IPEC dismisses trade mark and passing off claim in lemon cider dispute (Thatchers v Aldi)

This case illustrates some of the difficulties that brand owners face when trying to protect themselves against lookalikes, especially in the fast-moving and competitive market of alcoholic beverages. The court considered the evidence of reputation, intention, confusion and damage, and found it insufficient to establish either trade mark infringement or passing off.

Evidence that the Thatcher’s product was the benchmark when creating the Aldi product was not in itself persuasive. The majority of design decisions were said to have been made orally at Aldi, making the Thatchers case hard to substantiate in terms of how heavily their brand was leaned upon in creating the Aldi product. There was evidence that in email chains internally the Thatchers brand had been in mind. But even taken as a whole, this evidence isn’t sufficient to fulfil the conditions for reputational harm or advantage.

The case also highlights the importance of pleading the sign complained of with sufficient particularity. The court was critical of Thatchers for making contradictory submissions on what the sign was during the trial. The court held that the sign was the overall appearance of a single can of Aldi’s product, and not the four-can pack or one face of the can, as Thatchers had variously suggested.

The court also noted that the sign was three-dimensional, whereas the trade mark was two-dimensional, and that this was a point of difference between them.

However, issues of particularity aside, this is unlikely to have changed the case for Thatchers, the main issue hanging on whether there was unfair advantage/detriment or a misrepresentation.

 What was the background?

Thatchers is a Somerset-based heritage brand which produces cider and the registered proprietor of a UK trade mark for a device mark consisting of the word THATCHERS in black font, surrounded by an arc of text (including the word ‘Cloudy Lemon Cider’) and images of lemons and leaves, on a creamy-yellow background (see para ^[1] of the judgment for an image of the mark). Thatchers launched its canned cloudy lemon cider product in February 2020, and applied the trade mark to the outside of the cans and the cardboard containers of four-can packs.

Aldi is a supermarket chain that sells its own brand alcoholic cider products under the Taurus range, as well as third party branded products. Aldi launched a cloudy lemon cider product within its Taurus range in May 2022, sold as four-can packs in a cardboard sleeve.  The packaging of the Aldi product featured the word TAURUS and a bull’s head device in black font, surrounded by a yellow, green and white swoosh, on a creamy-yellow background, with images of lemons and leaves and the words ‘Cloudy Cider Lemon’ and ‘Made with Premium Fruit’ (see para [3] of the judgment for an image of the packaging).

Thatchers claimed that Aldi had infringed its trade mark under sections 10(2)(b) and 10(3) of the Trade Marks Act 1994 (TMA 1994), and had also committed passing off, by selling the Aldi product in a similar packaging to the Thatchers product.

Thatchers alleged that Aldi had intentionally mimicked the appearance of the Thatchers product, and had caused confusion and deception among consumers, as well as taking unfair advantage of and causing detriment to the distinctive character and repute of the trade mark.

Aldi denied infringement and passing off, and argued that it had used the Thatchers product as a benchmark for quality and price, but had not copied its packaging or sought to benefit from its reputation.

Aldi also raised a defence under TMA 1994, s 11(2)(b), contending that it had used signs or indications that were not distinctive or that concerned the characteristics of the goods, in accordance with honest practices (this was not considered by the court since it had already found in favour of Aldi).

 What did the court decide?

 The court dismissed Thatchers’ claim in its entirety, finding that it had not established either trade mark infringement or passing off.

On trade mark infringement, the court held that:

• the sign complained of by Thatchers was the overall appearance of a single can of the Aldi product, not the four-can pack or any part of it, as defined by reference to the particulars of claim and the list of issues
• the sign had a low degree of similarity to the trade mark, as the dominant and distinctive elements of each were dissimilar, and the elements that were similar were either descriptive, ubiquitous or commonplace
• there was no likelihood of confusion on the part of the public, as the average consumer, who was a retail purchaser of alcoholic beverages, would not mistake the sign for the trade mark or believe that the goods denoted by the sign came from the same or an economically linked undertaking as the goods denoted by the trade mark
• the court considered the context in which the sign was used and perceived by the consumer, including the fact that the Aldi product was only sold in Aldi stores or online, and that the Taurus branding and the bull’s head device were prominent on the packaging and the shelf-ready trays
• Thatchers had a reputation in the UK in relation to the trade mark, based on the evidence of its sales, marketing and promotion of the Thatchers product, and the recognition and success it had achieved in the market
• Aldi’s use of the sign did not take unfair advantage of or cause detriment to the distinctive character or repute of the trade mark, as the court was not satisfied that Aldi had an intention to exploit the trade mark’s reputation and goodwill, or that the use of the sign had objectively had that effect
• it did find that Aldi had chosen to ‘live dangerously’ but had not strayed into deceptive practice. The court also rejected Thatchers’ arguments that the difference in taste or quality between the products, or the wording ‘Made with Premium Fruit’ on the sign, had a negative impact on the image of the trade mark or caused consumers to distrust Thatchers
• Thatchers argued that evidence showed that Aldi’s intended to make a mark that was similar to Thatchers’ trade mark and that this was why Aldi’s sign looked similar. Thatchers argued that certain elements of both signs reflected this. The court noted that this was not a copyright or designs case so copying was irrelevant

 On passing off, the court held that:

• Thatchers had established goodwill in the business of the sale of the Thatchers product associated with the trade mark, for the same reasons that it had established reputation in the trade mark
• Aldi had not made any misrepresentations leading the public, or likely to lead the public, to believe that the Aldi product was that of, licensed, or approved by, or otherwise connected in trade with Thatchers, as there was no evidence of such belief or likelihood.  The court applied the same reasoning as in relation to the likelihood of confusion under trade mark infringement, and found that the trade mark and the sign were sufficiently dissimilar and distinctive to avoid deception

The decision supports the recommendation of many practitioners to create a myriad of protection for brands and packaging, pulling together the use of trade marks and designs in various forms to work together with the law of copyright (see, for example, M&S’s success against Aldi in Marks & Spencer PLC v Aldi Stores Ltd [2023] EWHC 178 (IPEC)—for more information about that case, see A GUIDING LIGHT: M&S v Aldi gin bottle ruling serves up useful reminders on UK registered design law (cms-lawnow.com).

While making the law of lookalikes endlessly complex, the courts appear unwilling to deviate from their previous practice or accept the obiter of L’Oréal v Bellure, Case C-487/07, that different types of advantage might exist outside those defined as standard (ie advertising or marketing advantages gained by Aldi as a result of the automatic connection in the mind of the consumers).

Case details

• Court: Intellectual Property and Enterprise Court
• Judge: Her Honour Judge Melissa Clarke (sitting as a judge of the High Court)
• Date of judgment: 24 January 2024

Kelly Saliger is a partner and Tycho Orton, an associate, at CMS Cameron McKenna Nabarro Olswang LLP. If you have any questions about membership of our Case Analysis Expert Panels, please contact caseanalysiscommissioning@lexisnexis.co.uk.

This article was written by CMS partner Kelly Saliger and Associate Tycho Orton and was first published on Lexis+ on 9 February 2024 available here.