Trade Marks and Passing off - Thatchers Cider Company Ltd v Aldi Stores Ltd

 

Jane Lambert

Intellectual Property Enterprise Court (HH Judge Melissa Clarke) Thatchers Cider Company Ltd v Aldi Stores Ltd [2024] EWHC 88 (IPEC) (24 Jan 2024)

This was an action for trade mark infringement and passing off.  It came on for trial before Her Honour Judge Melissa Clarke on 23 and 24 Nov 2024.  By para [148] of her judgment, she dismissed the claims for trade mark infringement and passing off (see Thatchers Cider Company Ltd v Aldi Stores Ltd [2024] EWHC 88 (IPEC) 24 Jan 2024).

The Dispute

The claimant, Thatchers Cider Company Ltd. ("Thatchers") makes and sells various types of cider and other alcoholic and non-alcoholic drinks.  It has registered the sign that appears on the left-hand side of the above illustration as a UK trade mark for cider and alcoholic beverages except beer in class 33 under trade mark number UK3489711 with effect from 14 May 2020. The defendant, Aldi Stores Ltd. ("Aldi"), is a retailer which supplies cans of cloudy lemon cider under the brand name "Taurus" in the packaging that appears on the right-hand side of the illustration.  Thatchers complained that Aldi had infringed its trade mark under s.10 (2) and (3) of the Trade Marks Act 1994 by marketing and distributing its drinks in that packaging and that Aldi has passed off its cloudy lemon cider as and for Thatchers by such sales and marketing.  

The Issues

At a case management conference which took place on 6 June 2023, His Honour Judge Hacon ordered the following issues to be tried:

"Trade Mark Infringement
1. Does the Claimant have a reputation in the UK in relation to the Trade Mark?
2. Is the overall appearance of the Aldi Product, as defined in paragraph 14 of the Particulars of Claim ("the Sign") similar to the Trade Mark?
3. If the answer to (2) is yes, does such similarity give rise to a likelihood of confusion pursuant to section 10 (2) of the Trade Marks Act 1994?
4. Did the Defendant's use of the Sign cause a link in the mind of the average consumer between the Sign and the Trade Mark?
5. Does the Defendant's use of the Sign without due cause, take unfair advantage of, and/or is detrimental to the distinctive character and/or repute of, the Trade Mark pursuant to s.10 (3) of the Trade Marks Act 1994?
6. Does the Defendant have a defence under s.11 (2) (b) of the Trade Marks Act 1994?

Passing Off
7. Is the Claimant the owner of goodwill in the business of the sale of the Thatchers Product associated with the Trade Mark?
8. Has the Defendant passed off by making misrepresentations leading the public, or likely to lead the public, to believe that the Aldi Product is that of, licensed, or approved by, or otherwise connected in trade with the Claimant?
9. If so, have the said misrepresentations caused damage?"

"The Sign" as defined in para 14 of the Particulars of Claim is in fact the packaging of a 4-pack of cans of the defendant's cider and will be referred to as "the packaging" rather than "the Sign" in this article.

The learned judge considered the issues slightly out of order starting with Issue 2, continuing with 3 and 1 and concluding with 4, 5, 6, 7 and 8.  

Issue 2 - Is the overall appearance of the Aldi Product, as defined in paragraph 14 of the Particulars of Claim ("the Sign") similar to the Trade Mark?

In Her Honour's judgment, the overall appearance of the Aldi packaging was similar to the Thatchers's trade mark but to a low degree. She arrived at that conclusion by the following reasoning.

Having considered Lord Justice Kitchin's observation in Comic Enterprises Ltd v Twentieth Century Fox Film Corporation  [2016] EWCA Civ 41, [2016] FSR 30, [2016] ETMR 22 that the likelihood of confusion arising from the use of a sign must be viewed from the perspective of the average consumer of the goods or services in question, the judge's first step was to identify such average consumer..   In this case, there was no dispute that the average consumer would be a retail purchaser of alcoholic beverages, including cider. 

Lord Justice Kitchin had also said at para [52] of his judgment in Specsavers International Healthcare Ltd v Asda Stores Ltd [2012] EWCA Civ 24, [2012] ETMR 17, [2012] FSR 19 that the average consumer "is deemed to be reasonably well informed and reasonably circumspect and observant" but rarely has the chance to make direct comparisons between marks and must instead rely upon the imperfect picture of them he has kept in his mind, and whose attention varies according to the category of goods or services in question. He or she normally perceives a mark as a whole and does not proceed to analyse its various details.  

