INTERLEGO A.G. v. TYCO INDUSTRIES INC. AND OTHERS

H. C. Action No. 4231 of 1984

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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JUDGMENT

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1. This is an action by the plaintiff against the 1st and 2nd defendants for infringement of copyright which it claims to have in a number of element drawings and moulds made from the drawings relating to its toy building products. A claim for passing off is no longer before the Court whilst the action against the 3rd and 4th defendants has been settled. For convenience I shall refer to the plaintiff either as the plaintiff or Lego, and to the defendants as the defendants or Tyco unless it is necessary to make a distinction between them.

2. The plaintiff is a member of a group of companies (the "Lego Group") which is famous for the manufacture and distribution of children's toy building sets under the trademarks Lego and Duplo. These sets are made of moulded brightly coloured plastic materials. It is common ground that Lego have established a high reputation worldwide for the high quality of their products. A booklet entitled "Facts & Figures" for 1984 ex: p.93 sets out details of the history of the Lego Group which facts are not in dispute. The business was started by Ole Kirk Christiansen in Denmark in 1932 for the manufacture of inter alia wooden toys. Mr Christiansen's son Godtfred Kirk Christiansen who was 12 years old at the time worked in the business from the outset. He is now the President and Chairman of many companies in the Lego Group including the plaintiff, having taken control in 1958 when his father died. In 1934 the trademark Lego which is derived from the Danish words "leg godt" which means "play well" was adopted. It is of interest to note that Lego in Latin means "I study", "I read" or "I put together". From small beginnings the business has developed into the Lego Group of companies which now operates in many countries over the world. Apart from a factory in Denmark the Lego Group has two factories in Switzerland and one in West Germany.

3. The idea for the building sets originated in 1947 when G. K. Christiansen and his father saw in Copenhagen an agent for a British Company called Windsor which manufactured injection moulding machines. The possibilities of the machine were demonstrated with some plastic toys from Great Britain which included some toy bricks of a firm called Kiddicraft. Samples of these bricks can be seen as exhibits L24 and L25. As a result of this meeting Lego became the first company in Denmark to use a plastic injection moulding machine for toy production. Having ascertained through their patent agents in Denmark that there was no protection in the country for the Kiddicraft products Lego decided to commence production of bricks similar to those made by Kiddicraft to be used as components in children's toy construction sets. The original decision made by the Christiansens was to make the bricks in the same way as the Kiddicraft brick, but to be designed to look like a Danish brick. Some changes became necessary in order to achieve the effect that was required, which included the introduction of sharp edges and flat knobs, and an alteration in the measurements from inches into millimetres to conform to the metric system that was used on the continent. The original plastic bricks, called the first generation, were first marketed in Denmark in 1949, but in the early stages sales were insignificant. At this time Lego produced about 200 different plastic and wooden toys.

4. During 1955 the second generation of brick was introduced when the slots which had been used in the first generation of brick were removed. Unfortunately, problems were encountered with the second generation brick with the result that a further change was made in 1958 with the introduction of the Lego stud and tube coupling system that was invented by Mr G.K. Christiansen.

5. The basic Lego brick is hollow, rectangular in shape with one open side and with rows of cylindrical studs on the top surface and cylinders moulded into the open interior. The studs on the top surface of a brick fit into the recesses between the cylinders and the walls in the interior of another brick which allows the bricks to interlock with one another so that various shapes may be constructed. Features of the brick are the striking colours that do not rub off and the smoothness of the surface which makes them tactilely interesting. The present day Lego brick is essentially the same product. as it was in 1949. All the changes have been refinements and improvements rather than drastic innovation. The characteristics of Lego are conveniently set out in the booklet "A product - an idea" ex.P95A on page 11 in the following terms:-

6. The stud and tube bricks proved to be very successful with the result that the business of Lego expanded. New sets were gradually introduced such as wheels, roof tiles, houses and trains. Illustrations of the basic components, and models may be seen on pages 12 and 13 of the booklet "A Product - an idea". During the late 1950's export markets opened up in Europe and the first foreign sales companies were formed. In 1943 the company in Denmark employed about 40 employees, but at the end of 1984 there were more than 3,700 employees employed by about 40 companies in the Lego Group in Denmark and abroad. Of these employees about 2,200 were employed in Denmark and about 1,500 in the companies abroad.

7. In 1960 Lego decided to concentrate exclusively on plastic products so that the production of wooden toys ceased altogether.

8. Legoland Park, which is an amusement park in Denmark, was opened in 1968. It is a model village and illustrates what can be done with Lego bricks. It is a big tourist attraction and 625,000 visitors attended there during its first year.

9. Duplo, a larger brick for use by younger children up to the age of about 5 years, was developed in 1967 and introduced onto the market in 1969. The Duplo bricks are interchangeable with the Lego system.

10. The range of Lego products has been extended over the years for older children to sets of a technical nature which include ships, space sets and battery powered trains. The versatility of Lego is quite remarkable. Lego is not in fact a toy in itself, but is a system devised to develop a child's mind, both for recreational and educational purposes. About 97.5% of all Lego products are sold outside Denmark. The booklet, "Pacts & Figures" reveals that 87% of all households in Sweden, 84% in Denmark and 80% in the Netherlands with children up to the age of 14 own Lego bricks whilst between 200,000,000 and 300,000,000 children in the world play or have played with Lego bricks. It is common ground that Lego products are manufactured to a high standard with particular care being given to safety requirements.

11. I now come to the defendants. The 1st defendant is an American Corporation which also manufactures and markets toys. The predecessor of the present company commenced business in 1926 in New Jersey for the purpose of manufacturing model rail road equipment. The 1st defendant employs about 200 employees. In 1985 the sales of the 1st defendant exceeded US$65,000,000. The 2nd defendant is a wholly owned subsidiary of the 1st defendant and employs 600 employees at its factory in Hong Kong which started business in 1968. In 1983 the 1st defendant was interested in manufacturing new products and decided to explore the possibilities of children's toy building blocks. With this object in view the 1st defendant obtained as many samples of toy building blocks of Lego and other companies that they could find, both in the United States and abroad and made a detailed analysis of these samples. Having ascertained that Lego was the market leader it was decided to make a brick in competition with the Lego brick, but cheaper. It was intended that Tyco bricks should be compatible and interchangeable with the bricks made by Lego. Investigations were made with regard to the property rights held by Lego in the United States where it was ascertained that all the rights, with one exception had expired in 1981.

