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MEGA BRANDS COMMENTS ON FAVORABLE EUROPEAN COURT DECISION ON TRADEMARKS

^{Published on 2010-09-14 06:20:30 - Market Wire}
 

MONTREAL, Sept. 14 /CNW Telbec/ - MEGA Brands Inc. (TSX: MB) confirmed today that in a September 14, 2010 judgment, the European Court of Justice rejected an appeal by Lego Juris A/S of a 2008 lower court decision invalidating Lego's three-dimensional trademark registration for its building block. This decision by the European Court of Justice, which cannot be appealed, is applicable in all countries in the European Union.

Since the original decision by the Cancellation Division of the European Office for Harmonization in the Internal Market ("OHIM") invalidating Lego's trademark registration has been applicable since 2004, the judgment by the European Court of Justice has no impact on MEGA Brands' extensive footprint in the European Union.

Background

Lego obtained its three-dimensional trademark registration in 1999. However, following an appeal by MEGA Brands, OHIM ruled on July 30, 2004 that the subject matter of the mark was prohibited by the absolute ground set out in Article 7(1)(e)(ii) of the Community Trademark Regulation, which precludes trademark registration for "signs which consist exclusively of... the shape of goods which is necessary to obtain a technical result." Following Lego's appeal, the OHIM decision was confirmed first by OHIM's Grand Board of Appeal on July 10, 2006 and then in a judgment by the European Court of First Instance ("CFI", now known as the General Court) on November 12, 2008. The CFI judgment was also appealed by Lego.

The decisions by OHIM, the CFI and now the European Court of Justice are based on leading case law of the European Court of Justice, which in 2002 decided the matter of Koninklijke Philips Electronics NV v. Remington Consumer Products Ltd. (C-299/99 of June 18, 2002). The Philips v. Remington case held that the shape of a product cannot be registered as a trademark if the essential functional features of that shape are attributable only to a technical result, even where other shapes would allow the same technical result to be obtained. OHIM, the CFI and the European Court of Justice have concluded that the Lego block was such a shape, and also found that the public policy rationale of Philips v. Remington, which involved the shape of an electric shaver, correspondingly applied to the Lego brick. As stated by the European Court of Justice in today's judgment, individual traders "may not use trademark law in order to perpetuate, indefinitely, exclusive rights relating to technical solutions". Patents can protect technical solutions, such as the means to interconnect toy bricks, but patent protection is limited in time and Lego's patents for the basic brick have long expired. Put simply, a trademark registration cannot be used to confer a potentially everlasting monopoly on a useful product configuration.

About MEGA Brands

MEGA Brands Inc. is a trusted family of leading global brands in construction toys, games & puzzles, arts & crafts and stationery. They offer engaging creative experiences for children and families through innovative, well-designed, affordable and high-quality products. Visit [ http://www.megabrands.com ] for more information.

The MEGA logo, Mega Bloks, Rose Art, MagNext, MEGA Puzzles and Board Dudes are trademarks of MEGA Brands Inc. or its affiliates.

Forward-Looking Statements

All statements in this press release that do not directly and exclusively relate to historical facts constitute "forward-looking information" within the meaning of applicable Canadian securities laws These statements represent the Corporation's intentions, plans, expectations and beliefs. Readers are cautioned not to place undue reliance on these forward-looking statements. Forward-looking information and statements are based on a number of assumptions and involve risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by them, including, but not limited to risks, assumptions and uncertainties described in the Corporation's MD&A for the second quarter ended June 30, 2010 and the year ended December 31, 2009, which are available at [ www.sedar.com ]. The Corporation disclaims any intention or obligation to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise, other than as required by applicable law.