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Bricky Trouble over Germany

Covid-19 has influenced our lifestyle in a historic way, indeed. A lot of things we did love to do are either limited or not possible at all. But that also means that life is changing and people look for other things they enjoy. Netflix and Disney Plus definitely increased their number of subscribers. Germans did a look of strolling through parks and the nature or went for a hike. And it has already been a time in which a product which many people associate with kids and toys grew massively in popularity over here: interlocking building bricks.

 

Interlocking Building Bricks – WHAT?

You might have never read the wording interlocking building bricks if you are an English native speaker. If you are German-speaking, the words Noppensteine or Klemmbausteine might sound very strange to you as well. If I name them LEGO® bricks, you quite surely know what I am talking about. You likely played with these ones when you were young. Me too. I loved it. And Covid-19 brought this hobby back to me – recognizing how many people out there share the same fascination about the bricks made from that special plastic called ABS, which creates sufficient friction so that the bricks stick together – until you separate them again.

However, if I call all interlocking building bricks LEGO® bricks, I will likely very soon receive an adhortory letter (German: Abmahnung) by lawyers working on behalf of the LEGO Juris A/S, who is holding all major rights on the bricks from Denmark (which are in fact also produced in other parts of Europe and China). In Germany, this is typically done by the Hogan Lovells chancellery. There is a small kind of trade war on the plastic bricks, which became that intense that I felt to share it with you.

If you do not dare to read a very lengthy posting, I at least ask you to read the very last paragraph and think about supporting Bricks 4 the Kids. 

 

What is the mess all about?

In order to understand why you can have lawsuits on plastic bricks in Germany, you need to go back to the 1930’s. LEGO® has been founded by Ole Kirk Christiansen in Billund, Denmark, at that time and made wooden toys. In parallel, a British company called Kiddicraft already made plastic building bricks with knobs on top. LEGO took over the principle in the late 1940’s and struggled with the same issue the original bricks had as well: they just did not fix well. Christiansen had the genius idea to add tubes to the bottom of the bricks, which significantly increased the stability. The Danish held the patent from 1958 onward and became the market leader in toys. In 2019, LEGO was the best selling toy company in Germany with some 510 million Euro. They also lead the global toy market, closely followed by Hasbro (source).

The patent protection ran out in 1978. This opened the market for other companies to produce bricks linking in the same fraction way. However, LEGO® tried to keep the same monopoly position in the toy market, majorly by using trademarks, wordmarks and 3D brands. It took until 2009 when the Bundesgerichtshof, the highest German court, decided that the brick as such cannot be a brand, as it majorly a technical solution. This has been confirmed by the European Court of Justice some one year later.

However, LEGO® and its companies still hold a lot of brands, trademarks and protected design which make it very very hard for other companies to enter that market. Even though some lawyers believe you likely have a chance to cancel these rights, the corresponding lawsuits are lengthy and cost quite a bunch. You have to clearly state that especially in the mid 2010’s a couple of companies just copied full set designs and constructions by the Danish market leader, some even with a comparably low quality. The company Lepin is likely the most well-known among them. They simply did trademark piracy, which I absolutely do not support. The company is busted. The peers of the Danish have however grown a lot in the meantime and deliver independent designs and ideas.

 

What has happened in the recent past?

As said in the last section, a bunch of peer companies to LEGO® grew in the recent years in Germany. The brick building scene grew with the product. Most of the LEGO® products nowadays are rather aiming to be purchased by adults than by kids. These peer companies, who are typically called Alternative Klemmbaustein-Hersteller in German – “alternative interlocking bricks manufacturers”, closed a gap in the markets. The largest German peer is likely Bluebrixx,  Apart from internet sale, they have about ten stores in Germany, in which they sell fully independently produced brick sets. The core topics are trains, cars, architecture – and the aim is rather to do scale modeling than playing with the objects. Even a comparably small car can be built of up to 500 stones in order to be detailed enough.

The Held – Part 1 (2019)

In the late 2010’s, the number of YouTube channels dealing with interlocking building bricks grew significantly in Germany. While LEGO® could so far control their market position quite well and even some legal action did not really draw attention, this changed when they sent an adhorty letter to Thomas Panke in Frankfurt in January 2019. Panke drives a building brick store in Frankfurt, which used to be a LEGO® only store. Panke reviewed LEGO® sets on YouTube and stated that he was more and more unhappy with the quality of the sets. The logo of his store and channel Held der Steine (“Hero of the Bricks”) had a building brick, which LEGO® felt that viewers will link to their company only and thus violates their mark rights.

Likely, the Held der Steine would have won a lawsuit easily. Instead, he changed his logo and published the letter in his YouTube channel. Due to his entertaining reviews, he had already been the largest channel on bricks – but the juristic action drew so much attention that the number of subscribers grew massively. This video only (see above) has been viewed over 2.2 million times. It was more or less that the beginning that Panke also focused on products from other companies. Panke became some sort of social media hero.

 

The Held and the Legostein (2021)

There have been a couple of lawsuits in between during these two years. Some of them might even just be caused that you might lose a trademark if you do not defend it, so you might not give too many negative credits to Denmark, when they for example became more aggressive with Bluebrixx. One of the key questions is whether you can use the word LEGOstein / LEGO® brick for products of other companies as well. It is a word mark and thus protected – but there have been word marks in the past which became a generic term / Gattungsbegriff. In German, you typically say Föhn when you refer to a hairdryer, to a Flex, you in fact mean a grinder or to a Tempo, when you mean a tissue. All are brands which became that popular that they are used in common language. Google, for example is currently fighting against being a generic term for using a search engine in the internet.