12. In February 1984 at the New York toy fair representatives of Lego at the invitation of Tyco met representatives of Tyco at Tyco's showroom. Here they saw presentations of built up models of building bricks which are illustrated in the catalogue that is marked P99 together with dummies of Tyco's packaging. During the meeting Tyco's representatives said that it was intended to manufacture the bricks in Hong Kong. Lego's representatives gained the impression that the major part of the elements used in the models were taken from Lego and Duplo bricks and it was subsequently ascertained that products were being manufactured in Hong Kong by the 2nd defendant which were exported in bulk to the United States where they were packed and sold. It is not denied by the defendants that they have done everything possible to produce a brick that is as close to Lego as possible and in particular with regard to the quality, colour, fit, feel and finish of the product. In fact, by their advertising material Tyco proudly claim that for the price of Lego you will get a lot more Tyco, that Tyco looks like feels like Lego, Tyco works with Lego, and Tyco costs much less.

13. On the 25th May 1984 the defendants' solicitors wrote to the plaintiff's solicitors a letter which sets out Tyco's position with regard to this matter. The letter has been aptly described by Mr Aldous who appeared for the plaintiff as a reverse letter before action. The letter reads:-

14. As a result of this letter the plaintiff issued the writ in this action on the 25th June 1984.

Pleadings

15. The plaintiff is incorporated in Switzerland. It is a holding company which holds the industrial property rights for the Lego Group in the United States, Canada, the United Kingdom and its dependent territories.

16. By the Re-Re-Re-Amended statement of claim the plaintiff claims ownership of the copyright in drawings relating to some of the elements of the Lego and Duplo toy building sets together with the copyright in the moulds made from the drawings. Details of the drawings and the moulds are set out in Table A of the Re-Re-Re-Amended statement of claim. The plaintiff also claims ownership of the copyright in the reconstructed drawings set out in Table B which relate to the elements of toy building sets which were at one time sold in the United Kingdom under the trademark Kiddicraft together with the copyright in the moulds made from the drawings. It is not in dispute that any rights that may exist in the Kiddicraft drawings have been assigned to the plaintiff whilst the defendants concede that if any copyright subsists it is owned by the plaintiff. The defendants also accept that the Lego products were offered for sale on the dates set out in the Re-Re-Re-Amended statement of claim.

17. The plaintiff's main allegations are set out in paragraphs 20 and 21 of the Re-Re-Re-Amended statement of claim which read as follows:

Some manufacture as I have said took place in Hong Kong, but ceased when Tyco removed the moulds from Hong Kong to the United States in March 1984. The drawings in Table A with two possible exceptions, which have no significance, were made by the authors in the course of their employment under contracts of service with companies in the Lego Group. In respect of drawings that cannot be found the plaintiff seeks to rely upon reconstructions that have been made of those drawings.

18. By their Re-Re-Re-Amended Defence the defendants deny that the plaintiff is entitled to copyright, but that if it does subsist there has been no infringement. However, if infringement is established the defendants rely on the defence provided by Section 9(8) of the Copyright Act 1956 that the elements would not appear to persons who are not experts in relation to the defendants products to be reproductions of the Lego drawings. It is further contended that of the drawings made before the 1st January 1973 they constituted designs capable of registration under the Registered Designs Act, 1949 and were intended to be used as a model or pattern to be multiplied by an industrial process with the result that reliance is placed upon the Transitional Provisions of Paragraph 8 of the Seventh Schedule of the Copyright Act 1956 and the Copyright (Hong Kong) Orders 1972 and 1979. The defendants also plead by way of defence abandonment, and estoppel. Finally there is a counterclaim by the defendants for a declaration that they are entitled to manufacture three of their products.

19. By a late amendment to the amended reply the plaintiff on the issue of registered design contends that the designs of two Lego elements and two Duplo elements lacked novelty so that they were not capable of registration under section 1(2) of the Registered Designs Act 1949.

The Statutory Basis for Copyright in Hong Kong

20. The statutory basis for copyright in Hong Kong is the English Copyright Act 1956 which was extended to Hong Kong by paragraph 3 of the Copyright (Hong Kong) Orders 1972 and 1979 as specified in Part I of Schedule I and as modified in Part II of that Schedule. Paragraph 4 provides inter alia that the Copyright (International Conventions) Order 1972, now the Copyright (International Conventions) Order 1979 shall extend to Hong Kong subject to the modifications specified in Schedule II. The Act, with the exception of empowering the Governor to make regulations, came into operation on the 1st January 1973. Although nothing turns on this point it is accepted that the commencement date for foreign works is the 12th December 1972 and for Hong Kong works the 1st January 1973. By virtue of the Copyright (International Conventions) Order section 1(5) the provisions are extended to Denmark.

Kiddicraft

21. Before copyright subsists the plaintiff must prove that drawings of the Kiddicraft bricks originally existed and if this is established to show a chain of causation between those drawings and the Lego drawings. The facts reveal that in 1939 Hilary Page of Kiddicraft Limited obtained a patent for his invention of the interlocking cubes. During the war there was no production of the cubes but in 1945 or 1946 Hilary Page approached Injection Moulders Ltd for a quotation to manufacture toy bricks with 4 and 8 knobs. The quotation was accepted and a mould was made. In 1945 Hilary Page filed a patent application to include slots in the bricks. Kiddicraft bricks were marketed in the United Kingdom in 1947 and were sold until the early 1950s with a moderate degree of success when production ceased. Hilary Page died in 1957. As there are no drawings nor moulds in existence, reconstruction drawings prepared by the plaintiff's expert Mr James Hewitt were admitted de bene esse.

22. I now turn to consder whether there were, in fact, any Kiddicraft drawings. The evidence for the plaintiff clearly shows that at least an element drawing was necessary, but that in all probability a mould building drawing and a mould drawing would also be required. Mr Hewitt's evidence was to the effect that it would have been extremely difficult to produce the moulds for the bricks without making the three types of detailed drawings first. His evidence that drawings would have been necessary was supported by six of the plaintiff's witnesses which evidence I accept. Mr Hewitt in cross-examination did not agree that Hilary Page could have used his patent drawing for this purpose. I have no hesitation in accepting the evidence of the plaintiff's witnesses that there must have been drawings in existence at the time the Kiddicraft bricks were manufactured. Although there is a possibility that Mr Stimson made the mould I accept the evidence of Mrs Higgins that it was made by her late husband F.C. Higgins.

