In the first major IP ruling of 2025, the dispute between Thatchers Cider Company Limited (Thatchers) and Aldi Stores Limited (Aldi) has taken another significant turn following the decision handed down by the Court of Appeal on 20 January. This case, which centres on claims of trade mark infringement and passing off, has been closely watched by the food and drink industry and intellectual property enthusiasts for its implications on brand protection and the boundaries of comparative product design.
Background
Thatchers, a well-known cider producer, brought proceedings against Aldi, alleging that the retailer’s cloudy lemon cider mimicked the packaging and branding of Thatchers’ own cloudy lemon cider, thereby infringing its trade mark and constituting passing off. At the heart of Thatchers’ claim was the contention that Aldi’s product created a likelihood of consumer confusion, capitalising on the goodwill and reputation of the Thatchers brand.
The High Court, in its initial judgment, found in favour of Aldi. While the court recognised the strength of the Thatchers brand and its goodwill, it held that the differences in packaging—including the use of distinct brand names and visual elements—were sufficient to avoid a likelihood of confusion. Moreover, the court was persuaded by Aldi’s argument that its packaging was sufficiently generic so as not to constitute infringement of Thatchers’ trade mark rights. The High Court’s decision was viewed by many as a setback for brand owners seeking to challenge lookalike products in a crowded marketplace.
Court of Appeal Decision
In its judgment, the Court of Appeal overturned the High Court’s decision, siding with Thatchers on key aspects of the claim. The appellate court focused on two principal issues:
Likelihood of Confusion: The Court of Appeal found that the High Court had placed undue emphasis on certain differences in the packaging while underestimating the overall impression created by Aldi’s product. The court held that the similarities in colour scheme, typography, and layout were likely to lead the average consumer to associate Aldi's cider with Thatchers, even if momentarily. The court emphasised that while Aldi may not have intended to deceive consumers directly, it sought to benefit from the established reputation of Thatchers' product to boost its own sales without incurring significant marketing expenses. This strategy, the court noted, allowed Aldi to achieve substantial sales rapidly without significant marketing spend.
Passing Off: On the issue of passing off, the Court of Appeal determined that Aldi’s actions had taken unfair advantage of the goodwill associated with Thatchers, having achieved significant sales without any promotion. The judgment emphasised that the law of passing off protects against not only direct deception but also against conduct that erodes a brand’s distinctiveness and reputation over time.
Therefore, Aldi did indeed take unfair advantage of the Thatchers trade mark by adopting packaging that created a likelihood of consumer confusion and unfairly benefited from the goodwill and reputation of the Thatchers brand. The judgment reaffirmed that Aldi’s conduct amounted to trade mark infringement and passing off, emphasising the legal principle that competitors cannot erode the distinctiveness of an established brand to gain a competitive edge.
Lord Justice Arnold, who delivered the court's lead judgment, concluded that: "The inescapable conclusion is that Aldi intended the sign to remind consumers of the [Thatchers] trade mark. This can only have been in order to convey the message that the Aldi product was like the Thatchers product, only cheaper. To that extent, Aldi intended to take advantage of the reputation of the [Thatchers] trade mark in order to assist it to sell the Aldi product."
Our Comments
This ruling represents a significant victory for brand owners, reaffirming the courts’ willingness to protect distinctive packaging and branding from imitation. The judgment underscores the importance of considering the overall impression of a product, rather than dissecting its individual elements in isolation. This comprehensive approach will be welcomed by businesses that invest heavily in cultivating a strong brand identity.
From an IP perspective, this case serves as a crucial reminder of the importance of robust trade mark enforcement strategies. The Court of Appeal’s focus on the overall impression of Aldi’s product, rather than a granular analysis of its elements, reflects a broader trend towards recognising the practical realities of consumer behaviour. For brand owners, this emphasises the necessity of comprehensive trade mark registrations that extend beyond logos to include packaging and other distinctive elements. At the same time, the judgment highlights the importance of proactive monitoring of the marketplace to identify potential infringements early and thereafter acting swiftly to protect valuable goodwill.
Brand owners looking to protect product packaging should also consider registered design rights as another form of IP protection, which can also be relied upon to stop copycat products (as Aldi also found out in a case from last year, this time involving M&S and its light-up gin bottle – see our blog here).
Businesses are encouraged to review their branding strategies and consider whether their trade mark (and/or design right) portfolios provide adequate protection against potential infringement. Similarly, retailers should take care to ensure that their own-brand products are sufficiently differentiated to avoid legal challenges, though there are some cynics who believe that certain budget retailers gain more out of the PR generated as a result of cases such as this than they lose, and so will continue to push the limits of imitating well-known brands.
If you wish to discuss the impact of this decision on your business or the use of trade marks as part of your brand protection strategy more generally, please contact a member of the IP, Technology & Data team or your usual contact at Brodies.
