Earlier today the Court of Appeal published its much anticipated judgment in the high profile dispute between Thatchers and Aldi over their lemon cider products.  

Introduction

Trade marks raise many bright signs and colourful fights in the grey areas, and bright people have colourful opinions about every one of them. When Thatchers sued Aldi over its "lookalike" lemon cider packaging, opinions on the issue were divided.  Was Aldi ripping off Thatchers? Was it duping customers? Or was it just using generic design cues on its existing in-house TAURUS brand?

Here are the labels, and our earlier article on the dispute 

Many people, and besides them even some lawyers, quickly decided it for themselves, and just as many were loudly adamant for Thatchers as for Aldi. For every person throwing up their hands over the "rip off" lemon artwork, there was another pointing to the independent TAURUS branding, including its bull logo. "It's nothing alike!", they say.

The original decision at trial

In Court the position was more nuanced. The judge in the IPEC clearly heard, and saw, both sides of the story (and we are told, she also smelled and tasted them). In January 2024, her judgment came out: the Court found for Aldi. 

Yes, the two labels were "similar" from a trade mark perspective. But it wasn't a strong similarity: it was made up of a composition of otherwise generic elements. The colour, though it matched on both, was ubiquitous for cloudy lemon cider. The use of lemon artwork was merely descriptive of the liquid in the can, and the two parties had styled their lemons quite differently. And for every similarity, there was a difference: the strong TAURUS brand for example, and the use of green 'swooshes', offset. 

So, the judge concluded that the similarity was low. It was a passing similarity. 

But was it liable to confuse? The judge thought not: Aldi had sold millions of these cans, and Thatchers had too. But there was little or no evidence that anyone had been confused. The judge looked at how the cans appeared on the shelf. She looked at the evidence. And yes, the Aldi product could bring the Thatchers product to mind. But that isn't an infringement unless it takes an unfair advantage, or is detrimental to Thatchers. Well, Aldi had done well commercially - but it was generally in line with sales of its other Taurus products. The lemon variant didn't seem to have outstripped the market in the way that Thatchers contended. Although the products tasted different, they were similar, and labelled with different ingredients.

The Court of Appeal disagrees

In a detailed judgment, the Court of Appeal disagreed with much of the original judge's analysis - and came to quite a different conclusion.

The arguments focused on infringement of a mark with reputation under section 10(3) Trade Marks Act 1994.  

1. On the facts, many of the judge's views were reversed. Arnold LJ in the Court of Appeal considered the degree of similarity was not only fleeting, but somewhat stronger. He pointed to the need to keep in mind the different relevant factors and harms in a test of infringement of a mark with reputation (under section 10(3)), as compared to straight  similarity (under section 10(2)). 
    
2. Second, the Court of Appeal pointed out that the judge had not dealt squarely with the extent of the accused infringement. One of the important, recognised harms where reputation is in play is an unfair advantage stemming from a transfer of image - a finding of the EU courts in L'Oreal v Bellure, which has long formed part of the UK's approach to determining these questions.
   
   Here, the court reassessed the evidence. It found that Aldi had not merely stopped at creating a link in the minds of consumers (which wouldn't be unlawful), but had gone further, and actively intended to transfer the good image of Thatchers to their product, and convey the message that it was "like Thatchers, but cheaper". That being the case, it was fair to assume that Thatchers had succeeded in their objective.
    
3. But what of the other Aldi TAURUS cider products? Again, the appeal judges disagreed with the judge below. While the first court found that the TAURUS range as a whole was distinctive (and that the lemon cider variant fit within it), the Court of Appeal lent weight to the distinct differences between the lemon TAURUS and Aldi's other products. While the others were severely black and white with no fruit depictions, this product had been designed quite differently, with its contrasting natural tones and lemon fruits and leaves. So that was no answer to the main accusation.  
    
4. And Aldi hadn't actively marketed their product — so was their success explained by the success of other TAURUS products? Well, Thatchers and Arnold LJ pointed to some design characteristics between those other TAURUS products and other brands such as Strongbow. Was the success of Taurus as a whole attributable to design cues from Strongbow? The Court didn't make a finding on this, but the question lurks unanswered: it was enough to see that Aldi had not spent money on marketing, yet the drink had performed well anyway.

What of the descriptive elements?

It's a foundation of trade mark law that using descriptive terms doesn't infringe. So why couldn't Aldi rely on that (and the defence in section 11(2)(b))? 

Well, while the judge below had carefully dissected away the various components of Thatchers' mark, the Court of Appeal pointed out that this was not a perfect approach. The registered mark they were dealing with was a label as a whole, and needed to be compared as a whole. It's true that different elements might be dominant, but that is a change in emphasis only. And while Thatchers' mark certainly contained 'generic' or descriptive elements, the assembly as a whole was distinctive.

Key takeaways

So, while Aldi had won at trial, it did not prevail when that decision was re-examined. Why?

It's a good question, and it boils down to the facts. In this case, Aldi had intended (the Court found) to go further than a fair trader should and actively benefit by transferring the good image of their competitor's reputation onto their own product. In the words of the Court, that was an unfair advantage because it enabled Aldi to profit from Thatchers’ investment in developing and promoting the Thatchers product rather than competing purely on quality and/or price and on its own promotional efforts.

On those facts, the conduct was an infringement. But this highlights the depth of the grey areas. In another world, would the same bright label have escaped infringement? Perhaps. If Aldi had a habit of creating new designs for each of its TAURUS products; if it had shown the success was due to marketing efforts; if it had put lemons on its label without copying - well, perhaps it would have been a different result. Even though the standard of infringement should be objective, the real evidence matters.

Overall, branding can feel frivolous, but trade mark rights are very serious assets: they're designed to limit free speech, but to do it fairly so everyone can carve out their own niche. But once that niche is carved, there's always room for others to squeeze in behind. As much as the pioneer can, and should, feel proud of their own work, it's fair too for others to follow them, so long as the emulation doesn't stray too far towards mimicry.

It's pretty common for competitors to end up styling themselves similarly. That's fair, and that's the way the market comes to a common 'design language': you can quite fairly follow behind someone in that way, and the law does even not stop you creating a mental link between your products and another. But the law will stop you doing it unfairly, and that's a hard question to call. What feels fair at the outset can lead to unfair results down the line.

The judgment from Arnold LJ is interesting in several other respects, including analysis of the interplay of EU case-law with the post-Brexit state of legislation. There is certainly more to study for future cases than just the points covered in this rapid response.

Further information

For further discussion on the protection of lookalike products in the UK and internationally see, Lookalike products around the world: inspiration or infringement?, Josie Price, Louise Sargeant, Nick Aries, Nicholle Yu, Yue Gao, Alison Wong