On 24 January 2024, the UK IP Enterprise Court issued a judgment concerning Thatchers’ and Aldi’s lemon cider products. Aldi admitted “benchmarking” its product against the Thatchers’ product, however Thatchers failed to prove that Aldi had reached the point of infringement.

Background

In February 2020, Thatchers released a cloudy lemon cider packaged in individual cans. Thatchers registered its product’s label as a device mark (the ‘Trade Mark’) for “Cider; Alcoholic beverages, except beer” in class 33. The Trade Mark was applied to the outside of cans and the cardboard containers of four-can packs of the Thatchers’ product, and used in marketing.

In response to an emerging trend for lemon-flavoured alcoholic drinks in May 2022 Aldi released a product, “Cloudy Cider Lemon” (‘Aldi Product’), sold under its “Taurus” brand. It was also sold as four-can packs and had a similar colour palette and imagery of lemons and leaves, but the signage on the cans was not always visible through the cardboard packaging.”

A side-by-side comparison of the Trade Mark and the Aldi Product are below:

Trade Mark

Aldi Product

In response to Aldi’s release, Thatchers alleged that Aldi’s get-up for the Aldi Product infringed the Trade Mark under the Trade Marks Act 1994, specifically;

• That the overall appearance of Aldi’s get-up was highly similar to the Trade Mark to result in a likelihood of confusion (under s10(2)), and
• That the Aldi get-up created a link between the Trade Mark and the sign in the mind of the average consumer that would result in an unfair advantage of, and/or detriment to, Thatchers’ reputation (under s10(3)).
• In addition, Thatchers claimed passing off.

No claims were made about Aldi’s “TAURUS” brand infringing the word mark “THATCHERS”.

Aldi denied any infringement under section 10(2)(b) or 10(3). To the extent infringement was found, Aldi sought to rely on the honest practices use of non-distinctive/descriptiveness terms defence (under section 11(2)(b)).

Infringement under section 10(2)

The Sign

As a starting point in the judgment, the judge HHJ Melissa Clarke observed that Thatchers had not been clear about the sign it claimed Aldi infringed. Was it a single can, the whole appearance of the can or a “four-can” pack? She decided that Aldi’s infringing sign was “the overall appearance of an individual can” not the four-can or the face of it (the ‘Sign’).

The judge emphasised that where the registered mark is a two-dimensional mark (e.g., a label that goes on a physical product but not the physical product which bears the product), and the infringing sign is a three-dimensional product, the court will not extend its comparison to the physical product which bears the mark.

HHJ Melissa Clarke went on to find that the Trade Mark as a ‘whole’ had an enhanced level of distinctiveness.

Similarity

On similarity the judge considered;

1. The dominant features of the Trade Mark and the Sign i.e., the brand names “THATCHERS” and “TAURUS”. She concluded that despite the two coinciding in the first and last letters, the visual similarities were too minimal to offset the aural and conceptual dissimilarities. 
2. Of the remaining elements, much of the similarity rested in either highly descriptive components (e.g., the cloudy lemon cider / cloudy cider lemon wording) or in generic and undistinctive elements (e.g., the pale yellow background, which is common among lemon flavoured beverages).
3. The remaining key component in both was the lemon imagery. Here the judge noted that four lemons were in effectively the same position, however the styling of the lemons and leaves (3D and somewhat realistic in Thatchers, versus cartoon in Aldi) was substantially different, and the most prominent lemon in the Sign (to the lower right) was new.
4. Finally, the judge noted that the “TAURUS” “swoosh” on the right of the Sign (which is a consistent branding across the “TAURUS” products) added a further noticeable distinction between the products.

Consequently, the judge found there was only a low degree of similarity between the Sign and the Trade Mark. This is despite finding that the Trade Mark had “enhanced distinctiveness”. In addition, the fact that the Aldi Product brought the Thatchers mark to mind was not sufficient to find confusion. The judge considered evidence from Thatchers of people calling the Aldi Product a Thatchers “rip-off” or “knock off brand”. However, she noted that these did not amount to confusion, and the only tweet which suggested otherwise only amounted to “fleeting confusion”.

Result: Thatchers’ claim that there was infringement under section 10(2) failed.

Infringement under section 10(3)

Reputation

The judge concluded that Thatchers had a reputation in the UK in relation to the whole Trade Mark, not just the word “Thatchers”. In reaching this conclusion, she considered the definition of “goodwill or reputation” as “the attractive force that brings in custom”. The judge accepted that the attractive force behind the Trade Mark was not just the words “THATCHERS” or “THATCHERS Cloudy Lemon Cider”, but also the presence of whole lemons on the label. This combination of elements was how Thatchers had chosen “to communicate to customers exactly what the Thatchers Product was”, a concept Aldi admittingly used to benchmark its own product.

Link

She was satisfied that there was the requisite link taking all the relevant circumstances into account and standing in the shoes of the average consumer with imperfect recollection. There was some evidence with comments about the Aldi Product being a “rip off” to support this position.

Unfair Advantage

The judge concluded that there was no unfair advantage taken. Whilst the Thatchers Product had been used as a “benchmark” when designing the Aldi Product, the judge did not find there was any intention on Aldi’s part to exploit the reputation and goodwill of the Trade Mark. Here she noted  the low similarity, and in particular that the similar elements were not distinctive through being either descriptive (the text) or ubiquitous or commonplace in lemon-flavoured drinks (the yellow and green palette and use of lemons). Further, Thatchers had failed to establish that consumers had changed their economic behaviour, with the Aldi Product achieving similar sales as other products in its “ TAURUS” family.

Detriment

The judge also concluded that the link was not sufficient to cause detriment. Thatchers had claimed firstly that the difference in taste would mean that customers who disliked the Aldi Product would wrongly assume the Thatchers product would taste the same, impacting Thatchers’ product. The judge dismissed this, following a blind taste test where she noted they were similar, but also clearly different.

Secondly Thatchers claimed Aldi’s line “Made from Premium Fruit”, where the lemon flavour had been artificially added, would lead to consumers distrusting their own “Made with real lemons”. The judge also dismissed this argument, noting if anything it could only lead to the consumer distrusting Aldi and learning “a lesson about ambiguous tag line wording”.

Result: Thatchers’ claim that there was infringement under section 10(3) failed.

Passing off

The judge did not spend much time on the passing off claim. Whilst she found that Thatchers was the owner of goodwill in the business of the sale of the Thatchers products associated with the Trade Mark, she concluded that Aldi had not misrepresented themselves as connected to Thatchers. Consequently, there could be no passing off.

Comment

This case demonstrates the fine, and perhaps sometimes rather vague line, between what is acceptable when designing the get-up of a supermarket own brand product to compete with a well-known branded product (which some might call a ‘lookalike’ product), and what is not.

Benchmarking against a well-known branded product when designing an own brand product, and adopting commonplace features when doing so, is not per se objectionable –  indeed it may be regarded as industry standard practice. However, the question of infringement will usually turn on whether unfair advantage has been taken of the protected trade mark or detriment caused to its distinctive character, without there being due cause. Answering these will often involve careful consideration of the defendant’s real intentions when designing their product and what they did, as well as whether any change in consumers’ economic behaviour can be shown or be inferred to have resulted. Merely establishing similarity between the marks and that a link is being made in the minds of consumers is not enough: more is needed to get home on section 10(3).

It will be interesting to see if Thatchers decides to appeal this decision. Watch this space!