Budget UK retailer Poundland has delayed the launch of ‘Twin Peaks’, a Toblerone lookalike chocolate bar, following a legal dispute with Mondelēz International, the company behind the much-loved bar. It follows public outrage at Mondelēz’s decision last year to put Toblerone on a diet, citing the falling value of the pound as the reasoning for thinning out Toblerone’s distinctive chunks, and dropping the bar weights from 400g to 360g and 170g to 150g. Novagraaf’s Claire Jones examines the fallout.

The Twin Peaks bar has two peaks rather than the one-peak chunks of the Toblerone bars, remains chunky, is larger than the Toblerone – and costs a mere £1. Poundland has stated that it is still intending to launch the product, even with the potential threat of legal action. Not that this is Poundland’s first brush with IP issues.

It is becoming increasingly commonplace for budget and own-brand labels to launch lookalike versions of well-known products, with brands continually having to battle against such copycats. The Twin Peaks bar is just the latest example from Poundland: it also sells Miracles, which resemble Galaxy Minstrels (made by Mars), and Nutters, which are similar to M&M’s (also by Mars). Is there anything that brand owners can or should do?

Passing off One possible action in the UK is ‘passing off’. Passing off is a common law right, which protects the goodwill that has accumulated in a brand and prevents it from being exploited by other parties seeking to ‘pass off’ their goods or services as being the same or associated with the brand.

Side by side, the Twin Peaks bar uses the same colours on its packaging and of course is a similar product, although it differentiates itself with its two hump-shape.

The still-used test for passing off was established in the Jif Lemon case in 1990; namely that it must be shown: (1) existence of goodwill; (2) misrepresentation by the defendant; and (3) damage.

However, case law would suggest that a passing off claim would be unlikely to be successful in this instance, due to the lack of misrepresentation. While the packaging and branding is suggestive of Toblerone, the brand is so well known that it is unlikely that consumers would mistake the Poundland version as the real deal. (See for example: Morocconoil Israel Ltd v Aldi Stores Ltd [2014])

Trademark infringement The alternative would be to bring a claim based on trademark infringement. A trademark is infringed if, in the course of trade, a sign which is identical with the trademark is used in relation to goods or services which are identical to those for which it is registered. Beyond that, when the marks are not identical, the brand owner needs to establish a likelihood of confusion. One famous case in this respect is that of Puffins v Penguins (United Biscuits (UK) Ltd v Asda Stores Ltd 1997). While Asda admitted to ‘matching’ the famous Penguin bars with its own Puffin product, the original trademark infringement claims were dismissed (although Asda was ordered to change the packaging).

It is the likelihood of confusion test which is the stumbling block: consumers are used to own-brand products and are unlikely to be confused.

Design rights Design rights are intended to protect the features of a design, and could be one avenue for brand owners seeking to protect the look of their products. However, copycats often slightly alter their designs which often makes it difficult to then enforce.

Copyright Without packaging designs rights, brand owners can rely on unregistered rights, such as copyright. However, again, it will be difficult to prove infringement if a substantial part of the copyrighted design has not been replicated. Differences between the packaging designs can be sufficient to avoid falling foul of copyright legislation (as an example of this see The Saucy Fish Co. V Aldi Stores Limited).

Consumer protection It is possible that copycat packaging can contravene the Consumer Protection from Unfair Trading Regulations 2008, which were implemented to protect consumers against ‘unfair commercial practices, particularly those directed at influencing the transactional decisions of consumers in relation to products’. Where there is a breach, the Regulations allow brand owners to bring a criminal prosecution against a competitor. There are also other regulators, such as Trading Standards and the Competition and Markets Authority which can bring proceedings under the Act.

Difficulties for brand owners While it can be difficult to bring action against copycat products, brand owners still do so; although not as regularly as we would expect, especially given the evidence of a wide range of retailers copying their brands. This can be due to a number of reasons, including the inherent symbiotic relationship between the retailers and the brand owners; they need each other to be attractive to consumers.

The British Brands Group (BBG) recently revealed new research by Acuity Intelligence which looked at how shoppers selected everyday consumer products, using eye-tracking techniques to allow the monitoring of the survey’s participants actual behaviour. The key results were summarised in a press release on 15 August 2017 (click here for the full research):

  • When searching for products, colour is the primary feature looked for;
  • When a copycat is present on a shelf, it is often identified before the brand, giving it an advantage;
  • When a decision is made, the copycat is mistaken for the brand in 20% of cases when both are present on shelf. This increases to 64% when only the copy is present;
  • Ageing populations, notably those with colour disorders and blurred vision, are at particular risk.

The BBG also provided a number of examples of potentially misleading packaging which had been identified in shopping trips in 2017. These include: Sun Blasts (similar to Fruit Shoots); Frosted Flakes (similar to Frosties); Crisp Rice (similar to Rice Krispies); Stackers (similar to Pringles); Cheese Puffs (similar to Wotsits); Oaties (similar to Hobnobs), and many others.

As for the Twin Peaks, Poundland has defended its right to launch the bar on the grounds that the Toblerone shape is no longer distinctive enough to function as a trademark (given its recent changes in size and shape). Mondelēz is suing for both trademark infringement and passing off. The success or failure of its claim could make a major difference to the ability (or not) of brand owners to bring actions against copycats in the future.