Copycat packaging claims likely to face same challenges as 'passing off' claims, says expert

Out-Law News | 13 Jun 2014 | 2:42 pm | 4 min. read

Rules of evidence would need to be materially different if new civil injunctive powers to prohibit copycat packaging are to be effective, an intellectual property law expert has said.

Iain Connor of Pinsent Masons, the law firm behind Out-Law.com, said that although a recent High Court case in London had shown the difficulties in proving a claim of 'passing off' when assessing product packaging likeness, powers to tackle copycat packaging may not have offered more protection to the market leading brand involved in the dispute.

In the case, Moroccanoil Israel Limited (MIL) claimed that retailer Aldi was liable for passing off by selling a hair product called 'Miracle Oil' in competition to its own 'Moroccanoil' product. It said that the name of Aldi's rival product, together with the 'get up' – the overall way in which it was presented, made Aldi's product appear "so similar" to its own "that a substantial number of consumers would mistake Miracle Oil for Moroccanoil or assume that they share a common manufacturer or that there is otherwise a trade connection between the two".

In the UK if you can prove that there is 'goodwill' in a business asset, then this goodwill is protectable. Goodwill is essentially the value in creating a recognised business reputation.

If another trader 'passes off' their services as being yours and appears to claim that their services are yours or that you are in some way connected or have endorsed the services, then you can take action. You can claim damages or seek an injunction to prevent that use, so long as you can show that you have or are likely to suffer damage as a result of the use.

The High Court said that MIL enjoyed goodwill towards its Moroccanoil brand. Most of the goodwill was towards the name of the product, with the goodwill towards the 'get up' playing "some additional part", the judge said.

The judge said that there had to be more than a mere link in the mind of the public between the two products for a passing off claim to succeed. There had to be evidence of "misrepresentation" on Aldi's part, he said.

"In this case that means whether the public would assume, because of the get-up and name of Miracle Oil, that it either is Moroccanoil or is made by the same manufacturer (or is licensed)," the judge said in his judgment. "No misrepresentation would be established if it were shown that the similarities did no more than cause Aldi's Miracle Oil to bring MIL's Moroccanoil to mind. A recognition on the part of the relevant public that the name and/or packaging of the former looks similar, even strikingly similar, to the name and/or packaging of the latter would not by itself translate into an actionable misrepresentation on the part of Aldi."

The High Court considered comments made about the similarities of both MIL and Aldi's products in a blog, but said the views expressed went "no further than thinking that this was cheeky on the part of Aldi and perhaps encroached on copyright or design rights".

The judge said that although Aldi had consciously decided to "make the packaging for Miracle Oil reminiscent of Moroccanoil to some real extent" and had "succeeded" in making consumers "think of Moroccanoil when they saw Miracle Oil in its packaging", it had not engaged in passing off.

"The evidence does not support any likelihood of a misrepresentation on the part of Aldi," the judge said. "The evidence does not lead to the conclusion that members of the public are likely to assume either that Miracle Oil and Moroccanoil are the same thing or that they come from the same manufacturer or are otherwise linked in trade, such as by a licence. Even if there were any such members of the public, they would be too few in number to cause damage to MIL's goodwill."

"Purchases of Miracle Oil have not been and are not likely to be made with any relevant false assumption in the mind of the purchasers. There is not even likely to be any initial interest confusion. There is no likelihood of an actionable misrepresentation," he said.

Earlier this year the UK government opened a consultation on plans to make a new "civil injunctive power" available to businesses to prevent rivals copying the designs of their product packaging. However, Iain Connor of Pinsent Masons said that the new powers may not help brand owners to tackle 'copycat packaging' unless the rules of evidence are changed.

"Unless you shift the rules of evidence so that it is a matter for the judge to determine whether or not two competing products are confusing, a lack of evidence of misrepresentation will continue to undermine copycat packaging claims in the same way as it does for passing off claims," Connor said.

"The Moroccanoil case highlights the challenges faced by brand owners, but it remains a question of whether evidence supports the claims they bring. The new civil injunctive power to tackle copycat packaging must achieve a balance between giving sufficient legal certainty and fairness to brand owners whilst providing fairness to rivals and prevent overwhelming monopolies developing," he said.

Connor said, though, that retailers should consider whether creating similar looking products to market leading branded alternatives is ultimately in their interest.

"Is it in the interests of the competitor to produce packaging which is confusing?" Connor said. "As all retailers such as Aldi are brand owners themselves and, on the basis that they recognise the value of brands, it does not suit their business to have products that confuse the public as that is detrimental to their own competitive products as well as to the established market leader."