As the summer reaches its peak and we reach for the ice-cream, it's time to catch up on the legal battles in the food & drink sector that have been decided upon in the first half of the year.
Here we discuss some of the key decisions and reflect on what can be learned by both IP owners and challengers going forwards.
Trade marks & designs
[2024] EWCA Civ 262, Lidl Great Britain Limited and another v Tesco Stores Limited and another, Court of Appeal, 19th March 2024
Many may remember last years' decision issued by the High Court, which attracted media coverage given the high profile nature of these two parties. In that decision, the High Court held that Tesco's use of a sign featuring a yellow circle on a blue background, to advertise its "Clubcard Prices" offer, had infringed Lidl's trade marks and copyright and was also contrary to the laws of passing off. A significant win for Lidl, but with somewhat of a sting in the tail as the Judge also concluded that Lidl had re-registered its logo, comprising of a yellow circle with a red border on a blue background, in bad faith as they could not show any intention to use it without the brand name LIDL and consequently the registration was cancelled.
Both parties appealed the decision to the Court of Appeal, with Tesco requesting that the findings of infringement and passing off be overturned, while Lidl argued the findings of bad faith against them should be dismissed and their trade mark registrations be maintained.
In its decision, the Court of Appeal concluded that:
- Tesco's appeal against the finding of passing off must be dismissed. While the Court of Appeal felt that the High Court's finding that a substantial number of consumers would be misled into thinking that Tesco's Clubcard Prices were the same as or lower than Lidl's prices for equivalent goods was somewhat surprising and that there were small flaws in the reasoning as more weight was placed on some of the evidence than might be appropriate, they concluded that the Judge was not only entitled to take that decision but the rest of the reasoning was not undermined by it.
- Tesco's appeal against the finding of trade mark infringement based on detriment to the distinctive character of Lidl's trade mark registration incorporating the "LIDL" word is dismissed. The Court of Appeal agreed with the High Court's decision that Lidl's price-matching allegation was made good on the evidence, and consequently, that the Judge's decision to find that there had been detriment to Lidl was rationally supportable. Moreover, there had been no error of law or principle in the High Court's reasoning that Tesco's use did not have due cause. Tesco could easily have used a different sign to promote their Clubcard Prices.
- Lidl's appeal against the High Court's finding that their trade mark registrations were applied for in bad faith was dismissed. The Court of Appeal held that there was no error in the High Court's decision to shift the burden of proof to Lidl, once Tesco had established a prima facie case of bad faith. At that point it was over to Lidl to explain their intentions when making the applications. Since they could provide no convincing evidence or witness testimony establishing their intention to use the logo without the "LIDL" word mark, the High Court was correct to find that the registrations had been filed in bad faith.
- Tesco's appeal against the finding of copyright infringement was allowed. The Court of Appeal was presented with an argument by Tesco which had not been previously put before the High Court. Tesco explained that it had arisen out of the way in which Lidl had sought to support the High Court's decision on originality when defending the appeal. Their new contention was that, even if the Lidl logo was considered to be an original work, Tesco did not infringe because they had not reproduced a substantial part as they had not copied what was original about it. The Court of Appeal judge agreed. They felt that while the work was sufficiently original to attract copyright protection, the scope of that protection was narrow. Since Tesco had not copied at least two of the elements that made the work original, namely, they had used a shade of blue which Tesco had previously used as part of their corporate livery, rather than copying the Lidl blue, and the distance between the circle and the square was different, they did not infringe Lidl's copyright.
Key take-away: Despite their success in overturning the decision on copyright infringement, this decision does not change the implications for Tesco. From a practical perspective, they have still had to incur the significant expenditure needed to change their signage, and in addition, face the possibility of having to pay their competitor substantial damages. It is a further reminder that marketing teams should run any campaigns, particularly significant ones, by their legal teams for clearance, especially if there is any indication, no matter how small, that it may bear some resemblance to that of a competitor.
