SANTA ANA, CALIF. (Jan. 20, 3 p.m. ET) — The flow of Mega Bloks Halo figures onto U.S. soil will not be suppressed!
Mega Brands Inc. announced Jan. 20 that it has withdrawn its federal court lawsuit against Lego Group, just one week after the suit was filed in U.S. District Court in Santa Ana, Calif. Mega Brands had gone to court to stop the U.S. Customs and Border Protection from blocking the importation of its construction toys based on the popular video game Halo. The Mega Bloks maker alleged a complaint by Lego Group started the process.
The Montreal-based company wanted a temporary restraining order and a permanent injunction.
But Mega Brands withdrew the lawsuit after the company was formally notified that Customs “will not interfere with the importation of any Mega Brands products into the United States,” the company said in a news release.
A Lego spokesman said that the company informed Mega Brands that “Lego had not made a direct claim against them” and that Customs would not block the products.
In its lawsuit, Mega Brands said Toys R Us told Mega on Jan. 6 that the U.S. Customs officials had notified the retailer that the products “might be detained by Customs because of a complaint by Lego.” On Jan. 10, Mark Girgis, Mega Brands' vice president of legal affairs, spoke on a conference call with Customs officials. In a statement filed in court, Girgis said that Christine Hogue, supervisor of what he called the border patrol's “toy team,” who confirmed that Lego pushed to keep the Halo construction toy sets from crossing onto U.S. soil.
A key argument hinges on Lego's trademark of the cylindrical stud element used during play to fit into tubes on the bottom of the bricks, connecting them together. Montreal-based Mega Brands Inc. is claiming that the studs are functional components, and therefore not eligible for trademark protection.
“Courts throughout the world” have supported that claim, Mega Brands said.
According to the suit, Lego's patents expired in the 1980s. Mega Brands entered the market in 1991. Then in 1999, Lego obtained a U.S. trademark. In the court filing, Mega Brands includes documents that the trademark covered the cylindrical surface feature on the lid of the bucket-shaped container that holds the toy bricks, not on the bricks themselves — and not a functional component.
Mega Brands officials also charge that Lego is trying to monopolize the U.S. market for building sets. Mega Brands cited a recent market study that said Lego recorded 85.5 percent of sales in the construction toy market.
Lego officials have said that the connecting knobs on Mega Bloks resemble Lego's knobs, causing confusion among consumers.