The IP Brief - March 2025

Thatchers appealed on no fewer than 10 grounds, all of which were focused on dismissal of its claims for unfair advantage and tarnishment under section 10(3) of the Trade Marks Act 1994 (TMA). It did not, however, challenge the IPEC’s decisions on likelihood of confusion or passing off.

In considering these grounds, the Court of Appeal found a number of errors in the IPEC’s assessment, including the following:

• It had incorrectly identified Aldi’s “sign” as the overall appearance of a single can of the Aldi product. In the Court of Appeal’s view, it was clear from Thatchers’ pleadings that the sign complained of was, in fact, the graphics on the cans and the cardboard 4-can pack.
• The IPEC incorrectly assessed the degree of similarity between Aldi’s sign and Thatchers’ mark as “low”. In part this was due to the IPEC’s error as to what constituted Aldi’s sign. Similarity should have been assessed as being “somewhat greater” than it was.
• When considering Aldi’s intention, the IPEC confused “intention to deceive” (which is relevant to likelihood of confusion) with an “intention to take advantage of the trade mark” (which is relevant to section 10(3)). Whilst Aldi sought to argue that this was merely an error of drafting in the judgment, the Court of Appeal disagreed as the IPEC had placed considerable emphasis on Aldi’s evidence that its intention was that the Aldi product should be clearly understood as a Taurus branded cider – something which would have been highly relevant to any allegation of intention to deceive, but much less relevant to Thatchers’ pleaded case of intention to take advantage of the reputation of its marks.
• The IPEC was wrong to find that Aldi had not significantly departed from its house style for its Taurus branded ciders – the Court of Appeal found it had.
• The IPEC had incorrectly discounted the fact that both Aldi’s sign and Thatchers’ mark included certain “faint horizontal lines”. In the Court of Appeal’s view, there was no way to explain these other than as a result of close imitation of Thatchers’ mark by Aldi.

Pulling all of this together, the Court of Appeal concluded that this case fell squarely within the realms of taking unfair advantage as described by the CJEU in L’Oréal v Bellure, involving “a transfer of the image” of Thatchers’ mark and “riding on [its] coat-tails”. Aldi intended its sign to remind consumers of the Thatchers mark and convey that its cider product was ‘like the Thatchers product, only cheaper’. And it was clear from some of the evidence before the court that at least some consumers understood that message. That, the court said, enabled Aldi to achieve substantial sales of its cloudy lemon cider product in a short space of time, without spending any money promoting it, and to profit from Thatchers' investment in developing and promoting the Thatchers’ product, rather than competing on quality, price and its own promotional efforts.

As for tarnishment, the Court of Appeal dismissed Thatchers’ appeal, agreeing with the IPEC that this part of the claim must fail.

This case has garnered significant attention amongst IP practitioners and triggered a policy debate about whether our current IP laws achieve the right balance between protecting brand owners against lookalike products and upholding competition and cheaper prices for consumers. The Court of Appeal, rightly, refused to engage in this policy debate, but ultimately its decision will be welcomed by brand owners as a step in the right direction. Whether or not other brand owners will be able to achieve a similar result will depend on the nature of their trade mark registrations. Here, Thatchers had been well advised to register a device mark containing all of the key elements of the get up for its cider product, which other brand owners should take note of. It almost certainly would have been unsuccessful had it had to rely on word marks alone.

With Aldi having already indicated its intention to appeal, however, this may not be the end of the story.

The claim was started by two companies from the luxury fashion group Thom Browne (“Thom Browne”) who sought to invalidate sixteen of Adidas’ position marks (the “Adidas Marks”) which relate to the location of the brand’s iconic “three stripes” on certain apparel and accessories (as exemplified in the image below).

Adidas counterclaimed for infringement and passing off in relation to a multitude of Thom Browne items which all featured Thom Browne’s “four bar” design (as exemplified in the image below). There was no claim that Thom Browne’s actions gave rise to a likelihood of confusion at the point of sale, but Adidas argued that there was a real risk of post-sale confusion, and that Thom Browne’s use of its “four bar” design took unfair advantage of, and was detrimental to the distinctive character or repute of, the Adidas Marks.

