Thatchers Cider Co Ltd v Aldi Stores Ltd [2025] EWCA Civ 5

Aldi's Taurus Cloudy Lemon Cider packaging was found by the Court of Appeal to take unfair advantage of Thatchers' registered lemon cider trade mark under section 10(3) of the Trade Marks Act 1994, reversing the IPEC. Thatchers' appeal on tarnishment failed.

Facts

Thatchers Cider Company Limited (“Thatchers”), the largest family-run independent cider producer in the United Kingdom, launched Thatchers Cloudy Lemon Cider in February 2020. It is the proprietor of UK Registered Trade Mark No. 3489711, a device mark registered with effect from 14 May 2020 for “cider; alcoholic beverages, except beer” in Class 33 (“the Trade Mark”). The Trade Mark was applied to the front and rear of 440ml cans and, in slightly modified form, to the four-can cardboard packaging. Between August 2020 and August 2022 Thatchers spent over £2.9 million promoting the product, and between February 2020 and August 2023 achieved sales of 11.6 million litres, worth £29.6 million at retail value.

In May 2022 Aldi Stores Limited (“Aldi”) launched Taurus Cloudy Lemon Cider as a seasonal variant of its existing Taurus own-brand cider range. Aldi used the Thatchers Product as its “benchmark” both for the cider itself and for the packaging design, which was developed by an external agency, Black Eye. The only product illustrated in the “Market Review” section of the design agency’s project reports was the Thatchers Product, and an Aldi email of 28 October 2021 asked to see “a hybrid of Taurus and Thatcher’s [sic] – i.e. a bit more playful – add lemons as Thatcher’s etc”. Unlike the Thatchers Product, the Aldi Product contained no real lemon juice, using instead citric, malic and ascorbic acids and “natural lemon flavour”. It achieved £1.66 million of sales from mid-May to December 2022, selling out within ten months, with no evidence of any promotional spend.

Thatchers sued in the Intellectual Property Enterprise Court (“IPEC”) for infringement under sections 10(2) and 10(3) of the Trade Marks Act 1994 and passing off. HHJ Melissa Clarke dismissed all claims (Thatchers Cider Company Ltd v Aldi Stores Ltd [2024] EWHC 88 (IPEC)). She found the Trade Mark had a reputation and enhanced distinctiveness as a whole (not merely in the word THATCHERS), and that consumers would make a link between the sign and the Trade Mark, but she found the similarity to be “low”, rejected the allegation of intention to exploit Thatchers’ goodwill, and found neither unfair advantage nor tarnishment. Thatchers appealed only against the dismissal of the section 10(3) claim; Aldi served a respondent’s notice with five additional grounds.

Issues

The Court of Appeal (Arnold LJ giving the sole reasoned judgment, Phillips and Falk LJJ agreeing) had to decide:

• what the “Sign” complained of actually was, on the pleadings and as a matter of the Court’s own assessment;
• whether the judge erred in her assessment of similarity between the Trade Mark and the Sign;
• whether the judge erred in her treatment of Aldi’s intention, in particular by conflating an intention to deceive with an intention to take advantage of the reputation of the Trade Mark;
• whether Aldi’s use of the Sign took unfair advantage of the reputation of the Trade Mark, and in particular whether the judge failed to address Thatchers’ pleaded “transfer of image” case;
• whether the use was detrimental to the repute of the Trade Mark (tarnishment);
• whether Aldi had a defence under section 11(2)(b) of the 1994 Act; and
• whether the Court should exercise its power to depart from the ruling of the Court of Justice in Case C-487/07 L’Oréal SA v Bellure NV [2009] ECR I-5185.

Arnold LJ expressly disclaimed any wider policy role, noting that the case had attracted commentary about “look-alike” packaging:

It is not the function of this Court to enter into these policy debates. Our task is to apply the law enacted by Parliament to the facts of this case.

Arguments

Thatchers

Thatchers argued that the judge had wrongly treated the Sign as a three-dimensional can rather than the graphics on the cans and packaging; that she had wrongly treated the two-dimensional/three-dimensional distinction as a point of difference; that she had wrongly imported her section 10(2) similarity assessment into section 10(3) without regard to the different purpose of the exercise; that she had confused intention to deceive with intention to take advantage of reputation; that her finding that Aldi had not significantly departed from its Taurus house style was rationally insupportable; that she had wrongly discounted the faint horizontal lines common to both, which evidenced copying; that her comparison of Aldi’s sales figures with other Taurus ciders was flawed; and, centrally, that she had wholly failed to address the pleaded case of “transfer of image” and riding on the coat-tails of the Trade Mark within L’Oréal v Bellure.

