Copycat marketing is the practice by one trader (the copycat) of designing, marketing, or presenting its product in such a way as to closely resemble the product of another (the original). This often results in a consumer either buying the copycat product believing it to be the original (mistaken purchase), or understanding that the products are made by different traders, but believing that because they are so similar they must be related in some way (mistaken attribution).
This can create problems for brand-owners, as this type of activity may not always lend itself to the forms of enforcement which are available to them. The relevant provisions of the Trade Marks Act 1994 (TMA) and the Copyright, Designs, and Patents Act 1988 (CDPA) are not always appropriate for dealing with copycat marketing, as copycat brands do not typically seek to infringe a trade mark or a copyright-protected piece of art or copy; rather, they aim to create an overall impression, or get-up, that is close enough to that of the original to cause a mistaken-purchase or mistaken-attribution situation to arise.
On the face of it, the tort of passing off might seem more suited to this type of activity. However, it sets a high bar for claimants to clear, and case law has made it difficult to prove. In order for a claim to be successful, the claimant must plead and prove the three classical elements of the tort:
- The existence of goodwill accruing to the claimant;
- Misrepresentation by the defendant that its product is actually the original;
- Damage caused by the misrepresentation.
Problems of proof
The need to prove the existence of goodwill can cause issues in copycat cases. In Moroccanoil Israel Ltd v Aldi Stores Ltd [2014] EWHC 1686 (IPEC), HHJ Hacon found that while the claimant had goodwill in its brand name, there was none in the get-up. Very few brands will be able to establish goodwill in relation to get-up, as opposed to their brand names, making this element hard to prove.
Misrepresentation is also hard to prove. In Specsavers International Healthcare Ltd v Asda Stores Ltd [2012] FSR 19 Kitchin LJ held that merely “living dangerously” was not sufficient to amount to deliberate misrepresentation. It is therefore easy for copycats to position themselves just on the right side of the line in this regard.
Finally, passing off requires proof of loss. This means that a claimant must prove that as a result of the copycat activity it has lost money or had its reputation damaged. That is not always easy or possible to do. In Moroccanoil the claimant could not prove that consumers who bought the copycat product would otherwise have bought the original, or that consumer dissatisfaction with the copycat was being wrongly attributed to the original.
An alternative route to relief may be found in the Consumer Protection From Unfair Trading Regulations 2008 (CPRs). Regulation 5 of the CPRs prohibits misleading actions, and sets out two ways in which copycat marketing might fall within its ambit. First, Reg. 5(2) contains a prohibition which can be broken down into the following relevant elements:
- The product’s overall presentation…
- deceives or is likely to deceive…
- in relation to the nature, benefits, or composition of the product…
- and causes or is likely to cause the average consumer to take a transactional decision he would not have taken otherwise.
This prohibition does not require infringement of a trade mark or any copyright work; neither does it require proof of the existence and infringement of goodwill, or of damage. Instead, it requires the overall presentation of the product to deceive or to be likely to deceive in relation to the relevant attributes. This reduces the exercise to be undertaken by the court hearing the case to an objective comparison of the presentation of the products with a view to determining whether they are so similar as to deceive.
Secondly, Reg. 5 (3) contains a further prohibition which can be broken down into the following relevant elements:
- The marketing of the product…
- creates confusion…
- with any products, trade marks, trade names or other distinguishing marks of a competitor…
- and causes or is likely to cause the average consumer to take a transactional decision he would not have taken otherwise.
This prohibition similarly does away with many of the hurdles posed by a TMA, CDPA, or passing-off action. Compared to Reg. 5(2), it arguably sets the bar lower: first, it relates to the marketing of the product, which is wider than its “overall presentation” and could include print and media advertising as well as packaging. Secondly, it only requires that “confusion” be created, as opposed to deception.
Law of average
Both Reg. 5(2) and 5(3) require that the activity would cause the average consumer to take a transactional decision he or she would not have taken otherwise (i.e. buying the copycat product). This requirement needs to be proved, but — unlike real consumers who have mistakenly bought copycat products — the average consumer is a notional legal construct. It is therefore not necessary to provide evidence that specific individual consumers have been deceived or confused; merely that the copycat is so similar to the original that the average consumer would be.
The CPRs also prohibit unfair commercial practices through Reg. 3. Regulation 3(4)(d) deems any practice listed in Schedule 1 unfair. One of these listed practices is the following (at paragraph 13): “Promoting a product similar to a product made by a particular manufacturer in such a manner as deliberately to mislead the consumer into believing that the product is made by that same manufacturer when it is not.”
This is also capable of covering copycat marketing, but can be harder to prove than either of the Reg. 5 prohibitions. First, it requires that the product be promoted so as to “deliberately” mislead. This introduces a subjective element of intent which is absent in Reg. 5. It also requires that the aim is to mislead the consumer about who makes the product, so it will only apply to mistaken-purchase cases, and not to mistaken-attribution cases.
Private prosecutions, public detriment
The issue for brand-owners seeking to use the CPRs is that the only way for them to do so is by way of a private prosecution. This is often unattractive, as the burden of proof is higher and trials last longer and are subject to greater delay in the criminal courts. A prosecution may also be disproportionate for low-level activity. In most cases, it is preferable for swift injunctive relief to be obtained by using breaches of the CPRs as the basis for an enforcement order under Part 8 of the Enterprise Act 2002. The latter method has been used successfully in the past — most notably in a 2009 case involving yoghurt. However, enforcement orders are not available directly to brand-owners: only certain designated enforcers — for these purposes mainly trading standards or the Competition and Markets Authority (CMA) — have the standing to bring such actions.
Use of the CPRs to combat copycat marketing therefore requires a joint effort by both brand-owners and public authorities. Not every instance of copycat marketing will be suitable for this kind of enforcement; there will need to be a public — as opposed to solely private — detriment involved in order for it to fall within the enforcement remit of a public body. Some important questions to ask might be:
- Does the activity undermine the operation of the market?
- Is any detriment which accrues to the brand-owners passed on to consumers (e.g. in the form of higher prices)?
- Is consumers’ freedom to make informed decisions infringed?
- Does the activity have a disproportionate effect on vulnerable consumers?
Part 8 also requires harm to the collective interests of consumers. While a one-off instance of copycat marketing could be actionable on this basis — on the ground that it contributes to the wider problem across the market — the scope for bringing a Part 8 action would be greater still where the activity is part of an on-going commercial strategy.
In assessing whether a particular case is suitable for Part 8 enforcement, it is necessary to look at the wider picture and consider the cumulative effect of the large number of low-value transactions that such cases typically involve. For the right cases, Part 8 and the CPRs may provide easier, quicker, and more effective resolution than some of the traditional methods. They should therefore not be overlooked by brand-owners or enforcers who are faced with copycat marketing.
Gough Square Chambers has provided an Opinion to the British Brands Group on enforcement in relation to copycat marketing. Those interested in the subject are invited to contact John Noble of the British Brands Group at jn@britishbrandsgroup.org.uk.
