Thatchers v Aldi: court ruling clouds cider lookalike’s future

In the recent landmark Court of Appeal judgment, Aldi’s lookalike product was held to infringe Thatchers’ registered trade mark by taking unfair advantage of that mark.  But what was the IPEC’s original decision?  Why did the Court of Appeal reach a different decision?  And what does this decision actually mean?

What was the IPEC’s decision?

The Intellectual Property Enterprise Court (the “IPEC”) dismissed all Thatchers’ claims that Aldi’s Taurus cloudy cider lemon lookalike infringed the Thatchers cloudy lemon cider trade mark, including its claims that Aldi’s lookalike:

• Caused consumer confusion, i.e. the average consumer considered that Aldi’s lookalike was linked to Thatchers cloudy lemon cider registered trade mark (pursuant to section 10(2) of the Trade Marks Act 1994 (“TMA 1994”)).
• Took unfair advantage of the reputation of Thatchers’ registered trade mark (pursuant to section 10(3) of the TMA 1994).

Why did the Court of Appeal reach a different decision regarding “unfair advantage”?

However, the Court of Appeal determined that Aldi’s Taurus cloudy cider lemon sign did take unfair advantage of the reputation of the Thatchers cloudy lemon cider trade mark. The Court of Appeal considered the following key points in reaching its landmark decision:

• Similarity – despite the IPEC assessing that the similarity between Aldi’s sign and Thatchers’ trade mark as “low”, it was clear that Aldi’s sign had close similarities to the Thatchers’ mark.
• Intention to deceive v intention to take advantage of reputation – the IPEC did not sufficiently identify the difference between an intention to deceive and an intention to take advantage of the reputation of the trade mark.  And applying the leading European Court of Justice decision in L’Oreal SA and others v Bellure NV and others on unfair advantage trade mark infringement, Aldi’s product was considered to include a “transfer of [some of the] image of the [Thatchers’] mark” and was “riding on the coattails of that mark”.
• Aldi’s intention – whilst Aldi did not intend to deceive consumers that its Taurus cloudy cider lemon product was linked to Thatchers, it nevertheless (unfairly) intended to take advantage of Thatchers’ trade mark.  This was shown by Aldi’s Taurus cider cloudy lemon packaging not closely resembling any of the other existing packaging of its Taurus range of ciders and mimicking some insignificant details of the Thatchers cloudy lemon cider trade mark.  And there was an “inescapable conclusion” that Aldi intended to remind consumers that its product was like the Thatchers’ trade marked product, but cheaper, to increase sales.
• Aldi’s Taurus cider cloudy lemon sales – Aldi also enjoyed significant sales of this new product within a short period of time, and there was no evidence that Aldi had invested in the promotion of this product nor that Aldi’s product competed purely on quality (with the Court of Appeal noting that the Aldi cider did not contain real lemon juice like the Thatchers cloudy lemon cider) and/or price alone.
• Unfair advantage – for the reasons touched upon above, Aldi was found to have obtained an unfair advantage of the reputation of the Thatchers cloudy lemon cider trade mark.

What does this decision actually mean?

The Court of Appeal’s judgment provides greater protection for trade mark owners, and prevents competitors and lookalike products unfairly taking advantage of their trade mark(s), where:

• their trade mark has a reputation in the UK;
• the infringing sign/lookalike product reminds consumers, or makes consumers think of, their trade mark; and
• there is no evidence as to why the infringing sign/lookalike product is a success other than it “riding on the coattails of” their trade mark.

This decision is therefore very good news for trade mark owners that have seen lookalikes take unfair advantage (as opposed to healthy competitive marketplace behaviour) of their registered trade mark(s).  And it will be a useful tool in helping to prevent competitors and/or lookalike products taking advantage of the substantial work, investment and resources that trade mark owners generally allocate to developing and promoting their registered trade mark(s).

However, it has been reported that Aldi may appeal this decision to the Supreme Court.  So whilst some lookalikes may be left with a bitter taste by the Court of Appeal’s decision the future perhaps remains cloudy for the time being.

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