The Building Blocks of The LEGO Group's IP Strategy
When it comes to truly global brands, any review of the most recognised companies must include The LEGO Group, which has been at the forefront of innovative toys for decades.
The IP story of The LEGO Group dates back to Denmark in the early 1960s, when family inventors of the iconic brick patented the novel design in international markets, including the United States. While that original patent has long since expired, the range and depth of their creative IP continues to this day.
Today, the company faces different IP challenges as their toys have expanded into a wide range of lines. These include partnerships with prominent third-party IP; as well as in-house innovations such as LEGO® Technic, DUPLO toys; and spin-offs into film, games and mobile apps.
IPOS International had the opportunity to discuss IP matters with The LEGO Group’s legal team in APAC to learn more about their ongoing IP strategy.
A major IP challenge facing The LEGO Group are copycat producers who try to pass off their goods as authentic LEGO products. As recently as earlier this year, the Guangdong Higher People’s Court in China awarded US$4.7 million to The LEGO Group, after it found a number of Chinese companies guilty of trademark infringement for peddling a similar product, under the brand name “Lepin”.
While these copycat producers – often based in China – may not copy its logo, they will copy almost everything else. This infringes the company’s IP rights in the images on product packaging, the building instructions, and the bricks themselves, which are often of lower quality and unsafe for children.
The bulk of The LEGO Group’s designs are protected by copyright – an often unregistered form of IP right that is harder to enforce than other IP rights, such as trademarks and patents. Still, every effort is made to take such infringing products off the shelves, said Robin Smith, Vice President and General Counsel for China & APAC at The LEGO Group. Such measures include cease-and-desist letters, customs seizures in cooperation with authorities, and administrative actions, wherever possible.
“We do a lot of trademark education campaigns, in addition to our cooperation with government authorities to take legal actions,” said Smith. “One example is our partnership with China IP News, in training middle and high school kids in IP Pilot Schools [in China]… where the emphasis is on IP education in trademark, copyright and patents.”
Another challenge has to do with the company’s lesser-known IP. While its logo and its “word mark” are incredibly well known – and therefore relatively easier to protect – other products like its minifigures pose a different challenge.
That’s because for the minifigures, we have to protect the “shape mark,” said The LEGO Group’s IP Counsel in Singapore, Franklin Galman.
This is especially felt in the APAC region, where most governing authorities are still growing in their understanding of non-traditional trademarks, Galman added. “We are working closely with authorities in the region to explain our minifigure shape marks as part of the registration process.”
Said Galman: “You don’t see a lot of shape marks, sound marks, or smell marks, and that poses a challenge to us at The LEGO Group, especially in enforcing rights in our minifigures.”
That said, the IP Counsel is happy to be located in Singapore, as the city-state has a reputation for being an IP hub. “The Singapore IP system is very innovation-friendly, striking the balance between the progress of the sciences and the arts, and protecting the rights of a trademark or an IP owner.”
A sensible IP strategy, however, is more than about protection; it’s also about leveraging IP and intangible assets to grow your business. One of the best ways to do this is through licensing, and The LEGO Group has done remarkably well by licensing-in third-party IP into the LEGO universe.
Today, there are countless strategic partnerships between The LEGO Group and other major brands, including Marvel, DC and Jurassic World, to name a few. But, the company had reservations at first, said Smith, thinking that it might be better to stick with its own IP. She recalled this about the company’s first partnership with Lucas Film, to develop the Star Wars products in 1998.
“Our President of the Americas, at the time, Peter Eio, was a huge supporter, and he definitely worked hard to help convince the rest of the organisations that it would be a worthwhile project to try, and certainly it was one of the best decisions the company has ever made,” Smith added.
When forging strategic alliances and finding collaborators, it’s crucial to strike a balance between the number of partnerships with prominent third-party IP, and dedicating resources to develop creative ideas in-house. For The LEGO Group, however, there was one thing that the company would not compromise on: staying true to the look of their iconic bricks.
Any company – no matter how big or small – needs to have an IP strategy, said Smith. “It’s important to get that set, right at the beginning.” And part of that strategy is to educate your employees on the importance of IP.
“As a lawyer for over 25 years, whose practice has included a lot of work on IP issues, I've been surrounded by patents, copyrights and trademarks for my whole career, whereas a lot of my colleagues don't understand what all of that is. So, it's important for us to train them on what IP is, how to properly use it, why it is important to our company, as well as how to properly protect the brand.”
For more advice on developing your own company’s IP strategy, and to find out more about IP training courses available for you and your team, contact IPOS International, where our mission is to help businesses use their IP and intangible assets to grow. Email us at [email protected].
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