Tesco v Lidl

Tesco is to change its Clubcard Prices logo, found throughout its stores across the country, after losing a trademark battle with Lidl.

An appeal by Tesco against a High Court ruling that the Clubcard Prices design infringed Lidl’s trademark rights for its yellow circle branding has been dismissed in a judgment handed down this morning.

The Court of Appeal upheld the High Court’s ruling that Tesco adopted its design in order to create a price comparison with Lidl.

However, Lord Justice Lewison expressed reluctance in arriving at the decision.

The appeal judge quoted an earlier case to say: “If I could find a way of avoiding this result, I would. But the difficulty is that the trial judge’s findings of fact, however surprising they may seem, are not open to challenge… With undisguised reluctance I agree… that the appeal should be dismissed.”

John Coldham, IP partner at Gowling WLG, said: “The Court of Appeal was openly uncomfortable with the factual finding made by the earlier judge that this was a price comparison with Lidl, as opposed to a price comparison with its own ‘non-Clubcard Deal’ prices, but this was not something that they could change on appeal.”

Tesco said it would honour the judgment and update Clubcard Prices logos in the coming weeks.

The High Court ruled last year that Lidl could have an injunction giving Tesco nine weeks to remove existing Clubcard Prices logos from stores in the event Tesco lost on appeal. Tesco head of legal Ryan Hetherington told the High Court the cost of doing so would be over £7m, thanks to the “extremely widespread use” of the logo, with over eight million signs in stores.

The nine-week time-frame will kick in if Tesco does not now lodge a further appeal, according to Richard May, IP partner at Osborne Clarke. May said the next and final appeal would be to the Supreme Court, but added that Tesco was unlikely be granted permission by the Supreme Court’s Appeals Committee because “there’s no major point of legal principle at stake”.

Tesco has given no indication of an intention to appeal.

Coldham said Lidl was also likely to seek compensation from the supermarket for the trademark infringement.

A Tesco spokesman said: “Our customers always tell us just how important Clubcard Prices are to giving them great value – and it’s been a key reason why we’re consistently the cheapest full-line grocer.

“We are disappointed with the judgment relating to the colour and shape of the Clubcard Prices logo, but would like to reassure customers that it will in no way impact our Clubcard Prices programme.

“Clubcard Prices, irrespective of its logo, will continue to play a central role in rewarding our Clubcard members with thousands of deals every week.”

A Lidl spokesman said: “Last year, the High Court ruled that Tesco’s Clubcard logo was copied from ours and infringed our trademark rights, allowing them to unfairly benefit from our long-standing reputation for value while misleading its customers.

“Despite this, Tesco prolonged the dispute by appealing, deceiving customers for another year.

“Therefore, we are delighted to see that the Court of Appeal has now agreed with the High Court that Tesco’s use of its Clubcard logo is unlawful. We expect Tesco now to respect the court’s decision and change its Clubcard logo to one that is not designed to look like ours.”

Coldham said: “Lidl will be delighted by this result – there is a court finding that it has a reputation as a discounter that offers goods at low prices, and that Tesco adopted its Clubcard Prices logo in order to effect a price comparison.”

May said: “The irony is that Lidl has developed a possible blueprint in how to successfully stop lookalike brands.

“If you can show that your trademark or get up conveys a particularly specific message, for example around value, that has been shown to be protectable. Although, I’m not convinced this litigation strategy can be deployed widely – as one of the Court of Appeal judge’s made it clear - this type of claim is at the ‘outer boundaries of trademark protection’”