When life gives you lemons, make cloudy lemon cider! The E&W High Court hands down judgment in Thatchers v Aldi trade mark case

In a recent decision which has divided trade mark practitioners across the UK, the High Court of Justice of England and Wales (the Court) found that Aldi's own-brand cloudy lemon cider product had not infringed the trade mark rights in the packaging of the product it was inspired by.  

Background

In February 2020, Thatchers Cider Company (Thatchers), a well-known cider producer, launched its canned Cloudy Lemon Cider product (Thatchers' Product) using the following mark, which was also registered as a trade mark in the United Kingdom (the Mark): 

In May 2022, Aldi, the supermarket chain which already sold a range of ciders under its brand "Taurus", launched its own cloudy lemon cider product within this range, using the following product get-up (the Aldi Product):

Thatchers consequently brought a claim before the Court, alleging trade mark infringement (under sections 10(2) and 10(3) of the Trade Marks Act 1994 (TMA)) and passing off, including on the grounds that (summarily) Aldi had intentionally mimicked the appearance of Thatchers' Product in designing the appearance of the Aldi Product, and in doing so:

1. intentionally set out to cause a link in the minds of consumers between the two, in order to encourage consumers to buy the Aldi Product; and
2. took unfair advantage of, or caused detriment to, the distinctive character and repute of the Mark, without due cause.

Aldi denied infringement, and additionally sought to rely on the defence under section 11(2) TMA, namely that, to the extent there was use of the Mark, such use was descriptive of  characteristics of the goods or services offered. 

The Court's ruling

The Court began by clarifying what the sign complained of was, given some lack of clarity in Thatchers' pleadings on this issue. It held, following certain admissions from Thatchers, that the sign complained of was the overall appearance of a single can of the Aldi Product (the Sign), and not the packaging of the 4-can pack, despite the fact that it appeared to be common ground that the Aldi Product would, more often than not, be present on Aldi's shelves in the 4-can packaging. 

Section 10(2)(b) TMA

Moving on to section 10(2)(b) TMA, the Court noted that there were six requirements established in Sky v SkyKick [2018] EWHC 155 (Ch) for a claim under this section to be made out, namely: 

1. there must be use of a sign by a third party within the UK; 
2. the use must be in the course of trade; 
3. it must be without the consent of the proprietor of the trade mark; 
4. it must be of a sign which is at least similar to the trade mark;
5. it must be in relation to goods or services which are at least similar to those for which the trade mark is registered; and 
6. it must give rise to a likelihood of confusion on the part of the public.

The Court found that the requirements at 1, 2, 3 and 5 were satisfied, leaving 4 and 6 to be determined. 

In respect of similarity, the Court noted that, given its finding in respect of what constitutes the Sign, it was in a position of having to compare a two-dimensional mark (i.e. the Mark) with a three-dimensional product (i.e. the Aldi Product). 

The Court held that the overall appearance of the Aldi Product was similar to the Mark, but only to a low degree, in light of its findings that the dominant elements of each sign were the central elements, namely "THATCHERS CLOUDY LEMON CIDER" for the Mark, and the bulls head device with the brand "TAURUS" for the Sign, which were aurally and conceptually dissimilar. The fact that whole lemons and green leaves were used on both products was a point of visual and conceptual similarity, but in the Court's view had been treated quite differently on the Sign and the Mark. 

As for likelihood of confusion, the Court agreed with Thatchers' submission that its Mark enjoyed a strong reputation and enhanced distinctiveness through use, and that enhanced distinctiveness attached to the Mark as a whole and not any individual element therein. 

Further, the Court noted that the average consumer shopping in Aldi, who is reasonably well informed and observant, would know that Aldi also sells third party brands in its stores, and would not be surprised to see something which they perceived or mistook to be Thatchers' Product. 

Despite this, the Court found that the absence of any real evidence of direct or indirect confusion despite the very high volumes of sales of both the Aldi Product and Thatchers' Product, was a (non-determinative) factor weighing against the likelihood of confusion, and further, that the colour palette used by both products (creamy-yellow and greens) was ubiquitous to lemon-flavoured drinks in the market, notwithstanding the fact that Aldi's disclosure documents showed that the design contractor had been specifically instructed to add lemons so that the Aldi Product would be a "hybrid of Thatchers and Taurus". 

Overall therefore, and given the low degree of similarity, the Court found that on a global assessment there was no real likelihood that the average consumer would be confused, and the claim under section 10(2) TMA failed. 

Kat having a pint of cider down at his local... 

Section 10(3) TMA

As for section 10(3), the Court was satisfied that Thatchers had a reputation throughout the UK during the relevant period, and that on the balance of probabilities, consumers seeing the Sign would call to mind the Mark, given evidence of numerous consumer comments online about the Aldi Product being a "rip off" or "knock off" of Thatchers' Product, which they would not have done if they just thought they were both cloudy lemon ciders. 

The remaining question was whether there was any unfair advantage or tarnishment/detriment. 

In respect of unfair advantage, the Court noted that, following L’Oréal SA v Bellure NV (C-487/07), what it was concerned with was whether Aldi had attempted to take advantage of, or ride on the coat tails of the Mark, in order to exploit it and gain a benefit from its reputation and Thatchers' marketing efforts which have been made by Thatchers.

It would also suffice if the objective effect of Aldi's use was to enable it to benefit from the reputation and goodwill of the Mark (Sky v Skykick). 

The Court observed that, in this case, although Aldi's witness admitted that Aldi had added lemons to the Sign in part because Thatchers had, he said that they had mainly done so because lemons and lemon leaves were very effective to communicate the fact to consumers that this was a lemon cider product. The Court consequently held that Aldi had endeavoured to develop a sign which was a "safe distance" from the Mark, and that the use of the Sign had not had the objective effect of taking advantage of the goodwill and reputation of the Mark. 

Thatchers' allegations of tarnishment/detriment also failed.

Passing off

Finally, in respect of passing off, the requirements which must be met are comprised of the ‘classical trinity’ arising out of the Jif Lemon case (Reckitt & Colman Product v Borden [1990] 1 WLR 491 HL) namely goodwill or reputation; misrepresentation leading to deception or a likelihood of deception; and damage resulting from the misrepresentation.

The Court held that there was no evidence before it that any consumers believed the Aldi Product to be that of Thatchers (e.g. that it had been manufactured, or licensed, or approved by Thatchers). For the reasons given in respect of finding no likelihood of confusion, the Court was satisfied that there was no misrepresentation. 

Accordingly, the passing off claim also failed, and Thatchers' case was dismissed accordingly.  

Comment

This decision has reignited the heated debate amongst trade mark practitioners about how trade mark law should apply to the launch of new products which use market leaders as benchmarks, including in respect of product packaging. Aldi must definitely be feeling vindicated, having proven itself to be on the right side of the law several times now. 

In this Kat's personal view, it would seem sensible to draw a distinction between situations where a competitor's product is used as an initial inspiration, and then either (a) steps are taken to depart from it in order to maintain a "safe distance"; and (b) steps are taken to make the two products as similar as possible. The latter appears to be what has happened here, albeit the Court was satisfied that the decision to do so was largely based on the desire to communicate to consumers the lemony nature of the product. 

That being said, this Kat did find it interesting that none of the other Taurus ciders (shown below), including the "dark fruit" and "pear" versions, feature any imagery showing the consumer which fruit they taste of: 

In any event, we're looking forward to the next one - thank you Aldi!