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Supreme Court of Canada Releases its Much Anticipated Decision in the Lego Trade mark Dispute
On November 17, 2005, the Supreme Court of Canada finally released its much anticipated decision in the Lego/Mega Bloks trade-mark dispute by dismissing an appeal brought by Kirkbi AG and Lego Canada Inc. from a 2003 Federal Court of Appeal’s decision in a passing off action against Mega Bloks Inc. The dispute arose as result of Lego trying to extend its expired patent protection using the trade-mark regime.
Lebel J., writing for the Court, found section 7(b) of the Trade-marks Act, which creates a civil cause of action, to be essentially a codification of the common law tort of passing off, and intra vires Parliament. Specifically, the Court found that:
1. The intrusion of section 7(b) into provincial jurisdiction is minimal and does not expand federal jurisdiction but merely rounds out an otherwise incomplete trade-mark scheme;
2. It is a valid exercise of Parliament’s general trade and commerce under the Constitution; and
3. It is sufficiently integrated into the Trade-marks Act as to create a functional relationship to sustain constitutionality.
Having upheld the constitutionality of s. 7(b), the Court nevertheless went on to find in favour of Mega Bloks by dismissing Lego’s claim under this provision of the Act by finding that Lego could not seek the protection of this section of the Act because it had no trade-mark rights to begin with due to the doctrine of functionality. In particular, the Court concluded that Lego’s claim to an unregistered trade-mark consisting solely of technical or functional characteristics of its blocks, which were previously the subject of patent protection, transgressed the legitimate bounds of trade-marks. In other words, the “law of passing off and trade-marks may not be used to perpetuate monopoly rights enjoyed under now-expired patents.”
For a copy of the decision, visit: