Case No: CC12P02026
Neutral Citation Number: [2014] EWHC 1686 (IPEC)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
INTELLECTUAL PROPERTY ENTERPRISE COURT

Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL

Date: 29/05/2014

Before :

HIS HONOUR JUDGE HACON
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Between :

	MOROCCANOIL ISRAEL LIMITED	Claimant	
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	ALDI STORES LIMITED	Defendant	

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Amanda Michaels (instructed by Sibley Germain LLP) for the Claimant
Michael Edenborough QC and Thomas Elias (instructed by Freeth Cartwright LLP) for the Defendant

Hearing dates: 15-16 April 2014
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Judgment
Judge Hacon : 
1.	The claimant (“MIL”) makes and sells hair products throughout the world, of which the principal and most successful is a hair oil marketed under the name “Moroccanoil”.   It was first sold in the United Kingdom in 2009 and, as elsewhere, it has attracted a good deal of favourable attention.  An image of a bottle of Moroccanoil and the box in which it is sold appears as Annex 1 to this judgment.
2.	The defendant (“Aldi”) is the well known supermarket.  In March 2012 Aldi brought on to the UK market a hair oil sold under the name “Miracle Oil”.   Annex 2 shows the bottle and box used for Miracle Oil.  MIL alleges that these sales by Aldi constitute passing off.  MIL’s case is that the get-up and name of Aldi’s product are in combination so similar to those of MIL’s product that a substantial number of consumers would mistake Miracle Oil for Moroccanoil or assume that they share a common manufacturer or that there is otherwise a trade connection between the two.
3.	The letter before action from MIL’s solicitors dated 27 March 2012 referred to a Community Trade Mark (“CTM”) owned by MIL.  Aldi counterclaimed alleging an unjustified threat of proceedings for infringement of the CTM.  MIL sought to respond to this by an allegation that Aldi had infringed the CTM.  There are invalidity proceedings before the Office for Harmonisation in the Internal Market (“OHIM”) so the allegation of trade mark infringement could not go forward at this stage, pursuant to art.104 of the Regulation (EC) 207/2009 (“the Trade Mark Regulation”).  At the CMC on 20 March 2013 Morgan J also stayed the counterclaim for unjustified threat of infringement proceedings.  The trial before me was only about passing off.
The Law
The classic trinity
4.	It was common ground that MIL has to satisfy the classic trinity of elements in an action for passing off, see Reckitt & Colman Products Ltd v Borden Inc [1990] 1 WLR 491; [1990] RPC 34 (“Jif Lemon”).  In the present case that means demonstrating:
(a)	goodwill in MIL’s business in the sale of Moroccanoil in the UK, which goodwill is associated with the get-up and name of the product such that they are in combination recognised by the public as distinctive of MIL’s product;
(b) 	a misrepresentation on the part of Aldi (whether or not intentional) in relation to the source of Aldi’s Miracle Oil product; and
(c)	damage to the goodwill by reason of the misrepresentation.
The relevant date
5.	The date for deciding whether a defendant’s conduct amounts to passing off is the date on which that conduct commenced, see Cadbury-Schweppes Pty Ltd v Pub Squash [1981] 1 WLR 193.  In this case it is 29 March 2012, when Aldi first put Miracle Oil on sale.
The nature of the misrepresentation
6.	MIL relied on three alternative forms of misrepresentation.  The first was the standard Jif Lemon type, i.e. that a substantial proportion of the public would as a consequence take Miracle Oil to be Moroccanoil.  The second was of the form which succeeded in United Biscuits (UK) Ltd v Asda Stores Ltd [1997] RPC 513, namely that although the public would distinguish MIL’s and Aldi’s products, they would assume an association between them in the form of there being a common manufacturer.  To this MIL added a further possibility, that the public would assume that Miracle Oil had been produced under licence from the source of Moroccanoil.
7.	The parties were agreed that in any of those alternative cases it is irrelevant whether the public would know the identity of the manufacturer of the products.
The meaning of ‘confusion’
8.	As often happens in passing off cases, there was a risk that misunderstandings could arise through use of the word ‘confusion’.  Mr Edenborough QC, who appeared for Aldi with Mr Elias, emphasised that ‘mere confusion’ is not enough; for a case in passing off to succeed there must be ‘deception’.  Mr Edenborough cited Barnsley Brewery Co Ltd v RBNB [1997] FSR 462, at 467 in which Robert Walker J referred to the speech of Lord Diplock in Warnink (Erven) BV v J. Townend & Sons (Hull) Ltd [1979] AC 731.
