Lidl Great Britain Ltd v Tesco Stores Ltd [2024] EWHC Civ 262

Background and key issue:

I have recently been interested in the Lidl v Tesco copyright case primarily because of its potential impact on brand owners with simple logos and consumer expenditure. Lidl sued Tesco for trademark infringement, passing off and copyright in 2020. The key issue in this case was whether Tesco’s use of a yellow circle in a blue square design as the logo for their Clubcard prices scheme infringed Lidl’s trademark. Tesco Clubcard holders are usually charged lower prices than those consumers who don’t have a Clubcard. Lidl argued that consumers, on seeing Tesco’s Clubcard price signs, would automatically associate them with Lidl’s brand. This would lead to an unfair advantage for Tesco by implying comparable pricing with Lidl since Lidl is often called a discounter supermarket. Tesco maintained that there was no similarity between the Clubcard prices logo and Lidl’s logo and that Lidl had never used the wordless mark in the form in which it was registered(paragraph 89). In 2023, the high court judge ruled in Lidl’s favour, issuing an injunction ordering Tesco to stop using the Clubcard Logo. Tesco appealed the high court judgement.

Court of Appeal judgment:

In the appeal, Tesco submitted that the high court judge erred by looking at the evidence presented by Lidl and that she should have instead reached a conclusion based on her common sense and experience. Tesco also contended that the judge had erred in principle by considering the evidence of Messrs Berridge and Paulson Lidl Vox Populi as being indicative of the response of the average consumer (paragraph 138). The Court of Appeal sided with Lidl, citing numerous instances where consumers connected Tesco’s signs with Lidl’s trademark. Lord Justice Lewison held that the high court’s judge’s findings of fact were not “open to challenge”; however surprising they seemed.  This may signify that Lord Justice Lewison would not have come to the same conclusion as the trial judge on the finding that a number of consumers would be misled into thinking the Clubcard prices were the same as Lidl’s. Conclusively, Tesco was found liable for trademark infringement and passing off.

Comment:

As a result, Tesco faces significant costs, exceeding 7 million pounds, to remove the logo due to its widespread use of the logo in stores. This expense could reduce spending among Tesco customers who are reliant on the Clubcard loyalty program. However, Tesco reassured customers that the judgement will not impact the Clubcard scheme. Additionally, this decision shows the importance of registering all aspects of a brand’s visual identity, including simple logos, so that brand owners can protect their brands when infringing. Nonetheless, even if Lidl’s victory is significant, this decision could backfire against them and other budget supermarkets, especially concerning copycat products.

Written by Nancy Oundo