23. When an author of a drawing is dead a presumption arises under section 20(5) of the Copyright Act 1956 with regard to originality. This section provides:-

The presumption provided under section 20(5) of the Copyright Act 1956 was not rebutted. The plaintiff is therefore entitled to rely on the evidence of the reconstruction drawings made by Mr Hewitt which I am satisfied accurately reflects how the original drawings would have appeared.

24. Doubt was cast by Counsel for the defendants that the bricks shown to the Christiansens in 1947 were not manufactured in Great Britain, but were in fact made in France. It is true that Kiddicraft took out a patent in August 1946 in France and manufactured cubes and bricks there. However, in my judgment the evidence indicates that the bricks were manufactured in Great Britain. Mr G.K. Christiansen said that he believed that the bricks were brought from Great Britain whilst the agent who showed them to the Christiansens was acting for a British firm. Another factor that supports the plaintiff's submission that the bricks were made in Great Britain was the conversion of the measurements to the metric system which would have been unnecessary had they been French bricks. I found the defendants' submission on this matter unconvincing. Accordingly I am satisfied that the bricks were made in Great Britain.

Originality

25. Pursuant to section 3 of the Copyright Act 1956 copyright subsists in every original artistic work under certain circumstances. Section 3(1)(a) provides :-

"3(1)         In this Act "artistic work" means a work of any of the following descriptions, that is to say,-

It was agreed for the purposes of this action that the plaintiffs drawings are artistic works within the meaning of the Act, but Mr Jacob who appeared for the defendants, reserved his right to argue this issue later in a higher Court. However, the House of Lords has since held in British Leyland Motor Corporation Ltd. & another v. Armstrong Patents CO. Ltd. & another (The Times 28th February 1986) approving the decision in L.B. (Plastics) Limited v. Swish Products Limited (1979) R.P.C. 551 that as the law now stands copyright applies to prevent the indirect copying of drawings of functional articles. With regard to the moulds it was submitted by the defendants that the plaintiff is not entitled to copyright protection as a mould does not come within the definition of either sculpture or engraving.

26. The drawings are element drawings, mould building drawings and reconstructions of drawings that are now missing. The reconstruction drawings were admitted de bene esse. They are not drawings in the aesthetic sense, but are technical drawings for manufacturing. For the purposes of the Act it is accepted that all the authors of the drawings were qualified persons and were of Danish nationality.

27. Mr Jacob submitted that the drawings were not original works as they are in effect copies of earlier drawings, redrawings or tracings. He described the drawings as derivatives in as much as each one virtually repeats what had been done earlier, but with amendments. As a result, he asserts that, unless the plaintiff can establish that the later drawing is substantially a new work it cannot be regarded as original.

28. I was referred to L.B. (Plastics) Limited v. Swish Products Limited (1979) R.P.C. 551 where Whitford, J. explained originality on page 567 in the following words:-

Later in his judgment on page 568 he had this to say about the labour and skill required for an original work and whether there can be copyright in a copy :-

The judgment of Whitford, J. was reversed by the Court of Appeal but was restored by the House of Lords.

29. From the authorities it is clear that copyright does not subsist in ideas but in the skill labour and effort that are put into the work for which protection is sought whilst the work must originate from the author. The amount of skill and effort required in each case is a question of degree and this test also applies to the drawings that have been copied with amendments or are redrawings. The authorities also show that each drawing must be considered separately as a whole and should not be dissected by looking at the drawing to see what is original and what has been copied from earlier drawings.

30. In this respect I was referred by Counsel to the speech of Lord Reid in Ladbroke (Football) Ltd. v. William Hill (Football) Ltd. (1964) 1 W.L.R. 273 at P.277 where he said:-

31. Another helpful passage on the matter of originality is contained in the speech of Lord Pearce in the same case at P.291 where he had this to say:-

32. Preparatory work may also be taken into account when deciding whether a work is original see Ladbroke (Football) Ltd. v. William Hill (Football) Ltd. at P. 287 and 290.

Drawings and Moulds

33. The facts reveal that the draughtsmen who prepared the drawings received about two and a half years training before they were qualified. Each draughtsman was possessed of varying degrees of skill having regard to the experience and ability of the individual. Mr Pucek was, I believe, the most skilled. I was taken through the drawings seriatim when Mr Moller, the plaintiff's Vice-President of engineering, gave a detailed explanation of the drawings the labour involved, the approximate time taken to complete the work, the reasons for changes that viere made and how it was carried out. Evidence by the draughtsmen was given either on affidavit or viva voce. The drawings of those authors who are now dead and whose drawings are missing were proved by reconstruction drawings. The drawings generally show the element from a top view and cross sectional views. During the preparation of a drawing a draughtsman would normally have had a sample of a Lego element and or an earlier drawing in front of him for reference. The first drawings for the standard 2 x 4 Lego brick which are missing were made by Svend Poulsen in 1949 when he was employed by Mr Bodnia's firm. Before Mr Poulsen prepared the drawings he received a rough sketch that had been drawn by Mr Bodnia together with instructions from him as to how the drawings should be done. The drawings showed the changes that were made from the Kiddicraft brick with the introduction of sharp edges, flat knobs, a variation in the dimensions, different colours and a radius on the inside bottom of the brick in order to obtain better clutch power. The reconstruction drawings were made by Mr Bodnia and took him about one week to prepare. These drawings may be seen in Bundle 3 at page 2B. I am satisfied that a considerable degree of skill, labour and effort were used by Mr Poulsen in the preparation of the original drawings to enable copyright protection to be claimed. The presumption afforded by section 20(5) of the Copyright Act 1956 also applies to these drawings. I accept the evidence of Mr Bodnia, and find that there is a direct chain of causation between the Kiddicraft drawings, the rough sketch of Mr Bodnia and the first drawings of Mr Poulsen. Mr Bodnia also produced the first mould for Lego.