9.	There is a difficulty in making the distinction in law identified in Warnink and Barnsley Brewery, among other cases, by differentiating ‘confusion’ on the one hand (no passing off) from ‘deception’ on the other (passing off).  The problem is that the law reports are full of cases in which misrepresentation is discussed in terms of whether or not there was a likelihood of ‘confusion’ on the part of the public.  This is not surprising.  In the Trade Marks Act 1994,  the underlying Trade Mark Directive (Directive 2008/95/EC and its predecessor Directive 89/104/EEC) and the Community Trade Mark Regulation liability for infringement, where there is a similarity between the trade mark and the accused sign and/or between the relevant goods or services, depends on a likelihood of ‘confusion’ on the part of the public (see s.10(2) of the Act, art.5(1)(b) of the Directive and art.9(1)(b) of the Regulation).  Even before the 1994 Act, a likelihood ‘to deceive or cause confusion’ (my italics) was the criterion for infringement where an action turned on the degree of similarity between marks (see Trade Marks Act 1938, ss.4(1) and 68(2B)).  Allegations of trade mark infringement and passing off are commonly argued in the same action and often the evidence and argument on statutory confusion in the trade mark sense get to double up as the central part of the debate about misrepresentation in the context of passing off.  The two concepts are not identical but there is an overlap.  Even where trade mark infringement is not in issue, force of habit can often lead to the word ‘confusion’ being used when discussing the key element of misrepresentation.
10.	Also, the term ‘deception’ is not completely free from difficulty.  Loose use of the word, by which in fact I mean use according to its ordinary English meaning, implies an intention on the part of the claimant, yet this is irrelevant as was made clear for instance in Barnsley Brewery and Warnink. 
11.	In Reed Executive plc v Reed Business Information Ltd [2004] RPC 40, Jacob LJ suggested at [111] that the distinction in law is more accurately stated to be the difference between an assumption on the part of the relevant public on the one hand and mere wondering on the other, a proposition which he later endorsed in Phones 4U Ltd v Phone4U.co.uk.Internet Ltd [2007] RPC 5, at [16]. 
12.	At the hearing of this trial debate inevitably slid into usage of the term ‘confusion’, although I think without any misunderstanding.  In this judgment I will largely avoid both it and ‘deception’, but since arguments were advanced by reference to those terms, particularly ‘confusion’, I will sometimes fall back on them.  I should be clear, though, that what matters is whether there was a misrepresentation.  In this case that means whether the public would assume, because of the get-up and name of Miracle Oil, that it either (a) is Moroccanoil or (b) is made by the same manufacturer (or is licensed).  This is to be distinguished from the public merely wondering whether the products are the same, or are made by the same manufacturer or are licensed.
The proportion of the public which constitutes a substantial part
13.	Not all customers of hair products in Aldi need make either assumption for MIL to establish passing off.  A substantial proportion will be enough.  What minimum proportion constitutes a substantial part?  In Neutrogena Corp v Golden Ltd [1996] RPC 473 Jacob J stated at [481-2]:
“…the crucial question is whether or not the plaintiffs have established a sufficient degree of confusion and deception to take the case above a de minimis level.”
In the appeal from Jacob J in that case (same citation) Morritt LJ said at [494]:
“…for my part, I think that references, in this context, to “more than de minimis” and “above a trivial level” are best avoided notwithstanding this court’s reference to the former in University of London v American University of London (unreported 12 November 1993).  It seems to me that such expressions are open to misinterpretation for they do not necessarily connote the opposite of substantial and their use may be thought to reverse the proper emphasis and concentrate on the quantitative to the exclusion of the qualitative aspect of confusion.”
14.	Lewison LJ considered the observations of Morritt LJ in Interflora Inc v Marks and Spencer plc [2012] EWCA Civ 1501; [2013] FSR 21 at [30].  He found that the important point to be taken from it is that passing off can be established even though most people are not deceived.
15.	Clearly a claimant in a passing off action need not show that most of the relevant section of the public would make the false assumption relied on.  Something less than half will do.  Mr Edenborough helpfully suggested that 15-20% was about right and Ms Michaels, who appeared for MIL, said that was fine.
16.	I have to say that focussing on a cut-off minimum proportion – X% or more of the relevant public making the false assumption is enough to make for an actionable misrepresentation – is seldom going to be useful.  In most if not all cases the total number of individuals which make up the relevant public will be virtually impossible to know, so it will be equally difficult to know what X% of that total is.  Morritt LJ implied that starting with the relevant minimum proportion of the public is the wrong way around.  I think the better approach is instead to consider what evidence there is relating to the assumption in issue, to take into account the cogency of that evidence, in broad terms the size and nature of the market in question and the channels of sale, and then assess whether it is likely that sufficient individuals have made or will make the false assumption such as to cause material damage to the goodwill of the claimant.
Initial interest confusion
17.	Ms Michaels submitted that there may be passing off even if the misrepresentation is dispelled by the time the purchase of the defendant’s goods is complete.  She submitted that ‘initial interest confusion’ can suffice and referred to Och-Ziff Management v OCH Capital [2010] EWHC 2599 (Ch); [2011] FSR 11.
18.	Mr Edenborough argued the opposite: if a purchaser is misled initially but his misunderstanding is dispelled before he makes a purchase, there is no actionable misrepresentation.  He relied on Woolley v Ultimate Products Ltd [2012] EWCA Civ 1038 in which Arden LJ said this at [4]:
“The misrepresentation must be more than transitory: it is not sufficient that a purchaser is misled initially but his misunderstanding is dispelled before any material step is taken (see Cadbury-Schweppes Pty Ltd v Pub Squash [1981] 1 WLR 193, PC).  In this case, for example, trade purchasers who were confused as to HENLEYS watches checked the position with Mr Wooley so that any misrepresentation to them was not operative.”
