In a much anticipated decision, the High Court has dismissed an infringement and passing off claim by Thatchers against Aldi, in relation to Aldi’s use of its get-up on its cloudy lemon cider product.
In making the decision, the Judge discussed the concept of benchmarking in relation to product development.
Read the full decision here.
The background
Thatchers Cider Company Limited (Thatchers), an established producer of alcoholic beverages, including cider, filed infringement proceedings (under sections 10(2)(b) and 10(3) of the UK Trade Marks Act 1994) against Aldi Stores Limited (Aldi), a discount supermarket chain in the UK. In addition, Thatchers claimed Aldi was liable for passing off.
Thatcher’s claims were based on the following grounds:
i. A likelihood of confusion (section 10(2)(b));
ii. Reputation of a registration (section 10(3)); and
iii. Passing off.
The marks
Thatchers is the registered proprietor of UK registration number 3489711 Thatchers Cloudy Lemon Cider Device (below) in class covering ‘Cider; Alcoholic beverages, except beer’ (Registered Trade Mark).
Aldi launched its own brand of cloudy lemon cider in May 2022 in the following get-up (Aldi Product):
The sign
The court held that the sign complained of was the overall appearance of a single can of the Aldi Product, and not merely one face of it.
Benchmarking
In evidence, the buying director for Aldi advised that once Aldi had identified a gap in the market, it would often identify a (usually) market leading product as a ‘benchmark’ which would act as the quality barometer. Aldi admitted that its intention was to deliver a product of the same or better quality as the benchmark product. Aldi accepted that it had used Thatcher’s cloudy lemon cider product as a benchmark when developing the Aldi product, but denied infringing the Registered Trade Mark or that any of the requirements for passing off were established.
Both parties agreed that the concept of benchmarking in relation to product development was, and had been a standard market practice for many years.
Thatchers claimed that Aldi departed significantly from the standard benchmarking process by not matching their own house style, and deliberately chose branding which was highly similar to the Registered Trade Mark.
Infringement claim
The Court found that
- The overall appearance of the sign in the Aldi product was similar to the Registered Trade Mark but only to a low degree;
- When the sign in the Aldi product was first offered for sale, the Registered Trade Mark had enhanced distinctiveness due to the extensive use that Thatchers had made of it;
- The dominant features of both marks namely the THATCHERS brand on the Registered Trade Mark and the TAURUS brand and bulls head device on the sign was dissimilar;
- On a global assessment, there was no likelihood that the average consumer would be confused;
- Thatchers had a reputation throughout the UK in relation to the Registered Trade Mark by 19 May 2022;
- Aldi’s use of the sign would cause a link in the mind of the average consumer between the sign and the Registered Trade Mark;
- Aldi’s use of the sign did not, without due cause, take unfair advantage of and was not detrimental to the distinctive character and/or repute of the Registered Trade Mark.
Despite Aldi admitting that it had advised its external design consultants that it wanted ‘a hybrid of Thatchers and Taurus’, the findings were that Aldi did not have the intention to deceive as benchmarking was a standard acceptable process and Aldi had not significantly departed from its house style.
Passing Off
In finding that the claim of passing off failed, the court found:
- Thatchers had goodwill in relation to the business of the sale of its goods sold under the Registered Trade Mark;
- There was no evidence that any consumers believed that the Aldi Product was that of Thatchers and thus no misrepresentation by Aldi.
This decision has reignited the debate around look-a-like products and just how close the get- up on products can get to the existing rights of others.
It will be interesting to see if Thatchers appeal the decision.
