On 29 January 2024, the Intellectual Property Enterprise Court ('IPEC') delivered an important judgment on trade marks in Thatchers v Aldi1, ushering in a new chapter in the ongoing discourse surrounding trade mark law, especially in the context of product launches of challenger 'bargain brands'. The legal battle unfolded between Thatchers, a well-known cider producer, and Aldi, the supermarket giant, as they grappled over Aldi's introduction of its own-branded cloudy lemon cider product.
1 Thatchers Cider Company Ltd v Aldi Stores Ltd [2024] EWHC 88 (IPEC)
Background
In February 2020, Thatchers unveiled its Cloudy Lemon Cider product, featuring a distinctive trade mark that had been registered in the United Kingdom (the 'Thatchers' Mark):
In May 2022, Aldi, already an established presence in the cider market with its 'Taurus' brand, introduced its own cloudy lemon cider variant in its Taurus range:
Thatchers issued a claim in the IPEC, alleging that Aldi's product infringed its trade mark rights, alleging intentional design mimicry and taking unfair advantage of the Thatcher's Mark.
The parties' claims
Thatchers presented a multifaceted claim before the IPEC, asserting trade mark infringement under ss. 10(2) and 10(3) of the Trade Marks Act 1994 ('TMA'), alongside a claim for passing off. The core of Thatchers' argument was (i) that Aldi deliberately fashioned its product to create an association in consumers' minds, encouraging them to opt for Aldi's offering over Thatchers', and (ii) that Aldi's product took unfair advantage of, or caused detriment to, the distinctive character and repute of the Thatchers Mark, without due cause.1 Aldi denied infringement, and invoked a defence under section 11(2) TMA (which it was ultimately unnecessary for the Court to consider).
The Court's analysis
The Court embarked on its analysis by identifying the allegedly-infringing sign in question as the overall appearance of a single can of Aldi's product, disregarding the common packaging of a 4-can pack. A detailed examination of the requirements under s. 10(2)(b) TMA ensued, wherein the Court acknowledged the fulfilment of several elements; use in the UK in the course of trade, without consent, and in relation to similar goods. However, the Court, perhaps surprisingly at first glance, deemed the overall similarity between the marks to be low, taking into account the distinctive elements embedded in each, in particular the words 'Taurus' and 'Thatchers'.2
Despite Thatchers' robust reputation, the Court concluded that there existed no substantial likelihood of confusion on the part of the average consumer. The fact that there was no evidence of actual confusion (either direct or indirect) despite the high volume of sales of each product was found to be a factor against a likelihood of confusion, though not determinative of such.3 Thatchers pointed to the yellow palette with green leaves adopted by Aldi as evidence of likelihood of confusion, but HHJ Melissa Clarke was persuaded by Aldi's argument that such a 'colour palette is ubiquitous to lemon-flavoured drinks.'4 She gave particular weight to the circumstances in which a potential customer would view the Aldi product:
"He will be scanning a shelf in which the Aldi Product comprising the Sign is placed within a 4-pack cardboard sleeve which, if viewed from above, presents the brand "TAURUS" and the bulls head device. The Aldi Product may, and mostly will, be set out on an SRP tray obscuring the Sign further and presenting the "TAURUS" brand, bulls head device and Taurus swoosh. It likely will be presented with many other "TAURUS" branded products, which may be on SRP trays or decanted from them."5
She also found that:
"The fact that the average consumer may look at the Sign and bring to mind the Trade Mark on the Thatchers Product is not sufficient for confusion."6
Accordingly, the claim under section 10(2) TMA was dismissed.
Acknowledging Thatchers' established reputation and the popular sentiment of consumers perceiving Aldi's product as a "rip off,"7 the Court delved into the detailed assessment of whether Aldi gained an unfair advantage or caused detriment under section 10(3) TMA. The Court recognised Aldi's conscientious efforts to create a sign that maintained a "safe distance"8 from Thatchers' mark and opined that Aldi did not intentionally take advantage of the reputation of the Thatchers Mark; nor did the Aldi product objectively do so.9 This was despite the fact that "Aldi added lemons to the Sign in part because Thatchers had."10
On point of objectivity, HHJ Melissa Clarke stated that she had in mind that there was no tarnishment to the Thatchers Mark,11 and so the Aldi product could not objectively be taking advantage of the Thatchers Mark. The judge carried out a blind taste-test of the two ciders, and accepted that they had a different taste; concluding, however, she did not accept that a mere difference in taste between the Aldi Product and the Thatchers product is sufficient to establish a case of detriment to repute. She followed the summary of Kitchin LJ in Comic Enterprises,12 discussing damage to reputation in the context of the CJEU case of L'Oréal.13 A likelihood of detriment must arise from the fact "that the goods... offered by the third party possess a characteristic or quality which is liable to have a negative impact on the image of the mark."14
Turning its attention to the passing off claim, the Court applied the standard trio of requirements derived from the Jif Lemon case.15 The Court scrutinised the existence of goodwill or reputation, misrepresentation leading to deception or a likelihood of deception, and damage resulting from the misrepresentation. Crucially, the Court found no evidence supporting a belief among consumers that Aldi's product was affiliated with Thatchers. The absence of misrepresentation and the absence of a likelihood of confusion culminated in the dismissal of the passing off claim.
Thatchers have stated an intention to appeal this decision.
Commentary
The Thatchers v Aldi case has reignited the ongoing debate among trade mark practitioners concerning the nuanced application of trade mark law to the launch of new products drawing inspiration (in varying degrees) from market leaders. The Court's ruling, while decisively favouring Aldi (which is no stranger to trade mark disputes, such as the claim brought by Marks and Spencer concerning the Colin the Caterpillar cake), underscores the distinctions that must be made between situations where a competitor's product serves as initial inspiration, departing from it to maintain a "safe distance," and instances where concerted efforts are made to maximize similarity between products. In light of this decision, other value retailers will undoubtedly be considering whether their branding strategies maintain a sufficiently safe distance from the brands that served as the 'inspiration' for their own branding strategies or could perhaps sail closer to the wind.
Brand owners, meanwhile, may look to registered design protection for their packaging before launching new product ranges, to seek to bolster the extent of their intellectual property rights to deter copycats from getting too close for comfort.
Footnotes
1. Ibid. at 6.
2. Ibid. at 69.
3. Ibid. at 105.
4. Ibid. at 101.
5. Ibid. at 111.
6. Ibid. at 112.
7. Ibid. at 118.
8. Ibid. at 130.
9. Ibid. at 134.
10. Ibid. at 129.
11. Above n. 1 at 134.
12. Comic Enterprises v Twentieth Century Fox Film Corp [2016] EWCA Civ 41 119.
13. L'Oréal SA v Bellure NV (C-487/07) EU:C:2009:378, [2010] RPC 1
14. Above n. 1 at 139-40.
15. Reckitt & Colman Product v Borden [1990] 1 WLR 491 HL
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