19.	This became a debate about whether ‘initial interest confusion’ forms part of the English law of passing off and if so, what that means.  I start with Och-Ziff.  Arnold J was principally concerned with an allegation of infringement of two registered Community trade marks.  It was in this context that he primarily analysed initial interest confusion and in particular whether such confusion was sufficient for infringement pursuant to art.9(1)(b) of the Trade Mark Regulation.  It is important to be clear what Arnold J had in mind.  He said this:
“[87]	What then is the status of initial interest confusion in European trade mark law? For this purpose, I shall define “initial interest confusion” as confusion on the part of the public as to the trade origin of the goods or services in relation to which the impugned sign has been used arising from use of the sign prior to purchase of those goods or services, and in particular confusion arising from use of the sign in advertising or promotional materials.”
Arnold J thought that damage to the trade mark proprietor was relevant to whether initial interest confusion should as a matter of principle qualify as confusion within the meaning of art.9(1)(b): 
“[101]	My conclusion is that the weight of authority supports the conclusion that initial interest confusion is actionable under art.9(1)(b). Furthermore, I find the arguments of principle in favour of this conclusion advanced by counsel for Och-Ziff more compelling than those against it advanced by counsel for the defendants. Counsel for the defendants had no convincing answer to the point that … confusion arising from an advertisement is capable of causing damage to the trade mark proprietor even if such confusion would be dispelled prior to any purchase. Although there will be no diversion of sales in such circumstances, there are at least two other ways in which the trade mark proprietor may be damaged. The first is that a confusing advertisement may affect the reputation of the trade marked goods or services. It is irrelevant for this purpose whether the defendant’s goods or services are objectively inferior to those of the trade mark proprietor. The second is that such confusion may erode the distinctiveness of the trade mark. Both of these points were explained with characteristic lucidity and verve by Laddie J. in the context of passing off by false endorsement in Irvine v Talksport Ltd [2002] EWHC 367 (Ch); [2002] 1 W.L.R. 2355 , in particular in the passages quoted below.”
20.	When Arnold J turned to initial interest confusion in the context of passing off he said this:
“[155]	In my judgment OCH Capital’s use of the signs complained of gives rise to a misrepresentation for similar reasons that I have given in relation to the claim for infringement of the OCH-ZIFF trade mark under art.9(1)(b). It is true that in passing off there is no limit on the relevant circumstances, but I do not accept that it follows that initial interest confusion is not actionable. 
[156]	This question is considered by Professor Wadlow in The Law of Passing Off: Unfair Competition by Misrepresentation, 3rd edn (London: Sweet & Maxwell, 2003) at §§5-22–5-24 and 7-37–7-40. As he says at §7-39 (footnotes omitted): 
“In the absence of better express modern authorities switch selling has to be approached from basic principles. First, Spalding v Gamage decided that there can be passing off with liability for substantial damages merely by advertising goods for sale, even if none are in fact sold. Secondly, the basis of passing off is a misrepresentation causing damage to the claimant’s goodwill and there are few a priori limits on what the misrepresentation may be or how the damage may arise: the case in which the defendant’s goods are sold as and for the goods of the claimant is now recognised as no more than a special instance of a more general rule. In deliberate switch selling there is necessarily a misrepresentation and the question ought therefore to be whether it is material in the sense that damage arises from it. 
‘[A] representation made by advertisements that the articles sold at a particular shop are articles manufactured by A.B. (if that is the legitimate effect of the advertisements, which is a separate question) must, in my opinion, be as imperious in principle and may possibly be quite as injurious in operation, as the same representation made upon the articles themselves.’
The success of switch selling as a business practice depends on a potential customer for the claimant’s goods being sold the defendant’s by a process in which the making of the misrepresentation is an essential step, and damage may therefore be said to arise from the misrepresentation even though the customer has ceased to be misled by the time the transaction is concluded. The general principle is that if the defendant successfully induces the public to do business with him by making a misrepresentation then it ought not to matter that the falsity of the representation would become apparent at some stage. …”
[157]	I agree with this analysis. Furthermore, in my view the points made by Professor Wadlow in the first and last sentences of this passage hold good even if the misrepresentation is innocent rather than deliberate.
Damage
[158]	Counsel for the defendants submitted that, even if there was a misrepresentation, there was no damage to Och-Ziff since OCH Capital was not in direct competition with Och-Ziff; and that, both for that reason and because any confusion would be dispelled by the time of a contract, Och-Ziff would not suffer any diversion of trade. I do not accept this argument for two reasons. 
[159]	First, it is well established that, even in the absence of competition and hence diversion of sales, a misrepresentation leading to the belief that the defendant’s business is associated with the claimant’s is damaging to the claimant’s goodwill. Secondly, it is also well established that, if there is a misrepresentation which erodes the distinctiveness of the indication in question, then that is damage for the purposes of a claim in passing off. As noted above, both of these points were well explained by Laddie J. in Irvine [2002] 1 W.L.R. 2355,
… 
[160]	In my judgment both of these types of damage are likely in the present case. The first requires no elaboration. As to the second, I consider that Och-Ziff can rely upon erosion of distinctiveness even though I have not accepted their art.9(1)(c) claim, for two reasons. First, because in this context I have found that there is a misrepresentation as to trade origin. Secondly, because in this context I consider that Och-Ziff are in a better position to rely upon goodwill in, and damage to, the OCH element of their various names.” 
