Intellectual Property - 2024 in review

Written by Liam McMonagle, partner, Thorntons 

The ongoing challenge of IP law, reconciling proprietary rights with the imperatives of free expression, innovation, and competition, manifested prominently in 2024, influencing everything from AI data ethics to retail supply chains.

Intellectual property law generally tries to strike a balance between protecting the rights of people and businesses to benefit from their creations while allowing freedom of expression, continued innovation and competition. Getting this balance right is not easy, and the conflict between these competing interests played out in 2024 in a number of settings, ranging from the development of AI tools and the materials they ingest and learn from, to the shelves of a discount supermarket.

The practices of some discount retailers of promoting own-brand products with uncanny similarity to market-leading brands continues to produce occasional work for the IP courts. Where in the past we had Colin the Caterpillar, this year saw a spat between Thatchers Cider Company Ltd v  Aldi Stores Ltd ([2024] EWHC 88 (IPEC)) over whether an Aldi cloudy lemon cider infringed Thatchers’ trade marks. At first instance, the Intellectual Property Enterprise Court (IPEC) found no infringement of registered trade marks or passing off – principally on the basis that there was no likelihood of consumer confusion and, in relation to the passing off element of the claim, no misrepresentation by Aldi. This was despite the fact that it appeared to be acknowledged in the proceedings that the Thatchers’ product had influenced Aldi’s design process and had been used as a reference point. In a judgment just released (Thatchers Cider Company Limited v Aldi Stores Limited [2025] EWCA Civ 5. 20 January 2025), the Court of Appeal allowed an appeal by Thatchers’ relating to the finding of non-infringement under section 10(3) of the Trade Marks Act 1994 on the basis that Aldi’s product took unfair advantage of its trade marks. At the time of writing, it seems likely that this judgment may be subject to further appeal, as its findings might have a significant effect on retailers’ product development practices.

Supermarkets also gave us one of the year’s more prominent trade mark infringement cases: Lidl Great Britain Ltd and another v Tesco Stores Ltd and another [2024] EWCA Civ 262, which involved the use by Tesco of a yellow circle in a blue square design to display Clubcard prices. Lidl claimed that this design was similar to its trade marks, and that Tesco’s use of the same symbols amounted to trade mark infringement, passing off, and copyright violation. The claim was principally based on the “unfair advantage” ground of infringement rather than the similarity of the marks themselves.

The case involved a range of complex issues, including the claim that certain Lidl trade marks were “defensive” – ie registered with no intention of being deployed in trade, but to impair use by others. The High Court’s finding that a key Lidl trade mark had been registered in bad faith was upheld on appeal. Lidl succeeded, however, with its passing off claim where the Court of Appeal was persuaded that Tesco's signage could mislead consumers into believing that its prices were matched with Lidl's, consequently benefiting from Lidl's brand and reputation. Tesco’s appeal against the finding of trade mark infringement was also dismissed on the basis the pricing campaign launched by Tesco had caused a detriment to Lidl by slowing the rate of customers’ changing spend patterns. The ruling ultimately emphasises that companies should think carefully about the real purpose and lawfulness of trade marks when registering, and how this would affect future enforcement proceedings.

The issue of “bad faith” trade mark registrations was of central relevance to one of the few trade mark disputes to make it to the Supreme Court in recent years, SkyKick UK Ltd and another v Sky Ltd and others [2024] UKSC 36.

This case was the culmination of many years of litigation as part of which broadcaster Sky sought redress for trade mark infringement by SkyKick which was using allegedly infringing marks in relation to emails, cloud storage products and services. SkyKick denied infringement and counterclaimed that Sky's marks were invalid on bad faith grounds.

The main issue before the Supreme Court was the validity of certain Sky trade marks which had very broad specifications – i.e. a very broad and generally expressed list of goods and services to which the marks registered would relate.  SkyKick argued that filing broad specifications without any genuine intention to use the mark across the entire specification constituted bad faith, thereby invalidating the trade mark entirely. This argument was partially accepted by the Supreme Court, which ruled that the overall breadth and scope of a trade mark's specification of goods and services could, in certain circumstances, justify an inference of bad faith. It did not accept that the marks were invalidated in their entirety. As such, the application may be partly invalid for bad faith, where that description involves specific sub-categories of goods or services for which the applicant never intended to use the mark. In this case, there was still a finding of trade mark infringement on the basis that SkyKick had infringed Sky’s trade mark registrations in promoting its “cloud backup” service.

The SkyKick case is instructive for many trade mark practitioners as it highlights the importance of drafting appropriate and precise specifications. There can be a tendency to frame these in very broad terms in the belief that this will obtain the broadest and widest protection when, in practice, there are limits. The approach taken to interpreting the specifications in this case also shows the importance of ensuring the class of goods and services identified is clearly and precisely defined on the basis that any ambiguity should be resolved in a manner which maximises free use of potentially available marks. Going forward, the use of terms such as “computer software” or “computer services” may well be too vague and open-ended.

Intellectual property law is substantially the same in Scotland, England and Wales, and therefore it is not uncommon for many of the most important or significant developments to take place in the English courts. Nonetheless, there were a couple of notable Scottish intellectual property cases in 2024.

Sky Ltd v Airlie [2024] CSOH 22 was a case brought by Sky for declarator of copyright infringement and interdict against the owner of the Troll Inn in Dundee arising out of the showing of Sky football broadcasts without a licence, which was found to constitute copyright infringement. It highlighted the difficulty with quantification of damages in cases of relatively small-scale individual copyright infringement, which was based on the use of Sky graphics and visuals rather than the match content. It was clear that an account of profits would be unviable to determine. The court also refused to base damages at the level of the normal Sky contract price on the basis that the infringement was established based on the use of the graphics only, and these were not separately marketed.

Deepmatter Ltd v University Court of the University of Glasgow [2024] CSOH 67 was a relatively rare case of a dispute arising between a university and one of its spin-out companies, to which the university had assigned certain IP. The company was concerned that some uses of that IP fell outside the scope of the existing contracts and sought to exercise its right to obtain information. The relevant agreement obliged the University to provide all information, documentation and assistance which Deepmatter reasonably required in order “to take any action in relation to the defence and/or the enforcement” of the assigned IP. The judgment consisted of a very detailed analysis of how that provision ought to be interpreted. Ultimately, it held that Deepmatter’s requests were reasonable and necessary for the company to assess potential litigation in enforcement of its rights. While this case doesn’t really break any new legal ground, it will be instructive for practitioners to observe the level of analysis applied to interpret the relevant contact terms, bearing in mind that the clauses which ended up as the focal point to this dispute are not typically the focus of particularly extensive negotiation.

2025 promises to be a busier year in terms of law reform as several countries’ new governments settle in. There are also likely to be significant developments in case law regarding the patentability of computer/AI-generated works, and the use of copyrighted material to train generative AI models. Plus, there’s always the possibility of some new case law on trade mark infringement following the Thatchers Cider Company appeal.

Written by Liam McMonagle, partner at Thorntons