In challenging validity, Thom Browne’s main line of argument was that the various Adidas Marks covered a wide variety of different permutations of the use of three stripes, including different lengths, positions and arrangements, and, as such, the marks failed to satisfy the identity requirements in section 1(1) of the TMA. In particular, it argued that some of the descriptions accompanying the various illustrations were unclear and imprecise, as well as being inconsistent with the graphic representations of the marks. 

Following detailed individual analysis of the marks, the High Court ultimately decided to invalidate eight out of sixteen of the Adidas Marks on the grounds that they failed to meet the identification requirements under the TMA.

In its analysis, the court focused on the potential scope for a number of “permutations” or “variations” of each mark. Whilst acknowledging that the fact that a particular mark encompasses a number of variations is not in itself sufficient to invalidate a mark, some variations will be impermissible.

Factors which the court took into account in considering whether the variations before it were impermissible included:

1. whether the variation would affect the ability of the mark to convey clear and precise information to the registrar, to economic competitors and to the relevant public; and 
2. whether the mark is capable of denoting origin to the relevant public so as to enable a consumer to repeat the purchase.

The first of these factors was particularly important in this case, with the court agreeing with Thom Browne that some of the descriptions Adidas had used were too vague and uncertain. For example, phrases like “running along one third or more of”, “substantially the whole length of” and “generally used vertically”, would be perceived as covering a wide variety of different forms, none of which (except the one illustrated) would be readily ascertainable from the words and illustration.

The court also placed considerable emphasis on the wording used to direct the reader to the graphic representations themselves - such as “as shown in the accompanying illustration”, “as illustrated below” and “as shown in the representation” - and whether those phrases would be read, in context, as limiting the scope of the mark to what was shown in the graphic representation only or as simply indicating that the graphic representation was intended as one of a number of examples. Where the court interpreted the wording as limiting the scope of the mark to that shown in the graphic representation, it ultimately found the marks to be valid. However, where the wording was interpreted as meaning that the graphic representation was simply an example, and the accompanying description was vague or unclear, the court found that the illustration could not serve to clarify the scope of the relevant mark, rendering it invalid.

Notwithstanding its findings on validity, the court proceeded to assess Adidas’s counterclaim for infringement on the assumption that all of Adidas’ marks were valid. But, ultimately, it still found that there was no infringement or passing off by Thom Browne.

Those parts of the judgment which deal with the question of likelihood of confusion and, in particular, the court’s assessment of similarity between Thom Browne’s signs and the Adidas Marks are worthy of note. Acknowledging that, for position marks, the position of the mark is an integral part of the mark itself, the court’s assessment of similarity between mark and sign included consideration of the sign’s orientation and position on the goods in question. Indeed, the court took the view that in certain circumstances that position will be decisive on the issue of similarity of marks and sign, finding in certain cases that the position of Adidas’ mark on the product in question rendered it dissimilar to Thom Browne’s four bar sign.

Overall, and bearing in mind certain differences between the mark and sign (including the different number of stripes (three vs four); the vertical orientation of the Adidas Marks versus the horizontal orientation of Thom Browne’s signs; and the position of the signs), the court found very faint to moderate levels of similarity across the board (with moderate levels being found where the Thom Browne signs showed a vertical orientation).

Bearing in mind that the average consumer would notice the difference between three and four stripes, the different markets in which the two businesses operate, and the lack of evidence of actual confusion despite Thom Browne’s signs and the Adidas Marks having been used in parallel for many years (going back to 2009), the court ultimately concluded that there was no likelihood of confusion in the post-sale context (nor, for similar reasons, any passing off, which requires not just confusion, but deception).

As for whether Thom Browne’s use of its four bar design took unfair advantage of, or was detrimental to the distinctive character or repute of, the Adidas Marks, the court rejected this claim too on the basis that Adidas failed to establish that Thom Browne’s use of its sign gave rise to a link between that sign and the Adidas Marks in the mind of the average consumer.

This is a fascinating case which sheds light onto the English court’s approach to position marks and highlights the importance of clear and precise specifications, particularly for such marks. A mark with a significant number of possible permutations could be susceptible to being invalidated. As a result, those applying for position marks should take particular care to clearly define the scope of those marks and seek to avoid registering individual marks which embrace a number of variations based on a theme. Where protection for such variations is desired, brand owners should consider registering separate marks for each variation, with illustrations of how each such mark appears on particular goods.