21.	Mr Edenborough pointed out that Arnold J’s adoption of Professor Wadlow’s analysis was met by a response in the fourth edition of The Law of Passing Off (see ¶7-060).  The passage from the third edition quoted by Arnold J was taken from a section of the book in which Professor Wadlow was considering ‘switch selling’.  This is a term first used in the United States to describe a particular form of dishonest trading.  The defendant represents that he can supply the claimant’s goods or services.  When a customer approaches the defendant however he is told that the claimant’s product is not available, but a similar product from a different source can be supplied instead.  Out of inertia perhaps, the customer buys the alternative.  The customer is not deceived at the time of sale.  He knows he is not getting the claimant’s product.  Is that passing off according to English law?  The third edition of The Law of Passing Off argued from first principles that it is.
22.	But Och-Ziff was not concerned with switch selling.  As appears from the passage quoted above, Och-Ziff was a more conventional type of passing off case in which a similarity between trade names led Arnold J to conclude that there was a misrepresentation and although there was no likelihood of direct damage by way of any loss of contracts, he was entitled nonetheless to infer a likelihood of damage in the form of (i) a false belief that there was a business association between the claimant and defendant and (ii) an erosion in the distinctiveness of the claimant’s name.
23.	Professor Wadlow writes in the fourth edition of his book that Och-Ziff is not authority for his reasoning in relation to switch selling.  Elsewhere in the fourth edition he expresses the further view that Och-Ziff should also not be
“…taken as standing for the proposition that ‘initial interest confusion’ in the trade mark sense is sufficient for passing off.   The relevant criterion is not confusion in some abstract sense, but misrepresentation, and the misrepresentation must be a material one, in the sense of being really likely to cause damage.” (at ¶5-186).
24.	I am not completely clear what Professor Wadlow means by ‘initial interest in the trade mark sense’ as opposed to that term in the context of passing off.  Arnold J defined the term, so far as he was concerned, as confusion regarding trade origin.  I take that to be the corollary of a misrepresentation as to the source of the goods or services, albeit prior to or without a sale.  I think Professor Wadlow may be focussing on damage as the point of distinction.  If so, I agree.
25.	It seems to me that Och-Ziff and Woolley are judgments entirely consistent with one another.  If a customer makes an initial false assumption as to a trade connection between the claimant’s and defendant’s goods but that assumption is dispelled before any purchase is made and as a consequence the claimant suffers no damage, there is no passing off (see Woolley).  Damage remains one of the three essential ingredients of the tort.
26.	In Och-Ziff there was goodwill and a likelihood of a false assumption as to trade origin on the part of the relevant public; there was no likelihood of a direct pecuniary loss but Arnold J inferred a probability of other damage.  This was therefore passing off of the conventional sort.
27.	In ‘switch selling’ there is, as the name implies, a sale.  There is no false assumption on the part of the customer at the time of sale but there is still damage: the customer has been lured in by the promised offer of the claimant’s goods or services and this false promise has led to a sale by the defendant at the expense of the claimant.  This would be passing off.
28.	By contrast, as I have just indicated, it seems to me that where ‘initial interest confusion’ as defined by Arnold J is dispelled before that confusion is acted upon, generally by making a purchase, in circumstances such that the claimant suffers no damage, this is not sufficient to give rise to passing off.
Absence of evidence of confusion
29.	Ms Michaels submitted that the absence of any evidence of actual confusion is irrelevant to the assessment of passing off and referred to Samuel Smith Old Brewery (Tadcaster) v Philip Lee (trading as Compton Brewery) [2011] EWHC 1879 (Ch): [2012] FSR 7.  I think this submission goes too far.  As Arnold J said in Samuel Smith (in the context of assessing the likelihood of confusion under art.5(1)(b) of the Trade Mark Directive, although later treating it as equally applicable to his discussion of misrepresentation and passing off) an absence of evidence of actual confusion is not conclusive, but in considering the weight to be attached to that absence it is relevant to consider what opportunity there has been for confusion (a) to occur and (b) to be detected (at [95]).
Misrepresentation caused by get-up
30.	MIL’s case is that a misrepresentation is generated by a combination of the name and get-up of Aldi’s product but the greater emphasis was placed on similarities in the get-up.  Mr Edenborough submitted that passing off cases based on get-up that were successful were rare indeed, Jif Lemon being one of the few exceptions which had depended on unusual findings of fact at first instance.  He referred to Professor Wadlow’s summary at ¶8-133 of The Law of Passing Off (4th ed):
“The difficulty confronting the claimant in all actions for passing-off based on get-up is that it is unusual for one trader’s goods to be distinguished from those of his competitors exclusively, or even primarily, by their get-up.  Normally a brand name or other mark is chosen and given prominence and it is this on which consumers are expected and encouraged to rely.  To make out a case based solely on similarities of get-up the claimant must show that deception is likely to notwithstanding the absence of his own brand name on the defendant’s goods and the likely presence there of the defendant’s brand name and perhaps other distinguishing matter.  Not surprisingly, the cases in which passing-off has been found have predominantly been ones of deliberate deception.”
