Scottish IP Court proves just the tonic for Hendrick’s in “Copycat” Trade Mark Action

United Kingdom

The issue of discount supermarkets selling “lookalike” or potentially infringing products has been a hot topic recently. Most readers will be aware of the proceedings raised by Marks and Spencer against Aldi in connection with M&S’ Colin the Caterpillar cake and Aldi’s alleged copycat product: Cuthbert the Caterpillar. Following a blaze of publicity (aided not least by the efforts of Aldi’s social media team) that case seems to have gone quiet and it remains to be seen how those matters will play out. Meantime, an action brought in Scotland by the owner of Hendrick’s Gin[1] has highlighted some of the benefits to brand holders seeking to enforce their IP rights in Scotland.

The case was brought by the Hendrick’s Gin owner William Grant & Sons (the “Pursuer”) who claimed that discount supermarket Lidl had infringed its trade mark through the sale of its own brand Hampstead Gin. William Grant also alleged that Lidl had committed the legal wrong of passing off.

Hampstead Gin has been sold by Lidl for at least 10 years, but in late 2020 Lidl redesigned the bottle and label to a dark round bottle with a diamond label (shown below).

Gin images

It was this re-design which caused the Pursuer to take action, and proceedings were raised. At the outset of the action, the Pursuer sought an interim interdict (the Scottish equivalent of a preliminary injunction) to prevent Lidl from selling its Hampstead Gin in Scottish stores, pending the outcome of a full trial. An interim interdict is a powerful remedy often sought by brand holders at the outset of an IP infringement action in Scotland.

In Interim Interdict cases, the Court will determine whether or not to grant an interim interdict based on the “balance of convenience”.  Therefore applying that test this case, the Pursuer required to show that the inconvenience to them in not obtaining the interim interdict was greater than the inconvenience to Lidl in being subject to an interim interdict.

Ultimately, Lord Clark was persuaded to grant the interim interdict on the basis of the Pursuer’s claim for trade mark infringement under section 10(3) of the Trade Marks Act 1994. As such, Lidl has been temporarily prevented from selling their Hampstead Gin in Scottish stores pending the outcome of the full trial.

Lord Clark pointed to the following reasons for granting the interim interdict:

  • The recent redesign by Lidl meant that the rebranded Hampstead Gin was a relatively new product. In contrast, Hendrick’s Gin had been on the market in its current form for quite some time and has an established reputation.

  • If the interim interdict was refused, but permanent interdict granted at the full trial, damage to the Hendrick’s Gin brand could be significant and, crucially, may be very difficult to quantify. Conversely, Lord Clark held that it would be easier to identify any of Lidl’s lost sales figures as a result of being subject to the interim interdict.

  • Importantly, it was only the newly redesigned bottle of Hampstead which Lidl were prevented from selling. Any products sold in of the previous bottle or indeed any other bottle which was not similar to the Hendrick’s Gin trade mark were not prohibited.

  • There was no undue delay in raising proceedings. Lidl argued that the Pursuer had been aware of the new Hampstead Gin since at least 16 January 2021 and proceedings were not raised until 7 April 2021. Lord Clark rejected this argument and held that, as parties were in communication for a period of time about the issues, he was not satisfied that there was any unjustified delay that could affect the balance of convenience.

This case serves as a reminder that the Scottish IP Court offers a rights holder-friendly and cost-effective forum which is very well-set up for the enforcement of IP rights, such as trade marks. Infringements often occur UK-wide, and in those circumstances brand holders have a choice as to where they want to bring proceedings. In almost all cases, Scottish jurisdiction can be obtained by carrying out a test purchase of the infringing product or services from Scotland (either online or in physical stores, as was the case here).

Some of the benefits of enforcing IP rights in Scotland include:

  • There is no requirement to send correspondence in advance of proceedings being raised. Whilst parties are free to issue pre-action correspondence if they wish, there are no mandatory provisions that require them to do so. That means actions can be raised quickly – often a crucial benefit to rights holders.

  • Interim interdicts are regularly granted on a without notice basis. Whilst this interim interdict hearing was defended, it is often the case that these orders are granted ex parte. In those instances, no advance notice of the proceedings is provided, and a hearing will proceed before the judge without the infringer or their lawyers being present. In such cases, an infringer will not be aware that the interim interdict has been awarded against them until process servers turn up at their door to serve the order.

  • Irrespective of the value of the case, the IP Court charges a flat fee of just over £300 in court fees to have an action raised. This is the case no matter what type of IP is involved, which can offer a significant cost saving in comparison to court costs in other jurisdictions.

It is important to highlight that this is just an interim decision and no final decision has yet been reached by the Court. However, the fact that interim relief was sought (and granted) in a situation where parties had been in communications for a number of months is interesting. One might speculate if a similar order would have been granted in the English courts in these circumstances. Certainly, in the author’s experience, there does seem to be a less strict approach to “urgency” and “delay” in Scotland when compared to the position adopted in the English courts.

This case serves as a useful reminder to brand holders that the Scottish IP Court offers an alternative forum with certain advantages and benefits when compared to other jurisdictions.

For more information on how this decision could benefit or impact your business, please do get in touch.

[1] A74/21 William Grant & Sons Irish Brands Ltd. v Lidl Stiftung & Co. & Ors [2021] CSOH 55