Court of Appeal finds in favour of Thatchers in ongoing dispute against Aldi over “lookalike” cloudy cider

In a decision highly anticipated by brand owners, the Court of Appeal held that Aldi has in fact infringed Thatchers’ trade mark through the sale of its Taurus cloudy cider product.

By way of a reminder, Thatchers brought trade mark infringement proceedings against Aldi in 2022. Thatchers, a family-owned cider business, developed a lemon-flavoured cider and invested millions into marketing the product which launched in February 2020. It also registered a figurative trade mark for the product’s label in May 2020 (the “Thatchers Device Mark”). In May 2022 Aldi launched a cloudy lemon cider under its own Taurus brand name. The presentation of the Aldi product shared a number of features with the presentation of Thatchers’ product.

Thatchers brought proceedings in the Intellectual Property Enterprise Court (“IPEC”) against Aldi, alleging that Aldi had infringed the Thatchers Device Mark and that the sale of the Aldi product constituted passing off. The trade mark infringement claim was based both on a likelihood of confusion with the Thatchers Device Mark under section 10(2) of the Trade Marks Act 1994 as amended (the “Act”) and that Aldi had taken unfair advantage of the reputation of the Thatchers Device Mark under section 10(3) of the Act. Each claim was dismissed. The IPEC found Aldi’s products had a low-level of similarity with the Thatchers Device Mark and the elements that were similar were either descriptive, ubiquitous or commonplace. The judge was not convinced that Aldi had an intention to exploit the reputation or goodwill of Thatchers Device Mark. Thatchers appealed the findings in respect of unfair advantage to the Court of Appeal.

Overview of the key points of the judgment

The Court of Appeal decision, delivered by Lord Justice Arnold on 20 January 2025, overturned the earlier IPEC decision on unfair advantage. The Court of Appeal found that Aldi had infringed the Thatchers Device Mark. The key points from the judgment are as follows:

Assessment of Aldi’s “sign”: At first instance, the judge had determined the assessment of infringement should be made based on the overall appearance of a single can of the Aldi product, and not just one face of it. The Court of Appeal found that the judge had erred in taking into account the repeating pattern of Aldi design being printed onto the can twice, and by excluding the use of the Aldi design on the cardboard 4-can pack of Aldi Product. The Court of Appeal found that the correct approach was to assess the relevant sign as the graphics placed on the cans and the cardboard 4-can pack, not the Aldi product itself.

Similarity of the sign and Thatchers Device Mark: The Court of Appeal’s finding as to the scope of Aldi’s sign also led the Court of Appeal to find that the judge had also erred in assessing the similarity of the sign and the Thatchers Device Mark. The judge had not taken into account the notional fair use of the Thatchers Device Mark, treating it as two dimensional rather than printed on the front and rear of a cylindrical container. Accordingly the Court of Appeal found that the judge should have assessed the similarity as being greater than she did.

Intention of Aldi: The Court of Appeal agreed with Thatchers that the judge had conflated the questions of whether Aldi had an intention to deceive consumers, relevant for the assessment of its claims under section 10(2) of the Act and passing off, and the question of whether Aldi intended its packaging to take unfair advantage of the Thatcher Device Mark. The Court of Appeal found that Aldi intended to remind consumers of Thatchers' product to convey that its product was similar but cheaper, thereby benefiting from Thatchers' reputation. In arriving at this conclusion Arnold LJ took into account the significant departure Aldi had taken from the packaging of its other cider products when designing the product in issue.

Unfair advantage: The Court of Appeal therefore concluded that Aldi’s use took unfair advantage of the reputation of the Thatchers Device Mark, which enabled Aldi to profit from Thatchers’ investment in both developing and promoting its product. This was supported by Aldi achieving substantial sales of their product in a short period of time without having to promote it. Arnold LJ held that the case falls squarely within the CJEU’s description in L’Oréal v Bellure of “a transfer of the image of the mark” and “riding on the coat-tails of that mark”.

Implications for brand owners

The question of “lookalike” products is an emotive issue for brand owners, supermarkets, and consumers alike. Following the IPEC decision many commentators questioned whether English law adequately protected the investment brand owners make in developing and marketing new products. Others countered that “lookalike” products maintain competition and fair pricing in the market, which in turn benefits consumers.

Whilst this case represents a victory for the brand owner, it is notable that the findings regarding the likelihood of confusion between the two product designs, and the likelihood that the Aldi product would deceive consumers for the purposes of passing off, were not subject to appeal. Rather than a broad victory for brand owners, arguably this case represents a narrower victory for a well-thought out brand protection strategy.

The fact of registering the label of the product as a trade mark, often overlooked by brand owners, and the fact that the product was successful (as demonstrated by the significant sales of the product) were the determining factors for the brand owner in this case. It emphasises the importance of a broad and holistic brand protection strategy, and how it can be used counter “lookalikes” effectively.

This may not be the last we see of this claim, as Aldi has already indicated that it intends to appeal the Court of Appeal judgment, which has clearly left a sour taste in its mouth. Arnold LJ noted that Aldi had asked the Court of Appeal to revisit the seminal decision of L’Oréal v Bellure. It will be interesting to see whether the Supreme Court would take up this invitation.