After taking account of Thatchers's submissions between para [74] and [76] and Aldi's at [77], the judge was satisfied that the dominant elements of the trade mark were the central element made up of the "THATCHERS" brand with "CLOUDY LEMON CIDER" in large and decorative font underneath. The whole yellow lemons with quite large green leaves around the top and left edge and the creamy-yellow colourway of the background were also important but less dominant. In Her Honour's view, the arc or roundel in the trade mark made up of the words "Family Cider Makers" at the top of the text and "Zingy and Refreshing" below were not negligible. However, she doubted that the average consumer would bring those words to mind. He or she might remember that there was something of the roundel about the trade mark rather than exactly how that visual impression had been created. The judge thought that the "Made With Real Lemons" wording was negligible for comparison purposes because it was unlikely to be remembered by the average consumer.  The overall impression of the trade mark carried in the mind of the average consumer would be dominated by the words "THATCHERS CLOUDY LEMON CIDER" within something of a roundel, with the lemons, leaves and background colour playing important parts.

The dominant elements of the packaging were the central element on the front and back of the can made up of the bull's head device with the brand "TAURUS" beneath. Also important but not dominant was the yellow, green and gold 'swoosh' emanating from the bull's head device in a curved arc both upwards and downwards which were also on the front and back of the individual cans.  Similarly important but not dominant were the whole yellow lemons disposed around the top, bottom and left edge front and back; and the creamy yellow background. The judge did not find the green leaves to be as important in the packaging as in the trade mark.  They were smaller and detached from the lemons and there was additional green on the swoosh which made the leaves less important visually though not negligible.

The words "Cloudy Cider Lemon" were not as dominant as the equivalent words are in the trade mark, because they were in a smaller non-decorative font which looked merely functional and descriptive. They were not as centrally placed, being on the lower portion of the packaging. In addition, the word "Lemon" was somewhat lost visually in a yellow font on the cream background. The words "Made with Premium Fruit" were neither distinctive nor dominant.

Her Honour considered that the brand names THATCHERS and TAURUS were aurally and conceptually dissimilar. Visually, the first and last letters of each being the same brought a very small element of visual similarity but it was minimal, and the presence of the very distinctive bull's head device underlined the conceptual and aural dissimilarity of the brands which meant that overall the dominant elements were dissimilar.   The swooshes on the packaging were important features not found on the trade mark and were a point of visual dissimilarity.

The cloudy lemon cider/cloudy cider lemon wording was visually similar, conceptually identical and aurally similar as were the same words with the same meaning, but in a different order but both were merely descriptive of the product.  The judge was satisfied that the average consumer would understand that they had a functional use and did not operate as an indication of the source of the product. In addition, the size and decorative nature of font and its central positioning that made that wording dominant in the trade mark was not replicated on the packaging which thereby reduced the visual similarity.

The swooshes on the packaging were important features not found on the trade mark and were a point of visual dissimilarity.  The use of whole lemons and green leaves in both the trade mark and the packaging was a point of visual similarity and conceptual identity though they were dealt with quite differently. The creamy yellow background of both the mark and packaging were visually similar though not identical. Another dissimilarity was that there was no arched wording giving the effect of a roundel in the packaging as there was in the trade mark.

The judge said at para [89] that she took all the above factors into account to reach her conclusion.

Issue 3 - If the Answer to (2) is yes, does such Similarity give rise to a Likelihood of Confusion pursuant to section 10 (2) of the Trade Marks Act 1994?

Judge Melissa Clarke referred to s.10 (2) of the Act in para [61] of her judgment:

"A person infringes a registered trade mark if he uses in the course of trade a sign where because—

(a)  the sign is identical with the trade mark and is used in relation to goods or services similar to those for which the trade mark is registered, or
(b) the sign is similar to the trade mark and is used in relation to goods or services identical with or similar to those for which the trade mark is registered,
there exists a likelihood of confusion on the part of the public, which includes the likelihood of association with the trade mark."