31.	I agree with this summary.  It is not a proposition of law, more a statement of the realities of the market place.  Goods are almost always referred to by their trade names, not their get-up.  Get-up may play a greater role in the recall and recognition of a particular product, but if the respective names of the claimant’s and defendant’s goods are distinctive, a misrepresentation by reason of similar get-up is likely to depend on the relevant public not noticing the name on the defendant’s product, or on a label attached to it, as was the case in Jif Lemon.
Bringing to mind
32.	One of the issues in this case was the effect on the relevant public of the similarities in get-up and name between MIL’s and Aldi’s products. Ms Michaels accepted that establishing a ‘link’ in the mind of the public within the meaning given to that term as an element of trade mark infringement pursuant to art.5(2) of the Trade Mark Directive would not be sufficient for passing off.  No misrepresentation would be established if it were shown that the similarities did no more than cause Aldi’s Miracle Oil to bring MIL’s Moroccanoil to mind.  A recognition on the part of the relevant public that the name and/or packaging of the former looks similar, even strikingly similar, to the name and/or packaging of the latter would not by itself translate into an actionable misrepresentation on the part of Aldi.
Living dangerously 
33.	There is a long standing principle of law that if a defendant has deliberately sought to take the benefit of a claimant’s goodwill for himself the court is likely to conclude that he has succeeded, see Slazenger & Sons v Feltham & Co (1889) 6 RPC 130 at p.538.  In United Biscuits Robert Walker J took this a little further.  He found on the evidence in that case that the defendant had been aiming to avoid deception but had taken a conscious decision to ‘live dangerously’.  In the preparation of the packaging of its ‘Puffin’ biscuit the defendant had wanted its product to appear to be an obvious competitor and parody of the plaintiff’s ‘Penguin’ biscuit.  The plaintiff was inviting comparison.  It had made changes to its initial designs so as to lessen the risk of deception but was still, in Robert Walker J’s view, living dangerously.  In his judgment this was not something that the court was bound to disregard (at p.531).
34.	In Specsavers International Healthcare Ltd v Asda Stores Ltd [2012] EWCA Civ 24: [2012] FSR 19 Kitchin LJ, with whom the President of the Queen’s Bench Division and Black LJ agreed, considered this aspect of the judgment in United Biscuits:
“[115]	In my judgment it is important to distinguish between a defendant who takes a conscious decision to live dangerously and one who intends to cause deception and deliberately seeks to take the benefit of another trader’s goodwill.  It has long been established that if it is shown that a defendant has deliberately sought to take the benefit of a claimant’s goodwill for himself the court will not “be astute to say that he cannot succeed in doing that which he is straining every nerve to do”: see Slazenger & Sons v Feltham & Co (1889) 6 R.P.C. 130 at p.538 per Lindley L.J. A trader who has taken the decision to live dangerously is in a different position, however. He has appreciated the risk of confusion and has endeavoured to adopt a sign which is a safe distance away.  All must depend upon the facts of the particular case.  Further, it must be kept firmly in mind that the ultimate question whether or not the similarity between the trade mark and the sign is such that there exists a likelihood of confusion is one for the court to determine in the light of its global assessment of all material factors, of which the intention of the defendant, as a person who knows the market in which he is offering his goods or services, is only one.” 
35.	Thus, finding whether there has been or is likely to be a misrepresentation is a global assessment.  Among the factors that can be taken into account is the subjective intention of the defendant.  This may be relevant because the defendant knows the market and can have an accurate insight into the likely perception of consumers (see also [155]-[158] in which Kitchin LJ returned to this topic in the context of argument regarding alleged infringement under art.9(1)(c) of the Trade Mark Regulation).  Nonetheless Kitchin LJ distinguished an intent to take the benefit of the claimant’s goodwill from an intent to live dangerously.  I interpret this to mean that the latter is not to be put on the same footing as the former.  I think if the defendant’s intent is that the name and/or get-up of its product will bring to mind the claimant’s product but not lead to any false assumption on the part of the public as to any sort of trade connection (including common manufacturer or a licence), then at best from the claimant’s point of view this is neutral.  Arguably, if the defendant is clearly shown to have a highly accurate perception of the target market, it helps the defendant.
Evidence in relation to goodwill
36.	I have no doubt at all that the claimant enjoys goodwill in its business in Moroccanoil.  The evidence included many examples of advertisements and press attention in the UK garnered by the product since its launch in 2009, often by reference to endorsements of its qualities from celebrities which, I imagine, attracted a good deal of attention.  The sales figures up to April 2012 were over £6 million.  In the same period £667,000 was spent on marketing in the UK, though this figure did not distinguish the Moroccanoil hair oil from other of MIL’s products.  However, since the hair oil was the leading product I infer that much of this sum was devoted to advertising the hair oil.
