The Department for Business Innovation and Skills (“BIS”) has decided it will not grant businesses the power to seek civil injunctions to prevent “copycat” packaging (i.e. that which mimics the look and feel of competing well-known brands). This decision follows BIS’ review of enforcement provisions in the Consumer Protection from Unfair Trading Regulations 2008 (the “CPRs”) (which implemented the Unfair Commercial Practices Directive (“UCPD”) in the UK) available here.
Copycat packaging may breach the CPRs if:
- it contains false information or its overall presentation is likely to deceive the average consumer;
- it creates confusion with any products, names or marks of a competitor;
- in each case in a way that affects, or is likely to affect, their purchasing decisions; or
- it deliberately misleads the consumer into believing that a product is made by a competitor when it is not.
Currently enforcement of the CPRs is reserved to specified enforcement bodies such as Trading Standards or consumer watchdog Which?. Last year, consumers were granted limited rights to enforce the CPRs by unwinding contracts, or receiving a discount or damages, but businesses have no such rights to enforce the CPRs directly.
BIS called for evidence from stakeholders in order to review whether businesses should be given a direct enforcement role, i.e. the right to apply for a civil injunction. This was an option available to the UK government under Article 11 of the UCPD, but one which it chose not to exercise at the time of implementation. Its recent decision to maintain the status quo is based on its review of the evidence received, which suggested that:
- whilst copycat packaging reduces consumers’ ability to make accurate decisions, this does not necessarily equate to consumer detriment;
- some consumers deliberately buy copycat products and a high proportion are happy with their purchase; and
- there is a lack of empirical evidence to demonstrate a negative impact of copycat packaging on prices or on brands’ incentives to innovate.
Brand owners have argued for some time that the current protection offered to them against copycat packaging under intellectual property laws in the UK is inadequate. This is because copycat packaging often falls short of the tests required for infringement under intellectual property law:
- For trade mark infringement, confusion of average consumers over the origin of the copycat product is often required (rather than mere association with the original brand). This can be a difficult hurdle to overcome, especially in relation to own-brand products sold by discounters (as consumers are aware that such retailers do not stock branded products, and so are unlikely to mistake products sold by them for branded products).
- For passing off, a claimant must establish the existence of goodwill in the get-up of his product, misrepresentation by the seller of the copycat product, and damage: proving goodwill and misrepresentation is usually a costly evidential process, and proving the existence of goodwill can be difficult if a brand owner’s product is relatively new.
It is worth noting that the UK is the only European Member State that does not provide redress under laws against unfair competition and unfair commercial practices. The result is that copycat packaging that would be considered unlawful elsewhere in Europe could not be challenged in the UK.
Brand owners had therefore hoped that this gap would be plugged by the government allowing businesses to enforce the CPRs directly. They are likely to be disappointed that their options for fighting copycat packaging will continue to be restricted to bringing actions for infringement of their intellectual property rights. However, enforcers and retailers that were opposed to the introduction of a civil injunction will feel that this decision is justified by the absence of consumer detriment and the legal uncertainty that they argued would result from this new right being introduced (which they feared could give rise to tactical and opportunistic litigation by brand owners).