Win For Lidl in Trademark Lawsuit Against Tesco Over Discount Scheme Logo

Win For Lidl in Trademark Lawsuit Against Tesco Over Discount Scheme Logo

The England and Wales High Court has ruled in favor German discount supermarket Lidl in a Trademark lawsuit against Britain’s biggest retailer Tesco in the battle over their competing yellow logos on a blue background.

The single judge Justice Joanna Smith was of the view that Tesco had infringed some of Lidl’s trademarks, passed itself off and infringed its copyright. The judge observed, “Tesco has taken unfair advantage of the distinctive reputation which resides in the Lidl [logo] for low price (discounted) value.”

In the present case, Lidl for its claim relied on trademark rights relating to two versions of the Lidl logo: a logo which includes the word Lidl and a logo without the word. The mark with text appears throughout Lidl’s stores, on its advertising and on its products. Lidl accepted that the wordless mark has never been used in the UK but it is still distinctive of its goods and services.

Lidl’s complaint focuses on the use by Tesco of a logo for its loyalty scheme Clubcard and its price promotions, which comprises a yellow circle on a blue background.

Tesco had referred to all of these icons in its statement of case as ‘the CCP Signs’, and it referred to the background (i.e., the Sign as defined by Lidl) as ‘the CCP Signifiers Background.’ The Clubcard scheme is globally recognized as the gold standard for customer loyalty schemes.

Lidl alleged that Tesco was seeking deliberately to ride on the coat tails of Lidl’s reputation as a ‘discounter’ supermarket known for the provision of value.

Tesco had filed a counterclaim alleging that some of Lidl’s trademarks were liable to be declared invalid on the grounds that they were registered in bad faith.

Justice Smith in order to examine the averments forwarded by Lidl on its claims of trademark infringement in respect of the mark with text, passing off and copyright infringement, relied on, among other evidence, expert witnesses and witnesses who were ‘ordinary members of the public’ who gave their responses to exposure to the signs in questions.

The Court also noted on a Lidl ‘vox populi’ that worked in the German chain’s favour, and 'clearly contained instances of connections being drawn’ between Tesco’s CCP signs and Lidl’s mark with text, connections which appeared to be prompted by a perception of price matching by Tesco to Lidl.

The Court observed, “in all the circumstances I find the overall impression formed in the mind of the average consumer is of similarity between the Lidl mark with text and the CCP Signs' (family of Tesco signs in dispute). I am satisfied that Lidl has established the necessary ‘link’. There is clear evidence of both origin and price match confusion/association together with evidence that Tesco appreciated the potential for confusion. I consider that the average reasonably observant consumer encountering the CCP Signs in the real world at the date of the launch of the Clubcard Price campaign would draw a link between the Uses of the CCP Signs and the Mark with Text and that the available evidence amply bears out my conclusion.”

With respect to the issue related to bad faith ruling, Justice Smith was of the view that Lidl had failed to displace the prima facie inference raised by Tesco that, at the time of the 1995 application, the wordless mark was registered in order to use it as a ‘weapon to secure a wider legal monopoly than it was entitled to, with no genuine intention to use it.’ This was sufficient to amount to bad faith and renders the 1995 wordless mark invalid, opined the Court.

Lidl was represented by Benet Brandreth KC and Tristan Sherliker, instructed by Bird & Bird.

Tesco was represented by Hugo Cuddigan KC and Daniel Selmi, instructed by Haseltine Lake Kempner.