MONTREAL (CP) - The Supreme Court of Canada says European toy maker Lego can no longer rule the playrooms of the country and must make room for Montreal-based Mega Bloks Inc.
The decision Thursday marks the third and final loss for Lego in Canada, as the country's top court denied Lego's claim that Mega Bloks infringes on its trademark.
"The monopoly on the bricks is over and Mega Bloks and Lego bricks may be interchangeable in the bins of the playrooms of the nation," the Supreme Court said in its unanimous decision.
"Dragons, castles and knights may be designed with them (toy blocks) without any distinction."
The ruling, which only applies in Canada, means Mega Bloks can continue to produce and sell its products.
The Montreal company has won lower court decisions in other countries, notably the large toy market in Germany, but the rulings are under appeal by Lego, a family-owned Danish company.
Mega Bloks spokesman Eric Phaneuf said the company is thrilled, but was expecting the positive ruling.
MEGA公司發言人Eric Phaneuf 表示:我們感受到威脅,但希望得到正面的裁決
"Now Mega Bloks prevails in Canada and this is over," said Phaneuf.
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"The court recognizes our full right and also the right for the end consumer to have a choice, so this is the end of the Lego monopoly in Canada." 法院認同我們所有的權利以及基層消費者有選擇的權利,這代表LEGO在加拿大獨占的結束.
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The publicly traded company estimates it has 40 per cent of the construction toy market in Canada, while Lego has about 45 per cent. 一間大眾消費公司估計LEGO公司在40%的組合積木市場中佔有45%的市場.
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Mega Bloks stock (TSX:MB) was up 73 cents at $25.40 in morning trading, a gain of about three per cent.
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Both companies produce toy blocks of similar design, with protruding stubs that link blocks of various size and colour together.
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Mega Bloks tend to be larger than Lego. Both work in the same way but can't be linked together.
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Lego, which sought an injunction and damages against Mega Bloks, contended the Canadian company's design could cause confusion among consumers.
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But the Supreme Court concluded that design or "functionality" doesn't confer a trademark and dismissed Lego's claim with costs.
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Similar findings came from lower courts in decisions dating back more than three years.
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Last July, in a 2-1 split decision, the Federal Court of Appeal upheld a lower court decision of May 2002. The lower court ruled that the sale of Mega Bloks brick products on the Canadian market didn't violate Canadian law.
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Mega Bloks is the world's second-biggest toy building-block maker, behind Lego.
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