34. Ove Nielsen who was trained as a tool maker joined Lego in 1953 and was involved until 1958 in every Lego element including the second generation brick. He was responsible for the element and mould drawings. His drawings made in 1956 for the 2x4 and 2x2 brick are now missing so that reconstructions were produced in evidence. It is probable that when Mr Nielsen prepared the drawings he would have had the drawings of Mr Poulsen relating to the first generation brick in front of him. Mr G. K. Christiansen confirmed that the reconstruction drawings resembled the work of Mr Nielsen. I accept the evidence with regard to the reconstructed drawings and as Mr Nielsen is now dead, apart from finding the drawings to be original section 20(5) also applies for the provisions therein have not been rebutted. The reconstructions of the 1956 drawings relating to the 2x4 and 2x2 bricks may be seen in Bundle 3 at pages 2A and 144A.

35. I have examined the originals of all the plaintiffs drawings, copies of which can be found in Bundle 3. The drawings show the development of a design process for the Lego brick from the first generation up to and including the third generation together with the Duplo and other individual elements. Later drawings show details of various improvements and amendments that have been made. An essential part of the skill involved in the preparation of each drawing relates to the layout and the precise dimensions for Lego works to a tolerance accuracy of five thousandths of a millimetre. I do not propose to analyse the other drawings individually in this judgment for it would be unnecessarily burdensome. A great deal of this narrative would of course be repetitive. A useful schedule prepared by the plaintiff sets out details of the work that was carried out, and the approximate time that was involved to produce each drawing. Some drawings took a matter of a few hours to draw including preparatory work, but others required two or three days to complete. Mr Pucek in cross-examination agreed that the 1976 drawings were in principle tracings of the 1968 drawings. Nevertheless, it is apparent that each of those drawings was prepared separately and required a great deal of skill. Having examined the drawings and having heard the evidence of the plaintiff's witnesses which I accept, I am satisfied that all the drawings required considerable skill, effort and judgment to prepare. Further I accept the reconstruction drawings in evidence as accurate drawings of the originals which are now missing. Where it applies, the plaintiff is entitled to rely upon the presumption provided by section 20(5) of the Act which has not been rebutted. Accordingly I am satisfied that the drawings of the plaintiff are "original" artistic works.

36. I will now consider whether a mould is an artistic work either as a sculpture or engraving.

37. Section 4B(1) of the Copyright Act 1956 defines engraving and sculpture as follows:-

"engraving” includes any etching, lithograph, woodcut, print or similar work, not being a photograph.

 

"Sculpture" includes any cast or model made for purposes of sculpture.

 

38. Mr Jacob submitted that as Parliament has not expressly legislated to cover moulds, they should not be regarded as artistic works.

39. There is no English authority to support the plaintiff's contention that a mould is either a sculpture or engraving. However, argument directed to this issue arose in a New Zealand case Wham-O Manufacturing CO. v. Lincoln Industries Ltd. (1985) R.P.C. 127 where it was held by Moller, J. at first instance that moulds were artistic works under the definition of engraving. His decision was upheld by the Court of Appeal where Davison, C. J. said at p.153:-

40. Although I am not bound by that decision, it is a persuasive authority. I find the reasons given by the Court to be compelling. Undoubtedly considerable skill effort and judgment is required to produce a mould. As a result I am satisfied that the plaintiff is entitled to claim copyright in the moulds as engravings.

Whether Pre-1973 Works Were Capable of Registration under the Registered Designs Act 1949

41. It is contended by the defendants that the works of Lego made before the 1st January 1973 are not entitled to copyright protection as they are designs that were capable of being registered under section 1 of the Registered Designs Act 1949 by virtue of the provisions set out in paragraph 8(2) of the Seventh Schedule to the Copyright Act 1956 which reads:-

42. Accordingly, the plaintiff will not be entitled to any copyright in the drawings or the moulds made before the 1st January 1973 if those works were capable of being registered as designs. There is no dispute as I have said that the works constituted artistic works within the meaning of section 3(1) of the 1956 Act and that they were to be used as a model or pattern to be multiplied by an industrial process.

43. Design is defined by section 1(3) of the Registered Designs Act, 1949 as follows:-

Some of the pre-1973 works were in fact registered by Lego under the Registered Designs Act, 1949. However, the 15 years protection provided under the Act has now expired Accordingly, in respect of the designs that were registered the onus is upon the plaintiff to show that the registrations were invalid.

44. The plaintiff seeks to argue that the designs have no eye appeal under the first part of the section, but that, in any event, even if there is eye appeal the works are excluded from registration under the second part of the section as they are dictated solely by the function which they have to perform. The plaintiff also asserts that drawings and moulds made from the drawings relating to the Lego bricks 24 and 22, and the Duplo 24 and 22 bricks lack novelty under section 1(2) of the Registered Designs Act, 1949.

45. The House of Lords considered section 1 of the Registered Designs Act, 1949 in the well-known case of AMP Incorporated v. Ultilux Proprietary Ltd. (1972) RPC 103 where it was held that the features of electric terminals were dictated solely by function and the designs were held to be invalid. In the course of his speech at page 112 Lord Morris of Borth-y-Gest referred to the first part of the section with regard to eye appeal in the following words:-

46. On the issue of eye appeal all the witnesses who gave evidence for the plaintiff apart from Mr Rotne the Vice-President of marketing said that the Lego brick has both a function to perform and is attractive to the eye. The defendants called four expert witnesses on this part of the case. Mr E.K.S. Young a toy manufacturer said that having made a comparison of the the Lego product with other products the Lego brick is considerably more attractive and has considerable eye appeal to the customer. Mr Yanta Lam, a fellow of the Society of Industrial Artists and Designs of the United Kingdom and a full member of the Hong Kong Designers Association expressed his opinion that the configuration and form of a single brick unit is based both on a mechanical function and upon aesthetics. Professor John Newson and Dr. E. Newson, Development Psychologists at Nottingham University are experts in toy design. They have written many books and articles on the subject and are consultants to the toy trade for the design and function of toys for young children. Additionally, they have been partners in a specialist toy shop for 14 years. In their report they set out their findings after making a comparison of Lego and Duplo bricks with bricks made by other companies including Tyco in which they consider that Lego bricks are visually attractive beyond what is necessary for the item to function as a brick. Professor Frank Height, Head of the Department of Industrial Design at the Royal College of Art in London has had a great deal of experience in plastic goods. In his report he described the design of the Lego brick in the following terms:-

