Packaging and product design often plays a significant role in consumer purchasing decisions, with innovative product design helping a product to stand out. However, there can be challenges when it comes to protecting and enforcing IP rights as demonstrated in the recent decision of Au Vodka v NE10 Vodka where the High Court refused an interim injunction. The case will now go forward to an expedited trial in January 2023.
The claim relates to passing off and is based on the allegedly deceptively similar get-up of NE10's vodka bottles. Au's claim relies on goodwill generated, not in its logo or trade mark, but instead in the shape, colour and design features of its vodka bottles. As such, this is a "pure" get-up case which means it faces the challenge that consumers are generally taken to not be in the habit of making assumptions about the origin of products on the basis of the shape of the goods in the absence of any graphic or word element.
Background
Au is a premium vodka brand range, launched in 2015, comprising vodkas sold in gold metallic bottles with a label bearing the brand Au79 . In 2019/2020, the addition of flavoured vodkas to the range led to an impressive growth in sales. Since launch, annual revenues have reached over £80 million, with a marketing budget of £3.6 million and a range of celebrity endorsements, including boxer Floyd Mayweather and former professional footballer Ronaldinho.
In August 2022, NE10 launched its own range of vodka in silver, blue, and pink metallic bottles (no gold bottle) bearing the label NE10 VODKA, leading to Au bringing proceedings for passing off, in which it sought an interim injunction to stop NE10's marketing and sales of its vodka products.
Decision
On assessing the merits in relation to the application for interim relief, Mr Justice Mellor commented that the shape and dimensions of the rival bottles were extremely close. However, other similarities detailed by Au relating to the get-up, were "expressed at a level of abstraction which is divorced from what ordinary consumers perceive and carry in their heads". Whilst consumers would notice the similarities in the shape and dimensions of the bottles and perhaps some of the other similarities relied upon by Au, those were likely to be outweighed by the use of the brand ‘NE10’ and the fact that none of NE10's bottles were gold. Unlike in the famous Jif Lemon case, which related to the squeezy lemon-shaped design of the product, the respective Au79 and NE10 labelling could not be discarded. The evidence suggested that Au's labelling was noticed, because consumers referred to it as ‘Au vodka’. The evidence also provided strong support for the proposition that the (larger) NE10 labelling did not go unnoticed by consumers, and indeed that NE10's products would be referred to as NE10 vodka.
In dismissing Au's application for an interim injunction, Mr Justice Mellor concluded that:
- Whilst the purpose of the approach to interim injunctions under the test in American Cyanamid was to avoid a mini-trial on the merits pending trial, it is often necessary in passing off cases, such as this one, to form a view on the strengths of the claimant's case in order to understand the scale of any likely damage.
- The balance of convenience (or the risk of injustice) favoured NE10 - if Au won at trial, any damage it suffered pending a trial in January 2023 would be largely compensated by an injunction at trial and an award of damages. However, it was unlikely that damages would be an adequate remedy for NE10 if it was wrongly injuncted – a key factor here was that the NE10 range was already on the market.
Thus, the Court refused an interim injunction and the case will proceed to a two day trial in January 2023.
Comment
The key issue for the Court to determine in this case at trial will be whether the defendant's product deceives consumers, which will largely depend upon the evidence. Whilst the claimant put forward some evidence in its interim injunction application which it said demonstrated consumers being confused by the NE10 range, the Judge concluded that the evidence in question did not demonstrate that people were actually deceived into thinking that the defendant's vodka was that of the claimant. However, as the Judge pointed out, much will depend on what happens in the next four months before the trial, and the evidence that is available at that point on this issue.
It is also interesting to note that the Claimant sought to rely on an EUIPO Board of Appeal decision which had said that a 3D trade mark for the shape of Absolut vodka bottles should be registered, in order to support its argument that the shape of a bottle without any labelling could be distinctive. However, the Judge noted that there were examples also where the EUIPO had rejected attempts to register the shape of goods or their packaging – pointing out that in this case the word/graphic elements on the labelling of the Au79 and NE10 bottles could not be discounted.