The packaging of cheap products from supermarket giant Aldi is always reminiscent of the big brands, such as Nurofen,Sultana Bran and Mars bars..
This is a universal formula for success in the world. The German discount chain operates unscrupulously with the slogan of "as much as a brand, but cheaper". It entered Australia in 2001, and the supermarket proved to be adept at fending off local trademark infringement, misleading and deceitful sexual behavior lawsuits.
So how does Aldi evade legal responsibility while taking advantage of existing brands? The Federal Court of Australia answered this question in a recent case.
Professor Michael Handler, professor of intellectual property law at the University of New South Wales, said: "Aldi`s business model is really smart-they know how to make a difference."
"they know where the law limits the protection of brands, and I think they`ll make sure they`re on the right side of the law. It may be a free ride, but it doesn`t hurt consumers. "
Aldi currently has more than 500 stores in Australia and is steadily increasing its market share. According to Roy Morgan (Roy Morgan), Aldi has a 12.1% market share in the $100 billion Australian grocery market, ranking third in supermarket wars, ahead of IGA (7.4%). It was second only to Woolworths (32.2%) and Coles (28.8%).
A key reason for the success of the company`s strategy is that its own brands cost much less than big-name products.
(Fady Aoun), a senior lecturer at the University of Sydney and expert in intellectual property law, said Aldi`s legal department "knows exactly what they`re doing" and how to imitate the product, while ensuring that there are enough differences in packaging and trademarks.
"the law always allows merchants to use comparative advertising-ads that compare their companies, products or services with competitors` companies, products or services in an all-round or a certain way," Orne said. "this makes the characteristics of a big brand a springboard for many products."
Soon after Aldi opened its first store in Sydney in January 2001, it received angry lawyer letters. A month after the store opened, American snack giant Frito-Lay sued Aldi, on the grounds that the Cheezy Twists sold by Aldi was similar to the Twisties. they produced
Frito-Lay won a lawsuit in July 2001, but it was too happy. Aldi later appealed to three judges of the Federal Court and won.
Most judges believe that Aldi`s Cheezy Twists deliberately targeted the Twisties market, but did not infringe Twisties`s trademark.
This is because the name Cheezy Twists is not very similar to the Frito-Lay trademark, meaning it is less likely to deceive or confuse consumers.
Most importantly, since Frito-Lay `s case was limited to trademark infringement claims, the court was not required to treat packaging as a whole, including color matching and design. It simply compares the visual and auditory similarities between the names "Cheezy Twists" and "Twisties".
"Trademark law is about brand names and logo.," said Michael Handler of the University of New South Wales. This means that defendant, such as Aldi, can easily evade responsibility by choosing a completely different name for his product. "
It is possible for companies to register a product`s image, including packaging and product shape, as trademarks, but this is not common, Professor Handler said.
Big brands are likely to be deterred by the painful experience of Frito-Lay, as it takes about 15 years for another company to confront Aldi on the federal court.
In May 2015, Moroccanoil Israel Ltd, an Israeli beauty company, sued Aldi`s Moroccan Argan Oil hair care product for copying its product. But the company failed in both the Federal Court and the Federal Court`s full court appeal.
Professor Handler said the cases of, Cheezy Twists and Moroccan Argan Oil reflect the fact that "consumers, especially those at Aldi, are very smart," knowing that the supermarket offers "similar but not" big brands.