She then considered the six requirements for infringement under s.10 (2) (b) that were stated by Mr Justice Arnold (as he then was) in Sky Plc and others v Skykick UK Ltd and another [2018] EWHC 155 (Ch), [2018] ETMR 23, [2018] RPC 5 at [285] from Comic Enterprises v Twentieth Century Fox Film Corp [2016] EWCA Civ 41 ):

"(a) there must be use of a sign by a third party within the UK; (b) the use must be in the course of trade; (c) it must be without the consent of the proprietor of the trade mark; (d) it must be of a sign which is at least similar to the trade mark; (e) it must be in relation to goods or services which are at least similar to those for which the trade mark is registered; and (f) it must give rise to a likelihood of confusion on the part of the public."

As I said in relation to Issue 2, the judge recaled Lord Justice Kitchin's words in Comic that "in assessing the likelihood of confusion arising from the use of a sign the court must consider the matter from the perspective of the average consumer of the goods or services in question and must take into account all the circumstances of that use that are likely to operate in that average consumer's mind in considering the sign and the impression it is likely to make on him. The sign is not to be considered stripped of its context "

The judge noted that confusion for the purposes of s,10 (2) (b) can arise in different ways and can include concepts usually referred to as 'direct confusion', 'indirect confusion' and 'wrong way round confusion',  Her Honour referred to paras [10] to [14] of Lord Justice Arnold's judgment in Liverpool Gin Distillery Ltd v Sazerac Brands LLC [2021] EWCA Civ 1207, [2021] ETMR 57:

"[10] It is well established that there are two main kinds of confusion which trade mark law aims to protect a trade mark proprietor against… The first, often described as 'direct confusion', is where consumers mistake the sign complained of for the trade mark. The second, often described as 'indirect confusion', is where the consumers do not mistake the sign for the trade mark, but believe that goods or services denoted by the sign come from the same undertaking as goods or services denoted by the trade mark or from an undertaking which is economically linked to the undertaking responsible for goods or services denoted by the trade mark.
…
[14] "Likelihood of confusion" usually refers to the situations described in paragraph 10 above. As this Court held in Comic Enterprises, however, it also embraces situations where consumers believe that goods or services denoted by the trade mark come from the same undertaking as goods or services denoted by the sign or an economically linked undertaking (sometimes referred to as 'wrong way round confusion')."

As I also mentioned in relation to Issue 2, the judge said that Lord Justice Kitchin summarized the key principles to be applied in assessing the likelihood of confusion in para [52] of Specsavers:

"a) the likelihood of confusion must be appreciated globally, taking account of all relevant factors;
b) this must be judged through the eyes of the average consumer of the goods who is deemed to be reasonably well informed and reasonably circumspect and observant, but who rarely has the chance to make direct comparisons between marks and must instead rely upon the imperfect picture of them he has kept in his mind, and whose attention varies according to the category of goods or services in question;
c) the average consumer normally perceives a mark as a whole and does not proceed to analyse its various details;
d) the visual, aural and conceptual similarities of the marks must normally be assessed by reference to the overall impressions created by the marks bearing in mind their distinctive and dominant components, but it is only when all other components of a complex mark are negligible that it is permissible to make the comparison solely on the basis of the dominant elements;
e) nevertheless, the overall impression conveyed to the public by a composite trade mark may, in certain circumstances, be dominated by one or more of its components;
f) and beyond the usual case, where the overall impression created by a mark depends heavily on the dominant features of the mark, it is quite possible that in a particular case an element corresponding to an earlier trade mark may retain an independent distinctive role in a composite mark, without necessarily constituting a dominant element of that mark;
g) a lesser degree of similarity between the goods or services may be offset by a greater degree of similarity between the marks, and vice versa;
h) there is a greater likelihood of confusion where the earlier mark has a highly distinctive character, either per se or because of the use that has been made of it;
i) mere association, in the strict sense that the later mark brings the earlier mark to mind, is not sufficient;
j) the reputation of a mark does not give grounds for presuming a likelihood of confusion simply because of a likelihood of association in the strict sense; and
k) if the association between the marks creates a risk that the public might believe that the respective goods or services come from the same or economically-linked undertakings, there is a likelihood of confusion."

Judge Melissa Clarke declared at para [90] that she had the Specsavers principles firmly in mind, She added that she had to assess the likelihood of confusion through the eyes of the average consumer taking into account all relevant factors including the context in which Aldi's packaging is perceived by the average consumer. 

