Copycat competition Fionnuala Carolan explores

Spot the difference

Y o u r e y e s a r e n o t d e c e i v i n g y o u . Y o u a r e j u s t b e i n g c o n f u s e d b y a c o p y c a t p r o d u c t ! F i o n n u a l a C a r o l a n l o o k s a t t h e p h e n o m e n o n o f c o p y c a t p r o d u c t s a n d w h y t h i s p r a c t i c e o f t e n g o e s u n c h a l l e n g e d

How many times have you walked around the discounters and had to do a double take at a product, thinking that a well-known brand must now be sold there (as indeed, more brands currently are), only to realise that it’s just a copy of that brand? It’s happening more and more and seems to have become quite an acceptable practice across the industry but are there any legal implications when you copy an established brand?

Just a few weeks ago, Lidl was ordered to destroy its chocolate bunnies by a Swiss court after Lindt and Sprüngli won a legal victory when the court ruled that it deserves protection for its recognisable and muchloved chocolate bunny. The federal court in Switzerland ordered Lidl to stop selling its version of the chocolate bunny and to destroy all its remaining stock. Explaining its decision, the court said that the Lindt and Lidl rabbits were likely to be confused by consumers, even though there were some differences between them.

In another victory for the famous Lindt bunny back in 2000, the chocolatier applied for a trademark on the three-dimensional shape of its bunny which was granted the following year. This came after a legal battle between Lindt and Austrian rival chocolate maker Hauswirth, which also made goldwrapped chocolate rabbits. Hauswirth was later ordered by a Vienna court to stop producing its bunnies.

M&S has three trademarks relating to its famous Colin the Caterpillar cake, including the words “Colin the Caterpillar” and the packaging. Last month the British retailer reached a deal with Aldi after it took legal action to protect its bestselling cake against Aldi’s Cuthbert, chocolate sponge roll. Details of the deal have not been revealed, but it is understood that Cuthbert’s appearance may be changed. Marks & Spencer said: “The objective of the claim was to protect the [intellectual property] in our Colin the Caterpillar cake and we are very pleased with the outcome.”

However an Aldi spokesperson has indicated that Cuthbert will be back saying: “Cuthbert is free and looking forward to seeing all his fans again very soon!”

We’ll have to wait to see how they navigate this one.

A selection of branded products and similar items available at Lidl. According to the Chartered Institute of Trade Mark Attorneys, supermarkets often get around mimicry by choosing a different brand or product name, while still hinting at the branded version of the product with certain packaging ‘cues’

Products that go unchallenged

Both the Lindt bunny and Colin the Caterpillar are two very well-recognised brands and it is not surprising that their owners are trying to protect them but there are so many other products we see every day that seem to go unchallenged. For example it’s hard to spot the difference between Aldi’s hazelnut spread Nutoka and the original Nutella. Also Lidl’s Snaktastic crisps are shaped just like the Pringles tube and Aldi’s Seal bars seem to differ from Penguin bars mostly in name.

Even beauty products are being duped. For example Aldi’s No 1-5 candles are a dead ringer for the Jo Malone ones, Essence from Lidl is similar to Light Blue perfume from Dolce & Gabbana and Aldi’s face cream Lacura is a fraction of the cost of high-end brand Sisley but some find it hard to tell apart. head of Technology & Innovation at law firm Matheson, most large brands actively monitor for copycat branding, and do frequently take action where the copycat brand is impacting their own brand and earnings, through diversion of business and therefore earnings to the copycat, but also where there is a disparity of quality which could indirectly damage a luxury brand.

“The steps taken by the big brands do not necessarily lead to court proceedings –some may be managed through prelitigation correspondence, others through trade mark opposition or revocation proceedings. Those approaches often lead to an agreed resolution. So there is more activity in protecting against copycat brands than would necessarily be public knowledge,” says Bohan.

Where a dispute cannot be resolved commercially, taking court action to enforce trademark and IP rights is the ultimate recourse for a brand, she says. “There are numerous factors which go into a decision to take legal action, including whether the action is based on infringement of a registered trademark, or “passing off”. A claim for “passing off” requires the brand owner to show, among other things, that

the copycat brand is capitalising on the goodwill of consumers toward the original brand, and that they would be confused into thinking that there is some kind of link between the two. This can be a harder standard to meet than the standard in registered trademark cases, may not be an available action in all countries, and is the hurdle on which established international brands like Moroccanoil have stumbled in recent years.”

