On 20 January 2025, the Court of Appeal handed down its judgment in the trade mark dispute between Thatchers Cider Company Limited (“Thatchers”), the largest family-run independent cider producer in the UK, and Aldi Stores Limited (“Aldi”), the UK subsidiary of a German supermarket operator, in relation to Aldi’s alleged copycat cider product. The case has been watched with interest by trade mark practitioners and brand owners, given its potential implications with regard to the extent to which UK law protects brand owners against “lookalike” products.

What is the dispute about?

The dispute centres around whether Aldi’s “Taurus” branded cloudy lemon cider product, launched in May 2022, infringes Thatchers’ cloudy lemon cider product, launched in February 2020. The products are pictured below:

Thatchers had taken the step of registering the below sign as a trade mark in the UK, in respect of “cider; alcoholic beverages, except beer” in class 33 with effect from 14 May 2020:

(the “Trade Mark”).

On 22 September 2022, Thatchers commenced proceedings in the High Court against Aldi for infringement of the Trade Mark pursuant to sections 10(2) and 10(3) of the Trade Marks Act 1994 (the TMA), and alleging passing off.

What happened at the High Court stage?

Thatchers was unsuccessful in respect of its claims. The Judge concluded that there was only low similarity between the Trade Mark and the sign used by Aldi, because the principal dominating features of each mark were, in relation to the Aldi product, the TAURUS and bull’s head device signs and, in relation to the Thatchers product, the THATCHERS brand name. It was held these elements were dissimilar. Where there was any similarity between the marks, for example, in relation to the colour palette and use of imagery, the Judge ruled that these features were not distinctive. There was also no evidence of confusion, which is always a significant factor when it comes to claims based on a likelihood of confusion (or passing off). The claims pursuant to section 10(2) of the TMA and for passing off failed.

In relation to the claim pursuant to section 10(3) of the TMA (namely that the Trade Mark has a reputation and the use by Aldi took unfair advantage of or caused detriment to that reputation), the Judge ruled that Thatchers did have a reputation in the Trade Mark in the UK, that Aldi’s use would call to mind Thatchers’ Trade Mark, but that that there was no unfair advantage or detriment to the repute of the Trade Mark by virtue of such use. In assessing whether there was detriment, the Judge even blind tasted the ciders (as she was directed to do!), and determined that “the products are not so significantly different that the taste of the Aldi Product is liable to cast the Thatchers Product sold under the Trade Mark in a negative light”.

What did Thatchers appeal?

Thatchers appealed the ruling only in relation to section 10(3), namely Thatchers’ reputation in the Trade Mark. It did not therefore pursue a finding that there was a likelihood of confusion pursuant to section 10(2) or that there was passing off.

This strategy of only appealing 10(3) allowed the Court of Appeal to spend more time considering the section 10(3) arguments in more detail, which appears to have paid off, as set out below.

What has the Court of Appeal decided?

The Court of Appeal has ruled in Thatchers’ favour and found that Aldi’s use of the sign did take unfair advantage of the Trade Mark for the purposes of section 10(3) of the TMA.

In particular, the Court found as follows:

• Similarity of Signs: The Judge held the sign used by Aldi closely resembled the Trade Mark, and this closeness was not coincidental. This was confirmed by the departure from Aldi’s usual style for other Taurus products and the fact that the Thatchers product had been used as a reference point in the design of the Aldi product. The Judge concluded that “the inescapable conclusion is that Aldi intended the Sign to remind consumers of the 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”.
• Unfair Advantage:
  • The case falls “squarely within the Court of Justice’s description in L’Oreal v Bellure of a “transfer of image of the mark” and “riding the coat-tails of that mark”, as alleged by Thatchers. Aldi had intended the Trade Mark to remind the public of the Thatchers mark, in order to boost sales and there was at least some evidence that consumers had understood the message, as evidence by social media posts describing the product as, e.g., “a Thatchers lemon cider rip-off”.
  • The Aldi product achieved a significant number of sales in a very short period of time, without any promotion (thereby suggesting that an unfair advantage was in fact obtained by use of a sign which called to mind the Thatchers Trade Mark). The Judgement notes that Aldi had not produced any evidence that it would have achieved the same level of sales without using the sign.
• Detriment: The Aldi product is not the same quality as the Thatchers product, because it does not contain real lemon juice. However, the Court did not interfere with the Judge’s finding at the High Court stage that the taste between the products was not so different that the taste of the Aldi product was liable to have a negative effect on the Thatchers product (this is a finding of fact she was entitled to make). Further, whilst Thatchers’ arguments that the Aldi product was misleading because the words “made with premium fruit” suggested that the product contained real fruit juice, it was not accepted that this would be detrimental to the Thatchers product. There was no evidence that any consumers had been misled about the composition of the Aldi product and had then regarded the Thatchers product less favourably. The Court of Appeal concluded that there was no detriment to the repute of the Trade Mark caused by Aldi’s use of the sign.
• Defences: Aldi sought to rely on a defence pursuant to section 11(2)(b) of the Trade Marks Act because the features of the sign it used which were similar to the Trade Mark were descriptive/non-distinctive. This argument by Aldi was dismissed by the Judge, who concluded the Trade Mark was deemed distinctive by the High Court Judge and that “it is illegitimate to dissect the Sign into its constituent elements for the purposes of applying section 11(2)(b) and to argue that, because some of those elements are descriptive, the Sign as a whole falls within section 11(2)(b)”.
• Aldi also tried to claim that its use of the sign was in accordance with honest practices in industrial and commercial matters, but this failed because the Court found that Aldi’s use amounted to unfair competition.
• Finally, Aldi also asked the Court of Appeal to depart from the case of L’Oreal v Bellure (i.e., EU law relating to unfair advantage). This was an option for the Court following the UK’s departure from the EU. However, the Court declined to do so. Amongst other reasons, the Court felt that a departure would create considerable legal uncertainty, and the case provides a principled basis for courts and tribunals to make decisions relating to the alleged unfair advantage of a trade mark. The Court commented that Aldi had essentially asked it to “discard all of the existing learning on unfair advantage and to start again from scratch, but without providing any road map for that exercise”. Interestingly, the Judge also commented that he “cannot resist the irony that Aldi should be inviting this Court to depart from L’Oreal v Bellure in a case where, I believe, Thatchers would probably have a remedy for Aldi’s use of the Sign under many systems of law, including German law, in unfair competition law even apart from trade mark law”.

