In the latest case between LEGO and the Chinese product, LEPIN, the UKIPO has ruled in favour of invalidating the latter’s mark on the basis of likelihood of confusion, unfair advantage and passing off.
The mark in question was , registered in the name of Shantou Chenghai District Longjun Toys Factory Co., Ltd, and covered, inter alia, “toys” and “building blocks” in class 28. LEGO requested the registration be declared invalid on the basis of s.5 (2) (b), s.5 (3) and 5(4) (a) of the Trade Marks Act 1994. For the grounds of s.5 (2) (b) and s.5 (3), LEGO relied on earlier EU Trade Mark No. 2829463 , which was registered for, inter alia, “games and playthings” in class 28.
LEPIN requested LEGO file proof of use in relation to this mark, and LEGO subsequently filed a large amount of evidence, amongst which showed:
- The mark had been in use in a substantially unchanged way since 1973;
- Turnover figures between 2013-2017 were £1,265 million;
- In 2017, 75% of UK children owned LEGO goods;
- In 2000, LEGO was named Toy of the Century by the British Association of Toy Retailers;
- The advertising spend in 2013-2014 throughout the EU was £1,000 million;
- LEGOLAND Windsor, a LEGO-based theme park, had 2.138 million visitors in 2016;
- The LEGO movie generated £42 million revenue in the UK and £90 million in the EU;
- Between 2015-2017, LEGO gained £75 million in royalties from LEGO-branded video games.
The evidence was held to be more than sufficient to prove use in relation to “games and playthings” and the compilation of this evidence undoubtedly influenced the decision by showing LEGO’s immense reputation. The Hearing Officer even noted that it is a “notorious fact” that the mark is in use in relation to toy building bricks and construction sets.
LEPIN tried to argue that the marks were dissimilar as LEPIN is a made-up word consisting of two Chinese characters; LE which means “happy, cheerful, laugh” and PIN which means “spell, piece, risk”, whereas LEGO is a known word, and referenced its inclusion in the Oxford English Dictionary. It was shown, however, that LEGO is recorded in the dictionary as being a trade mark, and so this argument was dismissed. The Hearing Officer ruled that LEGO is an invented word of high inherent distinctiveness, and found likelihood of confusion on the basis of the identical goods, the “no more than average” level of attention paid during purchasing these types of goods, the huge level of distinctiveness and the strong structural similarities, i.e. the fact that in both the marks the letters are slanted forward, with slightly curved edges and with a shaded border around the word.
Colour was another important issue considered in this case. LEPIN had tried to argue that the marks were dissimilar as LEPIN’s mark was registered in black and white, and LEGO’s mark is registered in colour, with a red background, the word LEGO in white and a black and yellow outline around the word. However, the evidence submitted by LEGO clearly showed that LEPIN’s mark was being used in the same colours as LEGO’s prior right.
The UKIPO held that, although the mark was registered in monochrome, LEGO’s evidence showed the use of LEPIN’s mark was in a highly similar/identical colourway to that of LEGO’s registered mark and long-standing use. The Hearing Officer, referred to the case of Specsavers international Healthcare & Others v Asda Stores Limited (Case C-252/12), and reiterated that it is not just the way the mark has been registered that should be considered, but also the way the mark has been used, especially if this mark has been used extensively in particular colours. This is especially true if those colours also reflect the way the earlier trade mark is used and registered, as it did in this case.
It was also held that the use of the LEPIN mark was a clear case of “free-riding”. LEGO had shown an enormous reputation within the UK, and LEPIN would undoubtedly find it easier to sell goods on the back of this reputation and goodwill. The use of the LEPIN mark (with highly similar colours/position on packaging/almost identical pictures of the goods used on the boxes), was considered to be intended to exploit LEGO’s reputation, and take unfair advantage of its reputation without paying financial compensation or the need to invest any marketing expense or effort.
LEGO’s evidence also included a number of complaints received by their Consumer Service Department, which include customers complaining of the quality, some genuine confusion between the marks, and also people getting irate at LEGO seemingly not doing anything to stop LEPIN, which could all be examples of unfair advantage and detriment to the mark, as well as dilution.
LEGO was also successful on the grounds of passing off. There was substantial goodwill in relation to construction toys, with the Hearing Office also noting that “it is the case that sometimes the eye has a tendency to see what it expects to see when a mark is extremely well known”, leading to the assumption that the word represented is LEGO. Also, the Hearing Officer believed that it was likely that consumers would think that the LEPIN products were a Chinese sub-brand or co-brand of LEGO, and this was shown through some of the customer complaints received by LEGO’s Consumer Service Department. The UKIPO ruled that, based on its use of the mark on identical/highly similar packaging and get-up, it was clear that LEPIN intended to benefit from LEGO’s goodwill. It also held, again, that LEPIN’s use would have been damaging to LEGO’s reputation, either through confusion of purchasers, belief by the public that the goods are somehow supplied/licenced by LEGO, or damage caused by inferior goods.
The request for invalidity was upheld on all grounds, and the mark was deemed to never have been registered. It is another win for LEGO, who have been quite successful in gaining broad protection for their brand over the years. Its long-standing reputation and substantively unchanged use for over 35 years no doubt has an influence on this, but it is their ability to show this with substantial evidence, ranging from extensive financial records, examples of LEPIN’s use of the mark, and examples of customer confusion, that demonstrates to other businesses the evidence required to secure this protection.