What can brand owners do about copycat products? Lessons from Moroccanoil v Aldi

 In briefMoroccanoil Israel Ltd v Aldi Stores Ltd [2014] All ER (D) 217 (May), [2014] EWCH 1686 (IPEC)

The claimant made and sold hair oil under the name 'Moroccanoil' and the defendant sold hair oil, 'Miracle Oil'. The claimant issued proceedings against the defendant for passing off. The Intellectual Property Enterprise Court, in dismissing the claim, held that the evidence did not lead to the conclusion that members of the public were likely to assume either that Miracle Oil and Moroccanoil were the same thing, that they came from the same manufacture or were otherwise linked in trade. Accordingly, the claimant had failed to establish passing off because the evidence had not supported any likelihood of a misrepresentation by the defendant.

What was this passing off dispute about?

The claimant (MIL) launched its premium hair oil product 'Moroccanoil' in the UK in 2009. Aldi, the discount retailer, introduced a hair oil called 'Miracle Oil' to the UK around three years later. MIL alleged that the get-up and name of Aldi's product were so similar to MIL's product that a substantial number of consumers would mistake Miracle Oil for Moroccanoil or assume there was some kind of trade connection between the two products.

Why did MIL’s claim for passing off fail?

In order to succeed in a passing off claim, a claimant must establish three elements:

  • existence of goodwill
  • misrepresentation by the defendant, and
  • damage

As is usual in passing off cases, MIL had no problem in establishing goodwill in its Moroccanoil and therefore the case focussed on misrepresentation (from which damage would flow).

There was strong evidence that Aldi wanted to create a product strongly reminiscent of Moroccanoil. For example, among Aldi’s disclosed documents were various label designs for Miracle Oil, one of which had been annotated by an employee ‘Design? needs to match Moroccan Hair Oil Colours’. However, as the Court of Appeal determined previously in Specsavers International Healthcare v Asda Stores Ltd [2012] EWCA Civ 24, intention don’t necessarily lead to misrepresentation, the essential ingredient of a passing off claim. In the Specsavers case, the court distinguished between an intent to take the benefit from the claimant's goodwill from an intent to live dangerously. On which side of the line did Aldi fall?

In this case, the court concluded that Aldi's intention was to make the public think of Moroccanoil when they saw Miracle Oil. The court accepted that Aldi had ‘lived dangerously’ by designing packaging for its Miracle Oil product that was reminiscent of Moroccanoil packaging. However, there was no evidence that Aldi wished to create a false assumption among the public that the two products were connected in some way, by a common manufacturer or licence for example.

Aside from Aldi's intention, there was no evidence that members of the public had been confused into thinking there was a trade connection between the two products or were likely to assume a connection. The judge commented that if a significant proportion of the public believed that Aldi's product was Moroccanoil, there was a fair chance that at least one or two people with complaints, possibly about quality or the divergence in price, would have written to either MIL or Aldi. No such evidence was presented.

In light of this judgment, what can brand owners do about copycat products?

The best course of action is to be prepared and have a suite of IP rights to rely upon. This case demonstrates that relying upon passing off alone can be difficult especially if there is no evidence of customer complaints or customers returning goods to the brand owner instead of a competitor. Relying on other rights could prove pivotal in a copycat case.

Trade marks

Notably in this case there was no consideration of MIL's trade mark registration for MOROCCANOIL because it is currently subject to invalidity proceedings before the Office for Harmonisation in the Internal Market. However, a trade mark infringement claim can be pleaded alongside or even instead of a passing off claim in a dispute concerning lookalike products. The more aspects of the product that are registered as trade marks (the brand name, the product shape, colour and packaging) the greater the chances of preventing copycat products where there is actual or likely confusion between the original product and its lookalike. Trade mark infringement cases are generally more straightforward and cheaper than passing off claims.

Consumer Protection from Unfair Trading Regulations (CPRs)

The CPRs SI 2008/1277 prohibit traders across all industries from engaging in unfair commercial practices in their dealings with consumers. The CPRs apply to lookalike products that mislead consumers. Unfortunately there is no direct civil cause of action for third parties under the CPRs—enforcement is via Trading Standards and subject to their decision to take action. However, there is possible good news for brand owners on the horizon as the Department for Business Innovation and Skills is currently conducting a review of the CPRs and copycat packaging in response to calls for reform. See: Horizon scanning—consultations — Consumer protection.

Designs and copyright

Certain aspects of get-up may be eligible for design protection which could be used to combat copycat products. Registered designs and Community unregistered designs can be used to protect two-dimensional design features such as logos and surface decoration and to protect against lookalikes that do not create a different overall impression. Unregistered design right can be used to protect original, three-dimensional shapes. Copyright arises automatically and may subsist in various aspects of packaging such as logos, photos, text.

A final word

Aldi may have won this round but it may have other battles on its hands. The Saucy Fish Co. has recently issued a claim for passing off and trade mark infringement concerning Aldi's lookalike fish packaging. So far Aldi has agreed to an interim junction preventing sales of its copycat product—perhaps an acknowledgment that the law might not be on their side this time?

Jessica Stretch, solicitor in the Lexis®PSL IP & IT team.

 

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