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Moroccanoil Israel Limited v Aldi Stores Limited 2014

Written by Rehana Ali on 17 June 2014

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The background

Morrocanoil Limited (MIL), makes and sells various hair products globally, they have been trading with hair care products in the UK since 2009. One of MIL’s popular products is its hair oil that is sold in a brown bottle with a blue label. In 2012 Aldi decided to launch their own brand of hair oil called ‘Miracle Oil’.

The oil sold by Aldi was also sold in a brown bottle with a blue label (similar to the product sold by MIL). In turn MIL alleged passing off and commenced proceedings regarding the same.

The law

The authority on the law of passing off is contained in the Reckitt & Coleman Products Limited v Borden Inc case, the case established that for an action for passing off to be successful the following elements must be satisfied, (in application to MIL’s case):

  1. Goodwill: the claimant must have goodwill attached to their product, get up, packaging etc i.e. an attractive force that generates income.
  2. Misrepresentation: i.e. the misrepresentation by Aldi (whether intentional or not) as to the source of their goods.
  3. Damage: damage resulting to MIL’s goodwill.

Initial interest confusion (IIC)/Misrepresentation

The concept of IIC was also discussed in the case, IIC refers to a situation where a consumer is initially misled but the misunderstanding is cleared up before he makes a purchase. Therefore if a potential defendant is successful in inducing consumers to make purchases from him by making a misrepresentation, this is seen as sufficient for establishing damage (if the misrepresentation is later rectified this is irrelevant), conversely where confusion is dispelled before it is acted upon (i.e. before an item is purchased) there is no damage and no claim for passing off.

The Court further commented that there would still be damage to goodwill even if there was no competition and no diversion of sales between the parties.  Misrepresentation is capable of being damaging if the false belief that the two businesses are associated damages goodwill or if it erodes the distinctiveness of a brand.

The conclusion

The first element of passing off i.e. ‘goodwill’ was successfully established due to the amount of marketing, press attention and celebrity endorsements Morrocanoil had generated since its inception onto the market, the judge highlighted that the goodwill was attached primarily to the name of the product but noted that the ‘get up’ i.e. packaging was also a contributing factor.

The second element of passing off ‘misrepresentation’, due to the evidence produced by proprietors of Morrocanoil (a beauty blog reviewing the products) the judge concluded that consumers would be aware that the two products came from different manufacturers (further points such as the cost differences i.e. Aldi’s product being sold for £4 and the claimants being sold for £30 contributed to this).  

To conclude it was evident that Aldi had created a product that no doubt brought Morracanoil to mind and potentially infringed copyright/design rights however this was not sufficient to establish a case for passing off!

 

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