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Caterpillar Wars!

Most people will have heard at least something about Caterpillar Wars, largely as a result of Aldi’s use of social media aimed at turning legal action into a PR campaign, but what exactly is happening?

M&S have applied to the court for an injunction forcing Aldi to remove their Cuthbert the Caterpillar from sale and to prevent them from selling anything similar in the future. Their case is based on the – alleged – fact that Cuthbert bears a striking resemblance to M&S’ Colin the Caterpillar but costs a fraction of the price. M&S’ concern is that selling a similar product at a lower price will damage their brand because Cuthbert is not of the same quality as Colin.

There is a wider lesson arising from this case regarding litigation and how it can be harnessed to benefit rather than impinge upon your business, which I will address below.

Trademarks

Essentially, a trademark is a sign that sellers of goods use to differentiate their products from those of other manufacturers or sellers. Trademarks can include words, phrases, numerals, moving images or gestures capable of distinguishing products of one business from another. Trademarks can also stretch to packaging and even the shape of goods.

If any one of those marks can be used to identify the entity who produced it, it is potentially registerable as a trademark.

Trademark Infringement

Infringement occurs when another entity uses an identical mark, or a mark which is similar to that which is registered in relation to a similar product and it is likely that the public will be confused by the association with that trademark.

M&S’ case is quite simple: Cuthbert looks sufficiently similar, if not identical, to Colin and so Aldi have infringed M&S’ trademark.

The test the court will apply, however, is whether Cuthbert is sufficiently similar so as to cause confusion amongst the public as to whether they think they are consuming Cuthbert or Colin. That is not a straightforward test, the retail giants involved will go to great lengths in order to prove or disprove the element of confusion. Legal opinion is generally split as to which way this case will turn.

Lesson

This case provides a useful lesson in how to treat litigation. Aldi, for example, have turned the case into a phenomenal marketing campaign. They have used social media to start a Free Cuthbert campaign, repackaged Cuthbert so that it looks like he is in a prison cell and Aldi have recently tweeted M&S inviting them to release limited edition caterpillar cakes to raise money for a charity supported by each supermarket. It is a genius campaign which will, no doubt, generate enough sales to more than cover the cost of the proceedings. M&S could well win the case, but Aldi could have the last laugh.

That is not to say that I advocate the infringement of intellectual property but litigation does not have to be perceived as a drain on your business.

Litigation has a number of advantages to businesses. Litigation forces parties to cooperate with each other because of the severe penalties imposable by the court for failing to comply with Rules and orders.

Further, there are stringent rules regarding evidence applicable to litigation. The adversarial court system allows for that evidence to be rigorously tested so that the result is reliable.

Litigation has precedent value. Previously decided cases can allow an element of predictability useful in assessing whether to pursue a claim in the first place.

That said, alternative dispute resolution (ADR), such as mediation or arbitration, are always worth considering. ADR can achieve quicker results at less cost and can provide for more flexibility in respect of the terms of a settlement agreement.

The key is to take legal advice as early as possible so that you can be guided through these processes cost effectively.

To find out how our experienced dispute resolution team can help you, call us on 01228 55260 or 01524 548494.

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