Sailing Close To The Wind: Budget Brands

• Published date: 25 May 2021
• Subject Matter: Intellectual Property, Litigation, Mediation & Arbitration, Trademark, Trials & Appeals & Compensation
• Law Firm: J A Kemp LLP
• Author: Mr Scott Gardiner

What do hair serums, salmon fillets and caterpillars all have in common? The answer is of course that they have all been the subject of high-profile trade mark disputes.

The arrival of budget supermarkets in the UK has increased competition and provided consumers with greater choice. However, in seeking to compete with more familiar and established household names, these lower-cost retailers have often 'sailed close to the wind' by bringing to market a wide range of so-termed 'copycat' or 'imitation' brands. Whilst some may argue that these 'copycat' brands simply provide busy shoppers with helpful 'visual cues' to familiar product types, it is easy to see why brand owners may take issue with the actions of their budget rivals.

Each year, brand owners invest substantially in the marketing and promotion of their products. Together with longstanding and widespread use, such investment helps brand owners secure valuable goodwill and reputation in their trade marks. After all, in the words of Lord Mcnaghten in IRC v Muller & Co's Margarine Ltd [1901] AC 217, goodwill is "the attractive force which brings custom". It is, in effect, what induces someone to buy Kellogg's corn flakes instead of the corn flakes offered by another provider.

Therefore, it is not surprising that new entrants to the market often seek to take advantage of the goodwill and reputation attached to already established third party trade marks by selling their own products under signs or in packaging which call to mind these more familiar and reputed brands. But just how close to their more premium rivals can the own-brand products offered by budget retailers be?

Moroccan Oil

Moroccanoil Israel Limited v Aldi Stores Ltd [2014] EWHC 1686 (IPEC)

This case concerned an action brought against Aldi by Moroccanoil Israel Limited (MIL). In bringing the claim, MIL argued that Aldi's sale of its own-brand hair oil under the name 'Miracle Oil' constituted passing off. In view of the alleged similarities between the respective marks and the overall 'get up' of the two products, MIL argued that consumers would:

• mistake Aldi's Miracle Oil product for Moroccan Oil;
• assume that Miracle Oil and Moroccan Oil have the same manufacturer; or
• otherwise believe that there was an association between the two retailers/products.

MIL's claim was dismissed on the basis that no evidence had been presented which demonstrated that consumers would in fact be deceived as to the origin of the relevant goods. Fatal to MIL's...