Philip Warren & Son v Lidl – No case of mi-steak-en identity

The High Court has dismissed a passing off claim brought by Philip Warren & Son Limited (PWS) against well-known supermarket, Lidl. The decision ultimately turned on the fact that PWS presented "insufficient evidence of a significant level of operative misrepresentation to any category of PWS' customers".

Background - PWS

PWS is a family run butchers which can trace its origins back to 1880. Based in Launceston, Cornwall, it trades at the higher-end of the local retail and wholesale market. The brand name 'PHILIP WARREN & SON' (often simplified to 'PHILIP WARREN') has been used by PWS since 1980. In recent years, PWS has also traded under the following logo:

When Lidl began using its 'WARREN & SONS' brand in 2015, PWS was already well established, particularly in and around Launceston. PWS was also well-known as a wholesale business, a supplier of luxury restaurants and was regularly promoted in the food press. In 2007, PWS had even been approached by US organic food giant Wholefoods, in connection with teaching staff how to set up butchers' counters in its UK stores.

Background - Lidl

Between 2015 – 2020, Lidl sold fresh meat products under the brand 'WARREN & SONS', largely using the following logo:

It was clear from the evidence that Lidl had not chosen the brand as a result of wanting to make any connection with PWS.

During this five year period, Lidl sold significant quantities of product under its 'Warren & Sons' brand. In PWS' initial letter to Lidl, its claim was valued at around £47M.

The dispute

Shortly after Lidl launched its 'WARREN & SONS' brand, PWS began to receive communications suggesting that some of its customers may have been confused into thinking that Lidl had started to sell PWS products. Whist the Court heard that PWS found this irritating, as a family business unfamiliar with IP law and with no trade mark registrations, PWS did not believe anything could be done.

After receiving legal advice, a letter before action was eventually sent to Lidl in late 2019 but by this time, Lidl was already phasing out its 'WARREN & SONS' brand. The last branded products were sold by Lidl in 2020. In the same year, Lidl also surrendered its 'WARREN & SONS' trade mark registration.

Passing off

To succeed in a claim for passing off, a claimant must satisfy the three requirements outlined in the famous Jif Lemon case: (1) Goodwill in the goods / services in question; (2) a misrepresentation leading (or likely to lead) the public to believe that the goods or services offered by the defendant are the goods or services of the claimant; and (3) damage to the claimant as a result of the defendant's misrepresentation.

(i) Goodwill

Lidl did not dispute that PWS had generated goodwill in relation to meat products or that this was significant in and around Launceston and in relation to PWS' wholesale business. The Court found however that there would likely be limited customer overlap (except for potentially in Launceston), as PWS and Lidl operated at very different ends of the market.

(ii) Misrepresentation

When considering misrepresentation, the Court considered the impact of Lidl's activities on PWS' customers. It held that the evidence of confusion was "at best, thin" and that it was unlikely that Lidl customers who were also aware of PWS would have been confused into believing the two retailers were associated. This was particularly so, given Lidl's strong reputation for primarily selling Lidl and other house branded goods.

Furthermore, whilst the two brands had traded side by side for 5 years, there had only been limited instances of actual confusion.

(iii) Damage

Lidl's use of the 'WARREN & SONS' brand was also found to have had no significant commercial impact on PWS' business. This was supported by the fact that PWS' claim for compensation was predominantly based on Lidl's sales as opposed to damage to PWS' business, which PWS had in fact been able to expand from 2015 onwards.

Accordingly, PWS' claim failed.   

Comment

The case reinforces the inherent difficulties of basing a passing off claim on a localised reputation and of demonstrating that a misrepresentation has occurred, or is likely to occur, where the businesses in question are known to operate at different ends and in different areas of the market.

The decision also serves as a reminder of the need to act quickly when the activities of another business potentially conflict with your intellectual property rights. As a general rule, the longer two businesses have coexisted, the more evidence of actual confusion will be required to convince the court that a misrepresentation occasioning damage has occurred.

In this case, it is unlikely that trade mark registrations would have altered PWS' fate. This is because the substantial period of coexistence, coupled with the limited evidence of actual confusion would have likewise undermined any claim that PWS could have sought to bring under s10(2) of the Trade Marks Act 1994.  

The full judgment, Philip Warren and Son Ltd v Lidl Great Britain Ltd [2021] EWHC 1097 (Ch), is available here.