Another Supermarket Lookalike Fight — Why Aldi Has Won First Round

In another lookalike dispute in the United Kingdom between the sellers of a well-known branded product and a supermarket chain, Aldi has defeated a passing off claim made by “Morcoccanoil” brand owner (MIL).

Both Aldi (left) and MIL (right) sell their rival hair care products in a turquoise blue coloured box that has orange graphics and vertical writing printed on it.

The Intellectual Property Enterprise Court (IPEC) judge found that there was a conscious decision by Aldi to make the packaging for its “Miracle Oil” product reminiscent of the Moroccanoil get-up, with the intention of making the public think of it and that Aldi had succeeded in its intention. However, the judge also held that the Miracle Oil name and packaging did not, in the circumstances, constitute a false representation in respect of any trade connection between the two products or their manufacturers and therefore there was no passing off.

Although MIL has also alleged infringement of one of its Community trade marks in these proceedings, the court ordered that this claim was to be stayed until separate invalidity proceedings, before the Office for Harmonization in the Internal Market (OHIM), in respect of this mark have been concluded. OHIM’s records showed that, rather than Aldi, it is the beauty product’s multinational Avon Products Inc that has applied for the Community trade mark for the “Moroccanoil” word and related figurative/get-up marks to be declared invalid.

The decisions of the OHIM Cancellation Division are currently being appealed. It may therefore be some time before the stayed infringement claim comes back before the IPEC. Since these proceedings were commenced, MIL has obtained a further Community trade mark for its current turquoise blue box get-up.

Among the options available to brand owners in such disputes, a new civil injunction power may be included in the future as a result of the recently closed consultation of the UK Department for Business Innovation & Skills. The IPEC’s passing off judgment in the present case demonstrates why brand owners would be wise to include trade marks and copyright in their armoury in the fight against lookalikes.

Why Did MIL’s Passing Off Claim Fail?

Passing off requires three elements — goodwill, misrepresentation, and damage. The judge had no difficulty in finding that MIL enjoyed substantial goodwill in its business in Moroccanoil.

However, in a lookalikes dispute, the misrepresentation element is often the trickiest to prove and it was on this basis that MIL’s passing off claim was defeated. MIL’s argument was that the get-up and name of Aldi’s product are in combination so similar that they amounted to a false representation that:

• (a)  The Miracle Oil product was the Moroccanoil product; or
• (b)  The products shared a common manufacturer or there was otherwise a trade connection between the two.

The judge made it clear that what matters for misrepresentation in passing off is whether the public would assume, because of the get-up and name of Miracle Oil, that it is either (a) Moroccanoil or (b) made by the same manufacturer (or licensed therefrom). This is to be distinguished from the public merely wondering whether the products are the same, or are made by the same manufacturer or are licensed. Further it is necessary to establish that a sufficient number of individuals have made or will make the false assumption such as to cause material damage to the goodwill of the claimant.

MIL did not put forward any direct evidence to show that any individuals had made false assumptions of this type. Although the absence of such evidence is not conclusive, it may be relevant depending on the opportunity that has arisen for relevant false assumptions to have been made and to be detected. Here the judge concluded that one would have expected that if consumers were assuming Miracle Oil to be Moroccanoil then that would have come to light.

There was also no sufficient basis to infer that any alleged misrepresentation had or was likely to occur. In particular although the judge accepted that get-up may play a role in the recognition of a product, if the respective brand names of the rival goods in question are distinctive, a misrepresentation by reason of similar get-up is likely to depend on the relevant public not noticing the name on the lookalike product, or on a label attached to it. Here the CARINO brand name was prominently printed onto the face of the Aldi product box and there were other clear differences between the get-up of the two products: the striking “M” logo on the Moroccanoil box and the presence of a leaf motif on the Miracle Oil box.

MIL’s claim that Aldi had taken a deliberate risk did not help it to establish that misrepresentation had occurred. The evidence showed Aldi’s intent was that the get-up of its product would bring to mind the Moroccanoil product but not lead to any false assumption on the part of the public. In fact, if a defendant is clearly shown to have a highly accurate perception of the target market, a finding of such intent helps its case rather than that of the claimant in a passing off claim.

Looking Ahead

Passing off “is closely connected to and dependent upon what is happening in the market place. It is a judge-made law which tries to ensure… a degree of honesty and fairness in the way trade is conducted… [and] the law itself has refined over the years” (Laddie J in the Edmund Irvine v. Talksport Ltd celebrity endorsement case).

Although some may argue its time has come, MIL’s attempt to extend passing off to “initial interest confusion” was unsuccessful. If a customer makes an initial relevant false assumption but that mistake is corrected before any purchase is made and as a consequence the claimant suffers no damage, there is no passing off.

However, it has recently been accepted that damage “may occur even if deception is dispelled before the moment of purchase (or other commitment), if the claimant’s goodwill is nonetheless harmed; and dispelled deception is actionable accordingly. Thus damage caused by passing off may successfully be claimed if a customer is deceived into going into one shop thinking it to be another if it can be established that, but for the deception, he or she might have gone into the claimant’s shop” (Fine & Country Ltd and Ors v. Okotoks Ltd and Anor [2012] EWHC 2230 (Ch)).

When initially confused consumers realise a lookalike product that caught their eye is not the product they set out to purchase, might they sometimes go on to purchase the lookalike anyway? If such initial interest confusion does result in sales of lookalikes it may be arguable that these sales would otherwise be open to and, in at least some cases, achieved by the referenced products. In the Moroccanoil case “initial interest confusion” of any kind was not established so another dispute must be awaited to provide guidance as to whether it may in some circumstances be actionable as passing off.