Inspiration or copying: Aldi in the news again
Family run sausage manufacturer Heck and yogurt maker The Collective are leading a public relations campaign against the German discounter after they both allege that Aldi is selling products “almost identical” to those made by the independent producers. Both producers claim they have received complaints from customers who have felt misled into believing that they were purchasing Heck and The Collective’s products. But is such confusion enough to succeed in an action for passing off?
The law on passing off requires 3 limbs:
- Goodwill – this is the reputation built up by a brand through the course of trade i.e. Heck has invested time and money in developing what is now the UK’s number 1 brand which enjoys 50% of market share.
- Misrepresentation – this is the most debated limb as the courts have consistently ruled that mere confusion is not enough to establish misrepresentation, a customer must be deceived into believing that they are purchasing a particular product from a particular brand i.e. that when they pick up Aldi’s 10 chicken chipolatas they believe they are purchasing Heck’s Chicken Italia sausages.
- Damage – that the misrepresentation could or has caused damage i.e. due to consumers believing that Aldi’s alternative originates from Heck, Heck then experience lost sales to Aldi or damage to its brand if the Aldi alternative is not of equal quality.
Owner and co-founder of Heck Andrew Keeble sent Aldi an open non-legal letter asking that it desist sales of its Italian style chicken chipolatas. Aldi responded with a lengthy letter. Keeble has stated he is reluctant to engage in a likely lengthy legal battle with the discounter.
Aldi is no stranger to these allegations having been involved into previous court cases. In 2014 Morrocan Oil famously lost its passing off case against Aldi’s Miracle oil because the court held that customers shopping in Aldi were aware by the time they purchased the product that the Aldi own brand products did not originate from the well-known high street brands. It did not matter that when they first saw the product in the shelves they were reminded of the well-known brand. In the same year the Court held in favour of the Saucy Fish Company and Aldi was forced to remove the products from its shelves, but this was in relation to registered trade mark infringement as opposed to passing off.
The question is, should the UK courts be doing more to protect those independent retailers who have invested time and money developing a product and brand – is it fair for them to be expected to take on market giants and face high legal costs that will only eat into their profits? Are decisions such as that in the Morrocan Oil case a deterrent of innovation or is such competition in fact good for the coin conscious consumer and the UK market alike?
This update was prepared by HGF IP Solicitor Liz Cooper. If you would like further advice on this or any other matter please contact Liz or your usual HGF representative, alternatively visit our Contact Page to get in touch with your nearest HGF office.