The Marks & Spencer (M&S) and Aldi “tussle” relating to Cuthbert the Caterpillar (and Colin the Caterpillar) has, so far, been played out almost entirely in the halls of social media. As is often the case, the “finer details” of the dispute are often lost in favor of the witty responses from Aldi’s social media team. In the court of public opinion, Aldi seems to have won by playing the role of the cheeky “underdog”, presented in contrast to the allegedly overbearing M&S, seeking to enforce its rights.
The legal issues in this matter relate to trade mark infringement and passing off. Aldi is particularly familiar with the latter, having fought its corner in the Moroccanoil case[1], which concerned “copycat” packaging. Aldi was able to successfully defend itself against the passing off claim on the basis that consumers apparently understood that Aldi’s core business was in discount goods, and therefore did not sell expensive branded products (or not as a priority). The judgment confirmed:
“some of the public…thought that the similarities were cheeky and might infringe rights relating to design. That is not passing off. So living dangerously in that regard is not relevant.”[2]
With Aldi being well known for “living dangerously”, it is interesting that M&S arguably fell on the wrong side of the court of public opinion. Aldi achieved this by deploying their social media team, which outmaneuvered M&S, who are not known for “non-traditional marketing”. Aldi’s posts contained “start-up”-type content, which is tongue-in-cheek and often seeks to dissemble away from the merits of the case. As in this case, the threatened party often finds a humorous way to point the finger at the “antiquated” institution seeking to enforce its legal rights as being the party overstepping. If successful, the defending party can massively increase its public popularity (and often revenue as a result).
The “underdog”-type marketing undertaken by Aldi is in stark contrast to the commercial reality, which is actually better represented by considering the respective financial positions, including the turnover and revenue figures quoted for each of Aldi and M&S. In 2018, Aldi’s turnover was reported to have exceeded 10bn in the UK and Ireland[3] alone, with other reports stating that Aldi has a global turnover in excess of €50bn. Comparatively M&S’ 2020 annual report confirmed that it had achieved a global turnover of £10.2bn[4].
Rather than this being David v Goliath, where M&S is pursuing a newcomer to the market, instead this is really an equal (or stronger) competitor defending itself using social media to best effect. Aldi has cleverly manipulated public opinion such that even if M&S were successful at trial (which is by no means a certainty), the negative PR associated with the litigation may cause an overall loss. Interestingly, social media commentators (e.g. on LinkedIn) have taken up the baton for Aldi, going so far as to research other “caterpillar cakes” at competitor supermarkets that M&S have apparently not taken action to restrain.
However, the public and practitioners alike should not make assumptions based exclusively on social media narrative, which “glosses over” a number of the pertinent facts. Certain questions, particularly given Aldi’s global turnover being almost 5 times that of M&S, need to be carefully considered. Other commentators suggested that because (so far as we are aware) M&S has not pursued other companies such as Morrisons for their own caterpillar cakes, M&S has therefore “given up” their rights. This author respectfully offers a counter-position. Where you have a dominant party (Aldi) which is known for “living dangerously”, one could have sympathy for M&S taking the view that Aldi (perhaps more so than others) was deliberately marketing towards M&S’ proprietary product. Secondly, when you consider the respective turnover of the parties, should Aldi be entitled to obtain what amounts to free advertising in relation to its cake product by designing towards the most well-known caterpillar cake in the UK market? Or is that perhaps “riding on the coat tails”[5] of M&S’ long-standing reputation, in an unfair way?
This matter brings into question the balance of IP protection and legitimate competition. On one hand, Aldi has historically been vindicated in IPEC because despite taking actions which could (in the words of the Court) have amounted to infringement, they were not “passing-off”, as there was held to be no misrepresentation which actually deceived the public. However, when it is clear that Aldi certainly has the financial clout to design, manufacture and market (e.g. using its excellent social media team) its own original products, then one must question why they created the Cuthbert product in question, and named it in that way. As the old copyright adage goes, “what is worth copying is worth protecting”[6]. If there is truly nothing that M&S should be entitled to protect in Colin, and there is no commercial benefit to Aldi commercially from designing close to it, one wonders why Aldi was quite so keen to “live dangerously” here, when it could easily have gone another way. If presented with the broader facts, including Aldi’s substantial corporate presence and turnover, and without their excellent social media team, it would be interesting to see if a re-trial in the court of public opinion would yield a different result.
[1] Moroccanoil Israel Ltd v Aldi Stores Ltd [2014] EWHC 1686 (IPEC)
[2] Above, at para 57.
[3]https://www.irishtimes.com/business/retail-and-services/aldi-revenue-in-uk-and-ireland-exceeds-10bn-1.3699113
[4] https://corporate.marksandspencer.com/annualreport
[5] See L’Oreal v Bellure [2010] EWCA Civ 535
[6] University of London Press Ltd v University Tutorial Press Ltd [1916] 2 Ch. 601 at 610
