Supermarket giant Aldi has been found responsible for copyright infringement over the packaging of a children's snack food. Aldi was taken to court by company Hampden Holdings, who revealed evidence of emails showing Aldi requested the design of its homebrand products copy that of rival brand 'baby bellies'. A federal court justice ruled that Aldi sought to use these designs 'for its own commercial advantage'.
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00:00Obviously, Aldi is a global business, over 12,500 stores globally. Their approach is
00:07to buy large volumes of inventory, but a very small range. That range is predominantly private
00:14label products. They adopt a phantom brand approach, so they don't call their products
00:19Aldi, they create brands for them. And the other strategy they use is a copycat strategy.
00:25So they make their products almost similar, but slightly different from national products.
00:30So when you're walking through a supermarket, we're not making very large informed choices.
00:34If the product looks like Nutri-Grain, it probably is Nutri-Grain. And that's how it
00:39works well with consumers.
00:41Okay, so why did this particular product packaging sale too close to the wind? And we might be
00:47able to bring up some of these packages while you're talking there and you can point to
00:52which is which.
00:54Yeah, very difficult to choose which is which. What we've seen today is that the court made
01:02a decision that the similarities were obviously too close. Obviously, there is a proportion
01:09of similarity that's enabled. It could be, you know, the colour of the packaging might
01:13be the same. But as soon as you start to play around with fonts, characters, claims, packaging
01:19size, all these things that are telltale of a national branded product, it becomes
01:24a little bit too complex. Obviously, that's what the court found. And therefore it's found
01:30it's fine accordingly.
01:31Yeah, okay, we might bring them up full screen and just point this out for viewers. So the
01:35products across the top, the baby belly bellies. So that's the original product. And the Aldi
01:42product on the bottom is that the baby puffs and that was what the court found was just
01:48too similar. And so what yes, okay, so Gary, can you point out in particular, what what
01:54is just goes too far with the this packaging?
01:58Obviously, the fonts are very similar. As you can see, the word puffs is used across
02:03all the packaging. The characters are a little bit similar. One of the things that Aldi did
02:08do was remove the font that was on the characters belly. So that was a decision that was made
02:14to say, listen, having the font on the characters belly was obviously very, very too close.
02:21So Aldi made the decision to remove it. But still, you know, the white packaging, the
02:25same pack size, similar claims, similar font, similar characters, just far too close to
02:31the wind. And on this occasion, they decided that it was too much of infringement.
02:35But there was also the fact in this case that there was an email. So to what extent does
02:40this legal victory rest on the discovery of this email, asking the designers to use
02:47the rival product as a benchmark?
02:49Yeah, listen, I guess without it, that email in play, Aldi could have very easily claimed
02:56it was a mistake. It was an error of design. They were given their designers specific specific
03:02instructions, which they followed. But on this occasion, they went a bit too far. An
03:07email trail that indicates that the designers were specifically asked to replicate or copy
03:13in some ways the national brand or national product, clearly showed that Aldi had sort
03:19of stepped out of its line to go about designing a product that was almost the same as the
03:26national branded product.
03:28Okay, so let's pretend that you're the Aldi manager now for a moment, and you're getting
03:34your designer to redesign this so it gets past the rules. What could they have done
03:40with the packaging to get it over the line?
03:43Yeah, listen, it could have changed the font size, the font colours, they could have changed
03:47the font itself to a different type of font. They may have changed, you know, the character
03:53to even further, maybe moving away from a white packet to a slightly different colour
03:58packet may have avoided it. But ultimately, we start to play with intellectual property
04:03and brands that look very similar. It's a bit of a grey space. And I think probably
04:10many of your viewers have wandered through an Aldi store and looked at some of the products
04:15and gone, gee, that looks very similar to what I normally buy when I go to one of the
04:19big two supermarkets. And ultimately, that's designed to connect with customers. You know,
04:24in a supermarket, we're not making very, you know, highly involved decisions. We're grabbing
04:29the same products we always grab. So if the product looks similar to what we would normally
04:33buy in a large shopping centre or in a large supermarket, it's very easy to make that decision.
04:39And so what are the lessons from Aldi for this, apart from not sending such explicit
04:45emails?
04:46Yeah, that's obviously one of the lessons. But ultimately, at the end of the day, I mean,
04:51the question comes down to does this have an impact on consumers? Will consumers trust
04:55Aldi any less? And we've certainly seen a lot of discussion over the last 12 to 18 months
05:00about distrust in supermarkets. Aldi is certainly in the top 10 of trusted supermarkets. This
05:06is obviously one case of many products that they sell where they've just gone over the
05:11threshold of IP and they've obviously, you know, will wear the penalty, whatever penalty
05:17that's going to be.