEGO, meaning that it is not just a trademark issue but also a safety issue.

Afaik we do know second hand that the cease and desist letter had the exact same terms as those put forward in court and that TLG didn't want the compromise put forward by HA Bricks before the court (also known somewhat second hand) or first hand (court text) work out another even when asked by the judge in court.
Make of it as you will but the TLG laywers sure seemed to me to want to make an example of HA Bricks and did.

TLG was well within its right as things turned out but should we applaud it for doing it and in the way it did in this particular case?

Edited May 30 by dtomsen

[Duq]

It's not about a consumer sueing Lego over a cracked brick. It's a consumer looking at a brick with a ball bearing and some stress marks and thinking "hmm, that Lego stuff is not as good as I thought, I'll buy Cobi next time".

The grey area is that I can buy ball bearings on Ali Express, push them into Technic bricks, and sell them at a train meeting to some friends, and Lego would be none the wiser. The effect is the same as what HA Bricks has done. In both cases there are now modified Lego bricks "out in the wild" that could damage Lego's reputation.

What I find hypocritical about the whole thing is that their own quality isn't what it used to be. I took a MOC out of a box a few weeks ago and pretty much every droid arm had split clips. Not from illegal techniques, just from being clipped onto a bar. I've load of broken parts, not just brittle brown (and I don't keep everything, I regularly bin the broken stuff). They can't produce consistent lime green parts. Five minutes of sunshine on a white brick and a few years later it's light tan. That is what is damaging their quality reputation for me, and it's why I wonder why I'm still paying premium for the real stuff. And yet they go after a guy who modifies a few hundred bricks in a year. That's less than Lego produces in a second.

As for the out of court settlement proposals, I don't know the details, don't know which side was more flexible, which was more stubborn, but it's really sad it's come to this.

On paper their case is correct. But they forgot to look at the bigger picture. "Just because you can, doesn't mean you should".

[Mylenium]

1 hour ago, MAB said:

We don't know if TLG had contacted this seller first to tell him to cease and desist.

They wouldn't have to. C&Ds are always optional and their legal leverage is debatable in most cases, anyway. It's one of those grey areas where half the time the underlying conflict still ends up in court, especially when a lot of money is involved. The rest of the matter is just typical LEGO. They just love to go nuclear when other options clearly were on the table...

Mylenium

Edited May 30 by Mylenium

[UltraViolet]

I think we need to be clear that indentifying a "genuine LEGO brick" for the sake of differentiating it from off-brands is rather difficult if by printing on it you can no longer call it a "genuine LEGO brick".  What on earth are you supposed to call it?  "Genuine LEGO brick" was obviously being used to indicate the origin of the bricks used, not implying that modifying them posed no (remote) risks that that quality would not be preserved though minor modifications.  A disclaimer on the re-sale product and the seller's website should have been plenty enough clarify.  I think we can safely say that, due to the extremely niche nature of the business, everyone purchasing would already understand what they are getting.

Also, how do you 'speak' the name LEGO while crediting their copyright without actually 'speaking' the name LEGO, considering disclaimers were a non-starter?  Seems like a trap to me.  How are you supposed to tell people they are buying "genuine LEGO bricks" if you can't actually say it?  Also, how on earth is anyone ever supposed to find your business on the internet if your only search term can be "compatible" or "leading" "building bricks"?  And further, what does "compatible" or "leading" mean without clear context?  I never buy MegaBlox because they are total trash.  How am I supposed to know what someone is selling me if they can't tell me, and why someone running a business be forced to use off-brand bricks just so they can print an image on them?

[Mylenium]

1 minute ago, UltraViolet said:

How are you supposed to tell people they are buying "genuine LEGO bricks" if you can't actually say it? 

That's the crux, isn't it?

Mylenium

[UltraViolet]

4 minutes ago, Duq said:

It's not about a consumer sueing Lego over a cracked brick. It's a consumer looking at a brick with a ball bearing and some stress marks and thinking "hmm, that Lego stuff is not as good as I thought, I'll buy Cobi next time".

The grey area is that I can buy ball bearings on Ali Express, push them into Technic bricks, and sell them at a train meeting to some friends, and Lego would be none the wiser. The effect is the same as what HA Bricks has done. In both cases there are now modified Lego bricks "out in the wild" that could damage Lego's reputation.

