The supermarket had registered two versions of its yellow circle on a blue square logo, one with the word, ‘Lidl’, and one without. It has only used the logo with the writing on it since opening its first supermarket in the UK in 1994. In 2020, Tesco began using a yellow circle on a blue background for its Tesco Clubcard loyalty scheme promotions, when it began offering point-of-sale discounts for card holders. Lidl claimed Tesco’s Clubcard logo constituted trade mark infringement, copyright infringement and passing off.
Ruling in Lidl v Tesco [2023] EWHC 873 (Ch) this week, Mrs Justice Smith upheld Lidl’s claims and dismissed Tesco’s counterclaim for invalidity of the wordless mark on the grounds of non-use and lack of distinctive character. Smith J upheld Tesco’s counterclaim for invalidity based on bad faith.
Intellectual property barrister Stephanie Wickenden, Serle Court, said the judgment ‘shows the complexity and potentially broad scope of the laws of trade marks, passing off and copyright.
‘It is unusual in that no claims were made of confusion as to the brand origin of goods or services, which is what the public most commonly think of when they read “trade mark infringement”. Instead, the trade mark allegation was that consumers were led to believe that prices had been price-matched to Lidl by reason of Tesco's use the yellow circle on a blue background. The judge found this gave Tesco an unfair advantage as consumers were more likely to buy the goods thought to be price-matched.
‘Even more unusual is the passing off claim, which was made out on the basis of misrepresentation as to equivalence. There have only been a handful of cases where this type of misrepresentation has been argued, often in a pharmaceutical context. In such cases it is argued that a rival manufacturer had adopted the look and feel of an original product to represent that it would work the same as the original.
‘The 'equivalence' found here was not of effect or purpose but of price; Tesco was found to have misrepresented that its products were Lidl price-matched based on the yellow circle on the blue background. This is a novel finding and it will be interesting to see if it remains confined to the unusual facts of this particular case, or it starts a trend for further claims based on equivalence rather than confusion.’
Lucy Marlow, senior associate at JMW Solicitors, said: ‘Ultimately the court found that Tesco’s clubcard logo was used to create a “subtle but insidious transfer of image” in the mind of consumers which would cause confusion, and ultimately found Tesco to have infringed.
‘This case followed many twists and turns and raised several interesting questions for trade mark lawyers. Ultimately this case acts as a useful reminder of the value of brands and the importance of ensuring that brands are consistently used and enforced promptly. Tesco have threatened to appeal this decision so this case is definitely one to watch.’
Ewan Grist, partner at Bird & Bird, representing Lidl, said: ‘Competition between supermarkets to attract and retain customers, particularly by way of price comparisons and price matching, is always intense and rightly so. However, in this case, the court found that Tesco had crossed a clear line by adopting a logo for its Clubcard scheme which was deceiving a substantial number of shoppers into thinking that Tesco was price matching against Lidl, when no such price matching was actually happening. The unfair advantage which Tesco derived from this will now be brought to an end.’
