In December 2025, New Zealand’s Court of Appeal handed a victory to toy and consumer goods company Zuru in its trademark infringement battle against global brand Lego by ruling in its favour.

The decision overturned a 2023 High Court ruling that found Zuru guilty of infringing Lego’s trademark.

Recently, the Supreme Court allowed Lego to appeal the Court of Appeal decision.

Hong Kong-based Zuru was founded by siblings Nick Mowbray, Matt Mowbray and Anna Mowbray who were all born in New Zealand.

At the core of the case were the words “LEGO® BRICK COMPATIBLE” prominently featured on the packaging of Zuru’s product line, dubbed MAX Build More plastic brick building kits. Lego filed a trademark infringement lawsuit against Zuru, arguing that consumers may associate Zuru’s bricks, which were cheaper, with those of Lego. As reported in an article on Radio New Zealand’s website, the Court of Appeal stated in its written decision: “The phrase ‘LEGO® BRICK COMPATIBLE’ is descriptive, not a badge of origin.”

According to Blake Carey, a senior associate at AJ Park in Auckland, the Court of Appeal affirmed the orthodox view of “use as a trademark.” With this view, “use as a trademark” means use as a “badge of origin” for the trademark user’s goods or services.  

“The Court of Appeal applied its findings to the facts of the case in a straightforward manner,” said Carey. He explained that to the Court of Appeal, the High Court judge should have asked the question whether Zuru was using Lego’s trademark in a way that would cause relevant consumers to think that the mark is telling them the trade source of the bricks inside the packaging. 

“The Court answered in the negative, meaning that Zuru’s use of  ‘LEGO® BRICK COMPATIBLE’ did not infringe Lego’s registered rights. Zuru did not use ‘LEGO®’ to indicate that the source of the bricks in the packaging was LEGO A/S. Rather, it only used ‘LEGO® BRICK COMPATIBLE’ to inform consumers that its MAX bricks were merely compatible with Lego bricks,” said Carey.

According to him, the Court of Appeal’s majority judgment provides welcome clarity on the extent to which companies can safely use “compatibility statements” on their packaging. “The judgment would seem to be pro-competitive, in that businesses may now be more willing to expressly state to consumers that their products are usable or compatible with well-established brands,” he remarked. “Of course, whether the Supreme Court will affirm the Court of Appeal’s view remains to be seen.”

Carey added that the judge, in a separate judgment to the majority, identified some potential issues with the interaction of the ‘orthodox view’ and the Trade Mark Act’s comparative advertising provisions. “Essentially, he considered that, if the orthodox view was correct, then ‘no use of a trademark in comparative advertising could ever amount to trademark infringement,’ meaning the comparative advertising defence would be redundant. The majority disagreed, saying ‘whether or not that would render the defence for comparative advertising largely otiose is an open question, although we do not accept that would automatically follow,’ but chose not to address the question in any fulsome way,” he said.

For Carey, the central question for the Supreme Court, which is what is “use” of a trademark, goes to the heart of trademark law and thus is crucial.

- Espie Angelica A. de Leon