Lego logo on box

Fifty-eight years ago today, Kirk Godtfred of Lego filed his patent application on the basic building block, literally, of Lego’s billion dollar private fortune.

Now, here’s the thing: A patent filed 58 years ago is long expired. The then-standard-17-year term ended in 1978. So how is it that Lego is still the only game in town?

Market Leadership & Quality

Lego is the world’s largest toy company. The Danish company’s revenues are $5 billion per year. About 20% of that is profit. It has 12,000 employees.

The company was in business for 40 years before it hit the big time with the plastic bricks for which it is now famous. It immediately jumped into market leadership in that product line. Its first patents gave it exclusivity that protected its front runner position and its prices and margins for decades.

40 years to get going

Lego is highly skilled in the design and manufacture of toys—especially the interlocking plastic building blocks for which it is so well known.

It is famous for quality. Every one of its little bricks has a code inside to identify the mold from which it came, so in the unlikely event of a product defect, the problem can be fixed quickly.

IP is sword and shield of Lego

The House of Lego was built on innovation, market leadership and quality. Intellectual property is its sword and shield.

Did you know that Lego has a competitor? Mega Bloks, which sells blocks at a lower price, is one-tenth the size of Lego. Most people have never heard of it. Lego hazed Mega Bloks severely in court and in the marketplace. You don’t step into the ring with the Champ without taking a few body blows. Mega Bloks survives but it is so far back in the race as to be unnoticed.

Expensive and popular

Kids recognize and ask for the Lego brand. Brand recognition and known quality are two reasons Why Legos Are So Expensive—And So Popular. Lego has gained even more leverage—and created new sales opportunities to new and existing customers—from exclusive movie franchise licensing deals, as explained below.

Oh, to be sure, not everyone loves Lego. If you’ve paid the better part of $100 for a small box of little bricks or a few hundred dollars for a larger or more popular set, you might harbor some resentment, too.

Patents

United States Patent 3,005,282, titled “Toy Building Brick,” was filed on January 28, 1958.

1958 was year of invention

In 1958, Eisenhower was President. Nikita Khrushchev became Premier of the Soviet Union. Charles de Gaulle became Prime Minister of France. The first passenger jets took off, a few of them on new Transatlantic routes. NASA was formed, and the first U.S. satellite was launched. The computer chip, the modem, and the TV remote control were invented. The Great Chinese Famine began—in three years it would cause the death of nearly 30 million people through a combination of natural disasters and poor planning. See What Happened in 1958.

The Lego ‘282 patent issued some three years later in October 1961.

Don’t stop with one patent

Lego didn’t file just one patent. It filed several in its first several years of modern era Lego-block business. The last of its basic patents expired in 1989. It also has patented many improvements and designs, almost 1,000 worldwide to date, and hundreds more are pending. See for yourself: Visit Google’s advanced patent search tool. Search for Lego in the “assignee” field.

Trademark

Lego is an enormously valuable brand, that is, an iconic trademark. It is instantly recognizable and associated with quality and goodwill. That is the classic purpose of a trademark: To let consumers know that the building blocks they are purchasing come from the source that they know and trust. The company takes seriously the responsibilities associated with its basic mark.

Lego is an iconic brand

Lego owns dozens of U.S. trademark registrations, and many more worldwide, on the marks Lego, Legoland, and other variations. You can run the list yourself, if you like, on the U.S. Patent and Trademark Office trademark search engine. (Are your company’s marks registered?)

If you would compete with Lego, don’t even think about using a mark close to theirs.

Don’t even think about it

Lego devotes a page of its website, cleverly titled “Fair Play,” to information about use and prohibitions concerning its trademarks and other intellectual property.

Copyright

The artistic appearance of Lego blocks, especially its newer, more ornate ones, is subject to copyright, and presumably Lego is diligent in registering its copyrights. This is a prerequisite to filing suit, and when a knock-off is discovered, Lego doesn’t want to waste any time in going to Court or Customs to have the infringing goods seized and destroyed. Lego has even paid the cost of having infringing plastic blocks melted down to protect the public (and itself) from confusion.

International

I mentioned China above. That country has come a long way since 1958, when its Great Famine began and the Lego block was introduced. It is now the No. 1 manufacturer in the world. (The U.S. is No. 2.) If you want to have any chance of stopping infringement in China, you had better register your Chinese copyrights and trademarks and patents there at the earliest possible opportunity.

