Written by Jennifer Tutty (Principal), Alyce Evans and Lucy Diggle.
Grab your snacks! In IP news, Aldi is being sued for copyright infringement. The German supermarket giant has been accused of copying the packaging artwork of an Australian children’s snack brand.
WHO: The case is being brought by Hampden Holdings IP Pty Ltd (Hampden Holdings), which owns the intellectual property (IP) rights in the Baby Bellies packaging artwork and licences it to Every Bite Counts Pty Ltd, an Australian company.
WHAT: The products concerned include the Baby Bellies snack range: Organic Blueberry Puffs, Organic Carrot Puffs and Organic Apple & Cinnamon Puffs! The relevant work (which Aldi has been accused of copying) comprises the design, layout, colours, fonts, and figures on the packaging.
Before we dive into the drama, let’s take at the inner workings of Aldi’s business strategy.
Aldi – ‘Good Different’?
Despite its renowned slogan “Good Different”, Aldi has (ironically) created a reputation for its brand imitation strategy. For those unfamiliar with the store, it regularly takes ‘inspiration’ from well-known brands’ products and packaging, to create comparable, in-house products at cheaper prices.
Predictably, this business model holds significant infringement risks.
Where then, is the line between creating ‘similar’ products and packaging, and ‘copying’?
Further, is Aldi ‘misleading’ or ‘deceiving’ the public, such that claims may be brought against it under Schedule 2 of the Competition and Consumer Act (2010) (Cth) (Australian Consumer Law)?
Prior Cases Against Aldi
Let’s take a look at some of the claims that have been brought against Aldi in recent years…
(PS. If you’d prefer to skip the prior case law and get straight to our top tips (and the current Baby Bellies case!), scroll down to the heading, ‘Decoding the Cases – What Does All This Mean?’)
Bad Hair Day: Moroccanoil Goes Head-to-Head with Aldi
Moroccanoil Israel Ltd v Aldi Foods Pty Ltd [2017] FCA 823
In 2017, producer and distributer of hair and skincare products, Moroccanoil Israel Ltd (Moroccanoil), brought multiple claims against Aldi.
The products in dispute? Aldi’s home brand range of Moroccan Argan Oil hair care products, which were named ‘Protane’ and ‘Naturals’.
Amongst other claims, Moroccanoil argued the following:
– That Aldi was misleading and deceiving consumers in breach of the Australian Consumer Law (due to the similarities in the packaging of Aldi’s Moroccan Argan Oil range and Moroccanoil’s products).
– That Aldi’s use of the label ‘Moroccan Argan Oil’ constituted trademark infringement.
Court ruling – No misleading or deceptive conduct
Although Aldi copied parts of the design and visual elements of Moroccanoil’s products, the court found that this wasn’t misleading or deceptive conduct. Aldi had not mislead or deceived consumers that its products were associated with (or actually were) Moroccanoil’s products.
Key to this finding were the obvious differences in the following:
– The brand names ‘Moroccanoil’ vs ‘Protane’ and ‘Naturals’. Aldi’s use of ‘Morrocan Argan Oil’ was the name of its product range, not the brand.
– The use of a glass bottle (Moroccanoil) vs a plastic bottle (Aldi) for the most similar of the competing products, the oil treatment.
– The different consumer markets. Moroccanoil’s products were sold as a more luxury salon-brand. In comparison, Aldi’s products were sold as discount products, intended for a more price conscious consumer.
Further determinations by the court that influenced the final decision included:
– A reasonable consumer would likely be aware of hair care products (other than Moroccanoil’s products) that use the colour turquoise for their packaging.
– Aldi’s slogan (at the time) “like brands, only cheaper” signifying to consumers that Aldi products may look like well-known brands, but they are not.
Based on these considerations, the court found that consumers were less likely to be confused between the products. Therefore, Aldi’s conduct was not a breach of the Australian Consumer Law’s misleading or deceptive conduct provisions.
Court ruling – No trade mark infringement
In addition to its Australian Consumer Law claim, Moroccanoil argued that Aldi had infringed its trade marks.
It argued that the label “Moroccan Argan Oil” on Aldi’s products was deceptively similar to its own two registered trade marks. These trade marks both contain ‘M Moroccanoil’, the signature orange M, and a turquoise background.
However, the colours themselves were not registered as specified features of the trademarks. Therefore, they were immaterial to the question of infringement in the case.
