A watchdog for the copycats
Supermarket brands packaged like the top sellers are under scrutiny, says Nick Walker
Tuesday 31 October 1995
This is exactly what I was, at least, according to Nigel Matthews, group secretary of Sainsbury's. "You would have to be pretty stupid to confuse the two products. Ours clearly says Sainsbury's. We don't think consumers are that stupid." Fair enough. Matthews is supported by a weight of research. According to the Consumers' Association, only 3 per cent of shoppers mistakenly basket lookalike products - or indeed branded products.
An own-brand product with a similar shape, size, colour or logo to the brand-name equivalent is perfectly legal as long as it doesn't confuse or deceive the consumer. This, some say, is the problem. Most other European countries have an unfair competition law. We don't. Customer confusion is not easy to prove. Neutrogena's recent successful case against Neutralia was boosted by customer complaints that attributed an advertisement for Neutralia (in which a nipple was bared) to Neutrogena. Even with this evidence, teams of lawyers still thronged outside supermarkets, waving affidavits at passing shoppers.
Most cases don't reach the courts. Sainsbury's tweaked the design of its Classic Cola cans after complaints from Coca-Cola, just as the supermarket shifted the position of a red mug on the label of its Full Roast Coffee after protests from Nestle. It is, say the brand owners, a case of supermarket sees, supermarket does what it can get away with.
But the on-going battle between supermarket and brand manufacturer could be entering a new chapter. Today sees the announcement of a new code of conduct to control lookalikes. The code comes a week after the British Producers and Brand Owners Group (which failed to have lookalikes banned in last year's Trade Mark Act) repackaged itself in the form of the British Brands Group. The new code has been brokered by the Institute of Grocery Distribution, a body that represents both retailers and manufacturers, along with six members of the British Brands Group.
It is understood that the code involves a dispute procedure. Where the parties still cannot agree, cases will be passed to arbitration. The code is thought to contain guidelines on how far retailers can go in copying colour schemes for own-label product packaging, although any list of dos and don'ts is highly unlikely. "With so many new products coming out, it can be very easy for a manufacturer or a retailer to put their foot wrong," says John Beaumont, chief executive of the institute. "Legal proceedings are not really the way professional organisations should be carrying on."
The supermarkets say the code is merely a reflecting process of negotiations they have been respecting for years. Brand manufacturers, on the other hand, are flexing their muscles and proclaiming victory over retailers, who, they say, only a couple of years ago were refusing to acknowledge there was an issue to be addressed at all. Some in the industry fear the code itself may be useless in any case. It has been noted that the membership of the committee that drafted the code was limited. Others have remarked that the retailers are not going to commit themselves to anything too onerous, pointing out that Tom Vyner, joint managing director of Sainsbury's, is this year's president of the Institute of Grocery Distribution.
According to a survey by Mintel published last week, brand owners are failing to convince consumers, particularly the young, of any difference in quality between big-name brands and supermarket own-label products. The new code may be a step in the right direction for brand manufacturers, but with the rise and rise of the supermarket, there is still a long way to go.
What the law says
Passing off is when you filch a competitor's trade by misleading conduct. Who is misled or how doesn't matter. You have to be able to demonstrate that your products have got the "goodwill" of the customer and that they have a reputation. Passing off has got nothing to do with unfair competition. It's very hard to win a case for passing off. The evidence is critical and is often hard to obtain. You have to act very quickly in passing-off cases to get an injunction, but this is very risky as the trader or manufacturer you are suing can claim damages for lost trade if you don't win.
Patents In order for something to be patented it has to be original in some way and an improvement on whatever similar product or process there was before, such as the means of putting a milk carton together. Patents are very expensive to obtain, and usually it is not worth applying unless you have the money to do so internationally and cover every potential market.
Trade marks Any mark distinctive of a product that is capable of being registered can be a trade mark. Generic words and laudatory words are not allowed - The Really Good Tomato Sauce, say. The theory is that no one can privatise words of the English language. Under the Trade Mark Act 1994, anything that is capable of graphic representation can be registered with the Registrar of Trade Marks, but the process can take at least 18 months.
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