Wednesday, February 02, 2005

Building a Legal Lego Case, Block by Block


"They are a company that enjoyed many years of monopoly in this market category and now they want to stifle anything competing against them in the construction toy aisle," said Brahm Segal, vice president and lawyer for Mega Bloks of Montreal.

The last major patents covering Lego's building blocks expired in 1978. Since the early 1990's, Mega Bloks has been involved in about a dozen lawsuits, most of them filed by Lego and still active. Best-Lock (Europe), which makes blocks compatible with Legos, is also involved in eight Lego-related lawsuits in Germany alone.

"We've definitely been spending more on lawyers than I would consider necessary to be in this business," said Best-Lock's chief executive, Torsten Geller, who runs the small company from Summerland, British Columbia. "Basically, Lego is trying to extend its patents to the end of all time. Lego's public image is totally different from the reality of the company."

Lego's management has been feeling the effects of increased competition ever since Mega Bloks decided in 1991 to go beyond its original product - jumbo bricks designed for infants - into Lego-size blocks. NPD Funworld, which tracks retail toy sales, would not give market figures but said that Mega Bloks is the No. 2 player, after Lego, in the construction toy market for the United States, the products' single largest market. Marc Bertrand, Mega Bloks' president and chief executive, said his company had a stronger market position in parts of Europe where construction toys were a much bigger business relative to the population.

Having recently been the father of the recipient of a gift of some knock-off Lego products, I have no sympathy for these guys. The competitors have an inferior product, and it's people like me who have to explain to their sons why thir cool "Lego-like" toy is a piece of junk.

I don't have a clue as to why it's junk; but it is, and I suspect there's IP behind it.

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