Flattery or confusion: What the law says about ‘copycat’ brands - comment

From caterpillar cakes and “anti-establishment” IPA beer to gin, the issue of “copycat” own brands has been thrown into the spotlight by a series of recent court actions involving some of the country’s best-known food and drink producers and discount supermarket chains.

Gin is among products where the issue of copycat own brands has been thrown into the spotlight. Picture: Getty Images/iStockphoto.

So what does the law say about “copycat” own brand products and where does this leave consumers who may unwittingly buy them believing them to be the genuine article?

What is a copycat brand?

A copycat brand (or product) is one that is similar or identical to that of another. Marks & Spencer’s much publicised claim for trade mark infringement against rival supermarket Aldi concerning the Colin and Cuthbert caterpillar cakes is perhaps the most high-profile example.

If you have a registered trade mark, you can mitigate against the risk of a copycat taking advantage of your reputation, or confusing customers and benefiting from that, by bringing an action for trade mark infringement.

The distiller and distributor William Grant & Sons was recently granted an interim interdict preventing the discount supermarket chain Lidl from selling its own-brand product, Hampstead gin, in its Scottish stores following Lidl’s rebranding of Hampstead gin.

William Grant & Sons claimed trade mark infringement and passing off by Lidl in respect of its product, Hendrick’s gin. The distiller claimed there was a risk of consumer confusion and advantage being taken of the "reputation and character” of the Hendrick’s gin trade mark.

What must a court consider when determining trade mark infringement or passing off?

The judge considered the following grounds to determine whether infringement or passing off of the Hendrick’s brand had occurred:

- Similarity and likelihood of confusion

The judge accepted that there was a sufficient basis to argue visual and conceptual similarity between the trade mark and the sign but recalled earlier case law providing that “the nature of the confusion that must be proved is confusion as to origin”. Taking all factors into account, including that Hampstead gin was sold exclusively in Lidl stores and at a significant price difference compared to Hendrick’s, the court said that the average consumer would be unlikely to be confused as to who produced them.

- Passing off

The court said that there is a difference between living dangerously, but endeavouring to keep a safe distance away, and deliberately intending to cause deception. It said there was insufficient evidence to show a deliberate intention by Lidl to deceive.

- Unfair advantage

However, the court said that there was sufficient evidence to show that the Hampstead gin sign called to mind the Hendrick’s trade mark, particularly based on social media evidence (discussed in more detail below).

The court had no doubt that the Hendrick’s trade mark had a sufficient reputation in the UK. It also said that it was difficult to view Lidl’s rebrand as accidental or coincidental, and that there was a reasonable prospect of success for William Grant & Sons in showing that Lidl intended to benefit from the “reputation and goodwill” of its Hendrick’s trade mark.

- Balance of convenience

The court granted an interim order preventing Lidl from selling its rebranded gin in Scotland, deciding the balance of convenience fell in William Grant & Sons’ favour but that Lidl could continue to sell the product using the previous uncontroversial design.

Public perception: social media sources in court

Aldi has already shown itself to be a shrewd user of social media. The discounter has taken to social media to poke fun at the court action brought against it by Marks & Spencer, asking Judge Rinder for legal advice and creating courtroom sketches of Cuthbert the caterpillar cake in the dock giving evidence.

Last year, James Watt, one of BrewDog’s co-founders, took to social media with a mock-up of Yaldi IPA after the supermarket created a beer of its own called Aldi’s Anti-Establishment Beer, which bore a resemblance to BrewDog’s flagship Punk IPA. Aldi now stocks BrewDog’s ALD IPA in its stores.

In the gin case, William Grant & Sons provided the court with social media posts and a YouTube video to show the public’s view on the matter. While the court said the value of this evidence is “different in quality from a proper survey, or affidavit evidence, as to the views reached by the public or indeed the average consumer”, it added it was “appropriate to note their content” and set out some consumers’ views, such as “Looks a lot like another bottle of gin” (followed by a winking emoji); and “I thought the exact same thing. I think that’s what drew me to it.”

This shows brand perception on social media will be taken into account when deciding intellectual property disputes.

The interim interdict preventing the sale of Hampstead gin, pending a full hearing, only has effect in Scotland. It remains to be seen whether William Grant & Sons will also raise a case in England and Wales to prohibit Lidl from selling Hampstead gin there. If so, it will be interesting to see whether any case William Grant & Sons might raise, or whether the case Marks & Spencer has brought against Aldi in England, will align with the Scottish judgment.

John MacKenzie is a partner and Ruairidh Leishman is a solicitor in Shepherd and Wedderburn’s commercial disputes team

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