His report concludes with the following words:-

47. In his submission, Mr Jacob said that a whole range of variables affect the design of the article such as the size, the relative proportions of length, width and height; whether it has sharp or rounded edges; the height of the knobs, flat, domed or hollow knobs: colour: the surface finish; slots or holes or ribs in the walls or the top. He maintained that they could all be varied without affecting the function of the article so that neither its shape and configuration nor its pattern or ornament are dictated solely by function quite apart from the fact that the features give both form and function. He summarised the effect of the evidence that there are features which appeal to and are judged solely by the eye, that these features are not a method or principle of construction and in so far as shape and configuration are concerned the features are not dictated solely by function and do not amount to a mere mechanical contrivance. In support of his argument he cited Kestos v. Kempat (1935) 53 RPC 139, Rosedale v. Airfix (1956) RPC 360, Cow v. Cannon (1959) RPC 240, and Harvey v. Secure Fittings (1966) RPC 515. In these cases designs of a brassiere, a bucket, a hot water bottle and water tanks were held to have some eye appeal and were held capable of being registered as valid designs. Accordingly Mr Jacob submits that as the Lego brick is a more attractive article than any of these objects a fortiori the design of the Lego brick must he capable of registration as it has definite eye appeal. However, these cases although not overruled must be considered in the light of AMP v. Utilux as they were all decided before that decision.

48. Mr Aldous argued that the Lego brick does not have eye appeal and that such matters as colour, a glossy surface and the Lego logo do not amount to design for the purposes of registration under the Act. However, he contended that even if there is eye appeal, the features of the article are attributable to or caused or prompted by the function the brick has to perform see Lord Pearson AMP v. Utilux supra P. 123.

49. A 2×4 Lego brick is rectangular in shape with two-side walls, two ends, a hollow bottom underneath with three cylindrical tubes and eight knobs on top. The Lego logo is featured on each knob. Its measurements are 9.63216 mm. The colours are bright and the feel is smooth. The function of the brick is to fit with other bricks in the Lego system and it is also compatible and interchangeable with Duplo.

50. Section 1(3) is a difficult section to interpret so it is not surprising that none of the witnesses really appreciated the significance of what is meant by eye appeal. The evidence adduced concentrated upon the article itself, with particular reference to the striking colours of the brick and the excellent quality of the finished product. No doubt the colours end finish will have an appeal to some customers. These matters, however, do not constitute a design that has been applied to the article. The defendants were unable to identify any features in the finished article which appeal to and are judged solely by the eye for nothing has been added as an embellishment to the brick to constitute a design capable of registration. Accordingly the defendants have failed to establish that the designs were capable of registration under the first part of the section.

51. With regard to the second part of the section it is necessary to consider the respective features of the article and to ascertain what they are meant for. Mr Aldous submitted a very helpful and accurate summary which sets out these features and the functions that they are required to perform. These are as follows:

52. The submission by Mr Jacob that the Lego brick could be made in a different form, although functional, so that the shape is not dictated solely by the function that it has to perform is contrary to the decision in AMP v. Utilux supra where Lord Morris in his speech had this to say at page 113:-

53. It is significant that the Vice-President of the Court of Appeal, Sir Alan Huggins, made a finding of fact on function at the hearing of the appeal relating to passing off on the interlocutory proceedings where at page 4 of the judgment he said:-

Even if I am wrong on the issue of eye appeal I am quite satisfied upon the evidence that the drawings are excluded from registration as designs, under the second part of the section by virtue of the fact that the features of the shape or configuration of the blocks are dictated solely by the function which the blocks have to perform.

54. The issue of lack of novelty has been raised which has to be decided by the eye as a matter of fact. The plaintiff asserts that the brick is essentially that which was designed by Hilary Page with variations and that as there has been no substantial change, there is no novelty. In this respect the design must be looked at as a whole and the burden to establish this fact is upon the plaintiff. In my opinion, looking at the two products side by side and a little way apart it is apparent that the bricks do lack novelty as compared with those of Hilary Page.

55. For the defendants it was argued that the attack upon novelty is remarkable in as much as it supposed that parliament first intended the Court to consider a notional registered design and then to consider the issue of novelty. It was also submitted that the word "constituted" indicates that the words "capable of registration" refer only to the nature of the design. Mr Aldous illustrated his argument by reference to a designer who made a drawing into which he put much labour, skill and effort for a design of an attractive vase. He then makes an application for a registered design, but ascertains that an earlier design on the same lines had been made by a third party some years ago. If the defendants' argument is right this designer will not obtain a registered design for his work as it is not novel nor will he be entitled to copyright protection. In my judgment I agree with the views expressed by Mr Aldous that it would be most unreasonable for that designer to lose his right to copyright under those circumstances. Mr Jacob further refers to the legislation being restrictive of trade and therefore it should be construed restrictively and sensibly. However, it is apposite to cite the words of Lord Devlin in Ladbroke (Football) Ltd. v. William Hill (Football) Ltd. (1964) 1 WLR 273 where at page 291 he said:-

56. Having considered the submissions and the authorities I am quite satisfied that the plaintiff is entitled to rely upon the matter of lack of novelty in respect of the Lego and Duplo bricks to which I have referred.

Effect of Lego Registrations

57. For the defendants it was submitted that as certain designs had been registered and patents obtained by Lego and Hilary Page it had the following effects: first that it operated as an admission against interest; secondly that the admission is irrebuttable; thirdly, that having had the benefit of the registrations, Lego is not entitled to disclaim the burden as it would be inequitable or unconsionable; fourthly that by their conduct, Lego have abandoned inconsistent ordinary copyright.

58. I accept that the burden lies upon the plaintiff to prove that the registered designs were invalid.

59. It is not in dispute that Lego registered designs and maintained those registrations in respect of several of the works that are the subject matter of this action. With regard to some of the applications, Lego challenged a query by the Registrar of Designs in 1962 that the knobs of the basic bricks could not he considered as ornamental and whether the shape and configuration was solely dictated by function. The same argument was raised by Lego in the United States where similar designs were described as ornamental designs to the United States Patent Office.

