In the latest of Aldi’s well publicised legal disputes, the Court of Appeal handed down judgment on 20 January 2025 in Thatchers Cider Company Ltd -v- Aldi Stores Ltd [2025] EWCA Civ 5, finding that Aldi had infringed Thatchers’ trade mark in relation to its cloudy lemon cider product. This is undoubtedly a significant victory for Thatchers – but what does this mean for the seemingly unstoppable rise of the “dupe” across the retail sector?
Background
To overlook the rise of “copycat” products in the retail space in recent years would seem near impossible. Across a range of industries, but particularly for food/drink and the beauty and skincare spaces, we have seen a notable increase in the availability of low-cost alternatives to particular well known or “cult” products.
In the legal sphere, Aldi has become somewhat of a poster child for this trend and for broader ethical concerns regarding the role of intellectual property law in protecting and encouraging innovation. In the last few years alone, disputes between Marks and Spencer and Aldi have been heavily publicised, with proceedings having been pursued through the Courts in relation to both Christmas gin products and the famous “Colin the Caterpillar” (or, in Aldi’s case, Cuthbert) birthday cake. It is perhaps not particularly surprising in the circumstances that a further battle has emerged, this time involving Somerset based family cider business, Thatchers.
Thatchers -v- Aldi: the Court of Appeal’s decision
In this particular case, Thatchers issued High Court (Intellectual Property Enterprise Court) proceedings against Aldi in relation to the sale of Aldi’s “Taurus” cloudy lemon cider since May 2022 and perceived similarities between the branding of the parties’ respective lemon cider products. Thatchers argued that Aldi’s Taurus cider infringed Aldi’s own trade mark registered in relation to the branding of its cloudy lemon cider, which was brought to market in February 2020.
The claim initially went to trial in November 2023 and, despite admissions from Aldi that it used Thatchers’ product for the purposes of “bench marking”, the High Court found in Aldi’s favour, being satisfied that no unfair advantage was gained by Aldi and that there was no substantial likelihood of confusion in the eyes of the consumer, with there only being held to be a low degree of similarity between the products.
The decision of HHJ Clarke was appealed by Thatchers, and the matter considered by the Court of Appeal in December 2024. On 20 January 2025, the Court of Appeal handed down its decision, overturning the first instance decision of the High Court and finding that Aldi had in fact infringed Thatchers’ trade mark.
Thatchers had appealed the first instance decision on multiple grounds, including in relation to the question as to whether Aldi had taken unfair advantage of Thatchers’ trademarked product, noting the marketing efforts undertaken by Thatchers.
The Court of Appeal found that the packaging of the Aldi product had taken unfair advantage of the distinctive character of Thatchers’ trade mark, under section 10(3) of the Trade Marks Act 1994. In doing so, the Court of Appeal made a number of observations on the “Taurus” product, including that Aldi had departed from its typical house style for its other Taurus ciders, which could not be considered to be coincidental.
The Court also considered the circumstances in respect of the marketing of the two products. The fact that Aldi did not intend for consumers to be deceived as to the origin of the Taurus product did not absolve Aldi from liability under section 10(3). Whereas Aldi had been able to sell significant volumes of the product without any evidence of having been required to market it, Thatchers had, by contrast, invested significant sums into the marketing of its cloudy lemon cider product. There was, therefore, an unfair advantage gained, in that Aldi had been able to profit from Thatchers’ investment in developing and marketing its product. This was found to be particularly striking in circumstances where the Aldi product was not considered to be of the same quality as that of Thatchers, as it did not contain real lemon juice.
Comment
The decision will no doubt be a significant blow to Aldi, but welcome news to brand owners in the context of the proliferation of copycat products across the retail sector – as well as coming as a reminder that the law can step in to support smaller, family run businesses as well as international giants. The decision will, however, likely be seen by some to disadvantage consumers who may be looking to make cost savings in a challenging economic environment.
The latest decision, and the recent legal battles in this sector more generally, are a reminder of the importance to brand owners of protecting their intellectual property to the greatest extent possible, particularly when creating disruptive branding in the industry in question. Consistency in branding and marketing may also help to cement a brand owner’s reputation in its field and mitigate against the risks of copycat products.
Some have queried whether the flurry of recent cases will simply open the floodgates to a spate of further claims against some of the key players in the retail sector. Although this may, to a degree, depend on what comes next for Aldi in this case, it is worth keeping in mind that the reputational and cost risk of proceedings of this nature – particularly in the context of opponents of Aldi’s size – is likely to remain a deterrent for many.
In any event, the battle is unlikely to be over just yet. Aldi has already indicated an intention to appeal the recent decision, and it will be interesting to see whether a Supreme Court judgment can bring further clarity in the retail space. We will report further on this topic after that decision.
For further information on this topic, please contact Laura Scott.
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