Are the tides turning on lookalikes? Aldi suffers two defeats in two months, but the jury is still out on sailing close to the wind.

Last week, the Court of Appeal in the UK issued a decision in Thatchers Cider Company Limited v Aldi Stores Limited [2025] EWCA Civ 5 which seems to have (at least temporarily) strengthened trade mark protection of market leading products against lookalikes, holding that Aldi’s cloudy lemon cider infringed market leader Thatchers’ trade mark.  This UK decision follows hot on the heels of a decision of the Federal Court of Australia in December, which also found Aldi liable for infringement in relation to the packaging of a children’s snack food product.  Both cases discuss Aldi’s practice of “benchmarking” at length and conclude that the packaging of the cider and snack puffs in question were too close to be a coincidence.  Do these decisions mark the end of Aldi’s benchmarking and its “like brands, only cheaper” strapline?

Aldi has stated it intends to appeal against the UK decision, so the position is far from clear in the UK, as we may now need to await input from the Supreme Court.  However, for the time being, the Court of Appeal judgment suggests that Aldi’s practice of “benchmarking” against market leading products may, in certain circumstances, be unacceptable on the basis that it takes unfair advantage.

Background

Somerset-based Thatchers, the largest family-run independent cider producer in the UK, launched a Cloudy Lemon Cider in February 2020.  The product, sold in individual 440 ml cans and four-can packs, was extensively promoted and sold well.  Thatchers decided to seek protection of its overall branding, securing a registration of the following label under UK Trade Mark Registration No. 3489711:

The well-known discounter Aldi introduced its own Taurus Cloudy Lemon Cider in May 2022, in packaging which Thatchers argued was infringing:

Thatchers initially issued proceedings for trade mark infringement (under Sections 10(2) and 10(3) of the Trade Marks Act 1994) and passing off before the Intellectual Property Enterprise Court (‘IPEC’), with a decision rejecting all of Thatchers’ claims issuing in February 2024 (see our LawNow article here).

Court of Appeal Ruling

Thatchers was granted permission to appeal the IPEC decision in respect of its case under Section 10(3) of the Trade Marks Act 1994, namely that Aldi’s use caused detriment to, and/or took unfair advantage of, the repute of Thatchers’ registered trade mark.  Thatchers succeeded on its claim of unfair advantage, resulting in a finding of infringement against Aldi.

Unfair Advantage

On appeal, Thatchers claimed Aldi’s cider product constitutes a classic case of unfair advantage by “transfer of image”.  The Court of Appeal agreed, concluding that “Aldi was able to achieve substantial sales [of its Lemon Cider] in a short period of time without spending a penny on promoting it”.

Despite calls from Aldi to depart from the precedent, the court considered the definition of “unfair advantage” set out in L'Oréal SA v Bellure [para. 41]:

"As regards the concept of 'taking unfair advantage of the distinctive character or the repute of the trade mark', also referred to as 'parasitism' or 'free-riding', that concept relates not to the detriment caused to the mark but to the advantage taken by the third party as a result of the use of the identical or similar sign. It covers, in particular, cases where, by reason of a transfer of the image of the mark or of the characteristics which it projects to the goods identified by the identical or similar sign, there is clear exploitation on the coat-tails of the mark with a reputation."

Arnold LJ went on to explain why the judge made various errors in her assessment of the contested sign, degree of similarity of marks and Aldi’s intentions.  Upon revisiting these points, the Court of Appeal concluded that the Aldi product and the Thatchers trade mark closely resembled one another and that this “resemblance cannot be coincidental” [para. 99].  Arnold LJ went on to state that:

“The inescapable conclusion is that Aldi intended … 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.  To that extent, Aldi intended to take advantage of the reputation of the Trade Mark in order to assist it to sell the Aldi Product”. 

Paragraph 114 of the Court of Appeal decision is key, explaining that Aldi took unfair advantage because it profited “from Thatchers’ investment in developing and promoting the Thatchers Product rather than competing purely on quality and/or price and on its own promotional efforts”.

Other Aspects of the UK Decision

In addition to the finding of unfair advantage, the Court of Appeal also considered Thatchers’ claim that there was detriment to the repute of its registered mark and Aldi’s claim that it should benefit from a defence to infringement on the basis that its branding had descriptive and non-distinctive elements on these additional claims.  In terms of detriment, the court held that consumers would know the Aldi cider originated from Aldi and that any issues around quality of the product (in particular that it was not made with real lemons) would impact Aldi and not tarnish Thatchers’ reputed mark. 

Aldi’s attempt to avail itself of a descriptiveness defence was also given short shrift.  Arnold LJ was not inclined to dissect Aldi’s packaging into different elements and hold that the use of lemons and leaves was descriptive/non-distinctive.  Arnold LJ also discussed the requirement under Section 11(2)(b) that for the defence to apply, any use must be in accordance with honest practices.  This was not the case for Aldi, with Arnold LJ badging its conduct as unfair competition.

Australian Ruling

The UK decision has certain parallels with a recent copyright infringement case against Aldi in Australia.  In Hampden Holdings I.P. Pty Ltd v Aldi Foods Pty Ltd [2024] FCA 1452 (request.pdf), the Federal Court of Australia upheld a complaint that the packaging of certain snack foods in Aldi’s Mamia children’s range infringed the market leading Bellies range – see images below.

In the Australian case, there was evidence of benchmarking and the judge found that the Aldi packaging reproduced various elements of the layout and design of the market-leading Bellies product, sufficient to make out a claim of copyright infringement.  The court held that Aldi was liable for additional damages on the basis of its flagrant copying, indicating that “Aldi sought to use for its own commercial advantage the designs that had been developed by a trade rival” [para. 231].

The Australian case illustrates the nuances of this area, as the court assessed numerous products across the Aldi Mamia range and the infringement finding was only upheld in relation to two specific products.  Several other snack products in the Mamia range were held to be on the right side of the line, notwithstanding that they had also been benchmarked against Bellies.

Conclusion

These cases demonstrate the difficulty of dealing with lookalike products and the uncertainty of bringing a claim in this area.  Brand owners can improve their position by seeking registered protection for composite marks and packaging, or potentially relying on unregistered copyright and passing off, but the line between infringement and non-infringement is blurry. 

As it stands, a product (i) with packaging that closely resembles the market leader, (ii) which can be shown to be the result of benchmarking, and (iii) which has enjoyed impressive sales figures absent any obvious investment in marketing, seems high risk in the UK.  However, every case (and indeed each individual product, as shown in the Australian case) will turn on its specific facts and the Supreme Court may yet have something different to say on the topic.

Co-authored by CMS trainee solicitor, Xenia Baranova.