Thatchers v Aldi: The Fine Line Between Fair Competition and Unfair Advantage

Thatchers Cider Company Limited v Aldi Stores Limited –  Arnold LJ, Phillips LJ and Falk LJ – [2025] EWCA Civ 5 -– 20 January 2025

Summary

The Court of Appeal (CoA) overruled the decision of HHJ Melissa Clarke and held that Aldi Stores Limited (Aldi) had infringed the Thatchers Cider Company Limited (Thatchers) trade mark for the Cloudy Lemon Cider packaging (Trade Mark), by taking unfair advantage of the Trade Mark under s10(3) Trade Marks Act 1994 (TMA). The CoA held Aldi had intended to take advantage of the reputation of the Trade Mark to help it sell its own cloudy lemon cider product. Aldi’s cloudy lemon cider product was sold with its Taurus Cloudy Lemon Cider graphics on the can and the packaging (Sign). Aldi obtained an unfair advantage from its use of the Sign because it enabled Aldi to profit from Thatchers’ investment in developing and promoting the Thatchers product.

The CoA also held Aldi’s use of the Sign was not in accordance with honest practices because Aldi was aware of the reputation of the Trade Mark, intended to take advantage of it and had no justification for using the Sign.

Background

Thatchers is the proprietor of the Trade Mark shown below.

Trade Mark No.3489711

The Aldi product which bears the Sign is shown below.

Aldi’s “Taurus” lemonade cider in 440ml cans.

Background

The HC rejected Thatchers’ claims for trade mark infringement under s10(2) and s10(3) TMA. Whilst the Judge found the Trade Mark had a reputation in the UK and the average consumer would likely call to mind the Trade Mark upon seeing the Aldi product, the Court held that there was no intention to take advantage of the goodwill and reputation in the Trade Mark.

HHJ Clarke conducted a taste test of the products and found they were similar in taste but accepted the products were different. The Judge rejected Thatchers’ argument that because Aldi’s product states it is ‘Made from Premium Fruit’ and yet only contains ascorbic acid and lemon flavourings, this would cause detriment to Thatcher’s reputation.

Thatcher’s claim for passing off also failed as HHJ Clarke held that Aldi had not made a misrepresentation that it was connected in trade with Thatchers.

Court of Appeal judgment

Assessment of similarity (s 10(3) TMA)

The CoA found the HC’s assessment of similarity was flawed for the following main reasons:

• The Sign was the graphics on the Aldi product and on the cardboard four can pack, not just the Aldi product itself;
• The HC Judge focused on the distinctive and dominant components of the Trade Mark, which was the correct analysis for a s10(2) claim on likelihood of confusion, but not for a s10(3) claim on unfair advantage; and
• The CoA disagreed with the HC judge and found the Sign manifestly departed from Aldi’s house style branding for its Taurus products.

The CoA concluded the Sign and the Trade Mark closely resembled each other, and the HC judge should have found a higher degree of similarity between the Sign and the Trade Mark.

The CoA agreed with Thatchers that it is often the reproduction of inessential details, here the faint horizontal lines, which evidences copying and an intention to take advantage. Furthermore, the Aldi product had significant sales in a short period of time without any promotion, and appeared to have sold better than the nearest comparator in its Taurus range.

The CoA found that it was entirely possible for Aldi to have conveyed its product was lemon flavoured without such a close resemblance to the Trade Mark, as demonstrated by the third party lemon-flavoured products produced in evidence that did not closely resemble the Trade Mark.

Unfair advantage (s 10(3) TMA)

The CoA held the “inescapable conclusion” of its assessment of similarity was that Aldi had intended to remind consumers of the Trade Mark, to convey that the Aldi product was like the Thatchers product, only cheaper. Aldi intended to take advantage of the Trade Mark’s reputation to sell the Aldi product.

As Aldi failed to present evidence that the Aldi product would have achieved equivalent sales without the Sign and a link with the Trade Mark, the CoA inferred Aldi obtained an unfair advantage from the Sign because it enabled Aldi to profit from Thatchers’ investment in developing and promoting the Thatchers Product, instead of competing with Thatchers on quality, price and marketing efforts.

Damage to the repute of the Trade Mark (s10(3) TMA)

The CoA accepted Thatcher’s argument that the presentation of the Aldi product was misleading because it likely gave consumers the impression that the Aldi product contained real lemon juice, instead of ascorbic acid and lemon flavourings. However, it did not follow that this was detrimental to the Trade Mark given the HC’s unchallenged finding that there was no likelihood of confusion between the products. The CoA considered it tenuous that consumers would regard the Trade Mark less favourably if they did realise they had been misled as to the Aldi product ingredients.

Honest practices defence (s 11(2)(b) TMA)

The CoA held Aldi’s use of the Sign was not in accordance with honest practices in industrial and commercial matters because Aldi was aware of the reputation of the Trade Mark, intended to take advantage of it and had no justification for using the Sign.

Conclusion

This decision is a stern warning to Aldi and other brands against riding on the coat-tails of another well-established brand. However, it does not signal the end of ‘lookalikes’ and ‘dupes’.  Instead, it holds that taking advantage of another brand does not necessarily fall foul of the Trade Marks Act, only where taking that advantage is deemed unfair. Perhaps if Aldi had invested in marketing the Aldi product and provided evidence of such marketing, Aldi could have disproved the inference that its notable sales were  attributable to the link with Thatchers, and the CoA may have considered the Sign as fair competition, rather than taking unfair advantage.

Indeed, this judgment demonstrates that investment in a brand’s reputation can pay dividends when asserting trade mark infringement under s 10(3), as Thatchers’ investment in its branding, marketing and use of the Trade Mark bolstered its case that the Trade Mark was distinctive and had goodwill.

Aldi has confirmed its intention to seek permission to appeal the CoA decision to the UK Supreme Court, so this may not be the end of the cider saga.

This article was written by Partner and IP Solicitor Marie McMorrow and IP Solicitor Josephine Carver