The legal dispute between Marks & Spencer and Aldi over their rival Colin the Caterpillar and Cuthbert the Caterpillar birthday cakes was the source of many headlines and Twitter posts in 2021. Trademark Attorney Luke Portnow explains what the supermarket chains' decision to settle out of court means for the UK's law of 'passing off' post-Brexit.
Colin v Cuthbert was not a 'normal' trademark dispute: the words/names are distinguishable from one another. Instead, this was a dispute (and full High Court claim) over copycat or ‘lookalike’ products.
Such lookalike products are potentially actionable in the UK under the common law tort of passing off, a type of unfair competition claim. Created by judges, remedies include injunctive relief, delivery-up, damages or an accounting of profits.
The UK courts (both pre-action and during trial) always press for amicable settlement. However, in the case of Colin the Caterpillar, many in the IP field were hoping for a full trial and decision. This would have provided some useful clarification on where exactly UK law stands on lookalikes.
This possible ‘new’ case law was of particular interest in the post-Brexit world, with the UK now falling outside the jurisdiction of the Court of Justice of the European Union (CJEU). Likewise, the EU Trademark Regulation (EUTMR) no longer applies and does not need to be considered, interpreted or applied to this UK common law tort.
Examining the status quo position
While the terms of the settlement agreement between Marks & Spencer and Aldi have not been made public, the status quo appears to have been maintained. In the UK, lookalikes are fair game and deemed an honest commercial practice, while the country's legal position remains based – at least for now – on the decisions of Jif Lemon, United Biscuits, Moroccanoil and Specsavers.
- Jif Lemon confirmed the classical trinity required for a successful passing off claim: goodwill, misrepresentation, damage or likely damage. The application and resulting success of this trinity naturally depend on the facts of each case.
- United Biscuits represents the high-water mark of a successful passing off claim. The ‘PUFFIN’ bars launched by supermarket chain Asda were highly similar to United’s long-established ‘PENGUIN’ chocolate bars (Asda even went as far as to use the phrase “Pick up a Puffin”). United won, handsomely.
- However, the claim in Moroccanoil failed because it was held that misrepresentation on the part of Aldi could not be evidenced or shown, so this purported lookalike was not actionable and could not be stopped.
- Specsavers was not a classic lookalike case, but one more about parody, although the elements for a successful (passing off) claim remain the same. The decision clearly showed, and the Court acknowledged, that competitors and their marketing teams ‘live dangerously’ and ‘sail close to the wind’. However, living dangerously and ‘drawing something to mind’ is not actionable infringement.
According to this case law, studying a competitor product and then offering a copy of it with a similar get-up is living dangerously, not passing off. The ruling in Specsavers acknowledges this to be an established market practice, with evidence showing how in-house legal teams tried to get as close to their competitors’ get-up and packaging as possible. Moroccanoil explains that consumers can see something and know it reminds them of a product, but are knowledgeable enough to study the product and see it is from a different source.
Lookalikes and the EU concept of trademarks with reputation
In the background to this, particularly with Moroccanoil, has been the UK Courts’ obvious reluctance of strictly applying the EU case law laid down by the Court of Justice of the EU (CJEU) in L’Oréal v Bellure. This case bequeathed the much-used phrase “riding on the coat-tails”, which is synonymous with taking unfair advantage of an earlier trademark with reputation.
Under CJEU jurisprudence, lookalikes are more about (and actionable) under concepts of dilution, “reputation”, “unfair advantage” and “advertising function”. The first two elements of ‘goodwill’ and ‘misrepresentation’ under the UK common law’s classical trinity of passing off do not sit neatly with this. As a result, it is hard to replicate those facts and jurisprudence on to passing off.
Of course, when it comes to actionable claims and injunctive relief from launching proceedings against a lookalike product, the EUTMR applies. CJEU case law exists as guidance, answering questions relating to clarifications of points of EU law from the courts of national member states. It is then for those national courts to apply those principles or try to map them onto the facts of the case before them.
Following Brexit, there was perhaps therefore an opportunity (and for some, a hope) that the Colin The Caterpillar case could see a depart from L’Oréal v Bellure and clarify (or even create) an important area of legal argument in the UK under the common law tort of passing off. Now that settlement has been reached between Marks & Spencer and Aldi, the chance of any such decision being handed down has vanished, at least for now.
Implications for brand owners
This legal position can cause a headache – and economic risk – for brand owners who wish to try to prevent or take action against lookalike copies of their products; in particular, those created by supermarket chains. Companies do not wish to see sales of their products fall or risk their brands being diluted by rival products, but they also have long-established commercial relations with the retailer selling that lookalike.
Care must also be taken when writing to third parties linked to those lookalikes: the manufacturer should be the target of such correspondence; otherwise, you can easily leave yourself exposed to an incredibly expensive counter-attack based on the ‘unjustified threats’ provisions under the UK Trade Marks Act (section 21).
As per the case law set out above, consumers are generally deemed knowledgeable of the copying or lookalike practices. ‘Drawing to mind’ is not infringement: competitors are quite free to get extremely close to your look and/or the actual get-up of your products. If they are not using a similar verbal or stylised trademark to one registered by the ‘original’ brand owner, action may be impossible without any decent evidence of actual marketplace confusion.
What was not considered in the case law, and what many in the UK IP profession were hoping to see discussed or even ruled upon in Colin The Caterpillar, was post-purchase confusion as a form of passing off (the cake having been removed from its packaging before being served).
As Marks & Spencer and Aldi ended 2021 with a new dispute (over supposed lookalike snow-globe-inspired liquor bottles), we may not have to wait too long for this topic to be discussed again. Given the UK court system is so heavily focused on amicable settlement, however, only brazen ‘overstepping-the-mark’ (as seen in United Biscuits) could provide for an actionable passing off claim that results in remedies for brand holders in the UK.
Luke Portnow is a Trademark Attorney at Novagraaf in the UK.