Why the LEGO vs BELA decision is interesting to all of us

LEGO Group announced recently a favorable decision issued in September 2017 by the Shantou Intermediate People’s Court, a second tier city in China. LEGO Group succeded for the first time in China to win an anti-unfair competition case in relation to the packaging of the LEGO Friends series. 

Despite not written in the several comments and congrats-articles I have read, I implied that the legal ground used by the Chinese Court was art. 5.2 Anti-Unfair Comeptition Law (AUCL 1993 version). And then I decided to write this note to clarify why LEGO vs BELA might be interesting to all of us (and not only to LEGO Group). 

Art. 5.2 AUCL 1993 reads as following: “An operator may not adopt the following unfair means to carry to transactions in the market and cause damage to competitors: (1) […]; (2) using, without authorization, the name, packaging or decoration peculiar to famous well-known goods or using a name, packaging or decoration similar to that of well-known goods, so that his goods are confused with the well-known goods of another person, causing buyers to mistake them for the well-known goods of the other person”. 

In short Art. 5.2 AUCL 1993 protects products and packaging against imitations only in the case that the product or the package is special and famous and there is likelyhood of confusion with the imitative product. The path to protection designed by art.5.2 AUCL is very narrow – special + famous + likelyhood of confusion - and indeed very few had suceeded in the past. 

See herein the previous foreign winners. I am not using the word trademark on purpose. You might agree with me that those products shapes above are so famous (not only in China) that they do not need to be named.  

Almost at the same time when the Shantou judges were examining and deciding the LEGO vs BELA case – i.e. last quarter of 2017 - the Chinese National People Congress adopted the new Anti-Unfair Competition Law that entered in force on January 1st 2018. 

Art. 6 AUCL2017 replaced and art.5 AUCL1993 and the wording of the new legislative formula is the following: “A business operator shall not perform any of the following confusing acts that will enable people to mistake its products for another business's products or believe certain relations exist between its products and any business's products: 1. unauthorized use of a mark that is identical or similar to the name, packaging or decoration of another business's commodity, which has influence to a certain extent;”. 

The words used are different: “famous” (知名) in the 1993 version and “with certain influence” (有一定影响) in the 2017 law. Expert commentors have said that despite the change in the wording there is not the real intention to open the room to shapes packagings other than famous. 

Herein you see the packaging at issue in the LEGO vs BELA case. 

Is the LEGO Friends packaging famous as the previous Ferrero Rocher, Crocs and Rimova? Or shall we conclude that LEGO vs BELA is the first application of the criterion “shape with certain influence” (instead of famous shape)? 

Fabio Giacopello is one of the managing partners of HFG Law&Intellectual Property. He has been widely recognized as one of the most valuable Intellectual Property practitioner in China.  Fabio is a member of the Internet Committee at INTA and Arbitrator at the Shanghai International Arbitration Center (SHIAC). Among the awards and recognitions Fabio received the following: “Recommended lawyer” by Legal500, “Winner of Client Choice Award – Trademarks (China)” by ILO, “IP Star” by Managing Intellectual Property, “Notable practitioner” by Chamber and Partners, “Leading practitioner” by WIPR, “Expert in the trademark category” by Asia IP.  He is author of several articles published by International and local publishing houses. Fabio has substantive experience in trademark portfolio management, trademark disputes litigations, enforcement including anti-counterfeiting.