It’s the familiar multicoloured 3D brainteaser that has challenged puzzle enthusiasts for more than 40 years and is still the world’s bestselling toy of all time.

But on Thursday – after a 10-year legal tussle – Rubik’s Cube lost a key trademark battle after the European court of justice (ECJ) said its shape was not sufficient to grant it protection from copycat versions.

The eponymous puzzle, invented in 1974 by Hungarian sculptor and architect Prof Ernő Rubik, is popular among young and old, with more than 350m cubes sold worldwide.

UK company Seven Towers, which oversees Rubik’s Cube intellectual property rights, registered the shape as a three-dimensional EU trademark with the European Union Intellectual Property Office (EUIPO) in April 1999.

But the court ruled that the EU trademark representing the shape of the Rubik’s Cube was invalid. The ruling has ramifications for the game’s various licensed manufacturers, including John Adams in the UK, which could face competition from mass-produced, cheaper imitations.

In May, a judge said the shape did not qualify for trademark protection. The case was brought by the German firm Simba Toys, which had challenged the trademark protection in 2006, claiming the cube’s rotating capability should be protected by a patent, not a trademark.

The European court of justice ruled: “In examining whether registration ought to be refused on the ground that shape involved a technical solution, EUIPO and the general court should also have taken into account non-visible functional elements represented by that shape, such as its rotating capability.”

The Rubik’s Cube is made up of turning miniature cubes. It was initially known as the Magic Cube and sold from a Budapest toy shop but was renamed in 1980 and launched worldwide.

According to NPD Group, the global information company, the Rubik’s Cube becamethe third bestselling game or puzzle in the UK this year, after the Pie Face Game and Monopoly.

The Rubik’s Cube has become a design icon, celebrated by many, including Chanel Photograph: Charles Platiau/Reuters

David Kremer, president of Rubik’s Brand in the UK, said: “We are disappointed by today’s decision by the ECJ. While the Rubik Brand is fortunate in having other trademarks, copyright, passing off and unfair competition protection to rely on which will continue to ensure its exclusivity, this judgment sets a damaging precedent for companies wishing to innovate and create strong brands and distinctive marks within the EU, and is not what European lawmakers intended when they legislated for 3D trademarks. We are baffled that the court finds functionality or a technical solution implicit in the trademark.”

Alex Brodie, a partner with international lawyers Gowling WLG, said:“Simba Toys have been successful, after 10 years of legal wrangling, in getting rid of Rubik’s 3D cube trademark. This judgment underlines the law that trademark registrations should not be used to obtain an eternal monopoly on technical solutions or functional characteristics of products – that protection is something that may be covered by other rights such as patent law – protection that has a limited life unlike trademarks. A great impact is likely to be on the toy and game industry who will be considering their portfolio of 3D trademark registrations to assess how viable those registrations are.”

The case is the latest in a series of high-profile failures to secure trademark protection for unusual and distinctive shapes.After a lengthy legal tussle, Nestlé was unable to trademark its four-finger chocolate bar KitKat in the UK, after a high court ruling in January.