This means that despite the Aldi product packaging containing similar colour tones to the turquoise Moroccanoil products and orange lettering, the court was unable to compare these features assessing the similarity of the Aldi counterparts.
Instead, the court was limited to comparing the word and visual arrangement of the ‘M Moroccanoil’ marks.
Ultimately, the court found that Aldi’s use of ‘Moroccan Argan Oil’ was not deceptively similar to the trade marks for ‘M Moroccanoil’. Therefore, there was no trade mark infringement.
Came, Saw and Contoured: Makeup Brand Wins Case Against Aldi
Islestarr Holdings Ltd v Aldi Stores Ltd [2019] EWHC 1473 (Ch)
In 2013, popular makeup brand ‘Charlotte Tilbury’ released a bronze and highlight palette, the ‘Filmstar Bronze and Glow’. Quickly, the product became a cult-favourite and best seller. Some years later, Aldi released its ‘Broadway Shape and Glow’ palette.
In 2019, the company behind the Charlotte Tilbury brand (Islestarr Holdings Ltd) (Islestarr) brought a copyright infringement lawsuit against Aldi under the Copyright, Designs and Patents Act 1988 (UK). It claimed that Aldi had infringed the copyright in its ‘artistic works’, namely the ‘Filmstar Bronze and Glow’ palette design casing and the design embossed into the makeup pan.
The court held that the similar starburst casing design and powder design embossing on both the Charlotte Tilbury and Aldi palettes, Aldi had infringed Islestarr’s copyright.
Decoding the Cases – What Does All This Mean?
RE: Misleading or deceptive conduct
As we noted above, Aldi has acquired a significant reputation amongst consumers for its brand-imitation strategy. This may make it increasingly difficult for other brands to successfully argue under the Australian Consumer Law that consumers have been mislead or deceived by Aldi.
Indeed, Aldi is so synonymous with its brand strategy that its tactics are the subject of fanfare and commentary in popular culture! For example, some people comically refer to an imitation good as “the Aldi version”.
RE: Trade marks
Protect your brand assets and reputation by investing in a strong trade mark portfolio.
The Moroccanoil case (above) highlights the importance of a broad portfolio of trade mark protection. In particular, if a brand wants to protect a certain colour, then it needs to register trade marks specifying these colours.
A trade mark lawyer can assist with developing a trade mark strategy to protect your key brand assets, including brand names, logos and colours. Speak to a qualified trade mark lawyer to develop a strategy for your business.
RE: Copyright
Know your rights!
While the Charlotte Tilbury case (above) applied UK law, the current case (involving the Aussie children’s snacks and Aldi) will apply Australian copyright law. Therefore, anyone interested in protecting their brand’s IP should keep a close eye on how this case pans out.
Back to the Current Case – Hampden Holdings (ie. Baby Bellies) v Aldi
As the present case focuses on copyright infringement, the court won’t be considering trade marks or misleading or deceptive conduct.
Instead, Hampden Holdings will have to prove copyright infringement under the Copyright Act 1968 (Cth) (Australian Copyright Act). In other words, it needs to prove Aldi reproduced a substantial part of its ‘artistic work’ (i.e. the Baby Bellies’ packaging design).
The ‘substantial part’ test is a qualitative not quantitative test. This means the court will not undertake an objective assessment of how much was copied. Rather, it will consider whether what was copied encompasses an important or essential part of the original Baby Bellies product.
Many IP experts believe that while Baby Bellies are unlikely to win the case, the litigation will serve a more pragmatic aim of leading to a settlement deal. Further, this may motivate Aldi to change its packaging for the products.
We will be keeping a close eye on this case. If it doesn’t settle, we look forward to its contribution to Australian case law surrounding copyright infringement in artistic works.
Further Information
If you have any legal questions regarding the above, please contact us through our online form or via email at hello@studiolegal.com.au.
For more legal and IP news, check out our blogs:
– IP News
Published 11 April 2023
Written by Jennifer Tutty (Principal), Alyce Evans and Lucy Diggle
Photo from Australian Financial Review, shared for the purposes of reporting news.
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The information in this article is of a general nature. It does not constitute formal legal advice and should not be relied on as such. Please see the full disclaimer in our website terms. Please contact Studio Legal if you are seeking advice about a specific legal matter.