The Court of Appeal has recently handed down its much-anticipated judgment in the latest iteration of the Thatchers Cider Company Limited v Aldi Stores Limited row, overturning aspects of the Intellectual Property Enterprise Court’s (IPEC) earlier, controversial decision.

The Court of Appeal concluded that Aldi’s “look-a-like” product took unfair advantage of Thatchers’ trade mark, establishing trade mark infringement.

The decision marks a significant victory for brand owners seeking to protect their brand against “look-a-like” products and will no doubt be warmly received by many commentators and brands alike, especially those who felt that the earlier decision had created uncertainty.

Background and the IPEC ruling

Thatchers is the largest family-run independent cider producer in the United Kingdom.

In February 2020, it launched Thatchers Cloudy Lemon Cider. Shortly thereafter, it applied to register the following sign as a trade mark, seeking to protect “Cider; Alcoholic beverages, except beer“. The previous year Thatchers had registered the word mark THATCHERS CLOUDY LEMON.

The Thatchers product has been extensively promoted since its launch and amassed an impressive sales performance as a result.

Aldi – a company known for its “own-brand” products which are often said to have the visual look and feel of competing leading brands – launched its own cloudy lemon cider drink in May 2022 under the “Taurus” brand, as shown below:

Thatchers initiated Court proceedings in September 2022, claiming trade mark infringement and passing off. The IPEC dismissed all claims.

Despite finding some similarities between the products, the Court felt that Aldi’s product did not, on balance, create a likelihood of confusion. This view was driven primarily by the conclusion that Aldi had not significantly deviated from its Taurus house style and that the lack of similarity between the brand names (“THATCHERS” versus “TAURUS”) outweighed any similarities inherent  within the packaging design elements.

Despite acknowledging that a link between Aldi’s product and Thatchers’ trade mark right would be formed in the consumer’s mind, the Court did not consider that Aldi’s use of the sign was taking unfair advantage of or was detrimental to Thatchers’ mark.

Thatchers appealed, but only in so far as the dismissal of its claim under Section 10(3) of the Act.

The Appeal: A Closer Look

The Court of Appeal identified several errors in the initial judgment, leading to a reassessment of Thatchers’ claims under Section 10(3). Those of greatest significance have been outlined below.

First, Arnold LJ disposed of the IPEC judge’s assessment that Thatchers’ trade mark was considered “two-dimensional” whereas Aldi’s sign was considered “three-dimensional”, and that this could be a notable “point of difference”.

The Court of Appeal clarified that the use of Thatchers “sign” ought to include both the cardboard packaging used on a multipack of ciders, as well as the imagery affixed upon an individual can.  This assertion, once accepted, created a greater case for similarity.

Second, the Court of Appeal found that insufficient weight was given to Aldi’s intention to create a product which was “like the Thatchers product, only cheaper”.

Aldi’s product was found to be a “manifest departure” from other products existing within its Taurus cider range (which, in many ways, adopts what appear to be similar iconography to that of another established cider producer, Strongbow).

Evidence adduced revealed a deliberate effort by Aldi to imitate Thatchers’ product, using it as a benchmark to promote its own lemon drink. Moreover, the presence of faint horizontal lines in both designs, while insignificant for confusion purposes, strongly suggested copying.

Third, Arnold LJ reflected on the significant sales which Aldi was able to achieve during the limited time in which its drink had been available for sale, this being despite the lack of any considerable promotional effort on Aldi’s part. Moreover, it was noted that the presentation of the product showed an obvious departure from the usual Aldi house brand.

All this together, the Court concluded, allowed it to come to the view that Aldi had taken unfair advantage of Thatchers’ trade mark.

Comment

This dispute serves as a useful reminder that even by simply avoiding consumer confusion that is not always enough to evade liability; exploiting the reputation of a well-known brand, even without directly misleading consumers, can constitute trade mark infringement.

More importantly, this row between Thatchers and Aldi perfectly exemplifies the need for brand owners to think imaginatively about how best to protect their innovative brands against “copycat”, “dupe” and ‘”look-a-like'” products.  Products that capture the “zeitgeist” are the most at risk of being copied – without adequate trade mark protection, preventing the commercialisation of the “look-a-likes’” become far more difficult.

Establishing a robust trade mark portfolio is, therefore, essential, and we encourage brand owners to consider protecting not just the label of their product, but each of its distinctive parts. Had Thatchers began with additional trade mark protection covering isolated elements of its packaging and the livery of its products then its job may have been easier, although protecting isolated packaging design elements can sometimes be difficult if those elements (by themselves) do not distinguish the goods for which trade mark protection is sought. With that said, it is conceivable that Aldi may have chosen to take a different path entirely if Thatchers had had more robust trade mark protection from the outset.

Aldi has indicated that it intends to appeal the Court of Appeal’s decision to the UK Supreme Court. We will continue to follow the issue with great interest.