What’s wrong with Aldi copying Colin the Caterpillar and what are the rules about giving away other brand’s products?
The public debate regarding Marks & Spencer and Aldi’s respective caterpillar cakes might be deemed as ‘branter’ by many onlookers but there is a lot at stake for brands, willing to lean heavily when it comes to their intellectual property, trademarks, logos, and taglines. We asked Jorja Knight, Head of Legal at PromoVeritas about passing off and also what the rules are when you are giving away another brand’s products as a prize.
Marks & Spencer decided to sue Aldi for breach of the intellectual property rights of its much-loved caterpillar cake – in other words Colin did not want Cuthbert, Aldi’s cheaper version, to gate crash its party. Since1990 over 15 million Colin the Caterpillar cakes have been sold and Marks & Spencer, claim that “love and care” is paramount in all their products and want to “protect Colin, Connie and our reputation”.
Supermarket giant Aldi hit back by playing the charity card and coming across as a fledgling discount supermarket but that did not fool Marks & Spencer. Having taken this to the high court they now need to prove how the Aldi cake is so similar that it causes confusion in the marketplace and diminishes the value their brand. Many of the other supermarkets on the high street have also created their own version of Colin, so is this the beginning of a further battle of the cakes? And is passing off really duping the consumer?
What is Passing Off?
Trademarks are registered, giving the owner an exclusive right to them and they are protected by legislation. Passing off is a more subtle challenge, often seen where rights are unregistered. It is fundamentally about protecting brand goodwill and reputation from those who may damage it. Simply put it is, it is about deception around selling a product or service, or using a name that is confusingly similar, and where you associate yourself in this way you could land up in hot water.
So, when a shop owner who claimed it was just a ‘coincidence’ that his “Singhsbury’s” store resembled retail giant Sainsbury’s was threatened with legal action – he changed the name to ‘Morrisinghs’. Interestingly, Morrison’s took a different approach and a Morrison’s spokesperson suggested it was flattered by the name choice!
Essentially, if there is a foreseeable harm to a trader’s reputation and consumers are confused between two similar products, there could be a challenge for passing off. To establish a claim for passing off, three key requirements must be met:
- Goodwill – proof of owning the ‘reputation’ in the goods, name or mark that consumer associates with a specific product or service.
- Misrepresentation – evidence that the trader has caused confusion, deceived or misled the consumer about the two products or services.
- Damage – the misrepresentation must have damaged or be likely to damage the goodwill or cause actual or foreseeable financial or reputational loss.
Passing off and prizes
Passing off gets even more interesting where prizes promotions are concerned because brand Reputation & Association are involved. A brand will always want to control outside influences and threats to their brand. Brands will consider how a third party giving away their products might affect their position, the exclusivity of their lucrative partnerships or sponsorship agreements. And if all three elements above are present, there are grounds for legal challenge. As we have seen there can be bad press, with consumers weighing in on social media.
When an Instagram influencer tried to run a prize draw with Glossier make-up products the brand asked her to ‘refrain from featuring Glossier product in any sort of giveaway as it violated their Terms & Conditions’. They stated that the promotion used their trademarks, service marks and logos without their consent, even though the influencer bought the products herself, used her own photography and clearly stated that the promotion was not affiliated with the brand in any way. After a flurry of negative publicity from the Instagram community that it markets to, the brand backtracked.
And it is worth remembering that back in 2010 the Stella McCartney fashion house lost an ASA Ruling after complaining about a Bodyform sanitary towels prize draw to win £100 of their underwear. The ASA rejected claims that the promotion took unfair advantage of or denigrated Stella McCartney products and meanwhile the Stella McCartney brand took a beating in the press for being so arrogant. Similarly, the Hugo Boss copyright story received a lot of negative coverage – comedian Joe Lycett recently changed his name by deed poll to ‘Hugo Boss’ to highlight how controlling and unfair the brand is to smaller businesses.
More recently we have seen Lidl pull their own brand ‘Hampstead’ gin that’s been selling for more than 10 years from shelves in their Scottish stores and changing its label and bottle amidst trademark battle with Hendrick’s. In this instance, it was found that there was sufficient basis to argue visual and conceptual similarity between the mark and the sign.
PromoVeritas POV on Prizes
Our advice is simply to be careful when you want to involve another brand’s products in a prize promotion but don’t be put off – it can be done. Always exercise caution. If you are planning a promotion the first step is to take legal advice on permission, or about how you might use another brand’s products in your marcomms without getting into trouble. For instance, you might need to state that you are giving a ‘luxury handbag’ or ‘designer sunglasses’ instead of naming the specific brands in your promotional materials –and being very clear that there is no association or sponsorship between the two.