Aldi toasts ‘clear-cut’ win in lemon cider trademark quarrel

Discounter says there is ‘nothing cloudy’ about the much-anticipated judgment | Lawyers say tide is with the discounters | Ruling deemed ‘a sad day in fight against lookalikes’ | No evidence of consumer confusion found| Reaction from Potter Clarkson, HGF, Mishcon de Reya, Stobbs.

Aldi has won its trademark fight against a UK brewery, after a High Court judge in London ruled there was a low degree of similarity between rival cider products following a blind taste test.

Her Honour Judge Melissa Clarke held yesterday, January 24, at the Intellectual Property Enterprise Court that cider producer Thatchers failed to prove that the German discounter was “riding on the coattails of its reputation” or had “intentionally mimicked” its flagship alcohol brand.

In delivering her decision, Clarke noted that, while “she was no expert and had never tasted cloudy lemon cider before” and had found the taste of the two products to be very similar, she accepted “that they are different”.

An ‘uncloudy judgment’

Commenting on the decision, an Aldi spokesperson said: “There's nothing cloudy about this judgment. It's clear cut.”

The case emerged when Somerset-based brewer sued the German discounter following the launch of Aldi’s cloudy lemon cider in its own-brand ‘Taurus’ range in May 2022.

In its complaint, the family-run business argued that Aldi had copied the appearance of Thatchers’ flagship brand in designing the appearance of its cider product to intentionally cause a link in the minds of consumers between the two.

Aldi countered that it had used the Thatchers product as a ‘benchmark’ when developing the Aldi product, but denied infringement of the trademark. Such benchmarking, it insisted, is a common and acceptable practice in retail.

The discounter further argued that it uses a single design toolkit as a starting point for design of all Taurus cans, so that they are consistent in their design and effectively communicate the characteristics of the particular product.

Dominant elements ‘dissimilar’

In her opinion, Judge Clarke noted that Thatchers failed to identify how the sign used by Aldi infringed its trademark and that the brand names ‘Thatchers’ and ‘Taurus’ are aurally and conceptually dissimilar.

“Visually, the first and last letters of each being the same brings a very small element of visual similarity but it is minimal,” she wrote.

The very distinctive bull’s head device on the Aldi sign, she added, underlines the conceptual and aural dissimilarity of those brands, meaning that the “dominant elements are dissimilar”.

Additionally, Clarke noted that while the cloudy lemon cider/cloudy cider lemon wording is visually similar, conceptually identical and aurally similar, they were positioned in a different order.

Further, she observed that what makes this wording dominant in Thatchers’ mark—the size and decorative nature of font, as well as its central positioning— is not replicated on Aldi’s sign, reducing the visual similarity between the two signs.

While conceding that the whole lemons and green leaves used on both Thatchers’ mark and Aldi’s signs are points of visual similarity and conceptual identity, Clarke found that they are dealt with “quite differently”.

The style of the lemons “are more realistically portrayed in Thatchers’ mark”, continued Clarke, primarily because “the cross hatching and use of colour bring an element of realistic three-dimensionality and shine to the surface of the lemons”.

In contrast, Aldi’s sign was found to depict the fruit in “a flat almost cartoon-ish way”, both in the arrangement of lemons and its treatment of the leaves.

The High Court did accept that Aldi’s sign had caused a link in the mind of the average consumer with Thatchers, but then determined that, overall, the discounter’s sign had a low degree of similarity with Thatchers’ mark and that there was no evidence of direct or indirect confusion among consumers.

Judge Clarke also reasoned that Aldi’s use of the sign does not take unfair advantage of Thatchers’ reputation, and is not detrimental to the reputation of the earlier trademark.

‘Tide with discounters’

The judgment immediately sparked debate among trademark lawyers, with many expressing surprise at the decision.

As Mark Kramer, partner at Potter Clarkson, told WIPR that the case shows that the tide is firmly with discounters such as Aldi and Lidl in these litigation battles with more established brands.

“The case considers a tension much explored by the courts in recent years: where does benchmarking against market leaders and using the same marketing lexis to communicate a product’s nature and qualities become unfair?

“Here, and once again, the use of a different brand name from the reference product has saved Aldi.”

The ruling, he explained, is part of a notable trend where older and more established brands regularly try and fail to undermine the approach to product development and marketing which underpins these supermarkets’ business models.

“If market leaders indeed continue to make such challenges I would strongly recommend both ensuring a detailed and considered approach to protecting their products.”

Pointing to Marks & Spencers’ success in defending the copyright of its bestselling cake, Colin the Caterpillar, against Aldi’s Cuthbert cake as a best practice case study, Kramer added that it was essential to provide the best enforcement toolbox possible.

In such scenarios, he advised brand owners and their counsel to consider the merits of the case as dispassionately as possible to ensure the best use of those tools. “For example, would it have been worth considering copyright here as well?” asks Kramer.

For Lee Curtis, partner at HGF, the decision hit the mark.

“It struck me as quite a finely balanced decision and it’s possible Thatcher’s may appeal but that’s a question ultimately for them.

“I was slightly surprised the judge found a link between the brands and that the Thatchers branding had repute, but ultimately did not find free riding or detriment. It seems to me to be a decision which turned on a knife, or maybe more aptly some lemons in this case.”

Also commenting, Jeremy Hertzog, partner and chair of the innovation department at Mishcon de Reya, pointed out that, in the court's eyes, Aldi had done enough to move a “sufficiently safe distance away” to avoid infringement.

“When assessing likelihood of confusion, the court gave particular weight to what the average consumer perusing the cider shelves at Aldi would see: namely the 'shelf stand-out' of the product gave an overwhelming impression of Aldi's 'Taurus' brand.

“Elements such as the limited colour palette and use of whole lemons meanwhile were found to be commonplace for lemon-flavoured drinks,” he said.

Like Curtis, Hertzog found it “particularly interesting” that the court ruled Aldi had not taken unfair advantage of the goodwill and reputation in Thatchers' trademark.

“Here, the court again placed emphasis on its conclusion that Aldi endeavoured to stay on the right side of the line, and therefore it did not have an intention to exploit Thatchers' reputation and goodwill (alongside also an objective assessment).”

A ‘sad day’

Commenting on social media platform, LinkedIn, Geoff Steward, head of litigation of Stobbs, described it as “a sad day in the fight against lookalikes”, but added that it was “ripe for appeal if Thatchers has the stomach for it”.

Adding that he found the “low similarity finding very surprising”, he argued that it “illustrates the traditional trademark thinking that brand name trumps everything else, whereas consumer behavioural science says the reverse, namely that colour/shape/artwork are the most important elements of packaging to those who actually buy the product”.

These cases, he continued, “desperately need…consumer behavioural science to educate the judges on consumer decision making”, to convey that “brand name has less importance than that attributed to it by the courts”.

According to Hertzog, the case highlights the current complexities for rights holders faced with 'lookalike' products, and the importance of taking the future prospect of lookalikes into account when designing their packaging and related IP protection strategy.

As the fallout from the judgment continues, Aldi is set to face yet another court battle soon, this time with long-time opponent Marks & Spencer.

Aldi is seeking to appeal a finding of registered design infringement against it in relation to the premium supermarket’s festive gin bottle designs

Given how well the discounters have fared before the UK courts to date, Hertzog predicts that rights owners will undoubtedly be tuning into that case in order to monitor developments even more closely.

Martin Howe KC and Beth Collett of 8 New Square were instructed by Stephens Scown for Thatchers, while  Stephanie Wickenden and Niamh Herrett were instructed by Freeths for Aldi.

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