Undeterred after Thatchers’ claim for trade mark infringement against Aldi was dismissed in the Intellectual Property Enterprise Court in February 2024, a Court of Appeal has now set aside the High Court’s judgment and ruled that Aldi had infringed Thatchers’ Cloudy Lemon cider trade marks with its cloudy lemon cider product and by doing so had obtained an unfair advantage.
Thatchers vs Aldi – the background
Thatchers was founded in 1904 in Somerset, where it is still based. In 2018 the popular cider producer identified a gap in the market for citrus-flavoured cider. It developed a lemon-flavoured product and invested heavily in marketing. It registered the trade mark pictured below in 2020.
Aldi has sold cider under the Taurus brand name since 2013. Aldi decided to introduce a cloudy lemon cider to the Taurus line as a seasonal variant in May 2022.
Caption: the registered trade mark and a can of the Aldi cider complained of.
Following the introduction of the Taurus cloudy lemon variant, Thatchers, represented by Stephens Scown LLP, Martin Howe KC and Beth Collett (barristers at 8 New Square Chambers) brought trade mark infringement proceedings against Aldi. Its claim was dismissed by HHJ Melissa Clarke, sitting in the Intellectual Property Enterprise Court.
The case attracted attention amongst trade mark law commentators, with opinion divided over whether the judge’s decision was a failure of trade mark law in protecting brand owners against ‘look-alike’ packaging, or whether it upheld healthy competition and thus cheaper prices for consumers.
Court of Appeal ruling – key points
Similarity between the Sign and the Trade Mark
On appeal, Thatchers challenged the judge’s assessment of the degree of similarity between the sign and the trade mark as “low”. Despite this assessment being a matter for the first instance court, Arnold LJ held that the judge should have assessed the similarity as being “somewhat greater” than she did, because she compared a three-dimensional sign (i.e. a can of the Aldi product) to the 2D representation of the trade mark, which was an error of principle. Later in his judgment, Arnold LJ held that it is plain that the sign closely resembles the trade mark.
Aldi’s intention
Arnold LJ drew a distinction between intention to deceive and intention to take advantage of a trade mark’s reputation. Although intention is only of evidential relevance, Arnold LJ held that:
- Aldi’s departure from its house style for Taurus ciders;
- the imitation of the faint horizontal lines on the trade mark; and
- the design process documented in evidence led to the inescapable conclusion that Aldi intended the Sign to remind consumers of the trade mark. To that extent, Arnold LJ held, Aldi intended to take advantage of the trade mark to assist it in selling their cider, by sending a message through the branding that the Aldi cider was like the Thatchers cider, only cheaper.
Unfair advantage
Arnold LJ held that this case falls squarely within the CJEU’s description in L’Oréal v Bellure of a “transfer of image of the mark” and “riding on the coattails of that mark”. In addition to his finding of an intention to take advantage above, Arnold LJ referred to social media evidence of at least some consumers receiving the message that the Aldi cider was a cheaper version of the Thatcher cider “loud and clear”.
Next, Arnold LJ held that it was a legitimate inference, in the absence of evidence to the contrary, that the fact Aldi was able to achieve substantial sales of their product in a short period of time without spending a penny on promoting it, that Aldi obtained the advantage it intended from the use of the sign.
Therefore, Aldi had obtained an unfair advantage, because it enabled Aldi to profit from Thatchers’ investment in developing and promoting the Thatchers cider rather than competing purely on quality and/or price and on its own promotional efforts. Arnold LJ also commented that his conclusion was supported by the fact that the Aldi cider is not actually of the same quality as the Thatchers product in that it does not contain real lemon juice.
What the decision means for brands
This case provides welcome authority on the circumstances in which a knock-off product crosses the line from healthy competitive marketplace behaviour and into unfairly taking advantage of a trade mark owner’s rights.
Following this judgment, where:
- a trade mark can be shown to have a reputation in the UK;
- the sign complained of calls the trade mark to mind (i.e. consumers make a link between the sign and the trade mark); and
- the product with the allegedly infringing sign performs well and there is no evidence that such performance is for a reason other than the link with the trade mark – that sign has taken unfair advantage of the trade mark, pursuant to section 10(3) of the Trade Marks Act 1994.
The decision by the Court of Appeal is a landmark decision for brands in the fight against the unfair advantage. Brand owners should consider the outcome and their own portfolios and strategy, especially in the fight against copycat products that undercut the hard work and investment that goes in to building a brand.
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You can read more about the announcement here – Thatchers emerges jubilant after trade mark infringement appeal win against Aldi
This article was written by Ted Bennett-Cronk, trainee solicitor, and Thomas Chartres-Moore, partner and head of our Intellectual Property and Data Protection team, who – as always – are here to assist if needed, so please do get in touch if you have any questions.