Bohan says that for bigger brands, any decision to initiate formal proceedings will generally be part of a wider brand protection strategy. “For all brands the owner needs to take into account the value of the brand, its key markets, the impact which the copycat is having, the available legal actions and remedies, the costs and timing of proceedings, and whether and how strongly any overtures to the copycat to resolve the issue commercially have been rebuffed. All of the relevant factors, including the risk of losing in court, will play into any decision around how, when and what action to take to protect a brand,” she

The market research expert’s view

Tara Moran, senior research executive at Spark Emotions Limited, a global market research agency, based in the UK with a team of experts in consumer and shopper psychology spoke to ShelfLife about the practice of copycat branding in grocery retailing

Q: Why do the discounters continually copy the well-known brands?

A: Well-known brands have already done the difficult task of gaining popularity and trust from consumers which can be expensive and takes time. When discounters adopt the well-known brand’s distinctive assets for their own label lines by making only minor adaptations, they are sidestepping the hard work and cost of building a brand’s reputation, and instead are reaping the benefits of one already established and recognised by shoppers.

By then sticking a lower price tag on the product, they encourage shoppers to trial, as shoppers will automatically associate the own-label brand with the performance and reputation of its wellestablished counterpart, making the switch to own label appear less of a jump for shoppers, and a risk worth taking for the more attractive price point.

Q: Why do the brands not challenge this behaviour more often?

A: Discounter brands are really clever about being on the right side of the fine line that separates coincidental similarities from trademark infringement. Previous brands have taken legal action against some discounters, but ultimately, if it is deemed that a consumer could not mistake the copycat for the real thing then the court will rule in the discounter’s favour. This costly process often isn’t worth it for brands, so they

are cautious of taking legal action.

Q: Do you think it’s confusing for consumers when own brand products emulate a wellknown brand? Is the quality the same?

A: Our brains take in and analyse enormous amounts of information every day, so we often use mental short cuts (also known as heuristics) to make that analysis easier and faster. Our brains switch to a more instinctive, faster mode of processing that is similar to being in autopilot (known as system 1 processing). When we go to buy our well-known product, we don’t need to inspect it fully as we know we just need to look out for its distinctive assets such as its logo or signature colour or bottle shape etc. If a discounter places a copycat product in a place where a shopper would expect to find their branded product, it could lead to confusion. However, while most copycats share key distinctive assets, there are usually still enough cues on the product for consumers to identity that it’s a copycat. That initial confusion while still in system 1 processing mode would soon fade after the shopper switches to a more considered, slower processing mode (system 2).

Q: Do you know if there are any guidelines on what is acceptable when launching a new product in terms of its likeness to an established brand?

A: Intellectual property partner Jeremy

Hertzog, of law firm Mishcon de Reya, says: “Brands are cautious about taking legal action in situations like this. The brand would need to prove that the copycat product is deliberately out to confuse the buyer into believing that the similar-looking product is actually connected economically to the original in some way.” Since there is an awareness amongst consumers around the approach and offerings of discounter supermarkets, this is rarely incited. Similarly, as discussed by the Chartered Institute of Trade Mark Attorneys (CITMA), supermarkets often get around their mimicry by choosing a different brand or product name, while still hinting at the branded version of the product with certain packaging ‘cues’. This underpins their marketing strategy of taking inspiration from leading brands while still (mostly) falling on the right side of the law.

Tara Moran, senior research executive at Spark Emotions Limited

Q: Aside from the Lindt bunny and the

M&S Colin the Caterpillar case, do you know of any other cases where a brand took legal action against a product they deemed had copied them?

A: When Aldi launched in Sydney in 2001, legal action was taken by US snack food giant Frito-Lay who sued Aldi over its ‘Twisties’ copycat, ‘Cheezy Twists’.

Although the court found Aldi’s copycat product deliberately targeted the same target market of Twisties, they concluded that it did not infringe trademark laws because the name of

Aldi’s ‘Cheezy Twists’ was not

‘deceptively similar’ to Frito-Lay’s brand, therefore consumers were unlikely to confuse the two. ■