William Grant & Sons v Lidl: where to be-gin?

16 June 2021. Published by Ciara Cullen, Partner and Ben Mark, Partner and Sarah Mountain, Partner

On 25 May 2021, the Scottish Court of Session (SCOS) granted an interim interdict (akin to an interim injunction), which prevents Lidl from selling its own brand 'Hampstead gin' in Scottish stores, pending the outcome of the matter at trial.

The order follows a claim by William Grant & Sons (WGS), owner of the well-known 'Hendrick's' gin brand, who alleged trade mark infringement and passing off. Whilst the SCOS found that WGS' claims in passing off and under s10(2) of the Trade Marks Act 1994 (TMA) had no reasonable prospect of success, it was prepared to grant interim relief in relation to claims made under s10(3) TMA.  

Background - William Grant & Sons

WGS' 'Hendrick's' gin brand is protected by the UK trade mark shown below. The mark is registered in class 33 for "alcoholic beverages":

Hendrick's gin was first launched in 2000. It is now sold in most major UK supermarkets (not including Lidl) in the following apothecary style bottle:

Background - Lidl

Discount supermarket Lidl is well-known for primarily stocking own-brand goods. In terms of spirits, Lidl has sold its 'Hampstead gin' for approximately 10 years. The product was originally sold in the bottle on the left (below) but following a redesign in December 2020, Lidl launched the bottle on the right (below) across stores in England, Scotland and Wales: 

In April 2021, WGS issued proceedings for trade mark infringement and passing off and lodged a motion for interim interdict with the SCOS. In considering whether to grant interim relief, the SCOS noted that it was not its responsibility to determine whether trade mark infringement and/or passing off had occurred but rather, whether the claims made by WGS has a reasonable prospect of success.

WGS's claims were three-fold: (1) so-called 'confusion' infringement under s10(2) TMA; (2) so-called 'reputation' infringement under s10(3) TMA; and (3) passing off under common law. In determining whether to grant an interim interdict, the SCOS considered each claim separately. 

The SCOS decision

(i) Confusion (s10(2) TMA)

Under s10(2) TMA, a person infringes a registered trade mark if, in the course of trade, they use an identical or similar sign in relation to identical or similar goods and where because of those similarities, there exists a likelihood of confusion amongst the public.

In considering WGS' arguments under s10(2) TMA, the SCOS noted (as per Pfizer Ltd and Pfizer Incorporated v Eurofood Link (United Kingdom) Ltd) that “it must however be remembered at all times that the nature of the confusion that must be proved is confusion as to origin.”  On the evidence before it, the SCOS did not consider that a likelihood of confusion between the parties' respective gins existed. This was partly due to social media evidence, which clearly showed that consumers knew 'Hampstead' was a Lidl product and partly due to Lidl's reputation for predominately stocking own-brand goods.

On that basis, the SCOS found that it was "unable to conclude that the average consumer would be likely to be confused as to common commercial origin" of the products and declined to grant an interim interdict in relation to the claims made under s10(2) TMA. 

(ii) Passing off

To succeed in a claim for passing off, the claimant must satisfy the well-established Jif Lemon trilogy of goodwill, a misrepresentation on the part of the defendant and damage.

In considering whether a misrepresentation had been made by Lidl, the SCOS considered a range of factors including the product names (which it found were distinguishable), the location where Hampstead was sold (Lidl stores only) and the price of both gins (£15.99 for Hampstead and c£30 for Hendrick's). The SCOS also noted that for the purposes of passing off, the fact that one product merely brings another to mind is not enough.

That being the case and bearing in mind the above factors, the SCOS held "there is currently no reasonable prospect that the test for a misrepresentation required for passing off will be met".  It therefore declined to grant an interim interdict in relation to the claims made in passing off. 

(iii) Reputation (10(3) TMA)

Claims under s10(3) TMA are reserved for trade marks with a reputation. Under that section, a person infringes a registered trade mark if they use an identical or similar sign in relation to any goods and/or services if the use takes unfair advantage of, or is detrimental to, the distinctive character or repute of the trade mark.

The bar for establishing reputation is not especially high and the SCOS was therefore in "no doubt" that WGS' mark had the necessary reputation in the UK. It then moved on to consider unfair advantage and/or detriment, which ordinarily requires a claimant to show that a change in consumer behaviour has occurred or is likely.  

In the present case, the SCOS found that WGS had a reasonable prospect of showing that there was a real likelihood of a change in the economic behaviour of consumers, causing an unfair advantage to Lidl. On the balance of convenience, the SCOS found that an interim interdict should therefore be granted in relation to the claims made under s10(3) TMA. 

Although a Scottish decision, the case serves as a useful reminder that the mere calling to mind of another product is not sufficient to succeed in establishing passing off. Likewise, the case also demonstrates that establishing a likelihood of confusion is extremely difficult where consumers perceive similarities between two products but clearly appreciate their separate origins (as the social media evidence demonstrated here).

The full judgment of William Grant & Sons Irish Brands Ltd v Lidl Stiftung & Co Kg and others [2021] CSOH 55 (25 May 2021) is available here.

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