Lidl has won a trade mark infringement case against Tesco for its use of a yellow circle on a blue background. The full (102 page) decision can be found here.
Tesco started using a yellow circle against a blue background to indicate that particular products were part of its ‘Clubcard Prices’ promotion. Whilst the Tesco Clubcard scheme started in 1995, Tesco only started to use the yellow circle and blue square signage since September 2020 (images reproduced from the High Court judgment).
Lidl took the matter to the High Court and sued Tesco based on its registered trade marks (images reproduced from the High Court judgment).
The discount retailer uses it’s Mark with Text throughout its stores, in their advertising and on products. Lidl claimed that Tesco’s use amounted to passing off and the Clubcard signage infringed copyright. It was also argued that Tesco’s use of the yellow and blue signage took advantage of the reputation and goodwill associated with the “discounter” supermarket – specifically quality goods at low prices.The company claimed that consumers would see the Tesco signage, link it to Lidl’s brand and reputation and conclude that Tesco was indicating their pricing was comparable to Lidl’s or that the prices were price matched. It was noted that Tesco was price-matching goods with Aldi, another discounter supermarket, at the same time.
Tesco counterclaimed that Lidl had filed its Wordless Mark in bad faith.
Tesco’s use was held to infringe Lidl’s trade marks, copyright in the Mark with Text, and amount to passing off. The judge, Mrs Justice Smith, found that there had been evidence of origin confusion and price comparison confusion on the part of the public. Perhaps more importantly, finding in Lidl’s favour, Mrs Justice Smith concluded “Tesco has taken unfair advantage of the distinctive reputation which resides in the Lidl Marks for low price (discounted) value”. However, Tesco was successful in claiming some of Lidl’s marks had been filed in bad faith, as Lidl had refiled its Wordless Mark in order to avoid the mark being revoked for non-use (which amounts to an abuse of the trade mark system).
Trade marks play an important role in communicating with consumers. This case did not turn on there being a likelihood of confusion; rather, Tesco was capitalising on Lidl’s reputation as a discount retailer. The decision highlights many points, but a fundamental one is that even relatively simple geometric shapes may be capable of acting as trade marks and benefiting from copyright protection.
It seems likely that Tesco will appeal the decision, so this is probably not the end of the story…
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