60. Mr Jacob also referred to the Lego patents for the tube version and Duplo showing the 24 and 22 bricks and to the patents taken out by Hilary Page.

61. In support of his submission that the plaintiff is not entitled to disclaim the burden after having had all the benefits Mr Jacob cited Habib Bank v. Habib Bank A.G. (1982) R.P.C. 35 as authority for the proposition that the conduct of Lego amounted to an estoppel by virtue of a representation to the world upon which the world is entitled to rely. In that case Oliver L.J. at p.36 cited with approval a passage from a previous judgment that he had given in an unreported case Taylor Fashions Ltd. v. Liverpool Victoria Friendly Society when he said:

62. In the instant case, it was not pleaded by the defendants that they were encouraged or allowed to assume anything nor suffered any detriment so the issue of private estoppel does not arise whilst it is clear that the Habib case does not extend the law of estoppel to public estoppel.

63. Upon the issue that Lego acted unconscionably there would appear to be no reason why they should not have taken all steps open to them to obtain all protection that was possible for their products. In order to obtain such protection they must necessarily rely upon the advice of their lawyers or patent agents. The designs that were registered were registered before the decision in Amp v. Utilux. At that time the law was not clear on the registrability of designs. In fact it is pertinent to observe that the law at the time of the decision of the Court of Appeal was ultimately considered to be wrong by the House of Lords. I agree with Mr Aldous that lawyers and other advisers would be placed in an impossible position if the law upon which they are asked to give advice was subsequently found to be wrong or had been later altered by Act of Parliament to the detriment of their clients. The plaintiff by relying on advice given before Amp v. Utilux is not to be deprived of protection by reason of subsequent changes in the law. Indeed it appears that the plaintiff was not aware of its entitlement to copyright protection until about 1980. By registering a design there is prima facie evidence that the design was capable of registration, but this does not debar the plaintiff from challenging the registration in this Court see Usher v. Barlow (1952) 69 R.P.C. 27, Allibert S.A. v. O'Connor (1981) F.S.R. 613. The Court is not bound by the decision of the Registrar which I am told is usually resolved in favour of the applicant when a dispute arises. In this case, I have had the benefit of full argument on both sides that was not available to the Registrar. The test to adopt is not the fact of registration but whether the design is registrable Allibert S. A. v. O'Connor (1981) F.S.R. 613. I do not consider upon the evidence that the conduct of Lego was in any way unconscionable.

64. I now turn to the next issue that of abandonment.

Abandonment - "Catnic"

65. The defendants submit that as Lego actually registered some of the designs, quite apart from their expired patents, that they have abandoned their ordinary copyright protection in favour of registered design protection. In effect the plaintiff should elect between two inconsistent types of right. This defence also applies to the Page patents and designs. Reliance is placed upon the case of Catnic Components Ltd. v. Hill & Smith Ltd. (1978) F.S.R. 405 where Whitford, J. said at p.427:

Although these words were obiter, the views expressed by Whitford, J. were followed in a Canadian case, The Rucker Company and others v. Gavel's Vulcanizing Ltd., an unreported decision given on the 25th November 1985 where Walsh, J. said at p.22:-

Neither the Court of Appeal nor the House of Lords had to decide the question raised by Whitford, J. in Catnic, but two Commonwealth decisions reached independently by Moller, J. in Wham-O Manufacturing CO. & Ors v. Lincoln Industries Ltd. (1982) R.P. C. 281 and Kearney J. in den Industries Pty. Ltd. v. Kis (Australia) Ltd. (1983) F.S.R. 619 did not follow Catnic.

66. A number of textbook writers have commented upon the views of Whitford, J. and in particular Cornish on Intellectual Property at p. 418 said :-

67. It appears that the issue before Whitford, J. was not properly argued and the cases of Werner Motors Ltd. v. A. W. Gamage Ltd. (1904) 21 R.P.C. 621 and William Edge & Sons Ltd. v. William Niccolls & Sons Ltd. (1911) 28 R. P.C. 582 were not cited. In Werner Motors Ltd. v. A. W. Gamage Ltd. Vaughan Williams, L. J. had this to say on p.629:-

68. Mr Aldous made two propositions. First if a designer produces a design for a part and assigns his copyright in the drawings to a third party, but later takes out a patent, does the patent deprive the third party of his copyright; and secondly, that there has to be a clear statutory authority to deprive a person of his rights. Abandonment was argued in British Leyland Motor Corporation & another v. Armstrong Patents CO. Ltd and another (1982) F. S. R. 481 where Foster J. at p. . 492 said:-

Mr Aldous also posed the question as to what would happen if a designer who designs a part in the United Kingdom to which copyright immediately subsists both in the United Kingdom and Hong Kong and later applies for a patent in the United Kingdom, what would then happen to the copyright in Hong Kong when he has not applied for a patent here.

69. On the matter of the desirability point that was raised in the Rucker case if those views are right it would seem that the third party should exercise his own skill and judgment instead of copying the works of the owner of the patent or copyright. It appears that the decision in Rucker was based upon the judges particular view of copyright law and the position in Canada which is different from that in Hong Kong. Having regard to the authorities and the submissions I decline to follow the opinion expressed by Whitford, J. in Catnic. On the issue of abandonment with regard to Page there was evidence that on at least six occasions he took positive action to protect his proprietary rights. This evidence is also contrary to the assertion that Hilary Page ever granted a general licence to third parties to copy his bricks which was not seriously pursued by the defendants. I therefore reject the submission that there has been an abandonment of copyright by the plaintiff or by Hilary Page.

70. I now turn to the question of infringement.

Infringement

71. On the matter of infringement, the plaintiff no longer relies upon infringement of the 1973 drawings nor upon the drawings of Sonia Bruhn and Inge Henningsen relating to the 34 roof the and that of Martin Hansen relating to the 24 Lego brick. As the drawing No. 1 in Bundle 3 made by Mr G. K. Christiansen is not absolutely clear, I do not find infringement of copyright. Further there was no evidence that there had been infringement of the Lego hub with knobs aa4 carriage wheel whilst the revised version of the wind shield is quite different from the original so I hold that there has not been a substantial reproduction.

