Thatchers Cider Company Limited v Aldi Stores Limited

The Court of Appeal confirms that a trade mark proprietor with a reputation can prevent a third party’s use of a similar sign where that use creates a link in the average consumer’s mind and results in a transfer of image or other unfair advantage, even in the absence of confusion. The assessment requires a global evaluation of factors including reputation, similarity, intention, evidence of advantage and whether use is without due cause or contrary to honest practices.

The claimant, proprietor of UK Registered Trade Mark No. 3489711 for a device applied to citrus-flavoured cider packaging, appealed the IPEC judge’s dismissal of its claim under section 10(3) of the Trade Marks Act 1994 arising from Aldi’s launch of a visually similar own-brand cider. The High Court (IPEC) had found a low degree of similarity, reputation for the mark but rejected unfair advantage and detriment claims. The Court of Appeal (Arnold LJ, Phillips LJ, Falk LJ) reconsidered the identification of the defendant’s sign, the degree of similarity, Aldi’s intention, and whether there had been a transfer of image (as described in L’Oréal v Bellure). The central issue was whether Aldi’s use of the sign took unfair advantage of, or was detrimental to, the trade mark with a reputation.

(1) Overall disposition: The appeal is allowed. The Court of Appeal substituted a finding that Aldi infringed the Trade Mark pursuant to section 10(3) of the Trade Marks Act 1994. (Arnold LJ giving the lead judgment; Phillips LJ and Falk LJ agreeing.)

(2) Identification of the sign: The Sign complained of is the composite graphics reproduced on the front and rear of each can and on the front of the four-can cardboard pack, not the product as a whole or a single flat face. The judge erred in treating the mark as two-dimensional and the Sign as three-dimensional; the correct comparison is between the Trade Mark as registered and the sign as actually used (paras 74–79, 82–83).

(3) Requirements for section 10(3): The court reiterated the assimilated case-law that nine conditions must be addressed for a s.10(3) claim: reputation, use, course of trade, lack of consent, similarity of sign, relation to goods/services, existence of a link in the consumer’s mind, one of the three types of injury (unfair advantage, detriment to distinctive character, detriment to repute), and absence of due cause. The analysis concentrates on link and unfair advantage (paras 37–40, 41–49).

(4) Similarity and enhanced distinctiveness: The registered device has enhanced distinctiveness from use and promotion. The Sign and Trade Mark are similar to a greater degree than the judge found when the Sign is properly defined and the mark’s actual use is considered; certain descriptive or ubiquitous elements (lemons, pale yellow palette, descriptive text) reduce weight, but overall resemblance is significant (paras 54–61, 82–86, 97–99).

(5) Link and intention: The judge’s finding that the Sign called the Trade Mark to mind is supported. The Court of Appeal found that, on the proper comparison and reading of the evidence (including design process documents, departure from Aldi’s house style, and reproduction of faint horizontal lines), Aldi intended the Sign to remind consumers of the Trade Mark and thereby intended to take advantage of its reputation to communicate the message “like [the proprietor’s product], only cheaper” (paras 62–66, 97–99).

(6) Unfair advantage (transfer of image): Applying the Court of Justice’s guidance in L’Oréal v Bellure, the court held that Aldi objectively obtained the advantage it intended: social-media comments, significant unpromoted sales of the Aldi Product in a short period, and documentary evidence supported an inference that a transfer of image occurred and that the advantage was unfair because it allowed Aldi to exploit the claimant’s marketing investment rather than compete solely on product quality or its own promotion (paras 110–116, 133–134, 114).

(7) Detriment to repute: The court upheld the judge’s decision to dismiss the detriment/tarnishment claim. Taste differences were insufficiently marked and there was no evidence that consumers who discovered the Aldi Product used flavourings rather than real lemon would attribute that deficiency to the Trade Mark proprietor or regard the Trade Mark less favourably (paras 119–125).

(8) Section 11(2)(b) defence (honest practices): The court rejected Aldi’s attempt to dissect the Sign into non-distinctive components so as to invoke the descriptive fair-use defence. On the facts, Aldi’s conduct amounted to unfair competition; the use was not in accordance with honest practices in industrial and commercial matters (paras 126–141, 134–140).

(9) Treating EU jurisprudence: The court declined Aldi’s invitation to depart from the Court of Justice’s ruling in L’Oréal v Bellure and reaffirmed its continued applicability to s.10(3) claims absent compelling reasons to depart (paras 142–152).

(10) Orders: The Court of Appeal allowed the appeal and found infringement under section 10(3). The judgment records the lead and concurring opinions; costs and any remedies were addressed in accordance with usual practice (operative outcome recorded) (paras 153–155).

• High Court (IPEC) – Her Honour Judge Melissa Clarke: claim dismissed: [2024] EWHC 88 (IPEC).
• Court of Appeal (Civil Division) – Allowed Thatchers’ appeal and substituted a finding of infringement under section 10(3) of the Trade Marks Act 1994: [2025] EWCA Civ 5.