Start your IP domestically, then go global

Lego does business internationally. It protects its IP on a global basis. (For Americans, IP protection starts with action steps in the U.S., and it can be extended internationally.)

Licensing and Co-Branding

Star Wars and Ghostbusters are two big, classic, long-lived movie franchises that have granted exclusive licenses to Lego for plastic figures and shapes. These licenses will run for decades and give Lego big advantages over its competitors. In a switch, Lego has made its products into actors in the 2014 Lego movie by Warner Brothers, with sequels and product releases scheduled for years to come. Legoland theme parks also are big business.

Litigation

Lego has filed lawsuits against competitors and copyists in China, Norway, Finland, Germany and Canada. It has won some of those cases, and it has lost others. Regardless of the ultimate legal outcome, Lego has been extremely vigorous in enforcing its IP. As a result, it has succeeded in stopping competitors in their tracks. The analogy is apt: If you’re a challenger, you’re standing on the tracks as a freight train barrels down on you.

Infringers are like zombies

Patent and other IP litigation is not for the faint of heart. If you want to gain and keep your leadership, you will have to fight for it. Look what Apple did to hold off Samsung—it filed and pursued dozens of cases all across the globe. Infringers are like zombies. Samsung never let up, though it did write Apple a check for $500 million.

Merchandising

You can buy Lego toys at house-branded stores, such as the one on Chicago’s Magnificent Mile, or from any number of retailers, or at Lego’s online store. They’re not missing many opportunities to sell to you.

The Lego ‘282 Patent Claim

The now-familiar Lego block was not the first interlocking block ever made. Long before 1958, Lego itself made interlocking wood blocks. It made plastic blocks starting in 1949.

Part of the challenge in obtaining allowance of a patent is figuring out how to describe and how to claim the novelty of the invention. You have to get it right, and complete, before you file the patent application. New matter—new explanation outside the original filing—cannot be added after the filing date. By the time a patent examiner reviews the application, it can be difficult if not impossible to cure deficiencies in the original application as filed. A non-final rejection can solidify into a final rejection.

What was novel about a building block?

Would you like to know exactly how to describe, or more specifically, how to claim, a basic Lego brick?

Here’s claim 1 of the ‘282 patent:

1. In a toy building set, a hollow building block of rectangular parallelopiped [sic, parallelepiped] shape comprising a bottom and four side walls, at least four cylindrical projections extending normally outwardly from said bottom and arranged in two rows of opposed projections to define a square, a tubular projection extending normally from the inner face of said bottom, and parallel to said side walls, the longitudinal axis of said tubular projection passing through the center of said square, and the periphcries of said cylindrical projections contacting said tubular projection and at least one side wall when said peripheries are geometrically projected normally to said bottom, whereby the cylindrical projections on one of said blocks may be inserted into clamping engagement with a tubular projection and a wall of another of said blocks.

The parallelepiped affair

I love parallelepipeds, don’t you? A parallelepiped can be a brick or a cube (two of its family members); its six faces are all parallelograms.

One might have thought that a simple invention like a Lego block wouldn’t need the help of a patent attorney. Claim 1 would suggest otherwise. Indeed, Lego’s ‘282 patent was prepared and prosecuted to issuance by U.S. patent attorneys.

What Lego Did Right in IP—And Your Company Can, Too

Lego had the right answers to the four W’s of patent: Who, what, why, and when:

  1. Who: Lego was in the business of making toy building blocks—far ahead of the unskilled layperson;
  2. What: The invention of the ‘282 patent—the interlocking plastic building block—was in Lego’s wheelhouse;
  3. Why: To stop competitors from encroaching on the invention;
  4. When: Lego filed promptly as soon as the invention was “ready for patent”—the bricks shown in the 1958 patent application are remarkably similar to those sold today—and Lego did not delay the patent filing, otherwise, it would have been barred by law from obtaining a valid patent.

Be like Lego

You and your company can be like Lego:

  • Invent, patent, sell (repeat);
  • Protect and enforce your intellectual property;
  • Be proactive, diligent and vigilant.

Acknowledgements

Thanks to my good friend Doug Hood for drawing to my attention this 58 year anniversary of Lego’s first patent filing, which NPR flagged in the distinguished journal called Facebook.

Thank you for joining me.