Watershed trade mark ruling to hit lookalike products

Aldi, known for making products that are “like brands, only cheaper”, has been held to infringe Thatchers' trade mark in respect of its lookalike cloudy lemon cider product.

Last week (Monday, 20 January), the Court of Appeal of England and Wales found in favour of Thatchers, who had brought a trade mark infringement claim against Aldi.

This is a landmark moment in trade mark law, establishing that lookalike products, whose packaging too closely mimics that of well-known packaging which has been registered as a trade mark, can take unfair advantage of and infringe a registered trade mark.

Geoff Steward is joint head of IP at Addleshaw Goddard (Picture: Mark Laing)

This judgment is a significant moment for brands and retailers alike and, unless overturned by the Supreme Court on appeal by Aldi, could result in further claims.

Thatchers originally brought its claim against Aldi in the specialist Intellectual Property Enterprise Court (IPEC) on grounds that Aldi’s use of similar packaging infringed Thatchers’ registered trade mark as a result of: (1) causing consumer confusion as to the origin of the goods under s.10(2) of the Trade Marks Act 1994 (TMA); and/or (2) taking unfair advantage of the reputation Thatchers has established in its cloudy lemon cider packaging (as registered as a UK trade mark) under s.10(3) of the TMA. Thatchers also brought a claim for passing off.

The first instance IPEC judge dismissed Thatchers’ claims on all grounds, leading to an appeal to the Court of Appeal in relation to the claim for unfair advantage (s10(3)) trade mark infringement only.

Lord Justice Arnold, the leading IP judge in the Court of Appeal, noted that Aldi achieved significant sales of its cloudy lemon cider product "in a short period of time without spending a penny on promoting it”. This amounted to a clear commercial advantage, which was said to be unfair as it enabled Aldi to profit from Thatchers’ investment in developing and promoting the Thatchers’ product, rather than competing purely on quality and price based on its own promotional efforts.

The court held that Aldi gained this unfair advantage as a result of the highly similar packaging for its cloudy lemon cider product. Aldi was found to have intended that the packaging to remind consumers of Thatchers’ trade marked packaging and to create a link in the mind of consumers – which sends the message to consumers that the Aldi product was like the Thatchers product, only cheaper.

This is a watershed moment for the law of lookalikes and a significant trade mark law development which is long overdue.

As my Addleshaw Goddard colleague and IP expert Ross Nicol has noted: “Scotland has a globally recognised and highly valuable food and drink industry and many leading Scottish brands will welcome this decision and follow developments very closely.

“While decided on its facts, it shows that it is possible for a brand owner to bring a successful unfair advantage claim where they have registered well-known packaging as a trade mark and a third party produces and sells a lookalike product that the court determines unfairly calls to mind the brand owner’s packaging in order to boost sales. However, Aldi have indicated that they will appeal the decision (to the Supreme Court), so this will probably not be the end of the story.”

Geoff Steward is joint head of IP at Addleshaw Goddard