William Grant & Sons are the owners of the globally renowned Hendrick’s Gin. In April, William Grant & Sons raised proceedings in the Court of Session against Lidl for trade mark infringement and passing off in relation to Lidl’s own brand of gin - Hampstead Gin. The issued raised in this case are analogous to those in the infamous Colin v Cuthbert action in recent weeks.
On 25 May 2021, the Court of Session issued their written decision in the case in which Lord Clark granted interim interdict in favour of William Grant & Sons therefore, requiring Lidl to remove Hampstead Gin from its supermarkets in Scotland on the basis of the claim for trade mark infringement.
The facts
Hendrick’s Gin was launched in 1999 and is renowned for being best served with a garnish of cucumber rather than the traditional citrus fruits and it has been marketed widely and consistently on this basis. Hendrick’s Gin is also bottled in a dark brown/black and opaque, apothecary-style bottle bearing a diamond shaped label. William Grant & Sons have a registered trade mark in the shape and design of the bottle in class 33 which is for alcoholic beverages.
Hampstead Gin has been sold by Lidl for a number of years exclusively within Lidl stores. In late 2020, Lidl changed the design of Hampstead Gin and the shape and colour of the bottle were updated along with the colour and design of the label. Lidl also added pictures of cucumbers to the label therefore, inevitably creating an association with Hendrick’s Gin. Lidl increased the price of Hampstead Gin from £10 to £15.99 and increased the bottle size from 50cl to 70cl thereby replicating the quantity of Hendrick’s Gin bottles. Moreover, Lidl increased the alcohol by volume to 41.4% which is exactly the same percentage alcohol by volume as Hendrick’s Gin.
This change of design prompted William Grant & Sons to raise proceedings in the Court of Session for trade mark infringement and passing off. They also sought interim interdict requiring Lidl to remove Hampstead Gin from its shelves pending the outcome of this court action.
The decision
The Court of Session decided that William Grant & Sons did not have reasonable prospects of success under section under Section 10(2)(b) of the Trade Marks Act 1994 (“the Act”) or in relation to the claim for passing off. For a claim under Section 10(2)(b), the trade mark owner, William Grant & Sons, must establish that there is a likelihood of confusion between the registered trade mark and the offending sign. The Court held that it was unable to conclude that the average consumer would be confused by the two gins. The same lack of likely confusion applies to the claim of passing off. The reasoning behind this decision was that Hampstead is sold exclusively in Lidl whereas Hendrick’s Gin is not sold in Lidl and is sold elsewhere. Also, the Court noted that Hampstead Gin is around half of the price of Hendrick’s Gin and, both of the products have different names.
However, the Court reached a different view on the claim under Section 10(3) of the Act which applies to well-known trade marks with a reputation. To make a successful claim under Section 10(3), the trade mark owner must establish that the use of the offending sign takes unfair advantage of or is detrimental to the distinctive character and repute of the registered trade mark. Importantly, there is no requirement on the trade mark owner to establish confusion. The Court noted that Hendrick’s Gin had a sufficient reputation for this to apply and that Lidl’s intention in changing the design was to increase the attraction of Hampstead Gin to their customers by creating an association in their mind with Hendrick’s Gin. The Court held that William Grant & Sons had a reasonable chance of success in pursuing a claim under Section 10(3) of the Act on the grounds that Lidl were ‘riding on the coat-tails’ of the Hendrick’s Gin trade mark and that this could influence the economic behaviour of Lidl’s customers. Therefore, it was held that Lidl were taking unfair advantage of the repute of the Hendrick’s Gin trade mark and may be harming the brand.
The Court then considered whether, on the balance of convenience, Lidl should be ordered to remove Hampstead Gin pending the outcome of William Grant & Sons’ claim under Section 10(3) of the Act. The Court noted that this particular Hampstead Gin bottle design was a new product and because Hendrick’s Gin had been sold for years in its distinctive bottle, the Hendrick’s brand could be damaged if Lidl were allowed to sell Hampstead Gin in that particular bottle pending the outcome of the action. The Court also considered the practical issues that would arise should Lidl be permitted to continue to sell Hampstead Gin, namely, that if William Grant & Sons were ultimately successful in the action, it would be difficult to quantify the damage to their brand in monetary terms. Comparatively, if Lidl were successful but they had been asked to remove the Hampstead Gin pending the action, the damage would arise from the lost sales which would be easier to quantify in monetary terms. The Court also noted that Hampstead Gin had been being sold using different bottle designs elsewhere and therefore, Lidl could revert to one of those unobjectionable designs if it wished to continue to sell Hampstead Gin in the interim period. Therefore, the Court ordered Lidl to remove Hampstead Gin in its current design in all of its stores in Scotland.
Issues arising from this case in the food and drink industry
This case highlights the challenges faced by trade mark owners in taking action against supermarkets who sell own brand products that are designed to look like well-known brands. Often the lookalike products have sufficient differences from the brand in order to avoid confusion in terms of the public. Moreover, the public are aware that this is a model used by many supermarkets and many are willing to purchase the lookalike products but are not genuinely confused between the products. William Grant & Sons ultimately seek to rely on the fact that Lidl were taking unfair advantage of the reputation and character of the Hendrick’s Gin trade mark, in an manner which may be detrimental to the brand. The case is similar to the issues raised and faced by Marks & Spencer against Aldi raised in the courts in England. It will be interesting to see if a similar decision will be taken by the court south of the border and whether trade mark owners see their rights strengthened under this particular type of argument.
You can find the Court’s written decision here.
This article was co-written by Clare Tuohy, Trainee Solicitor.
