A bitter result for Aldi in the Court of Appeal  

The Court of Appeal has dealt a bitter blow to supermarket giant Aldi by declaring that the packaging for their Taurus cloudy lemon cider infringed a trade mark owned by cider makers Thatchers.  

Aldi is known for sailing close to the wind when it comes to branding, with its in-house products’ packaging often bearing a striking resemblance to that of major brands. The strategy has landed the supermarket in court for alleged intellectual property infringement on several occasions, with the latest being this claim by Thatchers for alleged trade mark infringement and passing off. 

What was the case about? 

For over four generations, Thatchers has produced cider from its farm in Somerset. In 2020, it launched a cloudy lemon cider using the following packaging design, which it registered as a trade mark. In 2022, Aldi began selling its own ‘Taurus’ cloudy lemon cider in a similar packaging.

Thatchers took exception to Aldi’s packaging design and brought legal proceedings against Aldi, alleging trade mark infringement and passing off. 

Trade mark infringement  

Thatchers argued that Aldi’s packaging was similar to its registered trade mark, and that the public would likely be confused between the two products. Thatchers also claimed that its trade mark had a reputation in the UK due to the extensive use the company made of it. It alleged that Aldi’s use of similar packaging took unfair advantage of, or was detrimental to, that reputation. 

Passing off  

To succeed in its passing off claim, Thatchers needed to convince the court that its case satisfied the following three tests: 

• It owned goodwill in the packaging. 

• Aldi had misrepresented that its Taurus Cider was somehow connected with Thatchers and had confused consumers as a result. 

• Thatchers had suffered damage. 

What did the court initially decide? 

Despite Aldi admitting that it had used Thatchers’ packaging as a benchmark for its own, the Judge who first heard the case decided against the cider company. 

The Judge accepted that Aldi’s packaging brought Thatchers’ product to mind. However, the judge also pointed out numerous differences between the two, notably the adoption of the different product names ‘Thatchers’ and ‘Taurus’. Based on the differences, she concluded that there was no real likelihood of confusion on the part of the average consumer. 

The Judge accepted that Thatchers’ trade mark had a reputation in the UK. Despite Aldi having explicitly referred to the Thatchers packaging in its brief to its external design team, the Judge decided that the supermarket had retained its in-house style. As such, she did not accept that Aldi intended to take unfair advantage of Thatchers’ trade mark, or that Aldi’s packaging was detrimental to it.  

Thatchers appealed the ruling to the Court of Appeal, which handed down its judgment on Monday. 

What did the court of appeal decide? 

In a 40-page judgment, the Court of Appeal overturned the initial Judge’s findings, holding that Aldi’s packaging did indeed infringe Thatchers’ trade mark. 

Lord Justice Arnold noted that Aldi’s packaging ‘closely resembles’ Thatchers’ trade mark. The ‘inescapable conclusion’ of Aldi using this specific packaging is that the supermarket had intended to remind consumers of Thatchers’ product and ‘convey the message that the Aldi product was like [that] product, but cheaper’. Aldi had intended to take advantage of the reputation of Thatchers’ trade mark to boost sales of its own product. 

Lord Justice Arnold noted that Aldi’s strategy had enabled it to make substantial sales of the product ‘without spending a penny to promote it’, and that this pointed to the supermarket taking unfair advantage of Thatchers’ well-known trade mark. 

What does this mean for brand owners? 

Given the prevalence of copycat products on supermarket shelves in the UK, the Court of Appeal’s judgment will come as a welcome relief to well-known brand owners investing substantial time and money in product development and promotion. 

Lord Justice Arnold’s comments indicate a willingness on the part of the courts to enforce registered trade marks against copycats, regardless of differences between the packaging used and the trade mark, if the facts indicate infringement. 

Ben Evans, Head of Trade Marks at law firm Harper James, commented: 

The Court of Appeal’s decision is a significant one for brand owners, who at times can feel helpless in the face of extensive product copying carried out by supermarkets. Buoyed by the Judge’s comments and armed with the relevant trade mark registrations, brands can feel more confident that the courts will step in to protect their intellectual property rights. 

While each case will still depend on its facts, this judgment represents a levelling up of the playing field for brand owners and would-be copycats. The judge’s comments should send a warning shot to supermarkets that they cannot simply freeride on an established brand’s reputation by using lookalike packaging with abandonment. If they do, the court may very well put a stop to their actions and order them to pay damages to the brand owner