McCandlish Farmhouse Confectionery v Malone: AI Cannot Replace Evidence
A recent decision of the Outer House of the Court of Session provides a useful reminder that persuasive pleadings are no substitute for evidence. In McCandlish Farmhouse Confectionery Ltd v Malone and another, Lord Sandison considered claims of trade mark infringement and passing off arising from a dispute over "Chelsea Whoppers", a chocolate fudge confectionery product.
The pursuers sought, among other remedies, approximately £1.1 million in damages. The dispute concerned the use by the defenders, who operated a sweet shop in Troon, of the name "The Original Chelsea Cocoa Dusted Chocolate Fudge Whoppers" and associated branding. The pursuers relied on registered trade marks as well as goodwill said to subsist in the product.
McCandlish Farmhouse Confectionery v Malone: passing off must be proved
The judgment illustrates the familiar but fundamental requirements of a passing off claim. It is not enough to assert that two products look or sound similar. The claimant must establish the necessary goodwill and a misrepresentation likely to cause confusion, together with the relevant damage.
Lord Sandison concluded that the pursuers had not produced sufficient evidence to establish necessary goodwill and likelihood of deception. As a result, the passing off claim could not succeed.
This is an important practical point for businesses contemplating litigation. A detailed pleading may identify legal ingredients of a claim, but each material proposition still needs to be supported by admissible evidence at proof.
Trade Mark Infringement established
The position was different in relation to trade mark infringement. Lord Sandison accepted that infringement had been established in relation to the similarity of the names. However, the court did not grant permanent interdict because the defenders had already given an undertaking, accepted by the court, which provided sufficient protection against continued infringement.
More significantly, the court declined to award damages in the absence of proof of loss. Lord Sandison treated the circumstances as iniuria sine damno: a legal wrong without demonstrated loss. The pursuers had advanced allegations concerning brand dilution, reputational erosion and the effect of the defenders' pricing, but did not lead sufficient evidence demonstrating actual loss or the costs that would result.
The decision therefore highlights the distinction between establishing liability and establishing a financial remedy. Success on infringement does not automatically translate into a substantial damages award.
Building the evidential case from the outset
One of the broader lessons from the case is that IP disputes should be approached with the eventual evidential burden in mind. A business the believes its trade mark or other IP rights have been infringed should preserve contemporaneous evidence rather than waiting until litigation is underway.
That may include sales figures, customer enquiries, website analytics, advertising expenditure, correspondence with customers, examples of alleged infringement and evidence showing how the brand has been used over time. Such material can become particularly important where a claimant seeks to establish goodwill, consumer confusion or financial loss.
A warning about AI-assisted litigation
Perhaps the most eye-catching aspect of the judgment is Lord Sandison's criticism of the apparent reliance on AI-generated material. He observed that AI may help produce pleadings containing the appropriate legal language, but cannot provide the evidence necessary to prove the underlying facts.
The message for litigants is straightforward: AI cannot be treated as evidence. Assertions concerning goodwill, consumer behaviour, financial loss or market impact require proper evidential support.
For businesses, the case is a reminder that successful IP litigation requires more than identifying an arguable infringement. Parties should preserve documentary evidence, identify appropriate witnesses and obtain reliable evidence of commercial impact at an early stage. Parties should not mistake sophisticated wording for evidence.
