Again Lego finds itself under an attack from Mega Brands, a Montreal-based competitor and maker of Mega Bloks. This time – in U.S. District Court in the Central District of California.

Lego owns a U.S trademark for the design of its world-famous blocks. Mega Brands claims that the trademark registration should be invalidated, which would allow Mega Brands to freely export its products to the United States.

The foundation of the claim is that what Lego has is not really a trademark. Rather, it is an attempt to obtain patent-like protection under the guise of a 3D trademark.

In simple terms, patents protect underlying ideas of inventions, while trademarks protect distinctive elements that allow the public to distinguish products and services of one business from products and services of another business. Trademark rights do not expire (as long as the trademark owner renews the registration on time), while patent rights only last for 20 years.

Common law courts have developed the so-called doctrine of functionality which prevents registration as trademarks of 3D objects, if such a registration would amount to protecting the functional side of these objects.

In Canada, the Trade-Marks Act makes it clear that “No registration of a distinguishing guise interferes with the use of any utilitarian feature embodied in the distinguishing guise.”

Interestingly enough, one of the leading cases in Canada dealing with the doctrine of functionality was the decision of the Supreme Court of Canada in Kirkbi AG v. Ritvik Holdings Inc., which happened to involve the same LEGO blocks.

Mega Brands’ representative stated: “Lego’s patents expired more than 20 years ago and courts around the world, including the United States, have ruled against its attempts to use trademark law for functional elements. Its claims have been dismissed by lower courts in numerous countries.”

In fact, it’s a tough call. Are the LEGO blocks nothing more than a “clever locking system” in the words of Mr. Justice LeBel? If the answer is no, what is it in the shape of the LEGO blocks that distinguishes them from any other blocks that would employ the same locking system? Can Lego protect anything but its own name and the higher-level designs?

Leaving the law aside for a minute, do you think it’s fair that Lego should lose its exclusive right to manufacture and sell its blocks? Please leave your comments.

‘Law’ means different things to different people.

For lawyers, law is about what is legal and what is illegal.

For academics, law is about what rules should exist to govern people.

For activists, law is a vehicle to achieve larger goals.

For most clients, however, law is seldom anything more than a matter of risk management.

If the potential benefits that a client may derive with a lawyer’s help are smaller than the lawyer’s bill, then there is no point in hiring the lawyer, even if from the purely legal standpoint, the strategy suggested by the lawyer makes perfect sense.

Likewise, there is no reason to hire a lawyer if the cost of hiring the lawyer in order to reduce or eliminate a certain risk is higher than the damage that the client may suffer multiplied by the likelihood of that risk ever materializing.

Lawyers who do not look at their work in context of their clients’ needs and businesses do their clients a big disservice.

Here is a short case study that illustrates how I do things differently.

A TV channel wanted to use a song in one of its productions that would only be broadcast once. The channel invited the song’s composer on the set to talk to the audience about the song. The arrangement was that no money would be paid to the composer for his appearance or for the use of the song.

From the purely legal standpoint, the only correct way to deal with this situation was for the parties to enter into a very detailed license agreement depicting what the TV channel did or did not have the right to do with the song. Drafting such an agreement and then negotiating it with the TV station would have taken many hours of lawyers’ time. It would have also created a document that neither of the parties really needed.

What I suggested was that the parties act on a handshake – without any agreement in writing at all.

It meant that the composer could legally sue the channel at any time for unauthorized use of his song, thus ensuring that the channel would not want to use the song outside that one specific production. On the other hand, I made it clear to the TV channel that if it only used the song as stated (that is, only as part of the production of which the composer was an integral part), then the composer would never sue it for what was technically unauthorized use – because it would ruin his reputation as a reasonable and trustworthy person, while the potential award that he could receive in the result of a potential litigation was minuscule.

The channel agreed. No written agreement has ever been concluded. The show aired as planned, once. Combined legal costs of both parties were very close to zero.

Context matters.

To be able to practice law, lawyers must know what the law is. This does not prevent some of us from spending a lot of time thinking about what the law should be. The most important part is to be able to know one from the other. This article is based on my understanding of what the law should be, and I’m not deterred by fact that there are several provisions in the existing law that go against that understanding.

This article develops what I have written in Copyright and the Great Socialist Degradation, Failed Business Models of the Past, Eh?, and Modernization of the Inconceivable.

It is well-settled law and also the mainstream understanding that copyright exists to balance interests of creators and users. As stated by the Supreme Court of Canada in Théberge v. Galerie d’Art du Petit Champlain inc., the balance sought is the balance “between promoting the public interest in the encouragement and dissemination of works of the arts and intellect and obtaining a just reward for the creator”. In the U.S., the protection of copyright is now invariably linked to whether it would “promote the progress of Science and the Useful Arts”.

In my opinion, this approach is diabolically incorrect. I don’t even know what’s worse – that it is settled law or that it has become the mainstream understanding. It is especially alerting when this argument is brought up by the supporters of strong copyright laws.

In this paradigm, copyright is seen as little more than an unfortunate inconvenience that we all must suffer to be able to enjoy that what is created by others. This paradigm is also based on the assumption that everything ever created by others should be readily available to the masses, subject to certain pesky reservations invented to appease greedy authors and corporations.

It is no wonder that with preponderance of this approach, more and more people genuinely believe that today’s copyright laws are “ridiculous”, “antiquated” and “crazy”.