What does the case mean for the future for brand owners/lookalike products in the UK?

The case will certainly be celebrated as a victory for brand owners, although Aldi has indicated that it will appeal, so we will have to watch this space for a further judgment in the future.

Whilst the case is a positive step for brand owners, it is important to note the following:

1. Without a registration for its packaging, Thatchers would not have been successful in this case. Registering packaging in the UK seems therefore key for having a chance at fighting lookalikes which copy the get-up of a product, rather than the product name.
2. Not only had Thatchers registered its packaging, but it had also invested significantly in promoting the product (it had spent £2.9 million doing so), and it had sales of £29.6 million in a relatively short period of time. These numbers were significant, and meant that Thatchers was able to establish a reputation in the Trade Mark in the UK. Had it not been able to do that, the case would have rested on whether it could prove a likelihood of confusion with the Trade Mark, or misrepresentation for the purposes of passing off, both of which failed at the High Court stage and were not appealed.

The Thatchers business is over 100 years old and has an established reputation in the UK as a cider brand. It will have had a good existing platform from which to secure high sales, not to mention it seems to have had the budget to invest significantly in the required level of promotion of the product to achieve a reputation. The reality is that it may be harder for newer, smaller businesses to reach the levels of sales/marketing spend required to establish a reputation, and therefore protect themselves against lookalikes. One option for those companies may be to file a registered design as designs are relatively inexpensive to file, and design right claims do not require the claimant to prove a likelihood of confusion (they must demonstrate that the two designs give the same overall impression). However, it is not an ideal solution, as designs protect only specific visual aspects of the appearance of packaging (such as the shape and any patterns, but not any words or written elements) and competitors can often make reasonably small amendments to avoid infringement. Protection also expires after 25 years, whereas trade marks offer enduring protection, provided they are used correctly and renewed.

It goes without saying that trade mark owners would also be well advised to steer clear as much as possible of design elements on their packaging which are commonplace (such as lemons for lemon cider). Whilst it is perfectly understandable to include such elements, doing so opens the door for infringers to argue those features are commonplace and inevitably makes arguing infringement cases such as this one much harder. Brand owners should consider using distinctive features in their packaging and then registering those distinctive features as trade marks, both individually and collectively, so that they have the ability to take action even if only parts of the packaging are copied.

What is the position in the USA in relation to lookalikes?

The Judge commented as set out above that Thatchers would likely have other remedies in Europe outside of trade mark infringement, such as unfair competition. But what about the position in the U.S.?

In the U.S., a claim by Thatchers for trade mark infringement would require neither registration nor reputation to be successful. While registration of the design would provide a basis for relief under Section 32(1) of the Lanham Act (the federal statue governing trade mark law), Section 43(a) provides a cause of action for infringement of unregistered trade mark rights. Product packaging is in many instances deemed to be inherently distinctive, and Thatchers’ packaging would be no exception. Accordingly, Thatchers would only need to prove that there is a likelihood of confusion with Aldi’s packaging for a court to find in its favor. Likelihood of confusion is not necessary in all instances, however. Trade mark dilution claims do not require a showing that consumers would likely be confused but instead relies on reputation (usually referred to as “fame” in the U.S.) of the design in which rights are asserted.

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