Tesco Shown A Yellow (Club) Card

• Law Firm: Dehns
• Subject Matter: Consumer Protection, Intellectual Property, Copyright, Trademark, Dodd-Frank, Consumer Protection Act
• Author: Mr Daniel Wheatley and Joseph Letang
• Published date: 12 May 2023

Lidl Great Britain Ltd & Anor v Tesco Stores Ltd & Anor [2023] EWHC 873 (Ch)

On 19 April 2023, the High Court of England and Wales handed down its long-awaited judgment in the battle between supermarket giants Lidl and Tesco. The case concerned the use of Tesco's 'Clubcard Prices' sign, which was held to infringe Lidl's registered trade mark rights and copyright in its 'LIDL Logo'. Tesco's use also amounted to passing off. Here, we 'unpack' some of the key issues...

Trade Mark Infringement of the 'LIDL Logo'

This was not a case where the alleged infringement was based on there being a likelihood of confusion between Lidl's registered trade marks and the 'Clubcard Prices' sign. Instead, Lidl's case was that Tesco's use of its sign would take unfair advantage of the reputation of the LIDL Logo ("free-riding") and would be detrimental to its distinctive character ("dilution"). Success here requires that the earlier mark has a reputation and is sufficiently similar to the sign that is claimed to infringe. It is then necessary to find that the average consumer would form a 'link' between the earlier mark and the sign, and that use of the sign is without 'due cause'.

The LIDL Logo satisfied the reputation requirement. Turning to the question of 'similarity', Tesco tried to advance an argument that any resemblance between the LIDL Logo and the 'Clubcard Prices' sign existed in elements that were banal and commonplace, and that these were overshadowed by the very different verbal elements. This was in vain - Tesco's sign was held to be sufficiently similar to the LIDL Logo, a view supported not only by evidence from Lidl, but also Tesco's own disclosure (some Tesco employees had voiced concerns that the marks were similar).

It was held that the average consumer would form a link between Tesco's sign and the LIDL Logo, based on the evidence submitted by Lidl. Significantly, Lidl's evidence included comments from shoppers believing that the Clubcard Prices sign signified a 'price match' with Lidl or was otherwise connected to the German supermarket. Subsequently, Tesco's use of its 'Clubcard Prices' sign was found to be detrimental to the distinctiveness of the LIDL Logo, in part shown by Lidl persuading the court that it was forced to run a counter-campaign to minimise the damage caused by Tesco's activities. It was also held that Tesco had taken unfair advantage of the reputation of the LIDL Logo, specifically that of a discounter supermarket providing good...