72. The plaintiff relies upon the threat of infringement contained in the defendants' solicitors’ letter dated the 25th May 1984. Section 3(5)(a) restricts the reproduction of an artistic work in any material form by anyone who does not own the copyright. By section 48(1), reproduction is defined as follows:-

and section 49(1) provides -

73. There is no evidence of direct copying with the result that the plaintiff has to prove that the defendants infringed their copyright by indirect copying. Indirect copying is explained in Copinger (12th Ed.) at paragraph 461:-

74. It is therefore necessary for the plaintiff to establish that the defendants have either reproduced the whole or a substantial part of Lego's work. In order to succeed the plaintiff must prove that there was a causal connection that the defendants indirectly made use of the plaintiff's work. Where there is a substantial degree of objective similarity between the products of the plaintiff and those of the defendants the evidential burden will shift to the defendants, to provide an explanation that the work was created independently of the plaintiff's work. See L.B. (Plastics) Ltd. v. Swish Products Ltd. [1979] R.P.C. 551 at 625 Allibert S. A. v. O'Connor [1981] F.S.R. 613 at 626, Standen Engineering Ltd. v. A. Spalding & Sons Ltd. (1984) F.S.R. 554. In considering what is a substantial part quality not quantity is the test, see Ladbroke (Football) Ltd. v. William Hill (Football) Ltd. (supra) p.276 and what is worth copying is worth protecting see the same case at p.279, 288 and 293.

75. Tyco admit as I have said that they intended to produce a product that was as close to Lego as possible with regard to quality, colour, fit, feel and finish. They measured the Lego 2 x 4 brick in great detail and they used these dimensions for the basis of the Tyco system. The measurements were also used for the Lego equivalents and for those articles that did not have equivalents. Other evidence of copying that was admitted included the angle and cut of the roof tile, the inside roughness of Duplo although it was later abandoned by Tyco, the original shape of the outer part of the Duplo wheel and the height and the diameter of the Duplo knob. The evidence also shows that the angle of the wind shield was copied by the defendants together with the pin of the one knob brick. Nevertheless Tyco say that there are many dissimilarities from Lego and that the greater part is original to Tyco. Some of the measurements taken by Tyco were exact dimensions whilst some were modified.

76. Mr Jacob submitted that Tyco did not have access to or use any information contained in Lego's mould drawings, mould building drawings, moulds or moulding techniques nor did they have any information with regard to Lego's nominal tolerances as set out in the Lego drawings, but set their own nominal tolerances which are different from those of Lego.

77. Mr Jacob referred me to Bauman v. Fussell (1978) R. P. C. 485 where the plaintiff, a photographer had taken a photograph of 2 cocks fighting which was published in a magazine. The defendant painted a picture from the photograph and the plaintiff claimed that the painting was a breach of his copyright in the photograph. The plaintiff contended that the position of the birds was the main element of the photographic composition and that a substantial part of the photograph had been reproduced. It was held by the County Court judge who was upheld by the Court of Appeal that the effect of the painting was entirely different from that of the photograph, that the defendant had produced a new work of art of his own using the plaintiff's work only as an inspiration and that infringement of copyright had not been established. Mr Jacob urged me to apply the principles of that case to the instant case with regard to all the post-1973 Lego drawings as those drawings were only a conduit for the 1968 drawings for it is contended that Lego only made three real changes to the 1976 version from the 1968 brick by altering the point of entry for the plastic, the stated tolerances and the sharp corner. However, Bauman v. Fussell appears to have been decided on its own facts and there is a very persuasive dissenting judgment by Romer, L.J. where he said that the trial judge had not properly considered whether the painting was a reproduction of a substantial part of the photograph. Enumeration of the features of the photograph which were not present in the painting was not material to this question the consideration should be rather as to what had been reproduced than to what had not. I respectfully agree that this must be the correct approach, so that I am unable to accept Mr Jacob's submission.

78. There is an obvious similarity between the products of Lego and Tyco which raises a prima facie case that the defendants reproduced the whole or a substantial part of the plaintiff's work. It is abundantly clear that there is a causal connection between the plaintiff's drawings and the articles of Tyco. The burden therefore shifts to the defendants to give a credible explanation on a balance of probabilities that they did not do so. The only witness who gave evidence in rebuttal was Mr Martin, the 1st defendant's Vice-president of Engineering who has over 30 years' experience in all aspects of design moulding and the manufacture of plastic products including toys. Apart from Mr Deshmuck in the initial stages, Mr Martin was the person who measured the Lego bricks. The results of the analysis for the Lego bricks by comparison with the Tyco product are set out in ex: T26 and for the Duplo bricks in ex: T34.

79. Despite the admissions made by the defendants, they deny that they substantially reproduced the plaintiff's work for apart from taking the essential measurements, they claim that they manufactured their products in their own way independently from those of Lego by making their own tools, calculating their own tolerances and by manufacturing in a different way. The obvious similarities which were referred to by the plaintiff's witnesses were attributed by Mr Martin to moulding reasons.

80. I must now consider some of the evidence given by Mr Martin. In examination-in-chief, Mr Martin said that Mr Deshmuck was the tooling manager who played a relatively small part by making the first measurements of the blocks and that he left Tyco in May 1983. However, in cross-examination it was revealed that Mr Deshmuck did not leave Tyco until September 1983 and that he was also responsible for the initial drawings for the experimental mould which were later handed to Mr Kempe. Mr Deshmuck, in fact, placed the order for the experimental moulds. Quite clearly Mr Deshmuck took a more prominent role than Mr Martin had testified to earlier.

81. Further unsatisfactory evidence by Mr Martin concerned the texturing on the Duplo which he said was to improve the appearance by removing the mould marks. This evidence ultimately proved to be false for it was established that it was done to speed up the tooling.

82. Another illustration of Mr Martin's unreliability related to the Lego design that Tyco believed was the current model. On Day 12 page 33 line 1 Mr Martin gave the following evidence in cross-examination by Mr Rogers:

83. Later on the same day at page 45 Mr Rogers draw the attention of Mr Martin to evidence that he gave in the proceedings between the parties in the United States on the 31st July 1985 which can be found in bundle 5C page 1279 -

84. Mr Aldous submitted that an explanation for Mr Martin's change in his evidence was due to the fact that the argument on registrability only applies to the pre-1973 drawings and that if any copying took place it will relate to the 1968 version and not the 1976. It will therefore be contended that Tyco if they were held to be copying, were copying the 1968 and not the 1976 version. The evidence given by Mr Martin was inconsistent with the deposition which he gave in the United States.

