MONTREAL - Lego's long-standing legal dispute with Canadian toy maker Mega Brands (TSX:MB) has ended after the European Court ruled the Danish company doesn't own a trademark to the plastic building blocks they both manufacture.

The European Court of Justice in Luxembourg validated a lower-court ruling that Lego's bricks can't be legally protected by trademark law because their two rows of interlocking studs are a functional, technical shape that cannot become the property of any one company.

The ruling, which cannot be appealed, says companies can't use trademark law to indefinitely perpetuate exclusive rights relating to technical solutions.

Lego's patents, which protected its toy, expired long ago.

"Put simply, a trademark registration cannot be used to confer a potentially everlasting monopoly on a useful product configuration," Mega Brands said in a news release.

Montreal-based Mega Brands said the ruling doesn't have an impact on its operations in Europe because it upholds a registration decision that has been applicable since 2004.

Lego said it has no option but accept the court's ruling that its iconic blocks are functional.

"We have always disputed this -- and continue to do so. In other court actions we have shown that bricks with virtually the same function can have other appearances," Peter Kjµr, head of the Lego Group's intellectual property section, said in a statement.

But the privately held company said its desire to register the brick as a three-dimensional trademark is not for marketing reasons alone.

"It is naturally a matter of concern to us that use of the brick by others can dilute the trademark. But the worst aspect is that consumers will be misled."

It said that 40 to 60 per cent of shoppers believe they are buying a Lego product when they purchase one made by Mega Brands.

The trademark registered by Lego in 1996 came into effect throughout the European Union in October 1999. The Canadian toy manufacturer, then known as Mega Bloks Inc., applied to have the registration annulled, arguing it contravened legislation.

Mega Brands has prevailed in about 15 cases that have been launched by Lego around the world, including one in Canada.

The plastic blocks were the first toy manufactured by Mega Brands in 1984 and remain its best selling product. The company won't provide sales data on the product but industry observers estimate some $250 million worth of the plastic blocks are sold annually, with about one-third being bought in Europe.

Mega Brands shares were unchanged at 48 cents in early afternoon trading on the Toronto Stock Exchange.