Out-Law / Your Daily Need-To-Know

UK considers giving businesses powers to take civil action against rivals' copycat packaging

Out-Law News | 17 Apr 2014 | 9:37 am | 3 min. read

Businesses could be granted with a "civil injunctive power" to prevent rivals copying the designs of their product packaging under plans being considered by the UK government.

The Department for Business, Innovation & Skills (BIS) has launched a call for evidence in a bid to understand what issues, if any, there are with existing enforcement arrangements, how 'copycat packaging' impacts on consumers and what the costs and benefits are of giving businesses a civil injunctive power to prevent the activity, among other questions it has posed. 

The call for evidence is part of a review BIS is undertaking into the enforcement of the Consumer Protection from Unfair Trading Regulations (CPRs) against copycat packaging (20-page / 229KB PDF) , which has been prompted by industry lobbying and could last six months. 

'Copycat packaging' is the act of "designing a product’s packaging to give it the look and feel of a competing well-known brand", according to the government. 

Businesses cannot always rely on their trade mark rights to protect against copycat packaging because the practice is "distinct from counterfeiting as normally it does not involve copying trade marks", it said. 

However, the CPRs prohibits "any marketing of a product (including comparative advertising) which creates confusion with any products, trade marks, trade names or other distinguishing marks of a competitor". 

At the moment, though, businesses have to rely on a specified enforcement body, such as Trading Standards or consumer watchdog Which?, to take action against rival companies that engage in copycat packaging.

"Some brand owners have suggested that there is an enforcement gap in that the current enforcers have not devoted sufficient resources to tackling copycat packaging (where the brand owners say, it infringes the prohibition in the CPRs and the average consumer takes, or is likely to take, a different decision as a result)," the UK government's call for evidence document said. 

"Our understanding is that, notwithstanding the fact that there is an absence of consumer complaints, the enforcers have considered carefully the evidence presented by businesses. The enforcers do not consider that it establishes that copycat packaging causes significant consumer detriment or other adverse effects on the market. They do not therefore give priority to enforcement action over and above other more clearly detrimental practices. We would be interested in any views and supporting evidence as to whether there is an enforcement gap and, if so, the extent of it," it said. 

Intellectual property law expert Leila Panesar of Pinsent Masons, the law firm behind Out-Law.com, said that brand owners "do not always get the desired result" from the existing enforcement arrangements on copycat packaging. This means that there are many apparent 'lookalike' versions of packaging "still on the shelves", she added. 

"Copycat packaging is a grey area of the law covered by a combination of trade marks, passing off, copyright and design rights as well as the CPRs," Panesar said. "Although brand owners may have a strong case if their packaging has been deliberately and substantially copied, these IP rights do not protect abstract ideas and do not give brand owners a monopoly over, for instance, certain colours or shapes to indicate certain types of goods, unless those aspects happen to be registered as trade marks." 

"In addition, understandably, brand owners want to maintain a good relationship with the retailers they supply, who often produce 'own-brand' versions of their goods which may appear similar," she said. 

"Arguably, though, the combination of available IP rights should be enough to protect brand owners, who can use these laws to prevent others from copying their registered logos, words, images and 'look and feel' of their packaging, especially if they have a reputation in the marketplace. Brand owners also now have the option of using the Intellectual Property Enterprise Court (IPEC) to bring IP claims, which is specifically designed to achieve relatively quick and cheap resolutions to disputes. A new injunctive power may not add much to this in practice," Panesar added. 

In its call for evidence the UK government detailed some of the reasons why it was decided not to give businesses the power to take civil action against copycat packaging under the CPRs at the time the regulations were being finalised.

"The factors taken into account in deciding not to do so included that the general and designated enforcers would provide an adequate and effective enforcement regime; that, though consumers sometimes purchase the wrong product by mistake when packaging designs are similar, there was little evidence it caused real detriment; and that allowing business to business enforcement could result in a considerable number of disputes reaching the courts as businesses sought to further their commercial interests rather than the collective interests of consumers," it said. "In practice, it could result in a very different enforcement model than currently exists in the UK."

The government said it wanted to hear views on whether costs associated with giving businesses civil injunctive powers under the CPRs in respect of copycat packaging, such as the increase in court time and legal fees, would be outweighed by the benefits of introducing that power, such as to address detriment to consumers.

Businesses can provide their input into the call for evidence until 19 May.