The Appeal

The appeal came after the High Court initially dismissed Thatchers’ claim against Aldi for infringement of its registered trade mark (registration no UK00003489711) (the ‘Thatchers Trade Mark’) and passing off last January. The High Court held, inter alia, that there was no likelihood of confusion, as overall Aldi’s ‘Taurus Cloudy Cider Lemon’ only bore a ‘low degree’ of similarity to Thatchers’ Cloudy Lemon Cider. Thatchers appealed the dismissal of its claim in relation to section 10(3) of the Trade Marks Act 1994 (the ‘TMA’); shifting the focus of its arguments away from likelihood of confusion under s.10(2) and towards unfair advantage under s.10(3).

Images here present in the judgment which can be read here.

Crucially, the Court of Appeal found that the first instance judge had wrongly interpreted the sign Thatchers had complained of, although it hinted that the ‘contradictory and confusing’ submissions of counsel for Thatchers had likely not helped matters. From its revised interpretation of the sign, the Court then moved to find that the similarity between the sign and the Thatchers Trade Mark was greater than the first instance judge had recognised.

Whilst the Court declined to give its opinion on whether a defendant’s intention to take advantage of a trade mark’s reputation should be of more than merely evidential relevance following L’Oréal v Bellure, it was prepared to reach ‘the inescapable conclusion’ that Aldi had intended its Sign to remind consumers of the Thatchers Trade Mark:

‘this can only have been in order to convey the message that the Aldi Product was like the Thatchers Product, only cheaper. To that extent, Aldi intended to take advantage of the reputation of the Trade Mark in order to assist it to sell the Aldi Product. The fact that (…) Aldi did not intend consumers to be deceived, or even confused, as to the trade origin of the Aldi Product does not detract from this.’

As to whether the advantage was unfair, the Court noted that Aldi had achieved significant sales of its product despite there being a lack of evidence to suggest that it had spent any money promoting it. This contrasted with the significant investment Thatchers had made in promoting its product since its launch, including spending in excess of £2.9 million on an online campaign spanning two years. Its view was that Aldi had effectively been able to free-ride on Thatchers’ promotional efforts to help it sell its own product, which was ‘precisely the kind of conduct that the law is designed to protect the proprietor of a registered trade mark with a reputation against’.

With all necessary elements made out, the Court of Appeal was able to conclude that Aldi’s use of the sign had infringed the Thatchers Trade Mark pursuant to s.10(3) TMA.

What will the judgment mean moving forward?

The Court expressly acknowledged the public attention and close scrutiny that the first instance decision had attracted; in particular the assertion by some that the judgment represented a failure by the law to protect brand owners against look-alike products. Whilst the Court did not engage with such policy debates, this judgment undoubtedly offers a high degree of consolation to those critics and arguably shifts the balance firmly back in favour of trade mark owners. Whilst Aldi has indicated that it intends to appeal the ruling, brand owners should take comfort from this decision and ensure that they have a robust IP policy to protect their brands and products.

Now more so than ever, an effective IP strategy will empower brand holders to clamp down on ‘dupes’ of their products entering the market.