Thatchers casts a 'cloud' over Aldi's product development strategy – why registering the 'get-up' of products is important

Imitation products are often of great interest to consumers. Even if they are not the "original", the mimic can sometimes be a good alternative, and usually at a decent discounted price.

Trade mark owners, who have often spent considerable resources developing and promoting their product, their brand and their packaging, might be left out of pocket trying to compete with the imitators.

Perhaps Thatchers, with their success against Aldi in the Court of Appeal, will show trade mark owners a way forward – by protecting reputable get-up with a trade mark registration.

Background

In February 2020, Thatchers launched its new Cloudy Lemon Cider product. In May 2020, Thatchers applied for a trade mark for the get-up of its Cloudy Lemon Cider (Mark), which became registered in August 2020.

Aldi launched its Taurus Cloudy Lemon Cider (Taurus Cloudy) as one of its "seasonal products" in May 2022. Taurus Cloudy's get-up used similar graphics and a similar colour scheme as the Mark. For context, please see the judgment here.

Thatchers issued proceedings against Aldi for trade mark infringement and passing off.

Following the first instance liability trial, Judge Melissa Clarke held that Taurus Cloudy was of a low similarity to the Mark and, although the goods were identical, there was no risk of confusion amongst the public. In addition, Taurus Cloudy did not take unfair advantage of the Mark's reputation, and Aldi did not pass off its products because there was no misrepresentation as to trade origin (consumers knew Taurus Cloudy came from Aldi and not Thatchers).

The judge placed particular importance on one of the witnesses giving evidence for Aldi who, according to the judge, showed that Aldi did not intend to mislead consumers.

It is well-known that, when Aldi spots a gap in the market, it identifies a "benchmark" product and it tries to deliver a similar product. In this regard, Thatchers submitted that Aldi tried to 'sail as close to the wind as they could' and, realising how close their product was to the Mark, they tried to make some slight changes. For example, evidence showed that Aldi had requested "a hybrid of Taurus and Thatcher's" [sic], and "add lemons as Thatcher's" during the design phase.

However, the judge held that, although that may have been part of Aldi's process, the main concern is the final design of Taurus Cloudy which in her view was of a low similarity to the Mark.

Court of Appeal Decision

A year later, the Court of Appeal decided that the first instance judge was wrong in her conclusion and that Aldi is liable for infringing the Mark.

Thatchers did not contest the judge's findings regarding likelihood of confusion (for trade mark infringement under s10(2) of the Trade Marks Act 1994 (TMA)) or misrepresentation of trade origin (for passing off).

Thatchers' appeal focused on s10(3) TMA, namely that Taurus Cloudy's get-up was identical or similar to the Mark, the Mark had a reputation in the UK and Aldi's use took unfair advantage of the repute of the Mark. 

• On similarity, the Court of Appeal held that Taurus Cloudy's get-up was more similar to the Mark than assessed by the first instance judge; in particular, the judge was wrong to hold that a point of difference was that the Mark was two-dimensional while the use in Taurus Cloudy was three-dimensional.
• To reputation, Thatchers invested almost £3 million in promoting the product that made use of the Mark through TV advertising, posters, billboards and others
• Regarding whether unfair advantage had been taken, Aldi managed to achieve substantial sales of Taurus Cloudy without spending any money on promoting it. Aldi attempted to rely on the fact that it was a "seasonal product" but sales were disproportionate compared to other products under the Taurus brand, including other seasonal offerings.

Furthermore, the Court of Appeal held that the fact Aldi had no intention to deceive was irrelevant to the assessment of whether Aldi took unfair advantage of the Mark. Evidence (as above) indicated that Aldi clearly had the Mark in mind during the design process and intended the packaging of its product to remind consumers of the Mark in order to sell Taurus Cloudy. Unlike the first instance judge, the Court of Appeal found that Aldi had significantly departed from its usual house-style for its Taurus-branded products. Therefore, instead of investing in developing and promoting its own product, Aldi chose a similar sign to the Mark in order to take unfair advantage of the Mark.

Although not essential to their conclusion, the Court of Appeal also wanted to point out that Taurus Cloudy was not of the same quality of Thatchers' product as it does not contain real lemon juice. 

Interestingly (though not strictly relevant, nor within Thatchers remit), Thatchers also submitted that Aldi's other Taurus-branded products were similar to those of another competitor, Strongbow.

The Court of Appeal held that Aldi took an unfair advantage of the Mark as Aldi profited from Thatchers' investment in its development and promotion of its product.

Why is it important to register your trade mark?

Some readers may remember a similar case brought against Aldi over 10 years ago by Moroccan Oil.

There, Moroccan Oil was unsuccessful in proving that Aldi was trying to pass off its products as Moroccan Oil products.

In a passing off case, one has to prove a misrepresentation leading or likely to lead the public that the defendant's goods come from the claimant. As shoppers become more savvy about spotting the "original" and the "imitator", plus as Aldi's own reputation has grown over the years, it is less and less likely that consumers will be mislead into believing that Aldi's products originate from other retailers.

Here, Thatchers had a trade mark registered for its packaging and it could rely on s10(3) TMA – which meant that it did not have to prove misrepresentation as to trade origin, but instead could argue that the "link" in consumers' minds between the Mark and Taurus Cloudy took unfair advantage of the Mark's reputation.

Why should you consider registering your get-up?

Trade marks do not only protect names and logos. They can protect packaging and product get-up, provided it is distinctive and capable of distinguishing it from others.

Imitation products often do not carry the same name or logo as the originator. Aldi's Taurus Cloudy falls clearly under the "Taurus" umbrella of products, so "Thatchers" doesn't appear on Aldi's product.

Furthermore, originator products may be named simply in descriptive terms – e.g. "cloudy lemon cider" – so obtaining a trade mark registration is unlikely (as they are non-distinctive names) and it would be difficult to prevent the mimic's descriptive use.

However, as this case highlights, imitator products may copy the "look" of a product, rather than the name or logo, in order to bring the reputable, market-leading product to consumer's minds. Therefore, businesses should consider seeking trade mark registrations for their get-up and its distinctive components rather than just the house-brand or product name.

Not all get-up of products that look similar to a registered trade mark will fall foul of trade mark infringement under s10(3); given the complexities involved, it is important to obtain advice from a specialist."

Lessons

A trade mark for the design of packaging can help you stop competitors from taking unfair advantage of the investments you made into promoting your products and building their reputation.

If you want to learn more about how this might enhance your protection or trade mark portfolio or how to minimise infringement risks, get in touch with our trade marks team.