Diageo has alleged intellectual property right infringement over the retailer's Pitchers drink, claiming it is a copycat version of Pimm's.
It was understandable brands felt aggrieved, said Francesca Fellowes, specialist in intellectual property law at Hammonds. "Brand owners who have invested significant sums building a brand don't want to see the goodwill siphoned off by almost identical own-label products," she said. "This case will discourage the more blatant forms of copying, particularly if Diageo is successful in the litigation or Sainsbury's ends up having to pay out."
With the recession pushing own-label fmcg sales up 5% compared with 4% for brands [Nielsen 52w/e 11 July 2009], Fellowes expected brand owners to get "more and more aggressive" in defence of brands.
"A Diageo victory would make own-label manufacturers across the wider fmcg industry think twice about using obvious examples of copycat packaging."
However, she was surprised the Pimm's case had not been settled privately. "Few cases reach the courts, because of the high costs involved for both parties."
The boss of a £350m-plus food brand applauded Diageo's determination. "It is much more common now for retailers to go down the copycat route with own label rather than create something original."
"We are very conscious of supermarkets adding similar-looking products to shelves at the expense of our original versions," echoed the MD of an ambient food manufacturer
A successful outcome would prompt suppliers to look at other copycat products, said a buyer for a high-street retailer, listing Asda's County Cream liqueur as an example of a Bailey's copycat. However, Asda did not expect its £5.85 own-label bottle, which is £6.65 cheaper than the original Bailey's, to contravene legislation.
"We've been selling County Cream for some years without any conflicts of interest from our suppliers. Our designs are created independently so we don't believe we've infringed any intellectual property laws."
The buyer also suggested a poor trading relationship between Sainsbury's and Diageo had spurred the action. "Diageo has been playing hardball since Christmas to shift volumes. Tesco and Asda offered the 1-litre Pimm's bottle for £9.99 this summer, while Sainsbury's carried the 70cl bottle for about £11."
John Noble of the British Brands Group added: "Any company that strives to create distinctive packaging should root for Diageo."