With news that an out of court settlement has been reached between Marks & Spencer (M&S) and Aldi in the widely publicised dispute over caterpillar shaped cakes, we take a deeper look at copycatting in the food and drink sector.
They say that imitation is the sincerest form of flattery – but when the imitation is of a product’s brand identity, which has taken months of painstaking creative input and often no small amount of marketing budget, you can understand why some brand owners say, “enough is enough”. Copycatting is nothing new, of course. One only has to look back to the late nineties and the widely reported proceedings brought by United Biscuits against Asda in the PENGUIN vs PUFFIN saga. Some companies make it a core part of their business model to imitate the popular products of their competitors. But when is the right time to start enforcement, what is the best strategy and does the law adequately protect brand owners who don’t want to play the imitation game?
Battle of the caterpillars
The battle over the two caterpillar cakes was at the centre of the widely reported dispute between M&S and Aldi, when infringement proceedings were brought against Aldi for selling a caterpillar cake under the name Cuthbert. Many people will have enjoyed caterpillar cake at a children’s party, but can they confidently say which one? Alongside M&S’ Colin and Connie are Waitrose’s ‘Cecil’, Asda’s ‘Clyde’ and Tesco’s Curly’.
The question of why M&S filed the action against Aldi when there were already so many other rivals is an interesting one. Compared with some of the other caterpillar cakes on the market, the overall look of Cuthbert is certainly closer to its upmarket cousin. It may also be the case that the recently acquired trade mark registration in the Colin product packaging gave M&S the impetus to take on Aldi as a test case. It is no secret that M&S and Aldi have not seen eye to eye in the past, the present matter being just one of many disputes between the parties – so perhaps this was the straw that broke the caterpillar’s back. But the delay in M&S taking on any of the third-party caterpillar cake brands is likely to have led to an erosion of the distinctiveness and brand equity in ‘the original’ caterpillar cake. Taking action at the first sign of infringement can help to dissuade others from bringing out similar products and nip the lookalikes in the bud; challenging later when there are multiple copies already makes it much harder for the brand owner – and easier for the copycat to defend.
In addition to the legal proceedings, there was something of a media storm with Aldi’s tongue in cheek PR campaign tilting public perception against M&S. Pledging to pay a charity rather than the lawyers in a stream of Twitter posts, Aldi were very much seen as David fighting a heartless Goliath (won’t someone please think of the children?). Brand owners always need to remember the importance of social media when considering litigation; it can be a very valuable tool or indeed a highly damaging one if you get the strategy wrong - whether you’re the aggressor or defender. We saw a great example of this recently when M&S were on the other side of a dispute and were forced to settle with chocolatiers Choc on Choc, following a highly successful social media campaign by the apparent underdogs.
It’s all gin and games
In 2020, Lidl took a novel approach to copycatting, by strategically rebranding a product they were already selling. Hampstead Gin had been on Lidl’s shelves for a number of years, and, prior to the rebrand, had a fairly standard get-up – a rich, racing green coloured bottle with imagery and wording reinforcing its status as a London Dry gin. However, once the bottle had been given a face-lift, the similarities to the well-known Hendrick’s brand were significant and unmistakable: the bottle was now a very dark green with blue-ish undertones, the label of the gin had a floral design, and the placement of the words HAMPSTEAD and GIN, were identical to that of Hendrick’s’. Not only that but the size and alcohol content of the gin had been increased to match Hendrick’s. This was surely not a coincidence.
When William Grant & Sons, the owners of the Hendrick’s brand, brought proceedings before the Scottish Courts, it was held in an interim decision that, despite the similarities, the infringement did not constitute a likelihood of confusion, nor passing off. The Court took note of the fact that the gins were not sold through the same channels of trade (Hampstead exclusively at Lidl and Hendrick’s anywhere but Lidl), the different price points and, crucially, the different product names. However, on a much more encouraging note for brand owners, the Court did find that Lidl were riding on the coat-tails of the Hendrick’s trade mark, due to the reputation built up by the brand owner, and hence there was a preliminary finding of infringement on this (usually harder to prove) ground. An interim injunction was granted, preventing Lidl from selling the infringing bottles in Scotland.
Both parties appealed the decision, Lidl on the basis that the judge at first instance had erred in his finding that Hendrick’s had amassed a reputation in the mark as registered, noting the colour of the bottle covered by the registration was white or clear and not the dark coloured bottle in which sales had been made. William Grant & Sons’ appeal focussed on jurisdiction, requesting that the interim injunction was extended to all of the UK rather than just Scotland. Lidl’s appeal was unsuccessful, the appeal judge stating that where no colour is specified in a trade mark, extensive use of a particular colour can lead to that colour becoming associated in the minds of the relevant consumer with the mark. William Grant & Sons were successful, with the decision stating that parallel proceedings in both Scotland and England and Wales were not needed and as such the injunction should be extended across the UK.
Passing-off or passing the buck?
The Hendricks finding begs the question of whether the current laws go far enough to protect brand owners. Hendrick’s gin has been selling for over 20 years and has become synonymous as the go-to beverage accompaniment for cucumber. But what about those brands where evidencing a reputation is less easy? Or what happens if a brand cannot obtain registered trade mark protection for their products, given the notorious difficulty in obtaining shape and other “non-traditional” marks which lack verbal elements, like colours? An initial consideration may be to obtain design protection early on in the product development process. Registered designs protect the look of a product and can be relatively inexpensive, quick to obtain and a powerful weapon in the brand owner’s arsenal.
Beyond these registered forms of protection, brand owners can also rely on unregistered rights built up through use. But the question must be asked whether the law of passing off itself needs a new look.
Under common law, a third party is guilty of passing off where (i) a brand has goodwill attached to their product or service, (ii) the third party makes a misrepresentation to the public, for example leading to the belief that the goods and services are those of the brand owner or are somehow connected or authorised by the brand owner, and (iii) that there is (a likelihood of) damage. The misrepresentation element is where copycat cases come unstuck, since consumers are often not confused at all. Indeed, there is a question as to whether misrepresentation nowadays should focus less on the consumer’s reaction to the product and more on the act of misrepresenting itself. Consumers are now savvier than ever; with a smartphone in hand and information available at their fingertips, they know full well that the copycat is not the same as the leading brand, but they nevertheless buy the product because of the very fact it’s an (often cheaper) imitation. Continental Europe’s law protecting unregistered rights (the law of unfair competition) is often much more sympathetic to brand owners in such cases, as there is no requirement for confusion, and there is an argument that our own law of passing off should evolve accordingly, to reflect the realities of today’s marketplace. With passing off being a common law tort, decisions in the court are crucial for the form to evolve. Only time will tell if the law becomes more sympathetic to the plights of brand owners who decide that enough is enough.
Sadly, there is no golden gun when it comes to dealing with copycats, but there are a number of key points for brand owners to consider:
Monitor the market for copycat brands – take action at the earliest opportunity and do not wait for your competitor’s product to become one of many.
Be wary of getting caught in a media battle, unless you have a clear (and winning) strategy – whilst brand owners might see litigation as the only option, consider with whom you are dealing and the potential fallout, thanks to the power of social media.
Search before you launch – in a world where innovation in the food and drink space is becoming ever more difficult, it is unlikely your product will be the first of its kind – make sure you look at what is out there before making creating your brand identity.
Ensure you have adequate IP protection – alongside a product name, consideration should be made to product labelling and packaging, including both registered trade mark and designs.
If you have any questions or comments, feel free to contact Joe Francké or your usual Kilburn & Strode advisor.