Canadian toymaker Mega Brands Inc. has withdrawn its lawsuit in a California court alleging that Danish rival Lego AS was using trademark laws in the U.S. to protect its famous mini-bricks from competition.
Montreal-based Mega Brands said Friday it has reached a "satisfactory conclusion to legal matters" and pulled its legal action against Lego in the U.S. District Court of the Central District of California.
Mega Brands said its decision came after it received formal assurances from U.S. authorities that there will be no interference with the importation of any Mega Brands products into the U.S.
One week ago, Mega Brands filed its suit, seeking to invalidate Lego's 1999 functional U.S. trademark, after the U.S. Customs and Border Protection agency advised it that it could be subject to restrictions on the importation of some of its products.
Mega Brands alleged in the suit that its exports to the U.S. are crucial to its business and that customers – including giant Toys-R-Us – were warned this month that some Mega Brands products could be held by U.S. Customers "because of a complaint by Lego."
Mega Brands had been seeking a temporary restraining order and preliminary injunction in order to ensure its products sold in the U.S. are not affected by Lego's trademark claims.
Lego's patents to the iconic eight-studded plastic construction block expired more than 20 years ago, with courts in several countries striking down its claims that the construction toy is protected and that no one can make interlocking bricks using the same pattern.
Privately held Lego has been fighting off a commercial challenge from Mega Brands and other construction-toy makers in the building-block sector for years.
It lost its patent protection in 1978 but has continued to assert its legal rights using trademark and other laws.
In September 2010, the European Court of Justice said Lego cannot use trademarks to protect the shape of its colorful blocks.
The two rows of studs on the top of the bricks serve a "technical function" and thus cannot be trademarked, the court ruled.