Aldi

Aldi argued that L’Oréal v Bellure was concerned with imitation products, distinguishing “mere lookalikes” from “replicas and imitations”; that the claim involved trade mark overreach because the only distinctive component of the Trade Mark was the word THATCHERS, the remaining elements being descriptive or decorative, so that the registration only protected against signs including something similar to THATCHERS; that no (or no unfair) advantage had been taken; that textual differences in the information panels supported the finding of low similarity; that it had a defence under section 11(2)(b); and, as an argument of last resort, that the Court should depart from L’Oréal v Bellure.

Judgment

Standard of review

It was common ground that findings of fact could only be disturbed if rationally insupportable (Volpi v Volpi [2022] EWCA Civ 464, [2022] 4 WLR 48) and multi-factorial evaluations only if vitiated by an error of law or principle. The Court noted it had received “much more assistance on section 10(3) than the judge did”, the appeal hearing lasting as long as the whole IPEC trial.

Identifying the Sign

Arnold LJ held that, on the proper reading of the Particulars of Claim, the Sign was “the graphics on the cans and on the cardboard 4-can pack” – that is, the design printed on the front and rear of each can and on the front of the packaging – not the three-dimensional Aldi Product. He would have reached the same conclusion as a matter of his own assessment. The judge had erred both in treating the repeats on a can as a single three-dimensional sign and in excluding the packaging graphics, although she had been right in practice not to treat the side information panel as part of the Sign (which disposed of Aldi’s respondent’s notice ground 1).

Similarity

The judge erred in treating the two-dimensional/three-dimensional contrast as a point of difference. She had also wrongly disregarded how Thatchers actually used the Trade Mark: infringement is assessed on notional fair use, and where a mark has been used, actual use is “normally the paradigm case of notional fair use”. Similarity should therefore have been assessed as somewhat greater than “low”. However, Arnold LJ rejected Thatchers’ complaint that a single similarity assessment could not serve both section 10(2) and section 10(3); such a “short-cut” was permissible provided the tribunal did not allow factors relevant only to likelihood of confusion to condition the section 10(3) analysis.

Link and intention

Aldi’s challenge to the finding of a link failed: there was ample evidence, including social media comments quoted by the judge, and Aldi did not show the finding was rationally insupportable. On intention, the judge had transposed passages from PlanetArt LLC v Photobox Ltd [2020] EWHC 713 (Ch), [2020] ETMR 35, applying passing-off reasoning about intention to deceive to the unfair advantage question and placing weight on Mr Watkins’ evidence that the product was to be understood as Taurus-branded – relevant to deception, but much less relevant to the pleaded allegation of intention to take advantage of reputation. The judge’s finding that Aldi had not significantly departed from its house style was obviously wrong: the Sign departed in the colourway of the TAURUS wording, the prominent lemons and leaves, and the reduced prominence of the “swooshes”. She was also wrong to discount the faint horizontal lines when assessing intention, since “it is often the reproduction of inessential details which gives away copying”. Re-assessing the matter, Arnold LJ held:

The inescapable conclusion is that Aldi intended the Sign to remind consumers of the Trade Mark. This can only have been in order to convey the message that the Aldi Product was like the Thatchers Product, only cheaper.

Sales figures and unfair advantage

The Court found force in Thatchers’ criticisms of the judge’s comparison of sales figures, but held that the limited data permitted only the conclusion that the Aldi Product “achieved significant sales in a short period of time without any promotion” and appeared to outsell the nearest comparator, Taurus Cherry. The unpleaded suggestion that the wider Taurus range rode on Strongbow’s coat-tails had not been properly investigated and no conclusion was reached on it.

The decisive error was the judge’s complete failure to address Thatchers’ pleaded and argued case of transfer of image, which Arnold LJ described as “a clear error of principle”, requiring the Court to consider the matter afresh. Applying L’Oréal v Bellure at [41] and [49], the case fell squarely within the concepts of transfer of image and riding on the coat-tails. Aldi intended the Sign to remind consumers of the Trade Mark; consumers received that message; and Aldi achieved substantial sales without spending “a penny” on promotion. In the absence of evidence that Aldi would have achieved equivalent sales without the Sign, it was a legitimate inference that it obtained the advantage it intended. That advantage was unfair because it enabled Aldi to profit from Thatchers’ investment rather than competing purely on quality, price and its own promotional efforts. The fact that the Aldi Product did not contain real lemon juice was a supporting, though not essential, factor. Aldi’s “overreach” argument was rejected: the judge had found (unchallenged and rationally supportable) that the Trade Mark as a whole had a reputation distinct from the THATCHERS brand.

Detriment to repute

Thatchers’ tarnishment appeal was dismissed. The judge’s conclusion on taste differences was “unassailable”. As to the “made with premium fruit” wording, Arnold LJ accepted the presentation was misleading as to the presence of real lemon juice, but held that detriment to the Trade Mark’s repute did not follow: consumers were not confused as to origin, there was no evidence of complaints, and a consumer who considered the point would appreciate the materially different presentation of the Thatchers Product and would likely conclude, correctly, that this explained Aldi’s cheaper price.

