When the Court of Appeal gives you a lemon, don’t make lemon cider

FMCG Market Background

The use of lookalike packaging has been a long-established tactic of the budget supermarkets, such as Lidl and Aldi, and has surely been a factor in their rapid success within an incredibly competitive market where margins are notoriously thin.

Lookalike packaging could be defined as one that is close enough to a well-known brand, so that everyone understands who the packaging is mimicking, but far enough not to be considered to infringe that well-known brand. The aim is to convey the message that the lookalike product is (probably) of similar quality as the well-known brand, but cheaper.

Preventing supermarkets using lookalike packaging has always been difficult for brand owners; however, the UK Court of Appeal’s recent decision in the dispute involving Thatchers Cider Company Ltd (“Thatchers”) against Aldi Stores Ltd (“Aldi”) seems to indicate a new judicial trend to clamp down on lookalikes.

Thatchers vs. Aldi Round 1 at the IPEC

In 2022, Thatchers brought proceedings against Aldi before the Intellectual Property Enterprise Court (“IPEC”) over Aldi’s use of the below sign (“Aldi’s sign”). Thatchers claimed Aldi’s sign infringed its below trade mark registration, pursuant to sections 10(2)(b) and 10(3) of the Trade Marks Act 1994, alongside a claim of passing off. Thatchers argued that Aldi’s sign was confusingly similar to the Thatchers’ mark; it also claimed that Aldi’s product took, without due cause, unfair advantage of, or caused detriment to, the distinctive character and repute of the Thatchers’ mark.

Thatchers’ mark

Aldi’s sign

In the 2024 IPEC decision[1] (reported by us here[2]), Thatchers’ claim was dismissed with Aldi not being found to be infringing nor liable for passing off. The IPEC found that the similarity between Aldi’s sign and Thatchers’ mark was too low to create a risk of confusion. It also took the view that Aldi’s sign was not taking unfair advantage of Thatchers’ reputation. This was despite Aldi admitting that Thatchers’ lemon cider product had been used as a “benchmark” for developing its own lemon cider product.

Thatchers vs. Aldi Round 2 at The Court of Appeal

Thatchers appealed the IPEC decision, specifically in relation to the section 10(3) claim.  The Court of Appeal, acting as the appellant court, handed down its judgement[3] in January 2025, with Arnold LJ stating that the IPEC had erred in a number of matters and ultimately ruling that Aldi had been infringing under section 10(3).

One example of such errors was in defining exactly what was Aldi’s sign when making an assessment on the similarity with the Thatchers mark. Arnold LJ said that, rather than viewing Aldi’s sign as the entire 3D can, as was done at the IPEC, it should have been the graphics printed on the can and the 4-pack box.  With Aldi’s sign correctly defined, the Court of Appeal found that it was much more similar to the Thatchers’ mark than what the IPEC had initially ruled.

However, the key error in the IPEC case was the court’s failure to properly consider the unfair advantage limb of the section 10(3) claim. The framework of such a claim was set by the Court of Justice of the European Union (“CJEU”) L’Oréal[4] 2009 ruling, that gave rise to the concept of “riding on the coat-tails” of a mark with a reputation.

Factors that led to the new decision included the fact that Aldi could have conveyed that its product was lemon-flavoured without it being so similar to Thatchers’ packaging, with Arnold LJ noting that the resemblance between the Aldi packaging and Thatchers’ “cannot be coincidental”[5].  Aldi’s departure from its usual house style for its Taurus cider, which was “benchmarked” on Strongbow’s get-up (shown below), also showed intent for the new design to remind customers of the Thatcher’s packaging. The fact that Aldi had been able to achieve impressive cider product sales in a short period of time and with no advertising, demonstrated 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.”[6]

Moving on, having found infringement under section 10(3), Arnold LJ refused Aldi’s invite to depart from L’Oréal under the court’s post-Brexit powers set by section 6(5A) of the European Union (Withdrawal) Act 2018 and the European Union (Withdrawal) Act 2018 (Relevant Court) (Retained EU Case Law) Regulations 2020 (SI 2020/1525).

This was in contrast to Arnold LJ departing from the EUCJ in another recent Court of Appeal decision reported by us here[7].  Arnold LJ’s differing stance in this case was due to section 10(3) not being amended or repealed by Parliament, and L’Oréal being a longstanding persuasive authority, unlike in ICE[8], where EUCJ jurisprudence on the law of acquiescence was inconsistent.

Comments

Many in the FMCG sector are viewing this decision as a victory for brand owners by striking down on lookalike branding.  However, it should be noted that Thatchers’ trade mark registration in this case was a device mark of what is printed onto their cans. Had Thatchers merely relied on their trade mark protection for the word THATCHERS, it may not have been able to stop Aldi’s use. Therefore, while this new judgement falls in the favour of brand owners, a more nuanced take on the decision is that it is only favourable insofar that brand owners have strategic trade mark filing practices such that they have trade mark registrations, with a reputation, in place to protect against lookalike attempts.

For legal practitioners, this decision shows the limits of the IPEC in hearing a claim as complex as this one.  IPEC trials are limited to 2 days, and in orbiter, Arnold LJ noted that such a limit would not have helped the IPEC judge deal with the multitude of matters.  An interesting question to pose is whether the first instance case being transferred to the High Court would have given the judge enough time and assistance to come to the same finding as Arnold LJ did in the Court of Appeal.

Martin Thatcher, managing director at Thatchers said about the judgment “We couldn’t be happier with this decision” and “This is a victory not just for our family business, but for all businesses whose innovation is stifled by copycats.”  On the other hand, an Aldi spokesperson said “We think the Court of Appeal’s decision is wrong and we intend to appeal…”  If an appeal to the Supreme Court is granted, not only will Aldi have to convince the court that the Court of Appeal was wrong, it will have to do so with the backdrop of emerging consumer and broader behavioural science research[9] showing colour and stylisation of a product get-up playing more of an important role in consumer choice than a brand name.  This research gives credence to the section 10(3) unfair advantage limb of the case, and can only act as a headwind to Aldi’s potential appeal. A synopsis of the research surrounding lookalikes and copycats is reported by us here[10].

[1] THATCHERS CIDER COMPANY LIMITED v ALDI STORES LIMITED [2024] EWHC 88 (IPEC)

[3] THATCHERS CIDER COMPANY LIMITED v ALDI STORES LIMITED [2025] EWCA Civ 5

[4]Case C‑487/07 L’Oréal SA Lancôme parfums et beauté & Cie Laboratoire Garnier & Cie v Bellure NV Malaika Investments Ltd Starion International Ltd [2009]

[5] THATCHERS CIDER COMPANY LIMITED v ALDI STORES LIMITED [2025] EWCA Civ 5 [99]

[6] THATCHERS CIDER COMPANY LIMITED v ALDI STORES LIMITED [2025] EWCA Civ 5 [114]

[8] INDUSTRIAL CLEANING EQUIPMENT (SOUTHAMPTON) LIMITED v (1) INTELLIGENT CLEANING EQUIPMENT HOLDINGS CO LTD (2) KILLIS LIMITED [2023] EWCA Civ 1451