Apples to lemons to look-alike

Thatchers is a well-known British cider maker. It has been making cider of over 100 years, but for the last few years it has been fighting a look-alike branding battle with the discount supermarket, Aldi.

It all started with Thatchers’ first foray into fruit-flavoured cider. Seeing an emerging trend for lemon-flavoured alcoholic drinks, it launched its Thatchers Cloudy Lemon Cider in February 2020. £3 million pounds of marketing spend, a registered trade mark for the graphics used on the Thatchers Cloudy Lemon Cider product and its packaging and £20 million in sales later, the move from apples to lemons looked justified.

Big bets on big trends don’t go unnoticed in the market. Discount supermarkets, in particular, have enjoyed plenty of success imitating these successful trends with look-alike products. It was Aldi that jumped on the cloudy lemon cider cart and launched its Taurus Cloudy Lemon Cider, the Aldi Cider, in May 2022.

IPEC leaves a sour taste

Thatchers sued Aldi in September 2022 in the Intellectual Property and Enterprise Court (IPEC), a specialist UK court for intellectual property disputes of a certain scale. Thatchers made claims against Aldi for trade mark infringement and passing off. This was, essentially, on the basis that the Aldi Cider copied the graphics for Thatchers Cloudy Lemon and its UK trade mark.

Thatchers lost. No likelihood of confusion, no unfair advantage, no deception or damage. A surprising, but not wholly unexpected, outcome given the difficulties brands have experienced with tackling look-alike products in the UK.

If life gives you lemons, go to the Court of Appeal

Thatchers appealed the IPEC decision to the Court of Appeal. The appeal focused on overturning the decision on unfair advantage (under s.10(3) of the Trade Marks Act 1994). It did not appeal the decision on likelihood of confusion (under 10(2) of the Trade Marks Act 1994) or passing off.

The Court of Appeal would not, ordinarily, challenge findings of fact made by the IPEC judge. This would rule out, for example, a reassessment of factual matters, such as whether there is similarity between the Thatchers Cloudy Lemon UKTM and the Aldi Cider. However, the Court of Appeal found that certain conclusions by the IPEC judge were “rationally insupportable” and wrong in law or principle, and so it looked again at the fundamental trade mark infringement analysis.

Comparing apples with apples

The Court of Appeal found that the IPEC judge had made the wrong comparison between the Thatchers Cloudy Lemon and the Aldi Cider.

At the IPEC, the judge compared the Thatchers Cloudy Lemon UK trade mark (a 2-dimensional image) with a single can of the Aldi Cider (a 3-dimensional product). It also failed to consider the use of the Thatchers Cloudy Lemon UKTM in real life, and so failed to make a comparison between the 2D packaging of the Thatchers Cloudy Lemon and the Aldi Cider. This led it to the conclusion of low similarity between the Thatchers Cloudy Lemon and the Aldi Cider. The Court of Appeal had a different view. The correct comparison was between the Thatchers Cloudy Lemon UK trade mark (as registered and as used in real life) and the graphics on the cans and packaging of the Aldi Cider.

Considering the similarity test from this perspective, the Court of Appeal found the level of similarity to be “somewhat greater” than the judge found in IPEC.

It’s so unfair!

A finding of similarity gave Thatchers a route to re-argue unfair advantage. This argument had two main elements: that Aldi intended to take unfair advantage and that it did, in effect, take unfair advantage of the Thatchers Cloudy Lemon. As the Court of Appeal neatly summarised, Aldi was not competing on price, quality and promotional effort, but rather brazenly copying the features of the Thatchers Cloudy Lemon and communicating to consumers that the Aldi Cider was “like the Thatchers’ Product, only cheaper”. And so, the Aldi Cider did take unfair advantage of the distinctive character of the Thatchers Cloudy Lemon.

Intention

Aldi had actively intended for the design of Aldi Cider to remind consumers of the Thatchers Cloudy Lemon. Aldi already had a range of apple and other fruit ciders under its Taurus house-brand when it launched the Aldi Cider. The Taurus brand had a simple, dark, no-frills design pallet. However (see image below), Aldi departed from its house style for the Aldi Cider in the following ways:

• It used images of fruit and foliage.
• It used a light colour palette.
• The TAURUS brand name used black lettering against a light-coloured background.

It was also found in evidence that Aldi Cider was not just inspired by the Thatchers Cloudy Lemon, the Thatchers Cloudy Lemon was seemingly the only inspiration. During the design process for the Aldi Cider the only product featured in a “Market Review” document produced by Aldi’s design agency was the Thatchers Cloudy Lemon, and Aldi asked its design agency to produce “a hybrid of Taurus and Thatcher’s [sic] – i.e. a bit more playful – add lemons as Thatcher’s etc”.

Effect

Aldi had not just intended to take advantage of the Thatchers Cloudy Lemon, but it had succeeded in doing so. Despite spending a grand total of zero pounds on marketing the Aldi Cider, it had made almost £1 million in sales revenue.

Consumers had also commented extensively on the same-but-cheaper message with social media comments revealed in evidence including “a Thatchers Lemon cider rip-off”, “my kids would call this a knock-off brand”, “very good Thatchers cider rip-off”, and “not quite Thatchers Lemon but for half the price there’s not much to complain about”. The only plausible explanation for this outcome was that consumers saw and understood the message loud and clear, that the Aldi Cider was ”like the Thatchers’ Product, only cheaper”. It had achieved the transfer of image of the distinctive character of the Thatchers Cloudy Lemon to the Aldi Cider.

Let’s be honest, it really was unfair

Despite the finding of unfair advantage, Aldi attempted to argue that it had defences to trade mark infringement. Both of these failed.

Most damaging for Aldi is that the Court of Appeal found that Aldi’s conduct did not fall within the realms of honest business practices. The intent and success in taking unfair advantage was manifestly not honest. Aldi also tried to argue that it had only copied elements of the Thatchers Cloudy Lemon that were descriptive or not tied to branding (for example, using images of lemons and the descriptive wording “cloudy lemon cider”). That analysis did not give the full picture and Aldi could not simply ignore the overall similarities with the Thatchers Cloudy Lemon.

A final round?

Aldi intends to appeal this decision to the Supreme Court, although it is not yet clear on what grounds.

For brands, a useful lesson here is to obtain trade mark protection for the graphics used on their products and their packaging. Thatchers eventually succeeded because it owned a registered trade mark for the graphics used for the Thatchers Cloudy Lemon but it could have made its life easier if it had a wider portfolio of packaging marks to rely on against Aldi.

Case details at a glance

Jurisdiction: England & Wales
Decision level: Court of Appeal
Parties: Thatchers Cider Company Limited (claimant/appellant) and Aldi Stores Limited (defendant/respondent)
Citation: [2025] EWCA Civ 5
Date: 20 January 2025
Decision: dycip.com/thatchers-aldi-cider-appeal