Lidl v Tesco: An Own Goal For Lidl?

• Published date: 29 May 2023
• Subject Matter: Intellectual Property, Litigation, Mediation & Arbitration, Copyright, Trademark, Trials & Appeals & Compensation
• Law Firm: Potter Clarkson
• Author: Emmy Hunt, Mark Kramer and Elizabeth Barttelot

The supermarket wars continued on Wednesday 19 April, with Mrs Justice J. Smith handing down her judgment in the High Court in favour of Lidl.

For context and a summary of the previous decision in this matter, see our previous article here.

At 102 pages, this latest judgment is not for the faint hearted. If you wish to peruse it yourself, then you can find it here. However, in summary, Smith J found in favour of Lidl on "its claims of trade mark infringement in respect of the Mark with Text, passing off and copyright infringement". There are several aspects to this judgment, which we will break down separately below.

TRADE MARK INFRINGEMENT

Lidl only claimed trade mark infringement under s10(3). However, the Judge did find consumer confusion as to origin. Under s10(3) and Jack Wills, Smith J found that although Tesco had not "intentionally evo[ked]" the Lidl marks, they had taken unfair advantage through the "insidious image transfer" to Tesco of Lidl's marks' connotations of good quality goods at low prices.

Considering that direct evidence of change to consumer's behaviour can be difficult to obtain, Smith J instead read into "the fact that [Lidl] has found it necessary to take evasive action in the form of corrective advertising" as evidence of such a change in consumer behaviour.

COUNTERCLAIMS TO TRADE MARK INFRINGEMENT

Tesco's counterclaim that Lidl's Wordless Mark should be revoked for non-use failed in part. Interestingly, Smith J found that the Wordless Mark had been used whenever the Mark with Text was used. She applied the test as set out by Kitchin LJ in Specsavers, namely that "if the mark as registered (here the Wordless logo mark) is used only as part of a composite mark... the use must be such that the mark as registered is itself perceived as indicative of the origin of the goods or services" - to support her finding that use of the Mark with Text was equivalent to use of the Wordless Mark. Nevertheless, Lidl's use of the Wordless Mark did not extend to all of the goods and services covered by the registrations, and so partial revocation was found.

In considering whether the Wordless Mark had distinctive character, the Judge determined that evidence of consumer confusion between Tesco's and Lidl's signs demonstrated that the Wordless Mark was perceived as indicative of the origin of Lidl's goods and services and was, therefore, distinctive and validly registered.

The Judge also dismissed Tesco's counterclaim for invalidity that was based...