In a significant legal decision, the Court of Session in Edinburgh has ruled that Lidl’s Hampstead Gin infringes William Grant & Sons’ intellectual property rights in its successful Hendrick’s brand.
Lord Clark, handing down his decision, found in favour of the established Hendrick’s brand owners, stating that Lidl’s 2020 re-design of its Hampstead Gin bottle and label fell foul of Section 10(3) of the Trade Marks Act 1994. This provision states that infringement arises where a party uses an identical or similar sign to the registered trade mark, where that trade mark has a reputation in the United Kingdom and the other party’s use, being without due cause, “takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark”.
As to “without due cause”, Lord Clark stated “It is difficult to view the redesign, including the change in colour of the bottle, as accidental or coincidental,” as he issued an injunction against Lidl in Scotland.
A Constellation of Changes
Warming to his theme, the judge found that “The re-designed version contained a constellation of changes which simply could not have been accidental. It significantly changed the shape of the bottle from a traditional gin shape to the apothecary-style bottle represented in the Hendrick’s trade mark. It also changed the colour of the diamond-shaped label from white to a similar pale colour used on the bottle in the Hendrick’s trade mark”. The Lidl label itself bears images of cucumbers, which are typically – and unusually – used for garnishing Hendrick’s gin. Quoting from the established case law in L’Oréal v Bellure, Lord Clark confirmed that Lidl’s re-designed get-up “rode on the coat-tails” of the established brand’s allure and success.
Diluted Gin
Although he found infringement, the judge dismissed William Grant’s further claim of passing off. This relates to the common law tort, which involves a high bar of proof and is notoriously difficult to win. The judge held that the average consumer would not be confused into thinking that the two brands were the same, or that they came from the same commercial origin. The fact that Lidl’s get-up undoubtedly called to mind the Hendrick’s brand was not enough in itself to satisfy a claim in confusion or passing off. But William Grant’s established reputation in the brand was sufficient to support the claim that Lidl’s ongoing sales would risk diluting the allure and reputation of Hendrick’s.
Although trade mark law covers the United Kingdom, and a registered trade mark is a unitary right across the entire UK (unless specifically limited), the Court’s injunction is limited to Scotland. It remains to be seen whether William Grant will seek further satisfaction in the English courts.
Lessons
This case, as so many before, illustrates the importance for businesses of securing registered rights – whether trade marks, designs or patents – in their brands. William Grant failed in the passing off claim, but won on the basis of its registered trade mark.
Brand Battles
This is far from being the only case in which established brands take on disrupters and discounters. Rival discount supermarket Aldi has recently been sued by Marks & Spencer in a case involving the latter’s Colin the Caterpillar cake, and Aldi’s Cuthbert the Caterpillar product. Relatively few such cases proceed all the way to a decision, with the parties often negotiating a settlement behind closed doors, so it will be useful for brand owners and brand lawyers to see what a judge makes of the claim, if it proceeds.