Google’s copyright counsel, William Patry is absolutely right that copyright is not the basis for creativity. J.S. Bach wrote more amazing music than most other composers combined – before the advent of copyright laws. A great many designers upload their works online for anyone to use them freely. Soviet Union had copyright laws that only provided to authors the right to be recognized as the author, the right of first sale and a right to a "fair remuneration" (the amount of which was determinable by the government) for subsequent uses of the works over which authors had no control whatsoever – yet many great works were created in this period of Russian history.

However, Mr. Patry is dead wrong when he concludes (I oversimplify here) that because authors would continue to create even without being granted the full scope of exclusive rights and because copyright laws otherwise fail to fulfill one or another social purpose, governments should then only confer legal monopoly on copyright owners to the extent that such a grant would add value to the public.

The danger of this paradigm is that once it is accepted, today’s copyright laws indeed appear ridiculous. If the only purpose of copyright laws is to make sure that the consuming public be put to the least possible trouble as it consumes whatever works have been, are, may and will be created by other people, while making sure that the creative potential of authors is exploited to the fullest extent, then today’s laws are truly insane. There is no conceivable reason why authors (and subsequent copyright owners) should have all rights enumerated in our copyright laws, if the only motivation behind them is to take care of the public who may find it beneficial to enjoy these authors’ works. As I wrote in here, "provision of a bare minimum of food by a master to his slave, only sufficient for the slave not to die and to keep working, can hardly be called a ’balance of interests’".

The root of this problem is in the false premise that copyright laws exist for the benefit of the public, the collective. The other side of this premise is that somehow by virtue of being born in the shape of a human being, one should expect to have free and unrestricted access the legacy created by others.

I strongly believe that it is entirely irrelevant whether the public, our children and the future generations will benefit from the legal recognition of the right of creators to control the use what would not have existed but for their creative input. Interests of users should only come into play in the most limited of cases, where there is clearly no detriment to legitimate interests of copyright owners. The only exception to the “no detriment” rule should be the use of insignificant fragments of a previously created work for the purpose of critiquing that particular work, even if the copyright owner’s interests would suffer. The reasoning behind it is not that the creator should not be able to control the use of his works, but that the creator should not be able to use his copyright to silence opinions of others about his work.

Lawrence Lessig and Jennifer Jenkins lament over the works of Shakespeare that may not have been written if he had been required to obtain permissions from prior sources. This is supposed to develop into the following argument: because unauthorized use of someone else’s works may lead to the creation of a masterpiece that will be enjoyed by the masses, would it not be reasonable to disregard the interests of the author of the first work? My answer to that question is no. Interests of the collective do not trump the rights of the individuals – no matter how much benefit the collective may derive as a result of infringement of such rights.

The arguments about whether copyright laws should benefit the public only come into play in the paradigm where the interests of each individual are subordinated to the interests of a group, a collective, or "the whole society" (which, of course, is a non-existent entity, since society is nothing more than a collection of individuals each of whom has their separate interests).

This is where we see the common roots of the Occupy movement and the appeals to castrate copyright laws and create guaranteed rights for the public to consume something created by others.

Just like the Occupiers believe that interests of the 99% (although the number has been proven to be greatly inflated) should dictate the amount of property that the 1% should be “permitted to keep”, copyright collectivists believe that the interests of the public should define the scope of rights of copyright owners.

I do not see a conceivable reason why an author should not have the right to prohibit libraries from making his books available to the public. Or to put it differently, I do not see a conceivable reason why we became accustomed to expect that libraries should have the right to make these books available even if the person without whom the book would have never existed argues against it. To those who say, “well, this is the implied contract that authors make with the state: the state protects the results of authors’ work in exchange for authors making their works available to the public” I counter: “how is it different from saying that the government agrees to protect merchants from their goods being stolen on the condition that they will be mandated by law to give out some of them for free to the less fortunate”?

Just like a person who does not have enough money to rent a home should not have the right to demand that he be provided with a place to stay (housing is not a right); just like a person who cannot afford a doctor should not have the right to demand that others pay for him (regardless of what the law says, healthcare is not a right); just like a person cannot demand that the government should extort money from others to pay for his children’s schooling (regardless of what the law says, education is not a right); no one has a right to enjoy someone else’s works unless the author (or the subsequent copyright owner) and the user voluntarily agree on the terms of such use.

There is nothing more dangerous than buying into the arguments about what benefits the society as a whole.

Millions of people from different countries honestly believed – just some 70 years ago – that killing Jews and Gypsies would somehow benefit the rest. According to modest estimations, 65 million of people were killed by their own regimes in China, 20 million in the Soviet Union, 2 million in Cambodia, 2 million in North Korea – all in the name of creating a better life for the collective at the expense of individuals that make up the collective.

Placing the interests of the collective over the interests of an individual is the most horrible characteristic of all the barbarian regimes – no matter how benevolent their goal appears to be. People are not the means to a greater end. Authors do not exist to ensure that the rest of the globe enjoys a more inspired lifestyle; they pursue their own happiness. If in the process of this pursuit they are fortunate enough to create something that most of us value, we should be forever grateful to them. If they choose to give away their rights to the public (and as we can see, many do) – great. But just because a lot of us may enjoy their works does not entitle us to their unauthorized use. Authors are not our serfs – regardless of how great their works are. If they don’t, feel like sharing for free, there is no moral reason for us to extort a free license from them.

Over the first week of January, I made several improvements to the website.

Copyright, Trademarks and Domain Name service pages have been thoroughly revised to provide better description of these services.

Also, I added the code that allows to subscribe to Mincov Law Blog by RSS. Please go ahead and subscribe.