85. Further significant evidence was given by Mr Martin with regard to the pre-school plates of both parties. On Day 12 page 6 the following examination in chief ensued at line 21 -

That was the evidence in chief. I now refer to the cross-examination on Day 14 page 11 line 3.

And at line 36 on the same page the cross-examination continued.

Mr Rogers then put to Mr Martin part of the deposition of Mr Hirtle of Tyco's New Products department taken on the 15th March 1985 in the United States proceedings which resulted in the following questions and answers:-

86. This evidence supports the submission made by Mr Aldous that Mr Martin was the man in charge of moulding and that he sought to explain that the copying of Lego was as a result of moulding reasons. Mr Martin's evidence was inconsistent with the testimony of Mr Hirtle. It is plain that Tyco cut a Lego plate and made the same mistake as Lego about the lengths of the tubes and that they took the complete pattern minus the centre tubing.

87. There was a lengthy cross-examination of Mr Martin upon the reasons why Tyco weighed the Lego blocks. It appears that the Lego blocks were weighed to price the sets in March or April 1983 and that the Tyco blocks were weighed in June 1984 and again after the run of the experimental moulds in order to see whether their estimates were correct. A crucial document that was produced and can be found at p.178 of Bundle 18 was referred to by Mr Martin as the corner-stone document. This document is dated the 18th October 1983 and is headed "Block Sizes and Shrinkage Review", from which it is apparent that Tyco had received advice confirmed in ex: T36 to watch the weights carefully. Mr Lindsay of Tyco acted upon this advice and Mr Martin must have known what was done for he checked the document although originally in his evidence he said that he neither checked the packing nor carried out the tests that had been advised. When it was put to him in cross-examination that he was watching the weights, his answer was "I don't believe so". I do not accept Mr Martin's evidence on this matter.

88. Mr Martin was an unimpressive witness. His answers on many occasions were evasive and often resulted in a lengthy discourse that soon became irrelevant to the question that had been asked. There was a marked change in his demeanour from the confidence that he exuded in evidence-in-chief to the very restrained attitude that he showed in cross-examination. I found his evidence unsatisfactory and unreliable.

89. The evidence shows that after Tyco had decided to copy Lego, they tool: legal advice in the United States and were informed that it would be alright to proceed. After analysing the Lego products, they were under the impression that the 1976 version was the current range. Tyco had the opportunity and obvious intention to copy. The New Products section of the Marketing Department selected products to be made and required any alternative to be referred to them. Mr Deshmuck measured the 1976 Lego version to the best of his ability and thereafter instructed Mr Kempe who made the drawings for the experimental moulds which were ordered by Mr Deshmuck. Examples of the Lego brick were sent to the mould maker for reference and drawings must have been sent to him based upon Mr Deshmuck's figures. After the experimental moulds were made tri-axial measurements were taken in Hong Kong and the United States. There is clearly a causal connection between the drawings of the 1976 version of the Lego blocks and the products manufactured by the defendants.

90. For reasons best known to themselves, the defendants chose not to call 4 witnesses Mr Alley, Mr Kempe, Mr Hirtle and Mr Deshmuck who clearly took an active role in Tyco's decision to emulate the Lego brick. It is also significant that Tyco were in a hurry to manufacture their product in competition with Lego, and did not need to carry out any safety tests. The defendants have failed to discharge the burden of proof that had shifted to them to rebut the presumption that a substantial part of the plaintiff's work had been reproduced. The modified parts were obviously made as they might not be covered by the registrability defence. However, the individuality in the plaintiff's drawings has been taken by Tyco with the exception of the wind shield to which I have already referred. I find that the defendants have infringed the 1976 drawings of the plaintiff by taking a substantial part of those drawings and in turn indirectly copied the earlier drawings with the exception of the drawings which I have mentioned.

91. I now come to the defence raised by the defendants under section 9(8) of the Copyright Act 1956.

Does section 9(8) of the Copyright Act 1956 afford a defence

Section 9(8) provides:-

92. The onus of establishing this defence is upon the defendants.

93. In L.B. (Plastics) Ltd. v. Swish Products Ltd. [1979] RPC 551 the meaning of section 9(8) was explained by Lord Wilberforce at page 622 in the following words:

94. My task therefore as a non-expert is to consider the drawings of the plaintiff including all the written material and dimensions thereon set out with the articles produced by the defendants in three dimensional form and to decide whether the defendants' articles do not appear to be reproductions of the plaintiff's drawings.

95. Although Mr Moller gave evidence on behalf of the plaintiff to explain the various details in the drawings, I have not found any difficulty in malting a comparison between the drawings and the objects of the defendants reproduced in a three dimensional form. Having made the comparison I am in no doubt that the articles produced by Tyco reproduce a substantial part of the drawings made by Lego. Accordingly the defence raised under section 9(8) fails.

96. As a result the plaintiff's action succeeds.

97. I shall now at the request of the parties set out my views on the plaintiffs claim for additional damages under section 17(3) of the Copyright Act 1956.

ADDITIONAL DAMAGES UNDER SECTION 17(3) OF THE COPYRIGHT ACT 1956

98. Amongst the forms of relief sought by the plaintiff there is a claim for additional damages pursuant to section 17(3) of the Copyright Act 1956 which provides -

99. It is contended by the plaintiff that as a result of the letter written by the defendant's solicitors dated the 25th May 1984, they were invited to sue. Prior to that letter the defendants had in March removed the moulds out of Hong Kong so it is submitted that the plaintiff will not now be compensated nor will be able to obtain the moulds which form an expensive part of the reproduction. As a result the plaintiff contends that this was done in order to limit their claim to damages. Accordingly the plaintiff argues that the infringement by the defendants is flagrant for they had been advised that they could copy, knew at all times that they were copying and by the action taken to remove the moulds have attempted to avoid liability as to damages.

100. Having considered the evidence, I am satisfied that the plaintiff has shown prima facie evidence to support a claim for additional damages to be determined upon an enquiry into damages.

101. I will hear counsel on relief.