Section 11(2)(b)

The defence failed. Distinguishing Tomatin Distillery Co Ltd v Tomatin Trading Co [2021] CSOH 100, [2021] SLT 1327, Arnold LJ held the Sign was a composite sign which, viewed as a whole, was distinctive of Aldi and did not concern characteristics of the goods. He held that it is “illegitimate to dissect the Sign into its constituent elements for the purposes of applying section 11(2)(b)”. In any event, applying the honest practices factors he had set out in Samuel Smith Old Brewery (Tadcaster) v Lee [2011] EWHC 1879 (Ch), [2012] FSR 7, Aldi’s use was not in accordance with honest practices “because it was unfair competition”: Aldi knew of and intended to take advantage of the reputation, disclosed no legal advice, had no justification, and Thatchers complained promptly.

Departure from L’Oréal v Bellure

The Court declined to exercise its power under section 6(5A) of the European Union (Withdrawal) Act 2018 to depart from the ruling. Six reasons were given: Parliament has not amended sections 5(3) or 10(3) post-Brexit; harmonisation remains the legislative policy; the ruling supplies a principled basis for decision and Aldi offered no alternative; the ruling is not isolated but built on earlier case law and has been applied countless times; the academic criticism asserted was uncited, and Jacob LJ’s critique on the return of L’Oréal v Bellure to the Court of Appeal ([2010] EWCA Civ 535, [2010] Bus LR 1579) was obiter, focused on comparison lists, and had overlooked Whirlpool Corp v Kenwood Ltd; and departure would cause considerable legal uncertainty without evidence of commercial difficulty. Arnold LJ added, obiter, that he could not resist noting the irony that Aldi invited departure in a case where Thatchers would probably have a remedy in unfair competition law under many other systems.

Implications

The decision is a significant appellate application of L’Oréal v Bellure to supermarket own-brand “look-alike” packaging, but it is important not to overstate it. The Court did not lay down a rule that look-alikes infringe; it applied the established nine conditions for section 10(3) and corrected identified errors of principle in the judge’s reasoning. The outcome rested on the particular unchallenged findings that the registered device mark, taken as a whole, had a reputation and enhanced distinctiveness independent of the word THATCHERS, and on the Court’s own re-assessment of intention and advantage.

Several points of practical guidance emerge. First, claimants must plead the sign complained of clearly; the court will form its own view, and a mark should generally be compared with the two-dimensional graphics used on packaging rather than the physical article. Secondly, notional fair use includes the proprietor’s actual manner of use, so the printing of a two-dimensional mark on a curved can does not create a “point of difference”. Thirdly, tribunals may make a single similarity assessment serving both section 10(2) and section 10(3), but must not allow confusion-focused reasoning to infect the section 10(3) analysis. Fourthly, and importantly for brand owners, the deliberate absence of confusion is no answer: an intention that the sign should remind consumers of the mark, in order to convey a “like brands, only cheaper” message, may support a finding of unfair advantage even where consumers know precisely whose product they are buying. Fifthly, evidence of copying may be found in the reproduction of inessential details such as faint background lines, and in departures from the defendant’s own house style.

The judgment also confirms that section 11(2)(b) is to be applied to the sign as a whole, and that a composite sign cannot be dissected so that descriptive components generate a defence; and that the honest practices proviso is unlikely to be satisfied where the use amounts to unfair competition. Where a defendant relies on legal advice, non-disclosure of that advice deprives it of weight.

Limits are apparent. The tarnishment claim failed, showing that misleading presentation by a defendant does not automatically damage the claimant’s mark absent evidence of consumer awareness and adverse reaction. The Strongbow “benchmarking” point was left undecided because it had not been properly investigated in IPEC – a reminder that the streamlined IPEC procedure constrains the evidence available. Arnold LJ also left open, expressly, the theoretical question why a defendant’s intention should be more than evidentially relevant to unfair advantage, and the requirement of a change in economic behaviour was not separately argued. Finally, the refusal to depart from L’Oréal v Bellure signals that, absent a conclusion that the Court of Justice’s interpretation is erroneous, assimilated EU trade mark jurisprudence will continue to be applied in the interests of international harmonisation.

Verdict: The Court of Appeal (Arnold LJ, with whom Phillips and Falk LJJ agreed) allowed Thatchers’ appeal against the dismissal of its claim under section 10(3) of the Trade Marks Act 1994 and substituted a finding that Aldi had infringed the Trade Mark by taking unfair advantage of its reputation. Thatchers’ appeal against the finding of no detriment to the repute of the Trade Mark was dismissed. Aldi’s respondent’s notice grounds, including its section 11(2)(b) defence, were rejected, and the Court declined Aldi’s invitation to depart from the Court of Justice’s ruling in L’Oréal v Bellure.

Source: Thatchers Cider Co Ltd v Aldi Stores Ltd [2025] EWCA Civ 5