What I find hypocritical about the whole thing is that their own quality isn't what it used to be. I took a MOC out of a box a few weeks ago and pretty much every droid arm had split clips. Not from illegal techniques, just from being clipped onto a bar. I've load of broken parts, not just brittle brown (and I don't keep everything, I regularly bin the broken stuff). They can't produce consistent lime green parts. Five minutes of sunshine on a white brick and a few years later it's light tan. That is what is damaging their quality reputation for me, and it's why I wonder why I'm still paying premium for the real stuff. And yet they go after a guy who modifies a few hundred bricks in a year. That's less than Lego produces in a second.

As for the out of court settlement proposals, I don't know the details, don't know which side was more flexible, which was more stubborn, but it's really sad it's come to this.

On paper their case is correct. But they forgot to look at the bigger picture. "Just because you can, doesn't mean you should".

But it's clearly demonstrable in that instance that LEGO never produced parts with ball bearings inserted.  Further, the few hundred enthusiasts who bought these parts know this full well.  If some Joe Public finds a cracked brick, it is exponentially more likely it came like that in their sealed LEGO set and was not a modified part.

[Mylenium]

2 hours ago, Phil B said:

TLG is forced to pursue violations to keep their trademarks.

Sure, but c'mon... A specialized little shop that even I didn't know about half an hour ago before I picked up the news on Promobricks.de? Sounds like they are seriously overdoing it. Other options were on the table and all of the alleged issues probably could have been fixed easily in a few months and paying some punitive damages for the sins of the past.

Mylenium

6 minutes ago, UltraViolet said:

But it's clearly demonstrable in that instance that LEGO never produced parts with ball bearings inserted.

But they might at some point, unlikely as it is. I do get their point on that part.

Mylenium

[Duq]

29 minutes ago, UltraViolet said:

But it's clearly demonstrable in that instance that LEGO never produced parts with ball bearings inserted.  Further, the few hundred enthusiasts who bought these parts know this full well.  If some Joe Public finds a cracked brick, it is exponentially more likely it came like that in their sealed LEGO set and was not a modified part.

Clearly demonstrable it may be, but 90% of consumers would not know that Lego never produced such a part.

A judge might ask if it's plausible that an average consumer would know, and the answer would be no. You and I are not average consumers.

[MAB]

1 hour ago, Mylenium said:

They wouldn't have to. C&Ds are always optional and their legal leverage is debatable in most cases, anyway. It's one of those grey areas where half the time the underlying conflict still ends up in court, especially when a lot of money is involved. The rest of the matter is just typical LEGO. They just love to go nuclear when other options clearly were on the table...

Mylenium

Yes, but my response was that they should C&D if they wanted to 'play fair' and get the seller to stop in the first instance. If the seller ignored it or refused to cease at that point and LEGO decided to go all in subsequently then I'd say they had played fair and that the seller was at fault for refusing to stop when warned. There may well be other options but if they already gave the seller the option and he refused, then why not go all in.

2 hours ago, UltraViolet said:

Is there a single instance ever of a consumer suing LEGO over a cracked brick?  I couldn't even tell you how many of my "genuine direct-from-LEGO" bricks have broken due to faulty ABS plastic batches or design flaws.  Many of these parts are out of product and costly to replace through the resale market, and if I do replace them it's most likely through Bricklink where LEGO again takes a cut of the sale.  I've had to throw away many pieces even this week due to "Brittle Blue Syndrome", "Brittle Dark Red Syndrome", "Brittle Reddish Brown Syndrome", and a new one for me this week, "Brittle Dark Brown Syndrome".  I've also had to trash hundreds of cracked 1x1 bricks, headlight bricks, and cheese slopes.

There are cases of people suing (or taking to social media) over injuries caused by toys, including LEGO.  It is not the loss of a part if it breaks but tge possibility of an injury due to it being broken.

[SerperiorBricks]

2 minutes ago, MAB said:

Yes, but my response was that they should C&D if they wanted to 'play fair' and get the seller to stop in the first instance. If the seller ignored it or refused to cease at that point and LEGO decided to go all in subsequently then I'd say they had played fair and that the seller was at fault for refusing to stop when warned. There may well be other options but if they already gave the seller the option and he refused, then why not go all in.

My understanding is that the timeline was a contact from LEGO, followed by a C&D when HA Bricks refused to budge. That C&D was ignored, then the more egregious, recall all your sold models and customer data C&D was sent, which lead to this going to court because it was obviously overblown. However, LEGO's lawyers aimed for absolute destruction of HA Bricks with the terms of that court case result. LEGO has the last laugh, and total control to tighten the vice should they elect to impose the per-model fines.

