Today I am publishing a Report on the enforcement provisions of the Consumer Protection from Unfair Trading Regulations 2008 (the “CPRs”). The report reviews the case for giving businesses a power to seek civil injunctions against ‘copycat packaging’ (packaging designed to give a product the ‘look and feel’ of a competing well-known brand).
The Coalition Government agreed to review the case for granting businesses an injunctive power in relation to copycat packaging. BIS published a Call for Evidence seeking views on the proposal in April last year. I do not believe that the responses to the Call for Evidence have yet made the case for granting such civil injunction powers. I am announcing my decision that such a power should not be granted at this time.
The CPRs implement the Unfair Commercial Practices Directive (the “UCPD”). Copycat packaging potentially infringes provisions of the CPRs which prohibit traders from engaging in certain misleading actions including marketing a product in a way which creates confusion with a competitor’s products, distinguishing marks etc. Specified enforcers such as the Competition and Markets Authority and Trading Standards Officers may enforce the CPRs by civil sanctions; there are also separate criminal sanctions. Although the UCPD allows for competing businesses to be given enforcement powers, that option was not exercised when the CPRs were made in 2008.
The report I am publishing today highlights the key issues and assesses the evidence on consumer detriment, competition and innovation.
The views expressed during the review were polarised. Certain brand owners argued that a lack of enforcement has resulted in consumers being misled and sales being diverted from brand owners, which they say reduces innovation and distorts competition. For retailers, these arguments illustrate that the case is driven not by consumer concerns but by commercial considerations; they consider granting the power could be anti-competitive while not benefiting consumers. Others noted the absence of consumer appetite for action, questioned the appropriateness of amending consumer law to facilitate business-to-business litigation, and doubted whether there is a material enforcement gap given existing powers to pursue action in respect of intellectual property infringement as well as passing-off. Public enforcers do not currently consider there is consumer detriment arising from similar packaging (and if there were, that it would be mitigated by access to quick and easy redress i.e. exchange of products bought in error). They are also concerned that granting the power would damage the integrity of the enforcement system.
Brands are important to the UK economy and it is clear from the report that positive brand innovation is important to consumers. Following the review, I conclude there is little clear evidence that the use of similar packaging is causing any significant consumer detriment or hindering competition or innovation. There would be risks of unintended consequences if we changed the status quo, given the uncertainty around the evidence and the effects of the change, particularly in respect of the litigation that would result, and on enforcement. More generally, it would be difficult to reconcile granting this enforcement power with the Government’s deregulatory objectives.
I will be placing the report in the Libraries of the House. It will also be published online at: https://www.gov.uk/government/consultations/consumer-protection-copycat-packaging-call-for-evidence.
This statement has also been made in the House of Lords: