Who wins in an IP Lawsuit? M&S, Aldi and Copycat Products

By Joshua Ng


https://unsplash.com/photos/Oxl_KBNqxGA


Marks and Spencer recently announced that it would be suing Aldi for IP infringement, stating that Aldi’s Blackberry and Clementine Gin "constitute designs which do not produce on the informed user a different overall impression" to M&S’s Light-Up Gin. [1] This comes just months after a similar spat over the similarities between M&S’s Colin the Caterpillar and Aldi’s Cuthbert the Caterpillar. [2] The frequency at which the suits are happening, combined with Aldi’s propensity for getting embroiled in such suits to begin with, [3] suggest that there is more to copyright laws than meets the eye.


The law on design infringement


Given that three varieties of Light-Up Gin were registered as designs earlier this year, [4] it is likely that the applicable law is the Registered Designs Act 1949. Registering the design gives M&S the “exclusive right to use the design and any design which does not produce on the informed user a different overall impression”. [5] This means that Aldi’s product is purportedly an infringement on this right. Aldi might be made to, inter alia, forfeit or destroy the infringing product, [6] compensate M&S for damages, [7] and perform other actions that the court deems necessary to protect M&S’s interests. [8]


Can Aldi “win” in spite of a lawsuit?


It appears that design infringement penalties always produce equitable outcomes, given their flexible nature. What then, drives Aldi to come so close to flouting the law? It is possible that the added publicity provided by the proceedings will boost Aldi’s sales by enough to justify the infringement penalty. Moreover, the evidential requirement for claiming damages is high, in particular on lost and/or diverted sales per SPE International Limited v Professional Preparation Contractors (UK) Limited, John Glew [2002] EWHC 881 (Ch). The difficulty in obtaining evidence to prove substantial damages from lost sales might drive M&S to settle out of court instead, which might afford Aldi the ability to negotiate a favorable outcome. Whether Aldi’s gamble will pay off is uncertain, but it is clear that the risk calculus is not as simple as it seems.



References:

[1] BBC, ‘M&S accuses Aldi of copying Christmas gin’ https://www.bbc.com/news/business-59681863, accessed 19 Dec 2021

[2] BBC, ‘M&S hits back at Aldi's Cuthbert the Caterpillar cake revival’ https://www.bbc.com/news/business-56812445, accessed 19 Dec 2021

[3] Victoria Guild, ‘Copycat-erpillar: can IP rights protect brands from 'lookalike' own-brand products’ from Brodies LLP, https://brodies.com/insights/litigation/copycat-erpillar-can-ip-rights-protect-brands-from-lookalike-own-brand-products/, accessed 19 Dec 2021

[4] Financial Times, ‘M&S sues discounter Aldi over ‘copycat’ Christmas gin’, https://www.ft.com/content/ffccedd3-db95-4e5e-8641-d0cb9caeff81, accessed 19 Dec 2021

[5] Registered Designs Act 1949, s.7(1)

[6] Ibid, s.24D(1)

[7] Ibid, s.24D(2)

[8] Ibid

[9] Financial Times (no 4)