Why LEGO decided to impose something so harsh as to destroy HA Bricks? More than likely to punish HA for their violations, behavior, and to make an example against those that wish to challenge LEGO. 

[Mylenium]

8 minutes ago, MAB said:

Yes, but my response was that they should C&D if they wanted to 'play fair'.

The legal system isn't "fair" in that sense and LEGO's own claims of "fair play" apparently don't mean much when they feel threatened. Yes, it's nice to be informed that you may get steamrollered by someone, but it's not really a procedural requirement. And even if you do it, it's pretty much arbitrary. You can claim the moon, but you only find out in court whether that is true if you actually sue. ;-)

Mylenium

[MAB]

16 minutes ago, SerperiorBricks said:

My understanding is that the timeline was a contact from LEGO, followed by a C&D when HA Bricks refused to budge. That C&D was ignored, then the more egregious, recall all your sold models and customer data C&D was sent, which lead to this going to court because it was obviously overblown. However, LEGO's lawyers aimed for absolute destruction of HA Bricks with the terms of that court case result. LEGO has the last laugh, and total control to tighten the vice should they elect to impose the per-model fines.

Why LEGO decided to impose something so harsh as to destroy HA Bricks? More than likely to punish HA for their violations, behavior, and to make an example against those that wish to challenge LEGO. 

Yes, it makes perfect sense. And if HA Bricks refused to stop, they have themselves to blame. It will for sure put the frighteners up anyone else doing similar if they are contacted.

I can also understand the customer data part. No doubt many knew what they were buying. But if even just a minority were misled into thinking it was a LEGO product (and so safety certified), then a recall makes sense. They cannot force buyers to return but they can make it known that there are safety concerns if they have not been tested properly.

1 minute ago, Mylenium said:

The legal system isn't "fair" in that sense and LEGO's own claims of "fair play" apparently don't mean much when they feel threatened. Yes, it's nice to be informed that you may get steamrollered by someone, but it's not really a procedural requirement. And even if you do it, it's pretty much arbitrary. You can claim the moon, but you only find out in court whether that is true if you actually sue. ;-)

Mylenium

By using the quotes, I mean 'fair' in the sense that they are not being the bad guy from the outset, as in fair in what people/users/AFOLs/LEGO train fans think in the court of public opinion rather than a court of law. Some here are making out that LEGO went in heavy handed from the start. 

[Mylenium]

21 minutes ago, SerperiorBricks said:

LEGO has the last laugh, and total control to tighten the vice should they elect to impose the per-model fines.

The ruling is preliminary and if HA are smart, they would attempt to nullify or overturn that part at least. Damages are awarded by the judges/ case handlers. It's not that LEGO can just grab the money. Chances are they would still have to prove that actual damage was done in court for everyone on those lists they demand be handed over. The damages could also turn out a lot smaller e.g. based on the actual number of pieces affected in a set, not an abstract estimate. That's how it's typically and sensibly handled in European courts. Hard to say, though.

Mylenium

6 minutes ago, MAB said:

By using the quotes, I mean 'fair' in the sense that they are not being the bad guy from the outset, as in fair in what people/users/AFOLs/LEGO train fans think in the court of public opinion rather than a court of law. Some here are making out that LEGO went in heavy handed from the start. 

We can agree on that. But apparently LEGO doesn't care as long as they make money hand over fist. Our little bubble world here is just too insignificant and doesn't have an impact on where the real business happens. By that I don't even mean the train community or Eurobricks specifically, but the larger AFOL community. It just doesn't matter to them.

Mylenium

[dtomsen]

47 minutes ago, MAB said:

Yes, it makes perfect sense. And if HA Bricks refused to stop, they have themselves to blame. It will for sure put the frighteners up anyone else doing similar if they are contacted.

HA Bricks / Hein thought he had a strong case and could win in court. His lawyers too.
Even so, if TLG demanded he basically close shop what else could he do than go to court and take his chances?

Edited May 30 by dtomsen

[Toastie]

On 5/29/2024 at 11:06 AM, Duq said:

@Toastie You meant "So long, and thanks for all the fish" ;-)

My sincere apologies! One should never wrongly cite my beloved and truly admired Douglas Adams!

And with regard to the judge ruling against you: That was terrible. And should never have happened!

All the best,
Thorsten