Thatchers Cider Company Limited v Aldi Stores Limited [2025] EWCA Civ 5
- Where it is clear that the intention was to take advantage of reputation then such is unfair, not honest and will therefore infringe
- The Sign for comparison includes the packaging
- The ‘transfer of image’ principles in L’Oreal v Bellure represent legally sound law
In a judgment handed down on 20 January 2025, the Court of Appeal of England & Wales (CA) overturned the High Court’s dismissal of Thatchers’ trade mark infringement claim under section 10(3). This means Aldi must stop selling its lookalike cider.
Recap
As discussed in our previous article, which can be found here, Thatchers Cider Company Limited (Thatchers) brought a trade mark infringement claim against Aldi under sections 10(2)(b) and 10(3) of the Trade Marks Act 1994 (the Act), as well as a claim for passing off. Aldi’s activities infringe section 10(2)(b) of the Act if there is a likelihood of confusion with Thatchers’ registrations and, in this case, infringe section 10(3) if Aldi has taken unfair advantage of Thatchers’ reputation.
Thatchers relied on its UK trade mark registration no. 3489711:
(the Trade Mark)
Aldi had launched its brand of cloudy lemon cider using the following get-up:
The infringement and passing off claims were dismissed by the High Court at first instance.
The Appeal
Thatchers appealed the High Court decision regarding its claim under section 10(3) of the Act. A summary of the appeal decision is set out below, with the corresponding judgment paragraph numbers shown in square brackets.
The Sign
In the High Court, the judge determined that the comparison to be made was between the Trade Mark and the Sign, which she considered to be ‘the overall appearance of an individual can of the Aldi Product’.
On appeal, this analysis was found to be incorrect and it was held instead that the Sign consisted of ‘the graphics on the cans and on the cardboard 4-can pack’ instead [78].
Similarity between the Trade Mark and the Sign
The High Court judge concluded that the Trade Mark and Sign were similar to a low degree.
Thatchers submitted that the judge had erred in her assessment and the CA agreed, finding that the degree of similarity should have been held to be higher. The judge had been wrong to say that a point of difference between the marks was that the Trade Mark was 2-dimensional whereas the Sign was 3-dimensional. Additionally, the way in which Thatchers used the Trade Mark was important to the assessment as trade mark infringement is to be considered on the basis of notional fair use [82].
Aldi’s intention
The High Court judge held that Aldi did not intend to take advantage of the reputation in the Trade Mark.
Thatchers challenged the judge’s analysis for three reasons:
Firstly, the judge confused an intention to take advantage of a reputation of a trade mark (under section 10(3)) with an intention to deceive (under section 10(2)).
The CA considered that the judge had failed to distinguish between the two and explained that the differentiation was important. This is because the evidence relied upon by the judge, namely that Mr Watkins’ intention was that the Aldi Product should be understood to be a Taurus-branded cider, would have been highly relevant to an allegation of intent to deceive, but less relevant to an allegation of an intent to take advantage of the reputation of the mark, which was the pleaded allegation.
Secondly, the judge was wrong to find that Aldi had not significantly departed from its house style when designing the Aldi Product. The CA agreed and said that the Sign ‘represents a manifest departure from the house style’ [97].
Thirdly, the judge was wrong not to take into account the faint horizontal lines that appeared in both the Trade Mark and the Sign. The CA said that the judge was correct to discount the lines when considering likelihood of confusion, but should not have discounted them when assessing Aldi’s intention as the use of the lines showed clear evidence of imitation of Thatchers’ trade mark [98].
The CA therefore concluded that Aldi intended for the Sign to remind consumers of the Trade Mark, creating the impression that the Aldi product was a cheaper alternative. Thus, Aldi intended to take unfair advantage of the Trade Mark’s reputation. It did not matter if Aldi did not intend for consumers to be deceived or confused as to the trade origin of the Aldi Product [99]:
The inescapable conclusion is that Aldi intended the Sign to remind consumers of the Trade Mark. This can only have been in order to convey the message that the Aldi Product was like the Thatchers Product, only cheaper. To that extent, Aldi intended to take advantage of the reputation of the Trade Mark in order to assist it to sell the Aldi Product.
Aldi’s sales figures
The High Court judge held that the sales achieved by Aldi in relation to its lemon cider were not disproportionate to sales of other ciders in the Taurus family. This decision was criticised for a several reasons but ultimately, the CA stated that it was clear that Aldi had managed to achieve significant sales without any evident promotion [109].
Unfair advantage
The High Court judge rejected Thatchers’ claims that Aldi’s use of the Sign took unfair advantage of its Trade Mark’s reputation.
Thatchers’ main argument on appeal was that the judge should have addressed its pleadings stating that Aldi’s use of the Sign resulted in a transfer of image in the same way as described in the case of L’Oréal v Bellure¹.
This lack of consideration by the judge was deemed to be an error of principle and it was put to the CA to consider. The CA agreed that this was a ‘transfer of image’ case and held that it was clear Aldi intended the Sign to remind consumers of the Trade Mark and intended to take advantage of the reputation of the Trade Mark [114].
Detriment to repute
The High Court judge did not accept Thatchers’ arguments that the slight difference in taste between the products would be detrimental to the reputation of Thatchers’ trade marks. The judge also said that any ‘deceptive’ wording used by Aldi (namely that its product was made with premium fruit) was more likely to make consumers distrust Aldi than distrust Thatchers.
The CA agreed that the above factors were unlikely to cause detriment to Thatchers’ reputation and dismissed the appeal on this ground [125].
Aldi’s defence – section 11(2)(b) of the Act
Aldi argued that, even if its use of the sign did fall under s10(3), it had a defence available under s11(2)(b). Therefore, the key questions were, 1) is the Sign descriptive or non – distinctive and, 2) was Aldi’s use of the sign ‘in accordance with honest practices in industrial or commercial matters’. Since the High Court judge found that there was no infringement, she did not consider this defence.
The CA considered that it would be wrong to dissect the Sign into its composite elements to determine whether the defence applies and held that the Sign was not descriptive or non-distinctive. Nevertheless, the CA then went on to consider whether Aldi’s use was in accordance with honest practices and concluded that it was not.
Departure from L’Oréal v Bellure?
Finally, Aldi invited the Court of Appeal to depart from L’Oréal v Bellure. The Court of Appeal concluded that it would not be appropriate to do so for several reasons and emphasised the enduring relevance of the case.
Conclusion
This decision highlights the legal protections available to brand owners against ‘lookalike’ products that exploit established trade marks. It affirms the principle that companies cannot ride on the coat-tails of a competitor’s reputation to unfairly gain market advantage.
¹ Case C-487/07 L’Oréal SA v Bellure NV [2009]
