• 4 min read

IP Horizons: The appeal of Cloudy Lemon Cider

Presenting Back to Basics (21)

Ok, we admit it isn’t really the weather for sitting outside with a chilled glass of lemonade or lemon cider, but in the hope of sunnier times to come we thought you might enjoy reading about the Court of Appeal’s  judgment, handed down on Monday 20 January 2025, in the fairly swift trade mark infringement dispute between Thatchers and Aldi – [2025] EWCA Civ 5. You will undoubtedly have heard mention of this case – which essentially looked at the Thatchers branding, trade mark and reputation in its cloudy lemon cider and whether or not the Aldi Taurus cloudy lemon cider constituted trade mark infringement, and/or passing off and/or unfair competition in a trade mark sense.

Interestingly, to me at least, when Thatchers brought out their cloudy lemon cider in 2020, they applied to register the whole label as a trade mark and this trade mark appears on its 440ml lemon cider cans and the cardboard packaging of its 4-packs of cider cans.

Background of the Case

As we all know, Aldi is a German supermarket chain that is well-known for its low prices and its packaging which often calls to mind larger brands. The Aldi lemon cider, launched in May 2022 under its own brand “Taurus”, but in a departure from its usual house style, the cloudy lemon cider labels included imagery of whole lemons and green leaves to the packaging.  A few months later, an aggrieved Thatchers launched legal action for trade mark infringement and passing off

The judge at first instance handed down her judgment in January 2024 and ruled that there was no evidence of misrepresentation, so the passing off claim failed. As for confusing similarity under s 10(2)(b) Trade Marks Act 1994 (TMA), the judge found that there was a low degree of similarity between the signs and, in the absence of any real evidence of direct or indirect confusion, there was no real likelihood of confusion. Thatchers chose not to appeal either of these decisions.

The Focus of the Appeal

The focus of the appeal was the judge’s finding that Aldi’s packaging did not take unfair advantage or tarnish the reputation of Thatchers’ trade mark which of course focuses on intention under s10(3).

The leading judgment from the Court of Appeal was handed down by Lord Justice Arnold. It was accepted by the court that Aldi used Thatchers’ lemon cider as the “benchmark” for its product and packaging, but this is permissible at law within certain parameters.

Court of Appeal’s Judgment

Lord Justice Arnold held that in assessing similarity, the judge at first instance had disregarded the fact that the Thatchers trade mark was printed on the cylindrical surface of the can and so whilst it was 2 dimensional and not 3D as the Aldi sign was, the cylindrical surface took away from the 2D content of the mark.  A detailed discussion ensued between the Court of Appeal judges about the relevance of intention to a finding of passing off (i.e. intention to deceive), rather than the passages that focused on unfair advantage (i.e. intention to take advantage). 

Nevertheless, Arnold LJ found that Aldi had departed from its house style for Taurus ciders and imitated features of the Thatchers lemon cider, which showed “an intention to take advantage of the reputation of the trade mark in order to convey the message that Aldi’s cider “was like the Thatchers Product, only cheaper”. Haven’t we heard this before, I hear you chime?  Almost certainly if we look back at cases concerning ‘look alike’ products over the years.

In deciding whether Aldi had infringed s10(3) TMA, the Judges helpfully set out the key issues which were:

  1. whether Aldi’s sign gave rise to a “link” between the sign and the trade mark in the mind of the average consumer; and
  2. whether such link gave rise to a specified injury, namely: taking unfair advantage of the distinctive character or repute of the trade mark (also known as “free riding”), or detriment to the repute of the trade mark (also known as “tarnishment”). 

Evidence of Unfair Advantage

The Court found that Aldi intended to take advantage of the reputation of the trade mark to help sell its own product. It was clear from the social media evidence that at least some consumers received the intended message loud and clear (for example, consumers referring to it as “a Thatchers Lemon cider rip off”). Mr Justice Arnold said, “that was an unfair advantage because it enabled Aldi to profit from Thatchers’ investment in developing and promoting the Thatchers Product rather than competing purely on quality and/or price and on its own promotional efforts.”  The fact that Aldi had spent little or no money on the promotion of its own Taurus product was also noted.

Tarnishment and Honest Commercial Practices Defence

The Judges confirmed that they agreed with the Judge at First Instance’s decision that the Thatchers trade mark was not tarnished by the Aldi product despite the fact that the Aldi product contained no real lemons! The Court accepted that the use of language like “made with premium fruit” on the Aldi packaging, was likely to give consumers the impression that it did contain real lemon juice and the fact that this wasn’t true didn’t necessarily mean that there was detriment to the reputation of Thatchers’ trade mark. For there to be tarnishment, consumers would need to become aware that they had been misled about the composition of Aldi’s cider, and as a result, regard Thatchers cider less favourably. But there was no evidence this had occurred!

Outcome of the case

As a result, the Court found that Aldi couldn’t rely on the descriptive use defence in s 11(2)(b) TMA because it wasn’t right to dissect the Sign into its constituent elements for the purposes of applying section 11(2)(b), and to argue that, because some of those elements are descriptive, the Sign as a whole falls within section 11(2)(b). The Judges also maintained that Aldi couldn’t rely on the honest commercial practices defence, because their use of the sign was unfair competition!

Industry reaction and next steps

We do love a case on lookalike products!  Although opinion is often divided by brand owners and trade mark lawyers on the one hand, celebrating the positive outcome for companies protecting themselves against unfair competition from lookalike products and companies wanting to ‘uphold competition’ and ‘cheaper prices for consumers’ on the other, who will be disappointed with this outcome.

Aldi has indicated that they intend to appeal the decision and I, of course, will be waiting for Colin the Caterpillar to wade into the debate!

Disclaimer

This information is intended for general informational purposes only and does not constitute legal advice. We recommend seeking professional advice before taking any action on the information provided. If you would like to discuss your specific circumstances, please feel free to contact us on 0800 2800 421.

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