Claim No: IP-2022-000076 - [2024] EWHC 88 (IPEC)

Mr Watkins evidence is that where Aldi sees a gap in the market and decides to develop a similar Aldi product, it will often identify a “benchmark” product which is usually a market leader. He says that will act as the quality barometer, as Aldi’s intention is to deliver a product of the same or better quality as the benchmark leading product. He said in developing the Aldi Product, he chose the Thatchers Product to be the benchmark.

Both parties’ witnesses agreed that in the arena of product development by retailers and manufacturers, the concept of benchmarking against an existing product is completely standard market practice, and has been for years. However, Mr Milton said that benchmarking goes beyond looking at quality, and involves looking at “product development, design, looking at every aspect of the marketing mix… they will have looked at the brand leader in that market place and they will have looked at the most successful product and looked at everything else, in that order”. It was put to him in cross-examination that the fact that something may have been referred to as benchmarked, did not on its own inform what the product would look like, but Mr Milton disagreed, saying “it is likely to inform you what the product would look like” and he confirmed that he meant that he would expect there to be some visual resemblance if a project is benchmarked.

This was explored with Mr Watkins in cross-examination. Mr Watkins repeated that the benchmark was a benchmark for quality, and said that it was also used as a barometer for price, as Aldi’s aim was to produce a product of equivalent or better quality at a discounted price. He was asked whether the benchmark was also used to inform the packaging, and he initially said that it was not, that the packaging would reflect a much wider brief looking at the whole cider market but the lemon cider in particular. He said that was because the packaging was about conveying an Aldi product first and foremost, while communicating what the product is. Mr Watkins said that a wider review of the market looking at packaging would have been carried out by Aldi’s third party design consultants, the Black Eye Project.

This is not, in my view, supported by the evidence, which shows that during the development of the design of the Aldi Product with Black Eye Project and also with Aston Manor, the Thatchers Product was also being used as a benchmark for the packaging. Although there is relatively little in the way of documentary evidence arising from the Aldi side relating to design of the packaging, which I accept from Mr Watkins evidence is because the majority of the design decisions were communicated orally in accordance with Aldi’s deliberately lean and efficient business model, there are a number of paper design iterations and options produced by the Black Eye Project, and the only third party product which is illustrated in any of them is the Thatchers Product.

Mr Watkins said that he would have expected the team from Black Eye Project to have carried out supermarket visits and a market review, but accepted in cross-examination that he had no direct knowledge whether they did or not, and that it was possible that they had taken shortcuts in the interests of time. There is no evidence that they did so before me, and the documentation they produced illustrates and refers only to the Thatchers Product, so I find that they did not. Mr Watkins said in his written and oral evidence that he had carried out supermarket visits and market reviews of the cider sector very regularly, every week or two, in connection with the NPD which gave rise to the Aldi Product, but conceded in cross-examination, quite fairly in my view, that he now had no direct recollection of such visits, telling the Court that he had developed 50, 60 or 70 other projects since this one. He did, however, say that for every product that was put into an Aldi own-label, there would be store visits and a lengthy process of sampling and procurement of other products, to ensure he reached a position where he was happy Aldi were entering into the correct market, and I accept his evidence, which I think is truthful given the concession that he made that he cannot remember what he did, that it is likely he did the same while developing the Aldi Product.

Despite that finding, it seems clear from email communications from Mr Watkins and members of his team at Aldi that when making decisions about various design options and iterations, those decisions were being taken with the Thatchers Product as a reference point. The early iteration of the design was very much in the Taurus House style, with the “TAURUS” brand, the bulls head device and the swoosh in yellow, green and white. He said in his written evidence that he did not consider these early versions to do a good enough job of communicating the lemon flavouring or the more premium nature of the product, so he wanted a package design that “shouted lemon to consumers” which would communicate more value, to reflect the higher price of seasonal flavours. For that reason he asked the Black Eye Project to add pictures of lemons, like Thatchers, because he thought what Thatchers were doing with lemons to communicate exactly what the Thatchers Product was excellent, and, subjectively, better than the Brothers Cloudy Lemon Cider, for example. Accordingly, the instruction came from Mr Watkins’ team to the Black Eye Project that they wanted to see “a hybrid of Thatchers and Taurus”, “i.e. be a bit more playful, add lemons as per Thatchers”. In my judgment, that is using the Thatchers Product as a benchmark for the packaging.

A number of design options came back, one using cut lemons, others using whole lemons. Mr Watkins accepted that he chose the option which was more similar to the Thatchers Product, with whole lemons. He said that his team member preferred it, and he happily embraced her view as he thought that whole lemons looked more like lemons when in whole form, rather than when depicted as sliced. Mr Watkins was asked by Mr Howe: “Are you saying you were not influenced by the fact it would make it more similar to the Thatchers Product when your product landed on the shelves?” to which Mr Watkins replied “…it is absolutely right that they have whole lemons and therefore it is acceptable to infer that we would have preferred that based on that fact, but it was not the overriding factor in the decision. It would have been what do we think is right for our design at the time.” In my judgment, that admission that one of the reasons he preferred the whole lemons was because that is what was on the Thatchers Product, is again evidence that Aldi was using the Thatchers Product as a benchmark for packaging.

Mr Watkins was asked about other changes that were made to get to the final design, in cross-examination. He conceded that the background of the can was made a lighter cream which brought the colour closer to that of the Thatchers Product, but said that was done to increase the visual presence of the lemons. He said that he moved away from outlined, yellow lettering suggested by the external designers to a plain black font on “Cloudy” and “Cider” and yellow on “Lemon”. I have already noted that yellow is rather lost against the background, and can see that if the background colour had not been made a lighter cream it and the lemons would have been even less prominent. He said that he re-ordered the words “Cloudy” “Cider” and “Lemon”, because without those changes, that “looked far more like Thatchers than we would ever want it to, which is exactly why at that point we instructed a change to move it away from the Thatchers Product”.

Mr Watkins was asked his opinion on similarity of other elements on the Sign and the Trade Mark, including the arrangement of fruit, the leaves etc, and also about concerns expressed by Aston Manor about the similarity of Aldi’s final design to the Thatcher Product, but of course similarity is a matter for the Court. Despite those concerns, Aldi signed off the design, saying in an email that it had been “put through our legal team” and approved. In relation to the final version of the can which became the Sign, Mr Howe put it to Mr Watkins that the reason that Aldi made the Aldi Product “so similar” to the Thatcher Product was so that it would call to mind the Thatchers Product and that would make it easier to sell to customers, because they would get something they would think equivalent to what they are already used to. Mr Watkins denied it. He said “It is still clearly evident that the first thing you see is Taurus and the bull and the positioning of the swoosh. All still remain exactly as per design stage 1. It has had a number of iterations and changes, but it is still fundamentally an Aldi Taurus product. The first thing anybody will see is “TAURUS” and that was the intention”. I will return to this in due course.