Outsmarting the Copycat: Design Rights are the New Legal Weapon

ALDI are masters of the 'dark arts' when it comes to product imitation.

And they don't shy away from it - their slogan a case in point: 'Like brands, but cheaper'.

Some of their notable mimic brands include:

• Cuthbert the Caterpillar cake
• Wheat Bisks
• Neos (Oreos)
• Nutoka (Nutella)

Their look-a-like cheaper products aim to tread the delicate line of reminding customers of well-known brands through undoubtable resemblance, but not confusing or misleading them.

By only hinting at the original they often manage to stay on the right side of intellectual property laws.

This is big business for ALDI.

Otherwise known as the 'Halo Effect' (not the video game) - if it looks like the brand then it must be as good as the brand despite the cost, according to the psychology.

And their track record suggests they're pretty good at it with most disputes with household brands leading to a trial by social media and 'out of court' settlements. The sales figures aren't bad either.

Cuthbert the Caterpillar cake settled with M&S in similar fashion but ALDI continue to sell it. Make of that what you will.

When I asked a similarly disruptive company how such businesses manage their marketing/clearance budgets given the risks, they confirmed many don't have one. It's their legal budget.

How They Get Away With It

What ALDI do very well is focus on branding that hints at an original without crossing the line.

Names, fonts, colours, get-up and 'look and feel' all take inspiration without directly copying.

This subtle differentiation often allows them to stay within the boundaries of intellectual property laws.

Watershed Moment

However, household brands are fighting back.

In a landmark case earlier this year, M&S defeated ALDI over a copycat light up gin liqueur.

It achieved this by focusing on protecting design elements (such as bottle shapes or unique features) through design rights rather than relying solely on trade marks and passing off/unfair competition.

This brand protection shift effectively offsets ALDI's other points of difference in their look-a-like branding.

Design Rights

Registered design rights are exclusive rights in the visual appearance of the whole or part of a design (such as texture, materials, colour or shape).

The registration in the UK is cheap, and quick (compared to other IP registries).

But most importantly, from an enforcement perspective, the threshold for infringement is much lower than other IP rights such as copyright and trade mark infringement allowing action over products 'of the same overall impression' of the design.

Registered designs are having a renaissance not only offering a powerful advantage in protecting against copycat products but also increasing value in IP through broader IP portfolios.

ALDI and others may need to innovate further to maintain their approach.