For more information on the High Court's original decision, see: https://www.hgf.com/news/every-lidl-helps-lidl-wins-high-court-case-against-tesco-on-the-clubcard-prices-logo/
[2024] EWHC 88 (IPEC), Thatchers Cider Company Limited v Aldi Stores Limited, IPEC, 24th January 2024
Another case to feature in the media, because of the household names involved. Here, Thatchers brought a claim against Aldi and their TAURUS brand of cloudy lemon cider, alleging infringement of the Thatchers trade mark which comprises an image of the THATCHERS CLOUDY LEMON CIDER Label, on the grounds of a likelihood of confusion and detriment to their reputation as well as passing off.
Thatchers argued that Aldi intentionally created a link between their products and Thatcher's well-established product through the use of similar packaging and marketing. Aldi countered by claiming that their use of the "benchmark" product (being the Thatchers product) was lawful and that Thatchers claims lacked sufficient particularity.
Before they could assess the case brought by Thatchers, the Judge first had to deal with a preliminary issue of identifying what sign Thatchers were intending to complain of. This had been the subject of a Case Management Conference, and took up a significant part of the pleadings on the first day. Ultimately, the Judge found that the sign must be the overall appearance of a single can of the Aldi TAURUS product and not merely one face of it.
Once that had been decided, the Judge moved on to conclude that:
- There was no likelihood of confusion. The fact that Aldi's product may bring that Thatchers product to mind, was not sufficient for a finding of confusion. Overall, the marks were found to be similar but only to a low degree. This is primarily because of the differences in the prominent brand names, "THATCHERS" and "TAURUS" but also because of the bull logo used by Aldi. The Judge also felt that the colour yellow, and the use of lemons and lemon leaves on a lemon flavoured beverage, including lemon ciders was very common and therefore not particularly distinctive.
- While Thatchers had established that they had gained a reputation in their trade mark by the relevant date, and the Judge found that the relevant consumer, on seeing Aldi's product, would bring to mind the Thatchers trade mark, the Judge was not satisfied that there was any intention to exploit Thatchers' goodwill and reputation in their trade mark or that Aldi's product had objectively had the effect of doing so. Moreover, they did not agree that there would be detriment to Thatchers and accordingly found that the claim for infringement based on reputation failed.
- Finally, since there was no evidence that any consumers believed that the Aldi product was that of Thatchers, and for the same reasons given when finding that there was no likelihood of confusion, the Judge dismissed the claim of passing off.
- Key take-away: When bringing a claim of infringement,
be careful to clearly set out and particularise the sign against
which the claim is being made. Otherwise, as was the case here, the
decision may be taken partially out of your hands and be reached by
a Judge with input from the party against which you are bringing
the claim.
[2024] EWCA Civ 178, Marks and Spencer plc v Aldi Stores Limited, Court of Appeal, 27th February 2024
If the decision in the case between Aldi and Thatchers had given Aldi confidence that they were operating on the right side of the line, this next case will have swiftly given them something to think about. However, this time, it did not involve trade marks but registered designs. M&S had registered four designs for their gin-based liqueur bottles featuring gold flakes and LED lights. These designs were aimed at protecting their festive bottle designs launched in 2020 which incorporated innovative features to attract Christmas shoppers. Aldi began selling rival gin liqueur bottles in November 2021, prompting M&S to bring a claim for infringement. In the original decision, the High Court found that Aldi's bottles did infringe the registered designs owned by M&S as they created the same overall impression on the informed user. The decision was appealed by Aldi to the Court of Appeal. Ultimately, the appeal failed and the original decision of infringement by Aldi was maintained. From a neutral perspective, the decision offers some potentially useful guidance when considering registered design protection, or bring infringement proceedings against a third party: - The circumstances pertaining to the conduct of the proprietor of the design, and by extension the intention of the designer are not relevant. The design must be interpreted objectively.
- Where, as in the present case, the images used in the registered design are photographs of a product, the design claimed consists of the features of the product – the lines, contours, colours, shape, texture, and materials and/or ornamentation – visible in the photographs.
- Each registration must be separately considered. One registration should not be interpreted by reference to another, nor should they be amalgamated. On the other hand, two images that form part of the same registration can be considered together since they show the same design but from different perspectives.
