Moroccanoil Isreal Ltd v Aldi Stores Ltd
| Jurisdiction | England & Wales |
| Judge | His Honour Judge Hacon,Judge Hacon |
| Judgment Date | 29 May 2014 |
| Neutral Citation | [2014] EWHC 1686 (IPEC) |
| Docket Number | Case No: CC12P02026 |
| Court | Intellectual Property Enterprise Court |
| Date | 29 May 2014 |
[2014] EWHC 1686 (IPEC)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
INTELLECTUAL PROPERTY ENTERPRISE COURT
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
His Honour Judge Hacon
Case No: CC12P02026
Amanda Michaels (instructed by Sibley Germain LLP) for the Claimant
Michael Edenborough QC and Thomas Elias (instructed by Freeth Cartwright LLP) for the Defendant
Hearing dates: 15–16 April 2014
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
The claimant ("MIL") makes and sells hair products throughout the world, of which the principal and most successful is a hair oil marketed under the name "Moroccanoil". It was first sold in the United Kingdom in 2009 and, as elsewhere, it has attracted a good deal of favourable attention. An image of a bottle of Moroccanoil and the box in which it is sold appears as Annex 1 to this judgment.
The defendant ("Aldi") is the well known supermarket. In March 2012 Aldi brought on to the UK market a hair oil sold under the name "Miracle Oil". Annex 2 shows the bottle and box used for Miracle Oil. MIL alleges that these sales by Aldi constitute passing off. MIL's case is that the get-up and name of Aldi's product are in combination so similar to those of MIL's product that a substantial number of consumers would mistake Miracle Oil for Moroccanoil or assume that they share a common manufacturer or that there is otherwise a trade connection between the two.
The letter before action from MIL's solicitors dated 27 March 2012 referred to a Community Trade Mark ("CTM") owned by MIL. Aldi counterclaimed alleging an unjustified threat of proceedings for infringement of the CTM. MIL sought to respond to this by an allegation that Aldi had infringed the CTM. There are invalidity proceedings before the Office for Harmonisation in the Internal Market ("OHIM") so the allegation of trade mark infringement could not go forward at this stage, pursuant to art.104 of the Regulation (EC) 207/2009 ("the Trade Mark Regulation"). At the CMC on 20 March 2013 Morgan J also stayed the counterclaim for unjustified threat of infringement proceedings. The trial before me was only about passing off.
The Law
The classic trinity
It was common ground that MIL has to satisfy the classic trinity of elements in an action for passing off, see Reckitt & Colman Products Ltd v Borden Inc [1990] 1 WLR 491; [1990] RPC 34 (" Jif Lemon"). In the present case that means demonstrating:
(a) 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 in combination recognised by the public as distinctive of MIL's product;
(b) a misrepresentation on the part of Aldi (whether or not intentional) in relation to the source of Aldi's Miracle Oil product; and
(c) damage to the goodwill by reason of the misrepresentation.
The relevant date
The date for deciding whether a defendant's conduct amounts to passing off is the date on which that conduct commenced, see Cadbury-Schweppes Pty Ltd v Pub Squash [1981] 1 WLR 193. In this case it is 29 March 2012, when Aldi first put Miracle Oil on sale.
The nature of the misrepresentation
MIL relied on three alternative forms of misrepresentation. The first was the standard Jif Lemon type, i.e. that a substantial proportion of the public would as a consequence take Miracle Oil to be Moroccanoil. The second was of the form which succeeded in United Biscuits (UK) Ltd v Asda Stores Ltd [1997] RPC 513, namely that although the public would distinguish MIL's and Aldi's products, they would assume an association between them in the form of there being a common manufacturer. To this MIL added a further possibility, that the public would assume that Miracle Oil had been produced under licence from the source of Moroccanoil.
The parties were agreed that in any of those alternative cases it is irrelevant whether the public would know the identity of the manufacturer of the products.
The meaning of 'confusion'
As often happens in passing off cases, there was a risk that misunderstandings could arise through use of the word 'confusion'. Mr Edenborough QC, who appeared for Aldi with Mr Elias, emphasised that 'mere confusion' is not enough; for a case in passing off to succeed there must be 'deception'. Mr Edenborough cited Barnsley Brewery Co Ltd v RBNB [1997] FSR 462, at 467 in which Robert Walker J referred to the speech of Lord Diplock in Warnink (Erven) BV v J. Townend & Sons (Hull) Ltd [1979] AC 731.