Thatchers argued that its trade mark had acquired a high degree of distinctiveness through sales and use by the time that Aldi launched its product and that such enhanced distinctiveness had increased the risk of confusion. Aldi admitted that the word THATCHERS had achieved enhanced distinctiveness but not the trade mark.  It contended that Thatchers would have to show that the non-distinctive elements of the trade mark had gained distinctive character independently of the THATCHERS element and that was unsupported by the evidence. The judge rejected that contention and held that the packaging identified the product and improved its attractiveness.  She concluded that the trade mark had enhanced distinctiveness because of the extensive use that Thatchers had made of it.   

The judge said at para [100] of her judgment that she had gleaned the following facts that were relevant to the context in which the average consumer purchased goods:

"i) that when he is buying Aldi Product, he is in an Aldi shop or on the Aldi online shop as these are the only two sales channels in the UK;
ii) because at the relevant date Aldi did not sell Thatchers products, and had not done so since 2012, when the average consumer is buying cider in store or on the website he does not have the opportunity to make a direct comparison between the Trade Mark and the Sign;
iii) the average consumer, who is reasonably well informed and observant, would know that Aldi sells third party brands in its stores, including third party ciders;
iv) accordingly although he would not expect to see the Thatchers Product in Aldi (as Thatchers had not been sold in Aldi for many years) he would not be surprised to see something which he perceived as or mistook to be the Thatchers Product, as he might believe it was a new introduction;
v) the average consumer would pay an average level of attention to the products he is purchasing, but could be expected to browse for ciders and make a decision to purchase in a matter of a few seconds. Accordingly, he would be looking for visual cues from shelf stand-out, including colour, to draw his attention and encourage him to purchase."

On the last point, Thatchers contended that Aldi's cider looked very similar to its own when stacked on supermarket shelves, especially as it used the same colours.  Aldi replied that many lemon-flavoured drinks were packaged in those colours which the judge accepted.

Save for a tweet from someone who had visited the Aldi store and thought that he had seen Thatchers's cloudy lemon cider on display there was no evidence of actual confusion.  The judge observed that the absence of evidence of direct or indirect confusion notwithstanding the very high volumes of sales of both parties' products was a factor weighing against the likelihood of confusion but not determinative of it.

In determining whether there was any likelihood of confusion the judge took account of the low degree of similarity between the packaging and the trade mark.  She acknowledged that the mark had acquired some enhanced distinctiveness through use and the similarities in the colours and use of lemon designs but noted the differences between the words THATCHERS and TAURUS, Aldi's bull's head device and the widespread use of yellow for cider and lemon products and lemon leaf devices to identify lemon-flavoured drinks.  She added the absence of evidence of actual confusion to the assessment.  She considered evidence of Aldi's intention in designing packaging that was similar to the mark but was careful to distinguish between an intention to set up a competing business and an intention to appropriate a competitor's reputation and goodwill.  She took account of any similarity in the appearance of Aldi's products on supermarket shelves and its likely impression on the average consumer but reminded herself that bringing the claimant's mark to mind is insufficient to establish confusion.  She concluded on a global assessment that there was no real likelihood of confusion.  

It followed that the cause of action under s,10 (2) of the Act had to be dismissed.

Issue 1:  Does the Claimant have a Reputation in the UK in Relation to the Trade Mark?

Judge Hacon would have ordered this issue to be tried because s.10 (3) of the Trade Marks Act 1994 provides:

"A person infringes a registered trade mark if he uses in the course of trade, in relation to goods or services,] a sign which—
(a) is identical with or similar to the trade mark, 
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
where the trade mark has a reputation in the United Kingdom and the use of the sign, being without due cause, takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark."

in Match Group, LLC and others v Muzmatch Ltd and another [2023] WLR(D) 199, [2023] Bus LR 1097, [2023] EWCA Civ 454 ("Muzmatch"),  Lord Justice Arnold listed the requirements for a successful claim under s.10 (3) of the Trade Marks Act 1994 at para [55]:

 "(i) the registered trade mark must have a reputation in the relevant territory; (ii) there must be use of a sign by a third party in the relevant territory; (iii) the use must be in the course of trade; (iv) it must be without the consent of the proprietor; (v) it must be of a sign which is identical with or similar to the trade mark; (vi) it must be in relation to goods or services; (vii) it must give rise to a link between the sign and the trade mark in the mind of the average consumer; (viii) it must give rise to one of three types of injury, that is to say, (a) detriment to the distinctive character of the trade mark, (b) detriment to the repute of the trade mark, or (c) unfair advantage being taken of the distinctive character or repute of the trade mark; and (ix) it must be without due cause."