- The Court can take account, in the assessment of the overall impression, of the goods actually marketed which correspond to those designs. Especially, if they are to be used to confirm the conclusions already drawn from the designs. This is unless the product marketed by the proprietor differs from the design as registered.
- At least in a case such as this, the "indication of product" can be relied upon to resolve an ambiguity as to what is shown in the image, and in that sense to assist in the interpretation of the design.
On this point, it was noted that the UKIPO, in response to enquiry from the Court, had to explain that on or around 21 April 2023, it had updated its online registered designs viewing tool because it had become aware that "indication of product" information being provided by applicants was being wrongly mislabelled as a "description".
- It was reconfirmed that disclosure by the designer in the 12-month grace period does not impact on the design corpus, even for the purposes of infringement.
Key take-away:Registered designs can be helpful in taking action against lookalike products. It is interesting to speculate whether Thatchers would have been more successful in their case against Aldi had they obtained registered design protection for their Cloudy Lemon Cider labels as M&S did with their bottles. This decision also shows the value, in relevant cases, of using photographs when applying for registered designs compared to the more typical line drawings. For example, a line drawing may not have shown the 'light-up' features of the M&S bottle in the same way.
For more information on the original High Court decision, see: https://www.hgf.com/retail-scanner/design-registrations-to-win-this-time-its-gin-ms-vs-aldi/
Patents
T0804/22: A particular parameter pitfall
In this case, the European Patent Office's board of appeal upheld a decision revoking European patent EP3097790 (Symrise AG) for Turbid Beverages with Improved Storage Stability on the basis that the patent failed to provide sufficient information for a skilled person to carry out the invention. The patent claimed a turbid oil-in-water emulsion and defined the oil droplets in terms of an average particle size "x(n)" , wherein the term "x(n)" was defined as the average particle size that n weight% of all droplets in the emulsion show.
Although the patent described characterisation of particle size using laser diffraction, the opponents argued that this only enabled the average particle sizes to be defined by volume%. The patentee contested that the volume-based data could be converted to weight% using simple calculations. However, none of the examples in the patent provided a conversion from volume-based to weight-based average particle sizes. Furthermore, the evidence showed that, in the context of an emulsion, droplets of different sizes have different densities due to the contribution of the emulsification layer. Since a range of particle sizes would be present with inconstant density, it was found that the conversion from volume to weight cannot be calculated without extreme difficulty.
Accordingly it was found that there were "serious doubts, substantiated by verifiable facts" (the test for insufficiency) that the invention could be carried out. As such, the burden of proof shifted from the opponents to the patentee, enabling the opponents to make their case without submitting any experimental data.
Key take-away: It is critical to ensure that any parameter referred to in the claims can actually be determined using methods described or referenced in the patent, or known in the common general knowledge. Ideally, a patent will contain one or more examples which shows how a skilled person meets all of the requirements of claim 1. This places the initial burden of proof on an opponent to demonstrate that the examples cannot be reproduced.
T0629/22: Inventiveness of vegan cheese analogues
In this case the EPO's board of appeal considered the inventiveness of claim 1 of EP3422865 defining a cheese analogue comprising water, a specified amount and type of starch, a specified amount of potato protein and fat. The claimed analogue was distinguished over the closest prior art by the type and content of starch. According to the patentee, these features resulted in good melt-stretch characteristics. However, the board found that it was not credible that any product defined by claim 1 would have these characteristics, since certain processing steps were necessary to achieve them. Since the patentee could not rely on the technical effect of melt-stretch characteristics, the board defined the problem solved by the invention as merely being the provision of an alternative cheese analogue. The solution, i.e. the provision of a particular amount and type of starch, was held to be obvious in view of the prior art.
Helpfully, the patentee had filed an auxiliary claim set in which claim 1 defined a product made according to a particular process, thereby overcoming the issue of the missing method steps. However, the appellant (opponent) presented experimental reports showing that, in one example, a cheese analogue prepared according to claim 1 did not have the required characteristics, and thus argued that the alleged benefit of the invention could not be achieved across the scope claimed.
