As quite a few of you will be aware by now, there are enough caterpillar cakes on the market to form a netball team: Cecil (Waitrose), Charlie (Co-op), Clyde (Asda), Morris (Morrisons), Wiggles (Sainsbury’s) and Curly (Tesco). All of which seemingly made it onto the shelves smoothly. The question therefore is why Cuthbert (Aldi) has been singled out by Marks & Spencer plc (M&S). This article will aim to briefly explore the possible reasons for this, whilst also setting out the legal framework for intellectual property infringement.

It is not clear how long Cuthbert was sitting on the shelves before M&S filed an intellectual property infringement claim in April this year. However, the claim generated a significant amount of media attention, and the court of public opinion (aka Twitter) was quick to back the German discounter in a bid to keep Cuthbert on the shelves. Perhaps this was heavily influenced by what can only be described as a masterclass by Aldi in social media management. The question is: did the discount retailer lack remorse or were their actions tactful? Let’s take a look at the principles of intellectual property infringement.

Trade mark infringement

M&S owns a UK registered trade mark for ‘Colin the Caterpillar’. It also owns a registered trade mark for Colin the Caterpillar packaging. M&S may rely on its registered rights and claim that the ‘Cuthbert the Caterpillar’ sign is similar to their registered trade mark, is used in relation to goods identical with or similar to those for which the trade mark is registered and that there exists a likelihood of confusion on the part of the public, including the likelihood of association with the trade mark. This is a lot to digest. However, in essence, Aldi may argue that consumers would not confuse Cuthbert with Colin on the basis that shopping in Aldi’s store is enough for consumers to know Cuthbert is not associated with the M&S caterpillar cake, which is sold for £2.01 more.

Whilst Aldi’s humorous Twitter remarks may have shaped the public opinion. Interestingly, and perhaps intentionally, this may have also had the effect of diffusing any consumer confusion in creating widespread discussion, thereby cementing the distinction between the two cakes. On the flip side, M&S’s announcement of their legal battle may have had the Streisand effect, which on the surface looks great for Cuthbert in terms of publicity. However, if M&S wins the case, Aldi may be required to pay M&S a sum equal to the profits made on Cuthbert.

Passing off

In addition to trade mark infringement, M&S may claim that Aldi’s Cuthbert amounts to ‘passing off’. This is a common law offence, and can protect any goodwill associated with registered rights and/or unregistered rights (i.e. the brand reputation built-up in relation to Colin which attracts customers, including the ‘get up’ or appearance of a product). M&S asked Aldi to get rid of Cuthbert permanently in order to protect Colin, as well as its reputation, for 'freshness, quality, innovation and value'. However, M&S would need to prove, alongside misrepresentation, that Aldi has in fact damaged, or has the potential to damage their goodwill in Colin. It may be difficult for M&S to argue this given the saturated market for caterpillar cakes, which is likely to weaken their case.

There’s more than one way to skin a cat(erpillar)

Many market leading brand owners are hesitant about taking action for IP infringement, due to the costs in bringing an action, and the time it will often take to resolve the matter (often over a year). There is also the risk that the claim will be unsuccessful, in which case, they may be faced with significant legal costs, including the legal costs incurred by the alleged infringing party. In view of this, it may be that the parties will be able to come to an agreement behind closed doors.

That said, what communications M&S and Aldi may have already had before M&S issued the claim are unknown, and many IP infringement matters are settled outside of court, prior to proceedings being issued. Aldi have managed to settle other IP related disputes outside of court, but it is important to note that they haven’t always been victorious. One example is ‘The Saucy Fish Co’ case of 2014. In this case, Icelandic Seachill (The Saucy Fish Co) succeeded in obtaining a preliminary injunction against Aldi relating to the use of the term SAUCY on Aldi’s packaging for fresh fish. A key factor here was that The Saucy Fish Co was able to rely on its registered trade mark rights (like M&S), whilst Aldi’s packaging was not branded, which arguably made the origin of the product less clear. Given that the Aldi branding was also missing from Cuthbert’s packaging (Aldi has now added the words ‘Holly Lane’ before Cuthbert the Caterpillar (a name given to a variety of Aldi’s cakes and is a registered trade mark owned by Aldi Stores Limited)), the question is: who will be laughing when the court makes its decision?