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Lookalikes and passing off—bottle design get-up claim (Au Vodka)

07 November 2022. Published by Ciara Cullen, Partner and Sarah Mountain, Partner and Samuel Coppard, Senior Associate

Currently there's significant activity in the lookalikes space. The Au Vodka claim (Au Vodka v NE10 Vodka [2022] EWHC 2371), which focuses on bottle design 'get-up', arrived in the courts for an interim injunction hearing in September 2022. Au Vodka's application was dismissed. The judgment shows that passing off—get-up claims based on shape can be challenging to bring, particularly at the interim stage, and prompts the question of whether it's possible to bring Cofemel and copyright into the lookalikes arena.

The dispute

 The Au Vodka brand was launched in 2015 as a premium brand. It launched flavoured vodkas in 2019/2020 and saw its annual revenue exceed £40m in the year 2020/2021. Au Vodka markets heavily via social media using celebrity endorsement and has a current annual marketing budget of £3.6m.

Au Vodka NE10 Vodka

NE10 Vodka (graphite bottle in image) launched a new range of vodka in late August 2022 via a website, Instagram page and Facebook.  Au Vodka reacted swiftly and within two weeks they'd applied for an interim injunction to stop the marketing and sale of NE10 Vodka's new range until trial. The claim is for passing off, based on the allegedly deceptively similar get-up of NE10 Vodka to the get-up used by Au Vodka. 

The interim injunction application

 In considering American Cyanamid principles, the High Court recognised that in assessing the balance of justice in passing off cases it is frequently necessary to "form a view as to the strength of the claimant's claim in order to understand the scale of any likely damage".  In forming that view the court has dropped some markers on its thinking on the law of passing off as applied to the facts of this case and on the evidence submitted with the application. This may, subject to further arguments and evidence, provide some clues as to where the court may be headed at trial. 

Turning to the Jif Lemon passing off case, the court considered the three elements required to prove passing off of goodwill, misrepresentation and damage. It noted that "at the heart of passing off lies deception or its likelihood, deception of the ultimate consumer in particular". 

The court also considered the EU IPO Board of Appeal decision (R 1839/2021-5, 3 June 2022) cited by Au Vodka which concerned an application to register as a 3D mark the shape of a bottle for alcoholic beverages. Following the appeal, the shape mark was allowed to proceed to registration. In response to Au Vodka citing the Board of Appeal decision, the court clarified (quoting the Mag Instrument case) that only marks that depart significantly from the norm or customs of the sector and thereby fulfil their essential function of indicating origin, are not devoid of distinctive character. 

The court proposed to proceed "on the common sense basis that generally, consumers are not in the habit of making assumptions about the origin of products on the basis of the shape of goods in the absence of any graphic or word element." The word/graphic elements on the respective bottles: Au79 and NE10 would therefore be taken into account in establishing Au Vodka's reputation (the foundation for misrepresentation) with the name 'Au' and the gold coloured bottle the most significant features. 

The court then turned to the arguments on misrepresentation and the instances of actual consumer confusion, submitted by Au Vodka. It decided (acknowledging that it had strayed into mini-trial territory) that these did not amount to instances of actual deception. However, overall there was a serious issue to be tried on passing off with a finely balanced case. It stressed that the evidence that would emerge between now and trial could swing the case one way or the other. 

The court declined to grant an interim injunction.  When considering the American Cyanamid criteria and specifically whether damages would be an adequate remedy for NE10 Vodka if an injunction was granted pending trial, the judge appeared to take on board NE10 Vodka's claim that an injunction would 'kick the legs out from underneath [them] after a successful launch'. It focussed on the fact that NE10 Vodka's range had already been launched and that the grant of an injunction would result in new employees being laid off. Consequently, it found that damages would not be an adequate remedy. 

NE10 Vodka's defence to passing off claim

 Following the unsuccessful application, NE10 Vodka filed their defence on 17 October 2022. In their defence they adopt the position that it is common in the trade for vodka to be sold in tall elongate bottles, that 'Au' and the gold colour are the dominant and distinctive component of the getup, that upper and lower plates are common on bottles, and that NE10 Vodka sourced the bottles in China and the shape was available “off the shelf". They claim there is no deception.

The trial, directed by the court to be as early as possible in the term starting in January 2023, is eagerly awaited.

Au WaterRower 

 Au Vodka's claim has been pleaded based on passing off. This is definitely the key right to plead in this case, but it is arguable that Cofemel may also be triggered here. It is recognised that as part of retained EU law, Cofemel provides for the protection of any 'identifiable' work of applied art using only the ‘author’s own intellectual creation’ originality test. Remember—first instance courts are bound by retained EU case law; the Court of Appeal may depart from it for good reason while the Supreme Court is not bound by it at all.

Under Cofemel, categorisation of a work (as is the case currently under CDPA 1988) is not required. The Brompton Bicycle case extended this reasoning holding that a product whose shape is, at least in part, necessary to obtain a technical result may be protected by copyright where it is an original work resulting from the author’s own intellectual creation in that, through its shape, the author expresses their creative ability in an original manner by making free and creative choices in such a way that that shape reflects their personality.

These cases and unsettled issues were raised again in the WaterRower case in a strike out application in August 2022.  The court declined to strike out WaterRower’s claim for infringement of copyright in its water resistance rowing machine (the WaterRower) on the basis that the WaterRower did not meet the requirements to be a ‘work of artistic craftsmanship’. Instead, the judge held that the claimant had a real prospect of demonstrating at trial that the WaterRower meets the requirements of Hensher and Cofemel/Brompton and is a work of artistic craftsmanship. There was a real prospect of success under Cofemel/Brompton since the claimant could demonstrate that while the creator worked within the design constraints for a water resistance rowing machine, they were still able to exercise their free and creative choices.

For Au Vodka, a copyright claim would certainly bring evidential focus to copying allegations (which are alleged in the Particulars of Claim and which NE10 Vodka deny with there being 'no intentional copying') and away from deception which so far has produced a lukewarm response from the court.  

While there may be a sense of anticipation with the prospect of a successful copyright claim in more utilitarian object cases, the Retained EU Law (Revocation and Reform) Bill lurks in the background having just had its second reading on 25 October 2022. On the one hand this might mean that if the Bill passes, the courts of England and Wales will no longer feel compelled to follow Cofemel. On the other hand, there have been hints that due to large numbers of staff required to examine the huge swathes of EU retained law, the government might exercise the Bill's power of extension and push back the sunset clause to as late as 2026. Within that time frame, it is likely that the courts will need to address the Cofemel shaped elephant in the court room. 

Key takeaways on the passing off claim

The launch of NE10 Vodka was in late August and the interim injunction was sought on 16 September 2022 but even in this short period of time the court felt that NE10 Vodka had established a working trade that would be wrong to unravel. This case shows how important it is for brands to monitor the market and take action promptly to prevent the launch of an allegedly infringing product before it is on the market.

The court also spent some time commenting on Au Vodka's letter before action, sent the day following NE10 Vodka's launch (not ten days before when an image of the NE Vodka bottle was posted on Instagram).  Although Au Vodka's claim was discernible in the letter it was "not very well articulated" and was "buried in amongst a series of hopeless allegations which, understandably, have not been pursued." The judge also described it as "highly aggressive". These negative comments act as a reminder for brands to seek legal advice early from advisors experienced in lookalike claims and to take a measured, reasonable approach in the letter before action which can come back to bite at a later date.  

The case also shows how challenging it can be to collate, in a passing off action as opposed to a case of trade mark infringement, the right kind of evidence of confusion to show consumers are deceived into thinking that the defendant's goods are from a source they recognise, which is the claimant.