A consumer is likely to desire something that has the look of a premium brand for the price of a budget version. Similarly, a budget goods producer wants to ‘borrow’ the finery of premium brands and take advantage of their reputation.
In the context of a cost-of-living crisis, it seems appropriate to consider where the law stands on the adoption of the look and feel of market leaders by budget brands. Almost all supermarkets have their ‘own version’ of famous brands, but when does this highly similar branding cross the line?
The law of passing off exists to protect intangible, commercial assets (such as trading reputation). To prove passing off, three key elements must be established:
- The goods belonging to the market leader must have goodwill (essentially a particular identifying feature or feature that a consumer will recognise);
- There must be a misrepresentation by the own/budget brand, which leads, or is likely to lead members of the public to wrongly believe the goods originate from or are associated with the market leader; and
- This misrepresentation must cause damage to the market leader’s goodwill.
Reckitt and Colman Products Limited v Borden Inc & Others (aka the Jif Lemon Case) in 1990 was one of the first major skirmishes fought in court for control of the supermarket aisles. Borden released a lemon juice product sold in plastic squeeze containers shaped like natural-sized lemons… thereby aping Reckitt’s (very well known) Jif offering. The court held Borden had not taken sufficient steps to differentiate their goods from Reckitt’s, leading to consumer deception. This decision did not give Reckitt a monopoly on selling lemon juice in plastic lemons… but emphasised that Borden failed to adequately distinguish their get-up from the Jif product.
The United Biscuits v Asda case in the late 1990s went a similar way. Asda introduced a Puffin chocolate biscuit to compete with United Biscuits’ famous Penguin. The evidence showed there had been a miscalculation as to the degree of parody which was tolerable before the product became deceptive. The court ruled that buyers were likely to mistake the Puffin biscuit for the Penguin, thereby rendering the Puffin unlawful. This was something of a pyrrhic victory for United Biscuits as Asda were allowed to continue using the name.
A perennial legal risk for a premium brand is that their status may mean customers will not be considered confused when they see something similar. In the case of Moroccanoil Israel Ltd v Aldi Stores Ltd in 2014, Aldi faced allegations of passing off for their hair product named Miracle Oil, which bore similarities to Moroccanoil. Despite the comparable turquoise-blue colour, vertical writing, and shape of the bottle, evidence did not support the conclusion that the public were likely to assume Miracle Oil and Moroccanoil came from the same manufacturer. The claim failed as the number of potentially confused consumers was insufficient to cause damage to Moroccanoil’s goodwill. The relative price points (£4 against £30) and Aldi’s tendency to stock own brand products were considered.
Freddy SpA v Hugz Clothing Ltd in 2020 confirmed post-sale confusion can be sufficient to find misrepresentation. Here, the branding elements were the rear pockets of women’s jeans in the form of unique seam shapes. Even though there may not be confusion at the time of purchase (the lower price jeans clearly being marketed under the Hugz branding), the jeans were likely to have been bought with the intention that, when worn in public, other people would believe the jeans were made by the manufacturer of the original jeans. The case confirmed the owner of goodwill in a product has the right to have that goodwill protected throughout its life, not merely at the point of sale.
In 2022, Marks & Spencer’s Colin the Caterpillar Cake (which had been in existence for over 30 years), saw supermarket chains launching their own versions. Asda introduced Clyde, Tesco featured Curly, and Aldi unveiled Cuthbert. M&S initiated legal proceedings against Aldi for trade mark infringement and passing off. While M&S and Aldi eventually reached a confidential settlement, Aldi employed a creative social media strategy to win in the court of public opinion. Their tweet, ‘This is not just any court case, this is… #FreeCuthbert,’ (referencing Mark’s famous advertising slogan ‘This is not just food. This is M&S Food’), led to a substantial increase in brand engagement on Twitter. The dispute became one of Aldi’s most prominent news stories to date.
Earlier this year, Tesco v Lidl considered whether Tesco’s sign comprising a blue square background and a yellow disk containing the words Clubcard Prices infringed Lidl’s trade mark for a graphical device consisting of a blue square background and a yellow disc containing the word LIDL. A significant number of consumers were deceived into believing that Tesco’s Clubcard Prices matched or were lower than Lidl’s price for the equivalent product. This misconception damaged Lidl’s business as shoppers opted for Tesco instead. Therefore, Tesco was found liable for passing off, and lost concurrent trade mark and copyright infringement claims.
Even in the absence of registered intellectual property rights (such as trade marks), it is important to be aware that the risk of passing off remains. If a party can demonstrate the three key elements of passing off, the product may be deemed capable of duping customers, thereby inviting legal consequences – or in the case of Aldi, an unprecedented amount of publicity.
The specialist Intellectual Property team at Howes Percival are experienced in advising clients on all aspects of brand protection and potential intellectual property infringement.
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