One of the most iconic and most uniquely British brands in retail has found itself at the centre of what could be a very “bitter” dispute between its manufacturer and one of the UK’s largest supermarket chains.
Reports suggest that Diageo, the world’s largest premium drinks business responsible for brands such as Smirnoff, Johnnie Walker, Baileys and Guinness are about to take legal action against Sainsbury’s over their launch of “Pitchers”, their own version of Diageo’s “Pimm’s”.
Pimm’s has been something of a British institution for over a hundred years, with six different versionsbased upon the alcohol used to make them. The most popular version is Pimm’s No.1, long a staple of Wimbledon and the Henley Regatta as well as an increasingly popular pre-mixed drink in 250ml cans with Lemonade, finding favour with a whole new generation of consumers since Diageo purchased the brand in2006 and launched a number of extensive and successful advertising campaigns.
Diageo’s claim is based on Copyright Infringement, and follows Sainsbury’s launch of “Pitchers” as“synonymous with summer” and “cheaper than the branded equivalent”.
Sainsbury’s claim that their customers are “savvy enough to know exactly what they’re buying, the clue is in the name” and that there is “no basis” for Diageo’s allegations.
This kind of case is nothing new. Asda found themselves involved in a very protracted dispute with United Biscuits over 10 years ago after the Supermarket introduced “Puffin” biscuits as a competitor to the “Penguin” Brand.
The issue here was “passing-off”, which is a different cause of action to Diageo’s claim for copyright infringement. Passing-off deals with situations where a business can show goodwill in either the business as a whole or in one of their products which is traded upon by a competitor who attempts to mislead customers by confusing them into thinking that there is some kind of connection between the two.
In that case, United Biscuits won because the Court found that the packaging of the “Puffin” was deceptive by virtue of the fact that it also had an image of a “sea bird” with “dark colouring and a white front”; this and the use of the word “Puffin” suggested some kind of connection between the two.
This hasn’t deterred retailers in the meantime, with many now selling their own brand alternatives alongside market leaders. The Credit Crunch will probably make the situation worse as many Customers may find themselves hesitating to buy a “brand name” when they can have a cheaper alternative and when the makers of the branded version occasionally also manufactures the cheaper version under a different name. It’s perhaps this concern that has led Diageo to take action to avoid what they may well see as a threat to the value of their brand.
If the claim is based on copyright infringement, then it may be because of the similarity between the two labels-the artwork on both will be protected by copyright as an “artistic work”. Infringement takes place when a “substantial part” of an existing image is used in another, and these cases tend to be much easier to fight than passing-off cases, which would usually require evidence of confusion in the marketplace.
This is usually proved via survey evidence, as took place in the Neturogena v Neutralia case a few years ago.
It may be that Diageo have gone for what they see as the easier claim, but I’d be surprised if any Court case didn’t also contain allegations of passing-off and or trade mark infringement, as I’m sure that a number of trade marks will apply to the Pimm’s packaging, even if the name is further away from Pimm’s than Puffin was from Penguin.
What’s interesting is the fact that Sainsbury are one of Diageo’s biggest customers and that they don’t think that their relationship with the retailer will be affected.
There are a number of conflicting legal points at work in this dispute, but behind all of them is a commercial relationship which both sides will be very keen to maintain. Diageo are, after all, one of the biggest Drinks producers in the World and Sainsbury’s would have a lot of empty shelves in their Wines and Spirits aisle if Diageo chose not to deal with them any more.
That’s very unlikely, especially as Diageo themselves will not be keen to fall out with one of the UK’s longest-standing food retailers, serving 18 million customers a week through nearly 600 stores.
In any event, this may simply be the start of a new approach to this kind of case. We’ll have to wait and see-anyone for an Injunction??