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This month (January 2025), Aldi lost its legal battle against cider maker Thatchers in what could be a defining moment for lookalike trade mark cases. The Court of Appeal ruled that Aldi’s Taurus ‘Cloudy Cider Lemon’ took unfair advantage of Thatchers’ established brand, overturning a previous High Court decision. As Aldi vows to appeal, the case raises fresh questions about where the line is drawn between competition and infringement – leaving discount retailers treading carefully in the own-brand market. Sue Streatfield, partner in intellectual property at Clarion Solicitors, tells us more.

In what some have called a ‘watershed’ moment for lookalike trade mark cases, Aldi has been defeated by Somerset drinks company Thatchers in its long-running legal battle over a ‘copycat’ lemon cider.

The Court of Appeal found last week that Aldi infringed trade mark rights by using a get up for its own-brand "Cloudy Cider Lemon" cider named ‘Taurus’, with the intention of reminding customers of Thatchers’ 'Cloudy Lemon Cider,' which the court said amounted to taking unfair advantage.

In January 2024, however, the High Court had ruled in favour of Aldi, with the Judge concluding that there was a 'low degree of similarity' between the rival products.

Thatchers appealed against the dismissal of its claim under Section 10 (3) of the Trade Marks Act 1994, and a year on from the initial judgment, the Court of Appeal ruled that there was a high degree of similarity between the products which can only have been in order to convey the message that the Aldi product was like the Thatchers product, only cheaper and that, 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.

Aldi’s attempt to avoid infringement by arguing that certain elements of its packaging design were descriptive of the product (such as lemons) failed because the Court found that the high degree of similarity was not in accordance with honest business practices, noting that there were many examples of packaging for lemon flavoured drinks which looked very different from Thatchers’.

Aldi is no stranger to the consequences of launching lookalike products, having previously battled against Marks & Spencer over ‘copycat’ gin bottles and reaching a settlement with the retailer in a dispute over its Colin the Caterpillar cake, which M&S accused Aldi of copying with its 'Cuthbert' product.

Aldi has vowed to appeal against the latest decision in favour of Thatchers – but what’s clear is that the ruling could have an impact on how brands approach legal battles around lookalike products, and that Aldi and other retailers creating own-label products will need to tread carefully when launching competing products to established brands.

A grey area

The outcome of the case ultimately creates uncertainty for discounters and supermarkets creating own-brand products as to where the lines are drawn.

It is unlawful to use a sign which is identical to a registered trade mark for goods identical to those protected by that trade mark. It may also be trade mark infringement to use a sign for goods where there is a likelihood of confusion because of similarities between the sign/mark and/or goods sold/protected. These grounds are aimed at preventing consumers buying products thinking they are associated with a particular brand owner when they are not.

However, the Court of Appeal was concerned with the different legal ground that a person infringes on a registered trade mark if he uses a sign which is identical or similar to the trade mark where the trade mark has a reputation, and takes unfair advantage of this (even if there’s no confusion about the origin of the products). In the real world, navigating the law as a brand or business is more complex.

Thatchers, in this case, has an enhanced reputation, making it even harder for the discounter to avoid falling into the trap.

When the Court is assessing similarity, various aspects of the sign are taken into account – graphics, conceptuality, similarity in words. The test is essentially so wide that the argument for similarity can come from a number of different angles, creating a point of uncertainty for the alleged infringer.

Although Thatchers’ product was not the only cloudy lemon cider available in the UK beverage market, evidence submitted at trial showed that Aldi used Thatchers’ version as a reference in developing its own ‘Taurus’-branded version, essentially asking its designers to create a hybrid design between their own brand and that of Thatchers.

Although Aldi explained that it then rowed back from that hybrid when finalising the design to try to avoid it being too similar, the Court formed the view that were was a deliberate intention to create a link between the products.

Moreover, the Court of Appeal states that there’s a difference between trying to adopt a product get up which is a safe distance away from the reputational brand in question (which may not be unlawful) and intending to deliberately take the benefit of another’s goodwill (which is more likely to be). The crucial issue then is determining whether that commercial benefit crosses the line into being unfair.

Case law says that for this advantage to be considered unfair, there must be evidence of a change in the economic behaviour of customers, or evidence that it’s likely there will be a change.

In this case, the Court considered Aldi’s evidence of sales and found that it was able to achieve substantial sales of the product in a short period of time without spending a penny on promoting it, meanwhile Thatchers had spent £2.9 million on advertising to establish a reputation for its product. Based on this, the Court of Appeal said that in the absence of evidence that Aldi would have achieved those sales without the use of the get up in question, the inference is that Aldi obtained advantage from using it, thereby profiting from Thatchers’ investment rather than competing purely on quality and/or price and on its own promotion efforts.

The outcome of trade mark infringement disputes is dependent on the relevant facts but it remains to be seen whether, in reality, an alleged infringer is going to struggle to defeat an infringement claim under this ground if it’s unable to demonstrate that the sales of the product would have been the same regardless, which may be incredibly difficult to provide evidence for.

A new precedent

In response to the Court of Appeal’s ruling, Martin Thatcher, managing director and great-grandson of the founder of Thatchers, said: “This is a victory not just for our family business, but for all businesses whose innovation is stifled by copycats”.

Whether the ruling represents a ‘watershed’ or ‘landmark’ moment in trade mark law remains to be seen, but it looks likely that it will serve as a precedent for future cases against copycat and lookalike products and may encourage brand owners to pursue claims, while making it harder for discounters to form any kind of certainty as to whether they’re riding too close to the line.

We may see a wave of challenges for lookalike products from brands come forward, and it’s likely we’ll see increased litigation involving trade mark registrations for packaging and marketing assets.

The ruling should act as a warning to discount supermarkets who are looking to launch competing products to established brands about the risks of riding on their coattails.

But equally, claims against lookalike products will continue to present challenges and brand owners may wish to take advantage of the intellectual property rights available to protect their brands (by registering trade marks and designs). Thatchers’ choices in brand protection stood it in good stead, opting to protect the design of its packaging rather than just its name and logo – had it not, the outcome may have looked rather different.

The challenge for those seeking to rely on this precedent will be to show that they too have unique and well-established trade marks.

Final thoughts

What’s clear from this battle is that there are vagaries and grey areas in the realm of lookalike cases that are difficult to judge – the fact that two different Courts, a year apart, came to opposite conclusions reflects this.

The ruling can be seen as both a win for brand owners and a warning to discounters, who will need to tread with caution when offering lookalike products or else risk the consequences of trade mark infringement. The issue is that where the line is drawn remains unclear, making designing these products incredibly difficult to navigate.

Nonetheless, Thatchers’ win underlines the value in brands investing in appropriate intellectual property protection to fight off brands attempting to free-ride off their reputation and marketing efforts.

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