Diageo, the producer of Smirnoff vodka, has won a passing off action in the High Court against Intercontinental Brands (ICB), the makers of Vodkat. This was the first time the English courts had been asked to consider whether vodka producers have the same rights as the makers of champagne, whiskey, advocaat or sherry.
Following the launch of Vodkat in 2005, other similar products have come onto the market, such as Vodkova, Vodska and Voshka. Vodska and Voshka have since been withdrawn, however, following complaints from Diageo. By the end of summer 2009, ICB had spent a total of £6.3 million marketing Vodkat and sold approximately 600,000 bottles in 2005 alone.
Smirnoff vodka is 37.5 per cent alcohol by volume (ABV) whereas Vodkat is a mixture of vodka and fermented alcohol and is therefore cheaper. Although the labelling of Vodkat was recently changed so that the product is now described as a ‘classic schnapps drink’, the Court was of the view that this attempt at differentiation was ‘too little, too late’.
The Court considered that the distinction between the two products was not understood by all consumers and the confusion could result in a loss of sales for Diageo. Furthermore, even if a loss of sales could not be demonstrated, allowing ICB's marketing of Vodkat was likely to erode the distinctiveness of the term 'vodka'. Mr Justice Arnold said, “It will cease to be a term reserved for 37.5 per cent ABV spirits, and will come to be seen as a term applicable to lower strength products which include fermented alcohol.”
The Court was of the view that the introduction of products that are misleadingly similar but not the same as existing products will continue to grow unless the trend of ‘me-too products’ is kept in check. It therefore ruled in favour of Diageo.
ICB will therefore need to re-brand its product if it wishes to continue to sell it.