The first of those requirements is that "[t]he registered trade mark must have a reputation in the relevant territory" which in this context means the United Kingdom.  Having a reputation is also one of the ingredients of an action for passing off identified by Lord Oliver in Reckitt & Colman Product v Borden [1990] RPC 341, [1990] WLR 491, [1990] UKHL 12, [1990] 1 All ER 873, [1990] 1 WLR 491

Judge Melissa Clarke held that the claimant did have a reputation in the UK in relation to the trade mark by the time Aldi launched its product.   She dismissed Aldi's contention that the claimant's reputation kay only in the brand name THATCHERS at para [115] of her judgment:

"I am not with Aldi. Let us remember what goodwill or reputation is. It is "the attractive force which brings in custom" (IRC v Muller & Co Margarine Limited [1901] AC 217). I do not accept that a plain can stamped with 'THATCHERS' or 'THATCHERS Cloudy Lemon Cider' is likely to have accrued as much in sales as the Thatchers Product has achieved with the Trade Mark applied to it, nor that it could have been heavily promoted and subject to such wide engagement on social media in plain packaging as it has under the Trade Mark. That is a simply unrealistic submission, in my judgment. Once again, it is also not supported by Aldi's own evidence that improving the design of its packaging would improve the attractiveness of the Aldi Product to consumers, and enhance sales. That principle – which is surely a basic principle of marketing retail goods such as these – must equally apply to the Thatchers Product, which Mr Watkins thought did a very good job of using whole lemons in its design of the Trade Mark to communicate to customers exactly what the Thatchers Product was. That is why one of his team members emailed Aldi's third party packaging designers to say, 'add lemons as per Thatchers'. He thought the presence of lemons was attracting custom. I agree."

Issue 4: Did the Defendant's use of the Sign cause a Link in the Mind of the Average Consumer between the Sign and the Trade Mark

I referred to the requirements for a successful action under s.10 (3) of the Trade Marks Act 1994 which Lord Justice Arnold listed in Muzzmatch in relation to the need for the mark to have a reputation in the UK.  Another requirement is a link between the sign and the trade mark in the mind of the average consumer  The need to establish such a link was explained by the Court of Appeal in paras [120] and [121] of Specsavers:

"[120] Infringement under this provision requires a certain degree of similarity between the registered mark and the sign, such that the average consumer makes a connection between them. It is not necessary that the degree of similarity is such as to create a likelihood of confusion, but it must be such that the average consumer establishes a link between the registered mark and the sign; and this is to be assessed having regard to all the circumstances of the case, as the Court of Justice explained in Adidas- Salomon AG [2003] ECR I-2537 at [29]-[30]:

'[29] The infringements referred to in Art.5 (2) of [Directive 89/104], where they occur, are the consequence of a certain degree of similarity between the mark and the sign, by virtue of which the relevant section of the public makes a connection between the sign and the mark, that is to say, establishes a link between them even though it does not confuse them (see, to that effect, Case C-375/97 General Motors [1999] ECR I-5421, para.23).
[30] The existence of such a link must, just like a likelihood of confusion in the context of Art.5 (1) (b) of Directive [89/104], be appreciated globally, taking into account all factors relevant to the circumstances of the case (see, in respect of the likelihood of confusion, [Case C-251/95] SABEL [[1997] ECR I-6191], para.22, and [Case C-425/98] Marca Mode [[2000] ECR I-4861], para.40).'

[121] The fact that, for the average consumer, who is reasonably well informed and reasonably circumspect, the sign would call the registered mark to mind is tantamount to the existence of such a link: Case C-252/07 Intel Corporation Inc v CPM United Kingdom Ltd [2008] ECR I-8823 at [60]."

