Tesco must stop using its Clubcard logo after the High Court ruled it was copied from its supermarket rival Lidl following a multi-million pound legal battle.
Both Tesco’s Clubcard scheme and Lidl’s main logo feature a yellow circle on a blue background, leading the latter to accuse the former of infringing on its copyright and trademark.
Tesco launched a counterclaim ‘seeking to cancel some of the trademarks in issue’, setting up a court battle that was expected to cost both parties a collective £2.35m.
The High Court has now ruled in Lidl’s favour and will issue an injunction ordering Tesco to cease using its Clubcard logo. Tesco plans to appeal.
In her ruling, Justice Joanna Smith said: ‘Tesco has taken unfair advantage of the distinctive reputation which resides in the Lidl Marks for low price (discounted) value’ – though she rejected Lidl’s argument that Tesco had done so deliberately.
The German discount chain uses a yellow circle in its main logo, while Tesco uses one to promote its Clubcard scheme
Lidl and Tesco are believed to have spent £2.35m fighting each other in court over claims Tesco ripped off Lidl’s logo – a yellow circle set on top of a blue box with a thin red outline
Following the ruling, a Lidl GB spokesperson said: ‘Over the last three years, Tesco has been using its Clubcard logo to deceive many customers into believing that Tesco was price matching against Lidl or was able to offer the same great value as us.
‘We asked Tesco to change their Clubcard logo, but they refused, making it necessary to bring this case.
‘Having seen the evidence, the Court has now ruled that Tesco’s Clubcard logo was copied from Lidl’s logo, and it infringes Lidl’s trade mark rights and copyright.
‘This infringement allowed Tesco to take unfair advantage of our longstanding reputation for great value, misleading their customers at a time when they should have been supporting them.
‘We are pleased that the Court has agreed with us and that it will now order Tesco to stop using the Clubcard logo.’
A Tesco spokesperson said the supermarket is ‘disappointed’ by the ruling, which it plans to appeal.
They said: ‘We are surprised and disappointed by the decision today in relation to the claim brought by Lidl against our Clubcard Prices logo.
‘Clubcard Prices has always been about offering great value to our Clubcard customers, across thousands of products, as part of our commitment to keeping the cost of the weekly shop as affordable as possible. Nothing in today’s decision changes that.
‘This claim brought by Lidl was just about the colour and shape of the Clubcard Prices logo. The judge’s ruling concluded that there was no deliberate intent on Tesco’s part to copy Lidl’s trademark.
‘It has no impact on our Clubcard Prices scheme which we will continue to run in exactly the same way. We intend to appeal.’
Charlotte Duly, Head of Brand Protection at Charles Russell Speechlys, told MailOnline today: ‘A yellow circle on a blue background has spawned a multi-million pound intellectual property dispute, highlighting the enormous value companies see in their branding.
‘Lidl relied on survey evidence to show consumer perception of their wordless logo.
‘Tesco objected to this, and whilst undertaking a survey that complies with the requirements set down in case law can be difficult and onerous leading to an increase in costs for both parties, the survey was admitted into the proceedings.’
She added: ‘Lidl has won as the court agrees that Tesco has taken unfair advantage of the reputation in Lidl’s logos, even if this was not deliberate – a landmark decision between two major brands.
‘From both a general interest perspective and a legal point of view, there are a number of very interesting issues raised in this case and it will be interesting to see whether this judgment triggers more cases of this kind.’
Giving judgment in a pre-trial hearing between the two grocery giants last year, Mrs Justice Joanna Smith said: ‘In short, Lidl contends that Tesco’s use of a new sign in their ‘Clubcard Prices’ marketing is an infringement.
A Tesco spokesperson said the supermarket is ‘disappointed’ by the ruling, which it plans to appeal (stock image)
‘In bringing the claim, Lidl relies upon its trademark rights in two versions of the Lidl logo: a logo which includes the word ‘Lidl’ and a logo without that word, ‘the Wordless Mark’.
‘The Wordless Mark is a graphical device consisting of a blue square background bearing a yellow disk, bordered in a thin red line.’
She said Lidl’s lawyers argue the background to the supermarket logo is ‘capable of being, and is, perceived by the public in the United Kingdom as being distinctive of the Lidl group of companies’.
She added: ‘Essentially, Lidl says that Tesco is seeking deliberately to ride on the coattails of Lidl’s reputation as a ‘discounter’ supermarket known for the provision of value.
‘It pleads that Tesco’s use of the sign in connection with Tesco’s discount prices is intended to, and does, cause members of the public to call to mind Lidl’s business and the marks, including being suggestive of the fact that the prices of goods offered by Tesco for sale under or in connection with the sign are offered at the same prices, or lower prices, than could be obtained for the same or equivalent goods in Lidl stores.’
Setting out Tesco’s defence, she went on: ‘Lidl’s use of the Wordless Mark is disputed.
In her ruling, Justice Joanna Smith said: ‘Tesco has taken unfair advantage of the distinctive reputation which resides in the Lidl Marks for low price (discounted) value’ – though she rejected Lidl’s argument that Tesco had done so deliberately
‘Focusing specifically on the Wordless Mark, it pleads…The Wordless Mark is a figment of Lidl’s legal imagination and a product of its trademark filing strategy.
‘It does not exist in the real world….Lidl have never used the Wordless Mark and never intended to use it’.
Tesco’s lawyers sought to argue that results from a survey ought not to be included in the evidence at the forthcoming trial, saying amongst other things that the way the questions were phrased had been leading.
During the survey, participants were shown the wordless logo and asked ‘What do you think this image is?’ and ‘Now, please imagine that this image was used as a company’s brand…Which company would you expect it to be?’
The judge, allowing the survey evidence to be included at trial, said: ‘Looking at the answers to the survey in detail…one sees numerous responses that say ‘Lidl’ or ‘Lidl logo’ or ‘Lidl sign’ or even ‘It looks like the background of Lidl’, or ‘Part of the Lidl logo without the words’ or ‘Brand image for Lidl supermarket’.
‘This appears to me to be probative of recognition on the part of the participants that the Wordless Mark is a logo or trade mark,’ she said.
The judge went on to say that Tesco’s estimated costs to trial, even without dealing with the issue of the contested survey, ‘amount to £1,185,976, while Lidl’s amount to £1,170,244
‘The multi-million pound combined legal costs appear to be a reflection of how key this brand dispute is to both parties,’ she remarked.
Source : https://www.dailymail.co.uk/news/article-11989911/Every-Lidl-helps-Discount-supermarket-wins-High-Court-claim-Tesco-ripped-yellow-logo.html?ns_mchannel=rss&ito=1490&ns_campaign=1490&rand=1270