Thatchers Cider Company Limited v Aldi Stores Limited

Infringement under section 10(3) of the Trade Marks Act 1994 may occur without confusion or detriment where use of a similar sign takes unfair advantage of a reputed mark. A transfer of the mark’s image occurs where the sign intentionally reminds consumers of the mark, conveys that the defendant’s product is like the proprietor’s product but cheaper, and enables the defendant to profit from the proprietor’s development and promotion.

The court must assess all relevant circumstances. Intention is at least evidentially relevant, while the commercial advantage may be inferred from the intended message, consumer reaction and substantial unpromoted sales. The descriptive character of individual elements does not prevent protection of a composite mark with its own reputation. Nor may the section 11(2)(b) defence ordinarily be applied by dissecting a distinctive composite sign into descriptive components.

Thatchers owned a registered device mark used on the packaging of its cloudy lemon cider. Aldi used packaging for its Taurus cloudy lemon cider which had been developed by reference to the Thatchers product. Thatchers claimed infringement under sections 10(2) and 10(3) of the Trade Marks Act 1994 and passing off.

The Intellectual Property Enterprise Court dismissed all claims in [2024] EWHC 88 (IPEC). Thatchers appealed only against the dismissal of its section 10(3) claim. The principal issues were the identity of Aldi’s sign, similarity and link, Aldi’s intention, transfer of image and unfair advantage, detriment to repute, the section 11(2)(b) defence, and whether the court should depart from assimilated EU authority on unfair advantage.

1. Appeal allowed. Aldi’s use of the sign infringed the registered trade mark under section 10(3) of the Trade Marks Act 1994. The contrary finding in [2024] EWHC 88 (IPEC) was replaced by a finding of infringement: [153]-[155].

2. The sign was the design reproduced on the front and rear of the cans and on the front of the cardboard packaging. It was not the three-dimensional product or its information panel. The first-instance identification of the sign had consequently distorted the similarity assessment: [74]-[86]. Actual use of a registered mark will normally be the paradigm case of its notional fair use and may also inform its distinctive character and reputation.

3. Aldi intended its design to remind consumers of the registered mark and to communicate that its product was like the Thatchers product but cheaper. The close resemblance, departure from Aldi’s house style, reproduction of faint horizontal lines and design documents made that conclusion inescapable. An absence of intention to deceive or confuse did not answer the distinct question whether Aldi intended to take advantage of the mark’s reputation: [89]-[99].

4. The case fell squarely within the transfer-of-image and riding-on-the-coat-tails principles in L’Oréal v Bellure. Consumer comments showed receipt of the intended message, while substantial sales were achieved quickly without promotion. In the absence of evidence that equivalent sales would have occurred with different packaging, the court could infer that Aldi obtained its intended advantage. It was unfair because Aldi profited from Thatchers’ investment in developing and promoting its product instead of competing solely through its product’s quality, price and Aldi’s promotional efforts: [110]-[118].

5. Detriment to repute was not established. The products were insufficiently different in taste to cast the Thatchers product in a negative light. Although Aldi’s presentation could misleadingly suggest the presence of real lemon juice, there was no evidence that consumers transferred any resulting criticism to Thatchers: [119]-[125].

6. The section 11(2)(b) defence failed. The distinctive composite sign had to be considered as a whole and could not be dissected into descriptive elements. In any event, Aldi’s use was not in accordance with honest practices because it knowingly intended to exploit the mark’s reputation, lacked justification and engaged in unfair competition: [126]-[141].

7. The court declined to depart from L’Oréal v Bellure. Parliament had retained the relevant provisions, international harmonisation remained important, the ruling supplied a principled and extensively applied framework, and departure would create substantial uncertainty: [142]-[152].

1. Court of Appeal (Civil Division): By [2025] EWCA Civ 5, unanimously allowed the appeal concerning section 10(3) of the Trade Marks Act 1994 and substituted a finding of infringement.
2. Intellectual Property Enterprise Court: By [2024] EWHC 88 (IPEC), dismissed the claims under sections 10(2) and 10(3) and in passing off. Only the section 10(3) decision was appealed.