On 20 January 2025, the Court of Appeal of England and Wales handed down its much-anticipated judgement in Thatchers Cider Company Limited v Aldi Stores Limited [2025] EWCA Civ 5., partly overturning a decision in the Intellectual Property Enterprise Court (IPEC) that had previously found in favour of Aldi. This legal battle, which centred around issues of trade mark infringement and passing off, is a reminder of the complexities surrounding the enforcement of intellectual property rights against lookalike products, especially in industries where brand identity and reputation are key to success.
Background
Thatchers is an established cider and alcoholic beverage producer. It launched its cloudy lemon cider product in February 2020 and obtained a UK trade mark registration for the following device mark in August 2020. It appears on the outside of its product cans, the cardboard containers of the 4-can packs and on advertising and promotional material.
Aldi is a German supermarket chain that operates just under 1000 stores in the UK. It launched its own cloudy lemon cider in May 2022 under its TAURUS brand. This was sold as 4-can packs under the sign shown below:
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A few months later, Thatchers commenced proceedings at the IPEC, claiming that Aldi had infringed its registered trade mark. It also brought a claim of passing off.
IPEC Ruling
HHJ Melissa Clarke, sitting as a judge of the High Court, handed down her judgment in January 2024. In summary, the judge found that Thatchers has a reputation in its trade mark in the UK, but that the sign used by Aldi was similar to Thatchers’ trade mark to a low degree and therefore there was no likelihood of confusion. The judge also concluded that Aldi’s sign caused a link with Thatchers’ trade mark in the mind of the average consumer, but such use did not take advantage of, nor was it detrimental to, the repute of Thatchers’ trade mark.
Thatchers was given permission to appeal, with the focus being infringement on the grounds of unfair advantage of, or detriment to, the distinctive character and repute of its trade mark.
The Court of Appeal's Reversal
The Court of Appeal’s judgement, delivered by Lord Justice Arnold, partly overturned the IPEC’s decision on unfair advantage and found that Aldi had infringed Thatchers’ trade mark, based on the following:
- Similarity of the signs: In assessing similarity, the judge found that it was a relevant point of difference that Thatchers' trade mark was two-dimensional, whereas Aldi's sign was three-dimensional. However, Arnold LJ agreed with Thatchers that the judge was incorrect to disregard the way in which Thatchers used its trade mark, namely printed on the front and rear of the cylindrical surface of cans of its products (as well as on the front, rear and top of the cardboard packaging). Therefore, the judge’s finding of similarity should have been higher.
- Aldi’s intentions: Arnold LJ reaffirmed the fact there can be a finding of unfair advantage, even if the defendant doesn’t subjectively intend to exploit the reputation of the trade mark. However, he agreed with Thatchers that Aldi had significantly departed from its house style for its TAURUS ciders and the “inescapable conclusion” was that Aldi intended its sign to remind consumers of Thatchers’ trade mark.
- Unfair advantage: The Court of Appeal concluded that Aldi’s use of its sign took unfair advantage of the reputation of Thatchers’ trade mark in order to help sell its own product, and that they achieved substantial sales in a short period of time without having to promote it.
The Court of Appeal agreed with the judge's findings that there was no detriment to the repute of Thatchers’ trade mark. Although the wording on the packaging of Aldi’s product is likely to give consumers the false impression that its product is made with real lemons, it does not necessarily follow that this is detrimental to the reputation of Thatchers’ trade mark given the judge’s unchallenged finding that consumers are not likely to be confused as to the trade origin of Aldi’s product.
Comment
This case highlights the tensions between the interests of brand owners and their competitors regarding lookalike products. It also emphasises the importance of a broad brand protection strategy. If Thatchers had not registered the label of its cloudy lemon cider, it would have had to rely on word / logo marks or passing off, and the outcome may have been very different.
Brand owners need to think creatively about how best to protect their branding in order to counter lookalike products effectively. In practice, this might mean obtaining protection not just for one label, but also various separate facets of it.
Overall, the Court of Appeal’s judgement provides some comfort for brand owners seeking to protect themselves against lookalike products. However, Aldi has already indicated that it intends to appeal, so for now, the situation remains cloudy. Watch this space!
