Cider brand Thatchers enjoyed a significant win in the Court of Appeal recently in the case of Thatchers v Aldi. Thatchers took action against Aldi for a lookalike version of its cloudy lemon cider, successfully overturning the High Court. Great news for Thatchers, but what does this mean for brand owners with their own experience of lookalikes of their products?

1. Is it easier to get businesses that sell lookalikes to stop?

In short, it could be, but only if brand owners protect themselves well in the first place.

Thatchers' win was thanks to a figurative trade mark for the get up of its packaging which included its brand name on the front. This is a step forward from previous cases, where the inclusion of the brand name, combined with a lack of point-of-sale confusion, have prevented brand owners from bringing successful cases against lookalikes.

For the appeal, Thatchers relied on the grounds that the judge had erred in finding that Aldi had not taken unfair advantage of its trade mark and/or that Aldi's use of their sign was detrimental to the reputation of the Thatchers trade mark.

It did not appeal the High Court's other findings that consumers were unlikely to be confused as to the origin of the product or that Aldi had been passing off its goods as those created by or originating from Thatchers. So, this case focused on the extended protection provisions of section 10(3) of the Trade Marks Act 1994.

The Court of Appeal held that Aldi had taken unfair advantage of Thatchers' trade mark on the grounds that there was a clear intention for Aldi's sign to call to mind features of Thatchers trade mark, as a result of Aldi's departure from the house style used for its Taurus cider range, the inclusion of minor details (such as horizontal lines) and evidence that Aldi had referred to the Thatchers mark as part of the design process.

Thatchers was able to point to Aldi's intention to take advantage of the reputation of its mark, and couple this with evidence that Aldi had not made any investment in the marketing of its equivalent Taurus product to which the sign was applied.

The successful outcome was also thanks to a couple of additional factors:

Thatchers had a registered a trade mark for the get up of its product (i.e. the label/presentation of the can). This meant that it did not have to fall back on the tort of passing off. Passing off claims can often fall flat where brand owners fail to provide evidence that consumers were deceived into thinking that the lookalike product was connected to or provided by the brand owner in some way. Indeed, Thatchers claim for passing off at first instance failed for this reason.

The Court of Appeal considered the marks to have a greater degree of similarity than had been found at first instance. The Court of Appeal took a global assessment of the marks rather than focussing on the component elements of the mark and the sign. This is good news for brand owners in future cases.

The type of goods here are fast moving consumer goods (cider), meaning that consumers are likely to pay only limited attention when purchasing the goods. The Court of Appeal's assessment that the marks were more similar than identified at first instance meant that consumers were more likely, when looking at the Aldi product, to create a link with the trade mark. Although the amount of attention paid by consumers is more usually discussed in the context of claims based on likelihood of confusion (remember that no confusion was found at the High Court, and that was not part of this appeal), confusion is still relevant when considering the similarity between a brand owner's mark and a lookalike sign for the purposes of unfair advantage claims.

2. What should brand owners do differently now to improve their chances of success against lookalike products?

Consider registering a trade mark for the get up of your packaging. In the current case, Thatcher's having a trade mark covering the presentation of its product was key to its success. Whilst registering trade marks can be expensive, they can be very effective. The recent success of M&S against Aldi in relation to light up gin bottles confirms that registered designs are also powerful tools in the armoury, so take advice on the best strategy overall for your products;

Keep detailed information about how any new branding was developed. Thatchers was able to show that it had invested in the creation of a new brand identity for this product. Aldi's departure from its house style to call to mind the Thatchers design was telling;

Document the investment spent in the launch of a new brand. Thatchers was readily able to point to the extensive investment that it had made in the promotion of its brand, and this was persuasive both for proving that Thatchers' mark had a reputation, and for drawing attention to Aldi's lack of investment in marketing;

Write to infringers promptly. Thatchers' prompt action in relation to this matter was noted by the Court. It was also important that they acted quickly given that the Aldi product was only on the market for a short, but successful, period of time.

3. How can retailers better defend themselves against a lookalike claim?

Ensure that when they are taking "inspiration" from other products on the market, they do not mirror one brand too closely. It could be that they "mosaic" their design based on a number of different products to avoid falling within the scope of a "transfer of image" that created a problem for Aldi.

They must not assume that use of a different brand name will be sufficient to avoid a claim for infringement, particularly where the right relied upon covers other distinctive elements of the product "get-up". For example, in the current case, although Aldi used the name "TAURUS" on its cider products, the Court of Appeal still found that there were other parts of Thatchers' mark besides the Thatchers name that made the mark distinctive overall.

They could document their design process better to demonstrate (if it is true) that the inspiration came from sources other than the leading brand. Evidence of independent design processes, and independent marketing to establish a new product, will be useful to support a defence of this nature.

4. How should I decide whether I want to bring a case against a lookalike product?

Strategic importance

First consider how important the product in question is to your business. It is important to make strategic decisions about what is affecting your business. Consider the level of sales before and after the launch of a lookalike product. Consider whether there is a noticeable difference. This is only one factor but might help determine whether the legal spend is justified. 

Litigation can be expensive, but that cuts both ways. In our experience, sellers of lookalikes only tend to fight back when they genuinely believe they are in the right; many cases are settled at a very early stage as many responsible retailers are keen to put things right if they have overstepped the mark. 

The strategic importance might extend beyond the financial considerations of one particular product that has been copied. Some brand owners decide to take a stand as a matter of reputation, so that their business is not seen in the market as tolerant of "rip-offs", "dupes" or lookalike products.

If this is the case, ensure you take advice on your overall brand enforcement programme. A focus on online take downs for infringing products (for example, using our Saturn service), and consistently taking enforcement action against infringers by writing to them and opposing any similar trade marks, are all important factors to make it clear to the market that it is a mistake to target you and your products.

Consider the market that you operate in

Part of Thatchers' success was that consumers paid limited attention to the type of goods when purchasing them, and Thatchers could point to the visual aspects of their get up (other than their brand name) as being distinctive to the customer's eye.

In addition, it is clear that Aldi did not invest in marketing its goods because it only keeps new products in its stores for limited periods of time to test them out (perhaps bringing them back and marketing them depending on their success). It is unclear whether the same decision would have been reached in a case involving more expensive goods, or in a case where an alleged infringer had invested in marketing its lookalike product.

Consider the forum for bringing a claim

The Court of Appeal noted at the start of its judgment that the first instance claim had been brought in the Intellectual Property Enterprise Court (IPEC) where the length of any hearing is capped to two days. During these two days, the first instance judge was also required to listen to evidence on claims under two separate grounds against Aldi, plus Aldi's defence of each of those grounds.

This means that the first instance judge had nowhere near the same amount of time or opportunity to consider the evidence in the same amount of detail as the appeal judges.

Choosing the right court is a complex multi-factorial assessment, and it is important you consider this carefully. Our team has significant experience in both the High Court and the IPEC, meaning we have first-hand knowledge of the different options and what is best for a specific scenario. 

If you are facing issues with lookalikes, do get in touch with John Coldham, Khemi Salhan or a member of our team as we have seen significant success for clients and this judgment suggests that results might be even stronger in future.