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Article April 22, 2021

The case of the courtroom caterpillar

Two caterpillar cakes battling over intellectual property (IP) rights have sent newswires into overdrive in recent days. The fight has fast become a confectionery world’s Wild West shootout.

This story also featured in Insurance Post!

Marks and Spencer has registered trademarks for both the name and packaging of its cake, Colin the Caterpillar. They will also automatically have unregistered trade mark rights which protect general look and feel of their product. It believes Aldi’s cake, Cuthbert the Caterpillar, has infringed those trademarks and wants the store to stop selling the product.

No one knows for how long the two supermarkets have been trying to thrash out their differences behind closed doors. But news of the caterpillar face-off hit the headlines when Marks and Spencer lodged an IP claim with the High Court.

Since then, exchanges on social media haven been largely light-hearted and humorous. It seems both parties are trying to play their way out of the situation while keeping their reputations intact and their customers onboard.

Such high-profile IP cases don’t hit the headlines that often, although last year Aldi and Brewdog got into a very public spat over a copycat IPA beer, which resulted in a subsequent product partnership. Is that the intention here? We don’t know.

What we do know is that while these disputes are not often played out in such a public way, they are a feature of everyday trading in the food and retail sector as well as other industries more generally.    

Companies of all sizes face IP infringement exposures, whether seeking to protect their own rights or defending claims alleging they have infringed a third-party’s rights.

In the case of the plaintiff, IP insurance covers the legal costs of pursuing the claim. To trigger the cover, the claim should have good prospects of success and the legal action should be deemed proportionate to the infringement.

For the defendant, IP insurance covers the legal costs of responding to and defending the claim. If the claim is successful, it will also provide cover for any resulting damages that need to be paid.

Once lawyers  get involved, costs can rack up quickly and these cases can run to tens and hundreds of thousands of pounds. Occasionally, they can end up costing millions of pounds.

It’s worth noting that some IP infringement policy wordings – such as CFC’s – provide product recall cover. Traditional product recall insurance generally responds in situations where a product causes, or poses the threat of causing, bodily injury and/or property damage.

The product recall cover associated with CFC’s IP insurance doesn’t rely on these physical triggers and responds in the event of an IP dispute necessitating a product is taken off the shelves. This type of IP recall cover is also available on a standalone basis from CFC’s product recall team.

It's important to protect IP rights, whatever the business or situation – caterpillar cakes or not! Find out more about CFC’s IP policy and the product recall policy or contact the teams:
ip@cfcunderwriting.com

productrecall@cfcunderwriting.com