After being referred to Urbanbubble Limited and others v Urban Evolution Property Management Limited and others [2022] E.T.M.R. 18, at [86] to [97] by the claimant and to W3 Ltd v Easy Group Ltd [2018] EWHC 7 (Ch), [2018] E.M.T.R. 40 at [294] by the defendant, Judge Melissa Clarke remarked that both authorities relied on paras [120] and [121] of Specsavers.   She directed herself that she had to consider whether the use of the packaging gave rise to a link between the trade mark and the packaging in the mind of the average consumer, appreciated globally, having regard to all of the circumstances of the case. The fact that a sign would call the trade mark to the mind of the average consumer, who is reasonably well informed and reasonably observant and circumspect, is tantamount to the existence of such a link. There is no need for confusion.

Thatchers relied on social media comments such as "a Thatchers Lemon cider rip off", "my kids would call this a knock off brand", "very good Thatchers cider rip-off", "not quite Thatchers Lemon but for half the price there's not much to complain about" and "Not as good as thatchers but still decent" and oral comments to Thatcher's staff as evidence of a link. Aldi submitted that evidence of consumers comparing Aldi's product with Thatchers's was not sufficient as it only demonstrated a link between cloudy lemon cider products, and not the trade mark and packaging. 

The judge accepted that that might be the case with some of the comments but after taking all relevant circumstances into account, and standing in the shoes of the average consumer, she was satisfied on the balance of probabilities that seeing the packaging would call to mind the trade mark.

Issue 5 - Does Aldi's Use of the Sign without Due Cause, take Unfair Advantage of, and/or is detrimental to the Distinctive Character and/or Repute of, the Trade Mark pursuant to s.10 (3) of the Trade Marks Act 1994?

One of the other requirements of a successful claim under s.10 (3) listed by Lord Justice Arnold in Muzzmatch is that the use of the sign must give rise to one of three types of injury: (a) detriment to the distinctive character of the trade mark, (b) detriment to the repute of the trade mark, or (c) unfair advantage being taken of the distinctive character or repute of the trade mark.   

Judge Melissa Clarke referred to Mrs Justice Joanna Smith's review of the authorities and summary of the applicable principles in Lidl Great Britain Ltd v Tesco Stores Ltd [2023] EWHC 873 (Ch), [2023] E.T.M.R 30 at [73(15) – [73(27)]. Her Honour announced that she was concerned with the weakening of the trade mark's ability to identify the goods for which it had been registered by the use of the packaging. She noted that detriment would be established where there was evidence of a change in the economic behaviour of the average consumer or a serious likelihood that such change would occur in the future ( Argos v Argos Systems Inc [2018] EWCA Civ 2211).

She considered unfair advantage first.   She said that she was concerned with whether Aldi had attempted through the use of the packaging to take advantage of or ride on the coattails of the mark to exploit it and gain a benefit from that reputation and the marketing efforts which had been made by Thatchers to promote it. She referred to Case C-87/07 L'Oréal SA and others v Bellure NV and others  [2009] EUECJ C-487/07, [2010] Bus LR 303, [2009] ETMR 55, [2009] EUECJ C-487/7, [2009] ECR I-5185, [2010] RPC 1 and reminded herself that she had found the packaging to be similar to the trade mark and that the mark had a reputation.  She noted that she did not have to find intention but, where it is present, it is sufficient if the objective effect of the use complained of is to enable the defendant to benefit from the reputation and goodwill of the trade mark.  Finally, she said that unfair advantage requires a global assessment, taking into account all factors relevant in the circumstances of the case, including the strength of the trade mark's reputation, the degree of distinctive character of the mark, the degree of similarity between the marks at issue and the nature and degree of proximity of the goods or services concerned. Such global assessment may also take account of "the fact that there is a likelihood of dilution or tarnishment of the mark" where necessary (L'Oréal at [44] and [45]).

Thatchers had accepted that new entrants to a market often model their products on the market leader's, a process known as "benchmarking".  Thatchers did not complain of Aldi's benchmarking but it objected to its adopting a get-up that was similar to the trade mark rather than its usual house style.  The judge noted that the claimant's own evidence was that benchmarking involves looking at all aspects of the market leader's product and not just flavour and quality and that some similarity in the appearance of the competing product could be expected.  She was not persuaded that Akdi had departed from its house style. The brand name TAURUS, the bull's head and the swoosh device were prominently displayed.  Lemons and lemon leaves identified the product as a lemon drink which distinguished it from other Taurus ciders.  She was mindful of Daniel Alexander QC's dicta at para [80] of his judgment in Planetart LLC v Photobox Ltd and another [2020] Bus LR 2048, [2020] WLR(D) 266, [2020] EWHC 713 (Ch) of the need to distinguish between a defendant's intention to copy a claimant's business and a defendant's intention to represent falsely that it is or is connected with the claimant.   On balance, the learned judge was satisfied that Aldi did not develop its product with an intention of taking advantage of the goodwill and reputation in the trade mark.

