January 30, 2012 | last updated June 4, 2012 11:37 am

Lego locked in domestic copyright fight

CONTRIBUTED PHOTO
CONTRIBUTED PHOTO
Best-Lock’s minifigure, left, and Lego’s

As legal battles go, this one is far from child's play.

Danish toymaker Lego has chosen Hartford federal court as the stage for its latest legal attempt to beat back what it sees as a potential threat from a tiny overseas upstart to its dominance of the billion-dollar global market for plastic, toy blocks.

Lego, whose U.S. marketing and distribution operations are in Enfield, is suing Best-Lock Construction Toys Inc., a Hong Kong rival whose market share is but a mere fraction of Lego's.

For Lego, the issue is Best-Lock's alleged incursion of Lego's copyright purportedly covering the look and shape of its 1 ˝ -inch-tall, trapezoidal action figures found in many of its toy-block sets, according to its suit filed last October. Lego demands a ban on Best-Lock's allegedly infringing minifigures in the U.S. and the destruction of existing inventory.

But for Best-Lock and its German-born founder and CEO, Torsten Geller, much more is at stake in this latest legal joust with Lego. While professing confidence Best-Lock will prevail, Geller acknowledges that hundreds of millions of dollars in future sales are at stake not just for his company, but its suppliers and retailers.

Though the fight has consumed much of his attention and millions in legal fees, Geller, says it's all been worth it for principle — and pride. He blames Lego for converting him from one of its biggest admirers to Enemy No. 1.

"We have a long history with each other,'' Geller said. "I'm very popular with Lego.''

Lego did not respond to several emails for comment. Lego's lawyers in the case, led by the Hartford office of Day Pitney, declined comment.

Best-Lock's local attorney, the Hartford office of Murtha Cullina LLP, did not comment. No hearing date has been set.

Their feud, dating to 1998 in German court, has opened a window onto the bare-knuckles side of marketing those colorful, snap-together blocks that most consumers probably assume — incorrectly — were invented by Lego more than a half century ago.

Actually, British inventor Hilary Page created the iconic rectangular blocks during World War II. In 1958, Danish carpenter Ole Kirk Christiansen and son, Godtfred, introduced their Lego line that the toymaker has acknowledged was patterned after the British version.

Since then, Lego has methodically moved to patent, first the blocks, then its minifigures — pirates, truck drivers, astronauts, nurses, among others — that accompany its themed-block sets.

It is a tactic that Geller says Lego has unfairly used to try to keep competitors like him, and No. 2 Mega Brands of Montreal, Canada, out of the U.S. market for plastic blocks.

"They're crooks. They stole everything they have,'' Geller said of Lego. "They never invented a thing.''

Geller also claims Lego used its copyright claims to press the U.S. Customs service last year to interdict shipping containers carrying about $750,000 of Best-Lock products destined for such retailers as CVS, Walgreen's, Toys R Us, Family Dollar and Dollar General.

The first seizure of about $40,000 worth of Best-Block product occurred at the Port of Los Angeles last July, court papers show. Best-Lock's toy blocks are made in southern China.

The customs service declined comment, citing privacy restrictions.

Lego received a patent on its minifigure when it was introduced in 1978, court papers show. However, once the patent's 17-year exclusivity expired, Lego copyrighted the toy. Lego sets are made in primarily in Mexico and Europe.

According to minifigure historians, Lego has since produced more than 3.7 billion

But Geller argues that Lego's specific claim of a copyright covering the shape of the minifigures is unfounded.

"The simple shape of the figurines is a technical patent,'' he said. "They cannot extend the form of a patent to a copyright.''

Doing so, Geller argues, is akin to trying to copyright the shape of an airplane wing.

John T. Morgan teaches intellectual property at Quinnipiac University School of Law and has written about copyright and patent matters. At the Hartford Business Journal's request, Morgan reviewed Lego's seven-page complaint as well as Best-Lock's 25-page answer.

Among Lego's challenges, Morgan said, is convincing a jury that Best-Lock's minifigures too closely resemble Lego's copyrighted version in their appearance.

"The alternatives for creating variations that are not substantially similar may be so limited that the court may conclude that there can be no copyright,'' Morgan said. "Even If they are copyrightable, the court may well determine that the copyright is such that only virtually identical copying will be found to be infringing.''

Two years ago, Geller says, Lego registered its copyright marks with the U.S. Customs and Border Protection Service's customs and protections database. Customs authorities rely on the same database to identify and seize some of the billions of dollars in counterfeit products flowing into the U.S. illegally.

"Lego did not come after us,'' Geller said. "They let the Customs Service do their dirty work, stopping our containers.''

Once its Hartford suit was filed, Lego never served Best-Lock with notice of the filing, he said. Instead, Lego offered to drop its complaint if Best-Lock would at least alter the look of its mini- figurines sold in the U.S.

"I don't like intimidation and I don't like threats, and I said, 'No.''' Geller said. "I said to them we're not accepting your offer to change our product.''

He says he also demanded Lego instruct U.S. Customs to release its quarantined product.

The seizures, while an annoyance, did not keep Best-Lock from one of its best Christmas sales periods ever last season.

Geller says he and Lego have butted heads regularly since Best-Lock's founding in 1997.

In 1998, Best-Lock challenged Lego's exclusivity claims to toy-block design in Germany, which at the time accounted for about $300 million in toy-block sales — the same size of the U.S. market.

Six years later, Germany's high court sided with Best-Lock, ruling that its blocks, as well as those of other competitors, could be sold there.

In court papers, Best-Lock pegs Lego's share of the world's toy-block market at 86 percent. Geller says Best-Lock's share is a paltry 1.5 percent, but growing.

Today, the U.S. is Best-Lock's biggest market, followed by Germany.

Another rival block-maker, Mega Brands has about 10 percent of the global market, but its Mega Bloks dominate in its Canadian home market, Geller says.

Mega Brands declined comment beyond a statement issued Jan. 20 announcing its voluntary withdrawal of legal claims against U.S. Customs in a California federal court. Mega said it has "formal confirmation'' that the agency won't interfere with importation of its toy-block products into this country.

Geller said Mega Brands' sudden withdrawal of its suit "smells fishy.''

In an ironic twist, Geller, 48, claims that as a kid he was among Lego's biggest fans. He competed in his native Hamburg in numerous Lego-building contests, taking third place in one.

As an adult, Geller imported-exported industrial machinery and did well enough for him to "retire'' at 36. Later, he moved to London, where, searching for plastic blocks for his then two young sons, he discovered a British shop selling ones that weren't Lego.

It was then, he said, he learned the plastic toy blocks originated in England in 1944, not Billund, Denmark, Lego's world headquarters.

Geller says he was at first disillusioned, then livid. After that, he says, his passion for Lego morphed into beating it in the marketplace.

"They lied to me as a kid,'' said Geller, who now resides in British Columbia, Canada. "That's why I started this business. It's a personal vendetta, yes.''

But Geller is anxious to have the matter resolved soon in his favor. Spring is when retailers set their orders for the all-important Christmas season.

"Time is really of the essence here,'' he said.

Meantime, Geller vows to continue his campaign to portray Lego as an unscrupulous bully bent on dismantling any threat to its iconic toy-block franchise.

"Look, I can't beat them on the money front,'' he said. "I can only beat them on the moral front.''

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