Due to some legal actions against befriended traders (Panke’s store is just opening very rarely nowadays), Panke provoked in his videos and started to call bricks from alternative companies LEGO bricks as well. It just took a few week until he again received an adhorty letter. He disclosed it in his entertaining kind of displaying it – and this time, the video became a real PR desaster for the Billund brick company.

The video has been shared and promoted on many platforms. Panke did delete and re-do the videos where he used the wording, but they were even straighter than the original ones. The disclosure video has been watched over 2.5 million times (and thus had ten times more viewers than the video he did before about a helicopter model), it topped the German YouTube trends and the topic was even discussed in German mass media. The building brick community more and more felt to move away from the market leader – even though, of course, they still have a very large and solid fan base in the country.

 

And then there was Q-Man vs. LEGO® (2021)

Another trader for building bricks is Thorsten Klahold, who is driving the Steingemachtes (“Made from Bricks”) store in Paderborn. He is majorly doing internet trade and is also driving a YouTube channel. In contrast to Panke, he concentrated on alternative companies from the very beginning. Nowadays, he is the the general importer for one company, Qman, in Germany. In contrast to Panke, who is entertaining, but also provocative, Klahold is very fair and analytic on his channel, Johnny’s World. He tries to present facts very neutral. In a video in which he compared the LEGO® and the Qman fire station, he said that there are also reasons to go for LEGO®. He is also trying to have a fair and friendly community among the German brick builders.

On 4th March 2021, he disclosed that German customs stopped a container full of Qman® bricks at Bremerhaven port and did a full inspection. His delivery has finally been stopped due to potential copyright violations. You have to say that Qman® (in contrast to most peers) is having a wide portfolio of bricks for children. Klahold, his company and Qman® has additionally been added to a list that defines him as generally suspicious to do these kind of frauds all over Europe. In the meantime, it has been confirmed that LEGO® / LEGO Juris A/S has actively claimed to stop the delivery.

Even among the Danish fan community, there is hardly any argument that Qman® does copyright frauds. In the video above, Klahold explains that these actions, adding him to the CIS list and delaying is delivery are very likely majorly done to simply prevent him from getting new merchandise from his store.Obviously and in contrast to just having a fair competition about the best quality and price, this feels to be the most convenient way to reduce the number of peers in the German and European brick markets. In addition, the same chancery is also trying to hector private people, who receive building bricks by mail order. The threats (up to three years imprisonment) presented in Klahold’s video above only apply to companies, not to private customers.

This is especially perfidious, as LEGO® themselves claim on their website that they want nothing but fair play to the competitors. I feel that they are absolutely right to sue companies like Lepin who just copied their products. Qman® (and many other companies), though, have individual designs, individual figures to play with etc. In my point of view, it is only an action to frighten competitors and to reduce their influence on the German market. You may also say that I feel that it is a desperate try to keep a monopoly – which just can’t be good for any customers in any branch.

Klahold’s video got viral – and of course, the Held der Steine also commented on it and supported him with a video one day after. Many minor and major YouTube channels and social media seem to be joining. On 6th March, both videos, the original by Klahold and the Held der Steine support, were in the Top 10 trends of YouTube in Germany. Again, a company felt to be skillful in using and abusing laws (which I feel are generally made for a very good reason) – but completely fail in their social media strategy. Flyctory.com is just a small blog, but I felt it is a nice way to share the story with you – thanks for reading to that point.

 

A very wise reply

In addition to explaining the situation to his community, Klahold founded a charity. By crowdfunding, he said that he and Qman® will collect money. If they made it to 30,000 Euro until the end of the campaign, they will buy a container full of alternative interlocking building bricks for the net cost price in China and bring them to Germany. The aim is to give them for free to children’s home, kindergartens and other kids in unfortunate positions.

This campaign is called Bricks 4 the Kids and it feels to become the real PR disaster for the market leader. The 30,000 Euro limit has been reached after some 15 hours, even before the Held der Steine activated his publicity on the project. Currently, it is not a charity, so that you cannot deduct your donation from your income tax, but they are thinking about founding one in a second step. At the time of writing this posting (which is less than two days after the video on Johnny’s World, more than 5,000 people have already given more than 160,000 Euro. At the time of publishing, some twelve hours later, it was about 215,000 EUR. In an update video on YouTube, Klahold stated that there are also some 16k Euro of donations by PayPal. It is a massive statement for a fair play market in the building bricks community.

Yes, you have to be fair that LEGO® could use the same action on these containers from China again – but it is hard to believe that they can dare to do so. The PR disaster would be massive and lead even more a focus on the situation. Of course, Flyctory.com already supported the project financially – if you like to join, just click on the logo below – thank you!

 

 

 

I am not a lawyer or a trained person. As all postings in my blog, the posting is reflecting my best possible understanding of the situation and my personal opinion. It is not a legal advice / Rechtsberatung or similar. LEGO, Qman, Steingemachtes and Held der Steine are registered trademarks.

 

Sorry that all videos in this posting are in German.

 

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