On 24th January 2024 a decision was issued by the IPEC court (Thatchers Cider Company Limited v Aldi Stores Limited [2024] EWHC 88 (IPEC), determining that Aldi’s ‘lookalike’ cloudy lemon cider did not infringe Thatchers’ trade mark registration, nor did it pass it off as its own.

It would seem that Aldi has, once again, successfully evaded liability for another of its alleged “imitation” products.

Whilst some quarters had hoped the decision would depart from those that came before it in favour of lookalikes (optimistic that the decision would be a harbinger for copycat products taking unfair advantage of the ‘original’ product within the provisions of The Trade Marks Act) the decision has, conversely, aligned with and reinforced the status quo.

Background

Thatchers Cider, a family-owned business based in Somerset, launched its canned cloudy lemon drink in February 2020.  In the same year it applied to register a composite label mark, as shown below:

The application was filed on 14th May 2020 and registered on 11th August 2020 under UK no. 3489711 for “Cider; Alcoholic beverages, except beer’”.

Claims

Following launch by Aldi of a cloudy lemon cider product in May 2022 under its “Taurus” brand, Thatchers brought High Court proceedings against Aldi claiming trade mark infringement pursuant to Sections 10(2)(b) and 10(3) of the Trade Marks Act 1994 as well as passing off.

Thatchers alleged that the overall appearance of the Aldi product was highly similar to its own product. Insofar as its case under Section 10(3), Thatchers alleged that “Aldi intentionally mimicked the appearance of the Thatchers Product in designing the appearance of the Aldi product, and in doing so… took unfair advantage of, or caused detriment to, the distinctive character and repute of the Trade Mark, without due cause”.

Thatchers accepted that its THATCHERS word mark was the dominant distinctive element of its registered trade mark above, but contended that the colour scheme and arrangement of text within the Aldi lookalike label was very similar to that registered by Thatchers and that the positioning of the lemons showing on the Aldi product were in the same configuration as its trade mark (save for an additional lemon)).

Hence overall, it was alleged the overall appearance of the Aldi product was highly similar to that of the Thatchers product.

Thatchers also submitted that its trade mark had acquired an enhanced distinctiveness accrued as a result of extensive nationwide product sales that had been made since its 2020 launch.

Central to Thatchers’ Section 10(3) claim was that Aldi’s product had been “free riding” off Thatchers’ marketing and promotional spend which it had devoted toward its own product and which was said to have amassed a total of £2.9 million.

In their defence, Aldi accepted that it used the Thatchers product as a “benchmark” when developing its own product branding, but it denied all claims of trade mark infringement and passing off.

Decision

Notwithstanding that the Court agreed the Thatchers trade mark had enhanced distinctiveness, and that Aldi was recognised as having used the Thatchers product as a “benchmark” for its own cloudy lemon drink, the Court could not be satisfied that there was confusingly similarity of the kind prohibited by Section 10(2)(b) of the Act.

The Court observed that were certainly some elements in common, namely the colour profile and use of the “lemon” image livery, but concluded that these designs were ubiquitous to lemon-flavoured drinks.

A further factor in the Court’s thinking was the identity of the two brand names (THATCHERS and TAURUS) which were considered to play an important part in the overall assessment. Crucially, the clear difference of the two words was held to considerably counteract the importance and weight of the visual similarities that were readily apparent.

In its assessment of similarity, the Court found that there was a “low degree of similarity”, and that there was “no real likelihood that the average consumer… would be confused”.

Consequently, the claim for trade mark infringement made under Section 10(2)(b) of the Trade Marks Act was dismissed.

The Court did state that in its view Thatchers held a UK-wide reputation for its cloudy lemon label mark and that when confronted with this Aldi’s product consumers would call to mind the Thatchers trade mark registration.

Even so, the Court did not agree that Aldi’s use of the sign took unfair advantage of or was detrimental to the repute of the Thatchers trade mark. This conclusion was reached in part by its view that Aldi had not significantly deviated away from its house style when creating the product, and therefore, Aldi had succeeded in adopting a sign that was “a safe distance away” from the Thatchers trade mark registration. Accordingly, the claim made under Section 10(3) of the Act was also dismissed.

Thatchers’ passing off claim failed too on the basis that the Court felt satisfied there was no misrepresentation by Aldi to an extent the consumer would believe there to be any connection with Thatchers.

Comment

Lookalike brands are big business and there is no doubt they play a huge part in the success stories of many companies, including that Aldi and Lidl.

In order to guard established brands against this form of imitation brand owners need to think very creatively about how best to protect their branding through trade mark registration. Invariably, this could mean in practice protecting not just one label as a trade mark registration, but by protecting various separate facets of the label under several trade mark registrations and stripping out any unnecessary wording or other branding in order to leave a clear focus for the key identity to be protected.

Brand owners need not be discouraged by this decision, but it is a lesson that several layers of trade mark protection may be necessary for a brand owner to give themselves the strongest possible means of deterring or stopping a rival lookalike from hitting the shelves.

As this decision indicates, rightly or wrongly, the Court’s usual approach to these comparison cases tends to be by means of a forensic analysis of the individual parts, rather than a more holistic approach of standing back and looking at each brand “in the round”. This decision is a clear message to lookalike brand owners that they can sail very close to the wind and probably get away with it.

We will wait and see whether Thatchers appeal this decision.