The board observed that the amounts of starch, potato protein and fat used in this example were at the edges of the ranges claimed, whereas data presented by the patentee showed that the amounts of the claimed components could be varied substantially across the claim scope while still achieving the melt-stretch characteristics. The board also referred to the decision of the enlarged board of appeal in G1/03 in which it was stated that "the inclusion of non-working embodiments is of no harm" provided that there is "a large number of conceivable alternatives and the specification contains sufficient information on the relevant criteria for finding appropriate alternatives over the claimed range with reasonable effort".
Taking this into account, and in view of the information provided in the patent, the board found it credible that a skilled person following the teaching of the patent would obtain a cheese analogue having the required stretch characteristics. The claimed solution to the problem of providing a cheese analogue having such characteristics was then considered non-obvious in view of the prior art.
Key take-away: This case exemplifies how the credibility of alleged technical effects across the claim scope can determine whether an inventive step is found under the EPO's problem-solution approach. While the existence of a single non-working embodiment is not necessarily fatal to patentability, patent applicants are advised to include a number of examples that span the claim scope in their application at the time of filing. For opponents, finding a non-working example well within the limits of the claim, rather than at the edges, is much more likely to help challenge inventive step.
T1863/21: Interpreting a mechanism of action in a medical use claim
Nestlé appealed the opposition division's decision to maintain Nutricia's patent EP2575508. Claim 1 of the patent is directed to a non-digestible oligosaccharide for use in the enhancement of oral tolerance against dietary proteins, the oral tolerance being induced by partial milk protein hydrolysate. The main issue of dispute between the parties was how to interpret the claims. Nestlé submitted that the granted claims were directed to compositions comprising a mixture of partial protein hydrolysate and non-digestible oligosaccharide that induced oral tolerance to proteins. Nutricia's view was that claim 1 does not focus on the mixture, but on the role of the oligosaccharide. The board concurred with the patentee. It noted that claim 1 is a medical use claim in which the medical use consists in inducing tolerance to proteins, while the role of the oligosaccharide is to enhance the tolerance-inducing effect of the hydrolysate. This interpretation is consistent with the examples in the patent.
It was also considered whether the feature of enhancement merely sets out a mechanism of action. Nestlé argued that an underlying mechanism of action cannot confer novelty on a second medical use claim. However, the board did not accept this argument, noting that (i) it was uncontested that the claimed medical use was novel and (ii) the case law has established that a reference to a mechanism of action can lead to novel subject-matter, provided that it leads to a truly new useful application. The board therefore concluded that the question of whether the feature of enhancement related to a mechanism of action was merely academic; the important issue was whether it restricted the claim scope.
In response to Nestlé's insufficiency attack, the patentee filed additional data during opposition proceedings based on a binary blend of oligosaccharides, since only ternary blends were used in the examples of the patent. Nestlé disputed that an effect could be achieved using only one or two oligosaccharides. Rather than submitting its own data in support of this argument, Nestlé relied on a statistical analysis of the patentee's data. The board was unconvinced by this argument, noting that "statistical significance is not and should not be the sole criterion for considering experimental results, let alone for excluding them from consideration", and that a patent need not fulfil the same standards as a peer-reviewed scientific publication.
Nestlé then argued that the invention was insufficiently disclosed over its scope because the milk protein hydrolysate would not be capable of inducing oral tolerance against all dietary proteins as claimed. Since this argument has an irrefutable scientific basis, no data was required to persuade the board. The patentee was able to overcome this issue by limiting claim 1 to oral tolerance against milk proteins. Since the use of non-digestible oligosaccharides for enhancing of oral tolerance against milk proteins was not suggested by the prior art, the amended claim was found to be inventive.
Key take-away: Whether a feature in a second medical use claim is considered to be a mechanism of action is less important than the question of whether it restricts the claim scope in a way that provides something new over the prior art. Also, the lack of statistical significance does not automatically render a demonstrated technical effect implausible for the purpose of patentability assessment Europe. Opponents wishing to challenge a second medical use claim on the grounds of insufficiency will have a better chance of success by submitting their own data, unless there is a strong scientific rationale for arguing that the alleged effect cannot be achieved across the scope claimed.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.