UK: High Court finds Tesco's Clubcard logo gets a 'Lidl' too close for comfort

Lidl Great Britain Ltd brought claims against Tesco Stores Ltd for trade mark infringement, passing off, and copyright infringement. Lidl's registered trade marks included a logo featuring a yellow circle with a thin red line border within a blue square (the "Wordless Mark") and a similar logo with the word "Lidl" written across the yellow circle (the "Text Mark"). Lidl argued that Tesco's adoption of a logo for its Clubcard Prices promotion, which resembled Lidl's logo, created confusion among consumers and damaged Lidl's brand.

The court, in its decision, determined that Tesco's Clubcard Mark infringed upon Lidl's registered trade marks and constituted passing off and copyright infringement. Despite the dissimilarity between the words "Clubcard" and "Lidl" in the Text Mark, the average consumer was found to perceive a connection between the two signs. This led to confusion over origin and price comparison, causing damage to Lidl's distinctive character and reputation. Although Tesco did not intentionally seek to take advantage of Lidl's reputation, the court concluded that it had still benefited unfairly from Lidl's marks.

Additionally, the court recognized Lidl's logo as an original artistic work protected by copyright. It found that Tesco's Clubcard Mark copied a substantial part of Lidl's logo, and the absence of intention by Tesco did not absolve it of copyright infringement. Tesco's use of the logo was seen as an attempt to enhance the perceived value of its Clubcard Prices, further supporting the finding of infringement.

Tesco, on the other hand, launched a counterclaim to revoke Lidl's trade mark registrations for the Wordless Mark, citing non-use. The court rejected this counterclaim, stating that the use of the Text Mark also constituted use of the Wordless Mark. However, several registrations for the Wordless Mark were deemed invalid due to being applied for in bad faith. The court concluded that these registrations were sought not for genuine use but as a legal strategy to protect Lidl's rights by “evergreening” its trade marks.

Next steps

While the court's decision favours Lidl, it is highly likely that Tesco will appeal the ruling. This case serves as a reminder of the importance of presenting strong evidence in intellectual property disputes. The court meticulously analyzed the evidence from both parties, analysing the ways in which they supported the requirements of s10(3) TMA, giving weight to Lidl's consumer witness testimony and internal concerns expressed by Tesco. Lidl's failure to provide contemporaneous evidence to prove its intention to use the Wordless Mark weakened its defence against Tesco's bad faith allegation. The outcome of any potential appeal could have significant implications for the supermarket industry and trademark protection in the UK.