Thatchers also argued that Aldi's adoption of packaging that was similar to the trade mark resulted in increased sales which amounted to a  change in economic behaviour.   The judge was not persuaded that it did.  The sales of Aldi's lemon cider were not disproportionate to sales of other products under the Taurus brand.  There was no evidence that the defendant's sales resulted from its taking unfair advantage of Thatchers's investment in marketing and promotion of its trade mark.   Notwithstanding her findings that Thatchers's trade mark enjoyed a reputation and had acquired enhanced distinctiveness and that Aldi's packaging was similar to that mark albeit at a low level she found neither an intention to exploit the reputation and goodwill of the mark nor evidence that the similarity of the packaging to the mark had done so.

An alternative argument was that Aldi's product was different from Thatchers's, that some consumers would not like Aldi's and would be deterred from buying Thatchers's product because of the link that the judge had found between Thatchers's trade mark and Aldi's packaging.   Aldi submitted that a mere difference in taste between one product and another is insufficient to establish a case of detriment to repute and pointed to Lord Justice Kitchin's summary of the Court of Justice's judgment in L'Oreal at para [119] of his judgment in Comic.  The judge agreed with Aldi.  She was not persuaded that consumers who did not like the Taurus product would be put off from purchasing Thatchers's simply because of the link between Aldi's packaging and Thatchers's trade mark,

Finally, Thatchers contended that Aldi's sign that it was using premium fruit when it was using ascorbic acid and lemon flavourings was misleading.   It feared that consumers would mistrust its lemon cider product because of the link between mark and packaging,   The judge rejected that contention.   Consumers disillusioned by Aldi's claims need only check Thatchers's ingredients label.

Having found no evidence of unfair advantage or detriment Her Honour dismissed the claim under s.10 (3).

Issue 6 - Does Aldi have a Defence under s.11 (2) (b) of the Trade Marks Act 1994?

At para [69] of her judgment, the judge said that if the claim under s.10 (2) or (3) were to succeed Aldi would rely on s.11 (2) (b).   That subsection provides:

"A registered trade mark is not infringed by—
................
(b) the use of signs or indications which are not distinctive or which concern] the kind, quality, quantity, intended purpose, value, geographical origin, the time of production of goods or of rendering of services, or other characteristics of goods or services, ......

..........................

provided the use is in accordance with honest practices in industrial or commercial matters."

As the claims under s.10 (2) (b) and (3) did not succeed, it was unnecessary to determine this issue,

Issue 7 - Is Thatchers the Owner of Goodwill in the Business of the Sale of the Thatchers Product associated with the Trade Mark?

The judge noted at para [71] of her judgment that the parties had agreed that if the claims in s.10 (2) (b) and/or s.10 (3) were to fail, that was likely to be an answer to the claim in passing-off.   As the trade mark claims had failed it was unnecessary for her to decide Issue 7.  However, having decided that the trade mark had a reputation for the purposes of s.10 (3) in Issue 1 she held at para [145] that Thatchers owned the goodwill in the business of the sale of the product associated with its trade mark,

Issue 8 - Has Aldi passed off by Making Misrepresentations leading the Public, or likely to lead the Public, to believe that the Aldi Product is that of, licensed, or approved by, or otherwise connected in trade with Thatchers?

Judge Melissa Clarke found no evidence consumers believed that the Aldi Product was that of Thatchers or that it had been manufactured, licensed, or approved by that company.  There had been no misrepresentation.  Accordingly, the passing-off claim failed. 

Comment

This case illustrates brands' difficulty in excluding lookalike products from the market especially when such products are distributed by powerful retailers.  Probably the key to this case is understanding the difference between benchmarking which is permissible even when it results in goods that are similar to those of an established supplier and taking advantage of the supplier's goodwill.  There is a lot of useful material in this judgment on assessing similarity, likelihood of confusion, intention and unfair advantage and damage.  Anyone wishing to discuss this case should call me on +44 (0)20 7404 5252 during the usual UK business hours or send me a message through my contact form.