Passing off: Moroccanoil vs Aldi
Posted in | Jun 03, 2014
According to the judgment of HH Judge Hacon in a case before the Intellectual Property & Enterprise Court, Moroccanoil Israel Limited ("MIL") failed to establish passing off because the evidence did not support any likelihood of a misrepresentation by Aldi Stores Limited ("Aldi").
MIL made and sold hair products throughout the world and the most successful of these was a hair oil marketed under the name "Moroccanoil", which was first sold in the UK in 2009. An image of the packaging for this product is shown:
In March 2012 Aldi brought on to the UK market a competing hair oil under the name "Miracle Oil" and an image of the packaging for this product is shown:
Tort of passing off
In order for MIL to succeed in its claim of passing off it had to demonstrate:
- goodwill in MIL's business in the sale of Moroccanoil in the UK, which goodwill is associated with the get-up and name of the product such that they are separately or in combination recognised by the public as distinctive of MIL's product;
- a misrepresentation on the part of Aldi (whether or not intentional) in relation to the source of Aldi's Miracle Oil product; and
- damage to the goodwill by reason of the misrepresentation.
This case threw up various points which were argued in the context of well-established case law, but it began with the parties agreeing it was irrelevant whether the public would know the identity of the manufacturer of the products. The judge considered arguments as to the concepts of 'confusion' and 'deception', but ultimately he decided what matters is whether there was misrepresentation and went on to say:
"In this case that means whether the public would assume, because of the get-up and name of Miracle Oil, that it either (a) is Moroccanoil or (b) is made by the same manufacturer (or is licensed). This is to be distinguished from the public merely wondering whether the products are the same, or are made by the same manufacturer or are licensed."
It was not necessary that all customers of hair products in Aldi make either assumption for MIL to establish passing off. Passing off can be established even though most people are not deceived. Judge Hacon said that the better approach, having considered all the evidence, was to assess whether it was likely that "sufficient individuals have made or will make the false assumption such as to cause material damage to the goodwill of the claimant."
MIL contended that there may be passing off even if the misrepresentation was dispelled by the time the purchase of the defendant's goods had been completed. This is usually referred to as 'initial interest confusion' and there followed a debate about whether such confusion forms part of the English law of passing off. The judge concluded that where 'initial interest confusion' is dispelled before that confusion is acted upon, in circumstances such that the claimant suffers no damage, it is not sufficient to give rise to passing off.
It was MIL's case that that a misrepresentation was generated by a combination of the name and get-up of Aldi's product but greater emphasis was placed on similarities in the get-up. Aldi submitted that passing off cases based on get-up that were successful were rare indeed, Jif Lemon being one of the few exceptions which had depended on unusual findings of fact at first instance. Judge Hacon dealt with this aspect of the case when he said:
"Goods are almost always referred to by their trade names, not their get-up. Get-up may play a greater role in the recall and recognition of a particular product, but if the respective names of the claimant's and defendant's goods are distinctive, a misrepresentation by reason of similar get-up is likely to depend on the relevant public not noticing the name on the defendant's product, or on a label attached to it, as was the case in Jif Lemon."
The following are some of the other factors that led the judge to conclude that passing off had not been established:
- Trade channels – MIL's products were supplied almost exclusively through salons and were not the kind of products the public would expect to find in an Aldi store, where the vast majority of products are Aldi's own brands.
- Price differential – Miracle Oil sells for about £4 as opposed to about £30 for Moroccanoil. Consumers would not view these two products as being the same thing, although that does not necessarily exclude the possibility of common manufacture.
- Differences of get-up – MIL's case rested on the similarities, especially the turquoise and orange colours, but ignored the differences. The judge highlighted the differences as being the striking 'M' logo on the Moroccanoil box and the presence of Aldi's in-house brand CARINO and a leaf motif on the Miracle Oil box. This also applied to the labels on the bottles.
In the absence of a misrepresentation there can be no damage to the goodwill of MIL's business.
The full decision can be read at http://www.bailii.org/ew/cases/EWHC/IPEC/2014/1686.html
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