The name ‘Moroccanoil’
37.	MIL’s case was that the goodwill was attached to the name and get-up of the product in combination.  In other words, this combination was by the relevant date, 29 March 2012, distinctive of MIL’s product.  The argument of both parties at trial was largely split, dealing with the name and get-up separately.  As I will explain I think it makes little sense to separate them but it is convenient to begin with the name.
38.	The goodwill in MIL’s business must be attached to something and in the normal course it will be the name of the product rather than its get-up for reasons discussed above.  Aldi’s attack on this part of MIL’s case was that the name ‘Moroccanoil’ is descriptive.  I think this argument cuts both ways.  If the name is wholly descriptive, say the equivalent of ‘hair oil’ in the mind of consumers, those consumers are all the more likely to identify the product by reference to the get-up.  It was not suggested that the public couldn’t distinguish Moroccanoil from other products on the market, so they must be able to identify it by some sort of distinguishing label and the goodwill in the business will be associated with that.
39.	Experts gave evidence on both sides regarding the descriptiveness of the words ‘Moroccanoil’ and ‘Moroccan oil’.  In the end they barely disagreed.  They helpfully produced Points of Agreement in advance of the trial.  In this they stated that the term ‘Moroccan oil’ had greatly increased in usage in English since 2008, i.e. coinciding with MIL’s product being placed on the market.  Dr Kilgariff for MIL had examined a database or ‘corpus’ of English words gathered from the web, known as enTenTen12.  He found that in relation to ‘Moroccanoil’ 95.7% of occurrences referred to MIL’s product; in relation to ‘Moroccan oil’ the proportion was 24.2%.  He concluded that with or without a space the term had only entered the English language with the advent of MIL’s product in the English speaking world.  He thought the term in either form continues to be used very substantially as a brand.  Professor Hanks for Aldi had reservations about what could be concluded from enTenTen12 but while he would differ with some of the numbers advanced by Dr Kilgariff, he thought that what Dr Kilgariff had concluded was broadly true.  On that evidence it seems to me that the name ‘Moroccanoil’ is distinctive of MIL’s product in the UK.  This relates to the position shortly before the trial, but it was not suggested that at the end of March 2012 it would have been significantly different. 
40.	I was told that the validity of MIL’s Community trade mark MOROCCANOIL has been challenged in OHIM and that there is currently an appeal from a ruling by the Cancellation Division that the mark is descriptive.  I have not taken this into account.
The get-up
41.	There was argument about whether the get-up of Moroccanoil was by itself distinctive of MIL’s product.  I found this artificial.  The product is inevitably sold and marketed in packaging which has both the Moroccanoil name prominently on it as well as the get-up.  The get-up without the name could never have become distinctive because it has never been before the public.  This is not a Jif lemon type case in which the public would not notice the brand name.
42.	There was evidence that some customers ask for ‘the product in the brown bottle with the turquoise label’.  Tracey Woodward, who is a consultant in the cosmetics industry and has worked for a hair salon, said in cross-examination that staff in a salon would always refer to the product as ‘Moroccanoil’, but clients tend to remember a product by its colour or texture.  She said it was equivalent to clients asking for a red lipstick rather than referring to a brand name.  I do not find this analogy persuasive.  I accept her evidence that some salon customers identify the product by reference to its colour but this is consistent with their momentarily forgetting its name.  It does not suggest to me that the product is identified by its get-up irrespective of what name appears on the packaging.
The combination of name and get-up
43.	MIL’s case, sensibly, rests on the combination of name and get-up being distinctive of its product.  I do not doubt that it is.  In my view the name plays the greater role, so the goodwill in MIL’s business in the product will primarily be attached to its name, but I accept that the get-up plays some additional part.  The similarities in get-up of the box on which MIL relied were:
(i)	the turquoise blue colour
(ii)	the orange graphics; and
(iii)	the vertical writing.
In relation to the bottle MIL relied on the same features and in addition:
(i)	the shape of the bottle; and
(ii)	the colour of the bottle and cap.
Ownership of goodwill
44.	Mr Edenborough advanced an argument that the goodwill was owned by Joy Limited, MIL’s distributor in the UK, rather than MIL.  This was based on the wording of a distribution agreement.  The point was not pleaded and in consequence MIL had not adduced evidence to deal with it.  I did not find it persuasive in any event.
Misrepresentation
45.	There was no direct evidence of there having been a misrepresentation – nothing to show that any identified individuals had assumed that Aldi’s miracle oil had a trade connection with Moroccanoil because of Miracle Oil’s name and/or get-up.  I think in the present case that if a significant proportion of the public believed that Aldi’s product was Moroccanoil, there is a fair chance that at least one or two people with complaints about something, possibly quality or the divergence in price, would have written to one or other of the parties expressing that complaint.  I can see that it is less likely if the false assumption were that the products share the same manufacturer or that there is a licence arrangement.
46.	I asked Ms Michaels to identify the best evidence available to MIL to draw an inference of a misrepresentation.  She referred me to blogs that were annexed to the Particulars of Claim.  Many of the comments make no reference to Moroccanoil, but of those that do, the following examples give the flavour of their views in the cosmetics blogosphere:
“Double-Take: Aldi’s Miracle Oil is the Living Spit of Moroccanoil at a 10th of the Price
I did a bit of a blink blink eye rub when I saw this in my email.  ‘Aldi selling Moroccanoil?  Surely not!’
