Vodkat Case (Diageo v Intercontinental Brands [2010] EWCH 17 Ch)

As one of the world's most popular spirits, the leading vodka brands continue to enjoy vast profits and the recent interest in flavoured vodka has led to wider markets and even greater sales for companies such as Grey Goose, Smirnoff and Absolut. In 2009, the UK market for vodka alone was estimated to be worth £1.2 billion. Naturally, as with any lucrative industry, the vodka market has seen an influx of competitors vying for a share of the global profits, and supermarkets, established alcoholic beverage producers and smaller independent companies have all produced their own rival vodkas. Unsurprisingly therefore, producers of popular vodkas have been determined to protect their pole market positions and the recent case of Diageo v Intercontinental Brands [2010] EWHC 17 (Ch) has seen the sale of a vodka product that was not compliant with alcoholic drinks regulations being prevented through the law of passing off.

In Diageo v Intercontinental Brands, Mr Justice Arnold ruled in favour of the claimants (Diageo), owner of a number of world famous alcoholic brands such as Guinness, Johnnie Walker, Jose Cuervo and the international best-selling Smirnoff Vodka. Intercontinental Brands have seen great success in producing a number of drinks products to rival leaders in other sectors such as the cider and rum markets in the UK. However, in following Erven Warnink BV v J Towned & Sons (Hull) Ltd (No.1) [1979] A.C. 731, a case which helped develop the extended form of passing off in relation to a form of Dutch liqueur that was being produced by an English company, extended passing off was utilised to find that Intercontinental Brands had passed off its vodka based product, 'Vodkat' as actual vodka.

Vodkat is not a 'pure' vodka, as its 22% alcohol by volume means that it classifies for a different, lower duty class (Council Regulation No. 110/2008/EC set a minimum alcoholic strength by volume of 37.5% for vodka). Vodka is a clearly defined class of goods, which has a reputation giving rise to a protectable goodwill. With a significant amount of evidence gathered...