Aldi’s ‘cake trolling’ trades IP risks for tweets

The public row with Marks and Spencer over Aldi’s Cuthbert the Caterpillar is part of a well-practised marketing strategy, finds Alex Baldwin.

In April, news headlines for a short while led with a story that UK supermarket chain Marks and Spencer (M&S) was suing Europe’s largest supermarket chain, Aldi, over a cake that it claimed infringed M&S’ ‘Colin the Caterpillar’ product.

A couple of days after the media storm, Aldi’s Cuthbert the Caterpillar cake was pulled from store shelves, but not for long.

Aldi announced later that month that it will be bringing back a limited edition of its Cuthbert cake and donating proceeds to its charity partners Teenage Cancer Trust and Macmillan Cancer Support—the latter being M&S’ core charity partner for more than a decade.

A statement on Aldi’s official Facebook page read: “Hey Marks and Spencer we’re taking a stand against caterpillar cruelty. Can Colin and Cuthbert be besties? We’re bringing back a limited edition Cuthbert next month and want to donate all profits to cancer charities including your partners Macmillan Cancer Support and ours Teenage Cancer Trust. Let’s raise money for charity, not lawyers #caterpillarsforcancer.”

In 2018, M&S launched a special edition of the Colin cake in support of Macmillan, with 10% of all sales donated to the charity.

“‘Colin the Caterpillar’ is linked to the retailer’s 12-year tie-up with Macmillan Cancer Support, and 10% from the sale of each cake goes to the charity. By taking this legal action, M&S is seeking to protect its own revenues and those of its charitable partner,” says Mark Caddle, partner at Withers & Rogers.

This furore was the latest in several cases involving Aldi’s “own brand” products that pose a striking similarity to existing products, including a powder compact (Charlotte Tilbury), yoghurt (The Collective), and an infamous version of BrewDog’s Punk IPA beer.

Many consider Aldi’s “trolling” strategy an entertaining way of drawing media attention upon itself, presenting itself as a cheeky underdog to the media and consumers—a clever tactic given that the German chain, with more than 11,000 stores and 2019 revenues greater than £12 billion, is far larger than most of its competitors, including M&S.

What is the supermarket’s strategy and what can M&S do about it?

The main hurdle for M&S will likely be establishing that the appearance and ‘get-up’ of Cuthbert (and possibly his packaging) amount to an actionable misrepresentation that deceives consumers.”
Simon Clark & Marc Linsner, Bristows
Simon Clark
Marc Linsner

Passing off?

M&S claimed that Cuthbert “rides on the coat-tails” of Colin’s reputation, and while the complaint is private, many lawyers have pointed out that Aldi’s cake could constitute “passing off”.

Passing off in UK law describes that no-one has the right to market and represent goods or services as being someone else’s. This is generally cited as an alternative to “unfair competition” in the US.

“At the moment it is unclear if M&S is indeed alleging passing off, but the circumstances certainly suggest that passing off could form part of M&S’ case,” say Simon Clark, partner and Marc Linsner, associate, at Bristows.

“If so, it will not be a straightforward claim to argue. The main hurdle for M&S will likely be establishing that the appearance and ‘get-up’ of Cuthbert (and possibly his packaging) amount to an actionable misrepresentation that deceives consumers.”

Passing off, while not likely to offer a full solution to M&S’ argument, could prove useful in light of recent cases of post-sale confusion, explains John Coldham, partner at Gowling WLG.

“Passing off always has limitations and is generally not considered to be as effective as unfair competition can be in some of the European jurisdictions. However, the development seen in our win for Freddy v Hugz, a case in October 2020 in which post-sale confusion was found, could have the effect of broadening the effectiveness of passing off,” he says.

Other lawyers also cited the Hugz ruling as pertinent to the Aldi proceedings. “The decision in Hugz found that the principle of post-sale confusion (recognised in trademark cases) could amount to passing off,” say Clark and Linsner.

“As Colin and Cuthbert are both intended for celebrations and surprises, consumers receiving or consuming these products rather than actually purchasing them might make false assumptions about commercial origin based on the similarities in appearance and get-up,” they explain.

“In that sense post-sale passing off could provide M&S with a stronger passing off claim.”

“If I were M&S I would find it far more difficult to do a deal with Aldi given the way in which their PR machine has gone into overdrive.”
Aaron Wood, Blaser Mills

Trolling strategy

While the media attention has won Aldi marketing reach, and entertained lawyers, whether it has a direct impact on how this case and similar ones at Aldi will be handled is a different matter.

“I think Aldi’s ‘trolling’ approach has been very entertaining, but the difficulty is that it creates a ‘point of principle’ for M&S,” says Aaron Wood, trademark attorney at Blaser Mills.

“If I were M&S I would find it far more difficult to do a deal with Aldi given the way in which their PR machine has gone into overdrive.”

However, after the media storm dies down, there is precedent for Aldi to settle these disputes.

In 2014, the Saucy Fish Co brought a trademark action against Aldi, winning a preliminary injunction after convincing the High Court that its brand was distinctive. Following this, the parties promptly settled out of court.

“Aldi clearly revels in the attention, and is effective in its PR around such attacks,” adds Coldham.

“I do not think that the PR will affect the outcome of the proceedings, save that it might prompt the parties to consider settlement after the initial marketing benefit of the increased profile dies down.”

Social media have also been a key aspect of Aldi’s strategy. It has made a point in the past week of capitalising on the controversy and riding on the attention, with several of its tweets relating to Cuthbert receiving more than 100,000 likes. Tweets mentioning M&S performed particularly well.

Oliver Laing, partner at Potter Clarkson says: “The upsides of the strategy are clear—brand exposure and loyalty towards the Cuthbert product and Aldi more generally.

“Aldi’s social media strategy has been very successful, and even in the last year, a prospective case by BrewDog resulted in a collaboration between the two companies to mutual benefit.

“However, some may consider the light-hearted approach to potential IP infringement off-putting.”

Stronger reputation

While there may be arguments made for passing off and consumer confusion, Alex Borthwick, of counsel at Powell Gilbert thinks M&S’ best chance could lie outside these two options.

“M&S’ strongest case may be based on unfair advantage and/or detriment to the reputation of its ‘Colin the Caterpillar’ trademark,” says Borthwick.

“In such cases, the trademark owner need not prove customer confusion—it would be enough for consumers simply to think of M&S’ trademark when they encounter Aldi’s Cuthbert the Caterpillar.”

A detriment to reputation argument would hinge on M&S proving that Aldi’s caterpillar cake is inferior to its own to prove it is detrimental to the distinctive character of M&S’ well-known branding.

“A mark with a strong reputation is easier to tarnish and M&S could point to the 30 years’ use of its trademark, the popularity of its cake, and the fact that M&S food generally is highly regarded,” Borthwick added.

The popularity of the case seems to be a perfect storm for Aldi. While the lawsuit is being handled privately, Aldi wants to ride the publicity wave, with its viral #FreeCuthbert hashtag and making digs at its competitor.

Like many cases involving Aldi’s alleged copycat products over the past few years, this will likely be settled quietly while Aldi reaps the publicity benefits.

Image: Envato Elements / cliplab

Issue 2, 2021

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