Nope.  Definitely not.  In a triumphal move akin to Lidl’s Suddenly Madame Glamour/Chanel Mademoiselle coup, the budget retailer is sneaking out a remarkably Moroccanoil-alike blue and brown bottle onto shelves from Thursday 29th March.  Miracle Oil (where did they get the inspiration for the name, I wonder …) will be a 50ml bottle for a mere €3.99”
This was posted on 23 March 2012, probably in the Republic of Ireland, but relied on by MIL and it may well be indicative of the reception given to Miracle Oil in the UK.  It engendered 31 responses, including this:
“This Miracle Oil doesn’t claim to be Moroccanoil but is a bit cheeky with their choice of packaging.  I’ve no doubt there’d be a case to be answered if they’ve flouted any copyrights on design etc.”
The following appeared on another blog, posted on the date of launch, 29 March 2012:
“Aldi’s Version Of Moroccan Argan Oil – Miracle Oil
On twitter, I heard that Aldi had brought out their version of the Moroccan Argan Oil.  They called their version the Miracle Oil.  Priced at £3.99 for 50ml.
I wonder if this is just as loaded with cones as the bestselling overpriced somewhat original version.  How cheeky is the packaging.  I say good on Aldi for undercutting the over-priced version.  Did you get yours?”
On 7 April 2012 there was this:
“Aldi Miracle Oil
Another Aldi discovery I have found through reading Milk Bubble Tea’s blog – Miracle Oil.  If you think the bottle looks familiar then it’s because it’s a blatant dupe of the increasingly popular Moroccan Oil that every girl and her dog has been harping on about for a few months now.  The main difference between the two products is the price.  The cost of this was a mere £3.99 whereas Moroccanoil costs as much as £30.”
47.	Ms Michaels accepted that anyone reading those blogs would not be misled into a belief that Miracle Oil either was, or came from the same manufacturer as, Moroccanoil.  I think it goes further.  On MIL’s best evidential case the public who became aware of Miracle Oil did not believe that either.  Some of them saw obvious similarities between the respective names and get-ups (from whom I have selected the samples above), but their view went no further than thinking that this was cheeky on the part of Aldi and perhaps encroached on copyright or design rights.
48.	Ms Michaels also relied on the history of the development of the packaging for the Miracle Oil product, specifically on the allegation that Aldi designed that packaging with the Moroccanoil firmly in mind.
49.	This started with the submission that before March 2012 there was nothing on the cosmetics market which had packaging of a similar shade of bright turquoise.  Mr Edenborough relied on an extensive document called the Farncombe report prepared by an organisation called Farncombe International.  It displayed a very large number of products in the cosmetics sector from various sources.  Unfortunately it was not well organised and took its images largely from websites, some directed at the UK market, some not, without any indication whether and the extent to which each product shown had had a presence on the UK market.  In the end all that Mr Edenborough could get from it was that the colour blue is frequently used in packaging by the cosmetics industry.  There was also an attempt by Aldi to show that at least one other cosmetics range had a colour similar to that of Miracle Oil’s packaging, but the images did not make this clear.  I find that in March 2012 the particular shade of bright turquoise used by MIL was not to be found as a significant feature in the packaging of other hair care products marketed in the UK.
50.	Ms Michaels took me to documents produced by Aldi in disclosure which indicated Aldi’s goal in the development of Miracle Oil.  She submitted and I accept that while Aldi had a number of similar hair oils in mind, it focussed principally on competing with the clear market leader: Moroccanoil.  One of Aldi’s documents showed alternative front labels for Miracle Oil rejecting two proposed brown labels and approving one of the two blue versions.  The document was annotated by Nicola Willis as follows: “Design → needs to match Moroccan Hair Oil Colours”.  Ms Willis was assistant to Kelly Dix, who was a Buying Director at Aldi at the time.  Ms Dix was primarily responsible for the product.
51.	Neither Ms Willis nor Ms Dix gave evidence.  This was criticised by Ms Michaels.  However Ms Dix was on maternity leave at the time of and leading up to the trial and one of Aldi’s witnesses was Stephen Eivers, a Group Buying Director who had sufficient knowledge of the relevant facts and practice at Aldi.  Mr Eivers explained Ms Willis’s annotation on the basis that brand guidelines required the product to be in line with other brands in the same category, in particular MIL’s benchmark product.  He also said that the packaging for Miracle Oil was designed to match the colours commonly found in the marketplace for Moroccan hair oil, of which Moroccanoil was one.
52.	Ms Michaels criticised Mr Eivers as an unreliable witness.  I think Mr Eivers felt he had a duty to put his employer’s evidence in the best light, but I do not think this went so far as deliberately giving evidence that he knew to be incorrect or misleading.  However I also take the view that Mr Eivers had persuaded himself that Aldi paid a good deal less attention to MIL’s get-up than was in fact the case.  I believe there was a conscious decision by Aldi to make the packaging for Miracle Oil reminiscent of Moroccanoil to some real extent, in particular with regard to colour.