There is a difficulty in making the distinction in law identified in Warnink and Barnsley Brewery, among other cases, by differentiating 'confusion' on the one hand (no passing off) from 'deception' on the other (passing off). The problem is that the law reports are full of cases in which misrepresentation is discussed in terms of whether or not there was a likelihood of 'confusion' on the part of the public. This is not surprising. In the Trade Marks Act 1994, the underlying Trade Mark Directive ( Directive 2008/95/EC and its predecessor Directive 89/104/EEC) and the Community Trade Mark Regulation liability for infringement, where there is a similarity between the trade mark and the accused sign and/or between the relevant goods or services, depends on a likelihood of 'confusion' on the part of the public (see s.10(2) of the Act, art.5(1)(b) of the Directive and art.9(1)(b) of the Regulation). Even before the 1994 Act, a likelihood 'to deceive or cause confusion' (my italics) was the criterion for infringement where an action turned on the degree of similarity between marks (see Trade Marks Act 1938, ss.4(1) and 68(2B)). Allegations of trade mark infringement and passing off are commonly argued in the same action and often the evidence and argument on statutory confusion in the trade mark sense get to double up as the central part of the debate about misrepresentation in the context of passing off. The two concepts are not identical but there is an overlap. Even where trade mark infringement is not in issue, force of habit can often lead to the word 'confusion' being used when discussing the key element of misrepresentation.
Also, the term 'deception' is not completely free from difficulty. Loose use of the word, by which in fact I mean use according to its ordinary English meaning, implies an intention on the part of the claimant, yet this is irrelevant as was made clear for instance in Barnsley Brewery and Warnink.
In Reed Executive plc v Reed Business Information Ltd [2004] RPC 40, Jacob LJ suggested at [111] that the distinction in law is more accurately stated to be the difference between an assumption on the part of the relevant public on the one hand and mere wondering on the other, a proposition which he later endorsed in Phones 4U Ltd v Phone4U.co.uk. Internet Ltd [2007] RPC 5, at [16].
At the hearing of this trial debate inevitably slid into usage of the term 'confusion', although I think without any misunderstanding. In this judgment I will largely avoid both it and 'deception', but since arguments were advanced by reference to those terms, particularly 'confusion', I will sometimes fall back on them. I should be clear, though, that what matters is whether there was a misrepresentation. 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.
The proportion of the public which constitutes a substantial part
Not all customers of hair products in Aldi need make either assumption for MIL to establish passing off. A substantial proportion will be enough. What minimum proportion constitutes a substantial part? In Neutrogena Corp v Golden Ltd [1996] RPC 473 Jacob J stated at [481–2]:
"…the crucial question is whether or not the plaintiffs have established a sufficient degree of confusion and deception to take the case above a de minimis level."
In the appeal from Jacob J in that case (same citation) Morritt LJ said at [494]:
"…for my part, I think that references, in this context, to "more than de minimis" and "above a trivial level" are best avoided notwithstanding this court's reference to the former in University of London v American University of London (unreported 12 November 1993). It seems to me that such expressions are open to misinterpretation for they do not necessarily connote the opposite of substantial and their use may be thought to reverse the proper emphasis and concentrate on the quantitative to the exclusion of the qualitative aspect of confusion."
Lewison LJ considered the observations of Morritt LJ in Interflora Inc v Marks and Spencer plc [2012] EWCA Civ 1501; [2013] FSR 21 at [30]. He found that the important point to be taken from it is that passing off can be established even though most people are not deceived.
Clearly a claimant in a passing off action need not show that most of the relevant section of the public would make the false assumption relied on. Something less than half will do. Mr Edenborough helpfully suggested that 15–20% was about right and Ms Michaels, who appeared for MIL, said that was fine.
I have to say that focussing on a cut-off minimum proportion – X% or more of the relevant public making the false assumption is enough to make for an actionable misrepresentation – is seldom going to be useful. In most if not...
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