Initial interest confusion
53.	Ms Michaels submitted that I should take into account that MIL could rely on initial interest confusion and that it increased the likelihood of a misrepresentation.  She did not suggest that MIL had a specific case in this regard; there was no evidence from or about individuals who had made a false assumption which was corrected before a sale.  The argument advanced was that those who were initially misled by the name and get-up of Aldi’s product but realised their mistake before purchase had equally to be considered.  The likelihood of a misrepresentation was thus all the greater.  Confusion of this type would not come to either party’s attention so the absence of evidence of confusion was all the more easily dismissed as irrelevant.
54.	The short answer to this is that for the reasons I have explained I do not believe that MIL is entitled in law to rely on initial interest confusion.  Even if it were, the evidence does not support the inference that initial interest confusion has happened or is likely to.
55.	Although argued in some detail by both sides at trial, in the end I do not believe that the allegation of initial interest confusion took MIL anywhere.
Living dangerously
56.	Ms Michaels did not suggest that Aldi had deliberately intended to exploit MIL’s goodwill.  But she maintained that it had lived dangerously by consciously creating packaging for its product which had strong similarities with the packaging used for Moroccanoil.
57.	As I have indicated, I do not think there was anything unlawful in Aldi creating a product with get-up which brought the get-up of Moroccanoil to mind.  I think Aldi intended to do so and succeeded, to the point that some of the public interested in hair oil thought that the similarities were cheeky and might infringe rights relating to design.  That is not passing off.  So living dangerously in that regard is not relevant.
58.	However Ms Michaels also submitted that this case was closely analogous to United Biscuits.  The conscious intent by Aldi to use similarities with the Moroccanoil packaging to bring MIL’s product to mind was living dangerously in the sense that the public was liable to assume that the two products share a common manufacturer or that there was a licence arrangement in place.  Ms Michaels strongly submitted that I should take this into account.  I do not, firstly for the reasons stated above in relation to the judgment of the Court of Appeal in Specsavers.  Secondly, in United Biscuits there was evidence to show that the public had indeed assumed that Penguin and Puffin biscuits were manufactured by the same entity, so reliance on ‘living dangerously’ was supportive at best.  There was no evidence in the present case of a public belief in a common manufacturer or licence and no basis for drawing that inference.
Aldi’s submissions 
59.	Mr Edenborough made the following points on misrepresentation:
(1)	MIL’s products were supplied almost exclusively through salons, either as applied by the staff or as sold to clients.  This is a high-end salon product that the public would not expect to find in Aldi.  It appears that MIL’s product can also be found on eBay and Amazon, albeit not through any act by MIL, but there was no evidence about the extent to which this happens.  I was also shown MIL’s submissions to OHIM in the proceedings referred to above in which MIL emphasises that its products are sold by salons to discerning customers who are educated in their use by the hairdresser.
(2)	Aldi is a store in which the public expect to find only goods sold under Aldi’s own brands.  In the case of cosmetics, Aldi uses the in-house brand CARINO.  This was undermined, however, by Mr Eivers’ admission that Aldi also stock some well known branded goods such as Colgate toothpaste.  I think Aldi’s customers have come to expect the possibility that cosmetic brands other than those of Aldi will be available in the stores.
(3)	The price of Miracle Oil, about £4, is so different from the price of Moroccanoil, about £30, that the two products would not be viewed by consumers as being the same thing.  That may indeed be unlikely, but it would not exclude the possibility that they came from the same manufacturer.
(4)	MIL’s case rested on the similarities between the get-ups of the Moroccanoil and Miracle Oil boxes, while ignoring the differences.  The differences were in particular the striking ‘M’ logo on the Moroccanoil box and the presence of the CARINO brand and a leaf motif on the Miracle Oil box.  The same applied to the labels on the bottles. 
(5)	Mr Edenborough submitted that the shape of the bottles and the colour of the bottles and caps were commonplace.  I am prepared to accept that in relation to colour, but am not convinced about the shape of the bottles.
Conclusion on misrepresentation
60.	Taking all the foregoing into account, in my judgment the evidence does not lead to the conclusion that members of the public are likely to assume either that Miracle Oil and Moroccanoil are the same thing or that they come from the same manufacturer or are otherwise linked in trade, such as by a licence.  Even if there were any such members of the public, they would be too few in number to cause damage to MIL’s goodwill.
61.	I think that Aldi intended to make the public think of Moroccanoil when they saw Miracle Oil in its packaging and I think Aldi succeeded.  But purchases of Miracle Oil have not been and are not likely to be made with any relevant false assumption in the mind of the purchasers.  There is not even likely to be any initial interest confusion.  There is no likelihood of an actionable misrepresentation.
Damage
62.	Mr Edenborough sensibly conceded that if MIL established a misrepresentation of any type relied on, I would be entitled to infer that MIL had suffered damage.  I need therefore say no more about damage.
Overall conclusion
63.	In my judgment MIL has failed to establish passing off because the evidence does not support any likelihood of a misrepresentation on the part of Aldi.  I will therefore dismiss the action.

ANNEX 1

ANNEX 2