Lidl v Tesco in the High Court: battle of super-marketing logos

Do you consider Tesco’s below Clubcard logo (used since September 2020) is similar to Lidl’s below logos? The High Court recently thought it was and found trade mark and copyright infringement and passing off by Tesco. No doubt Tesco will appeal. We provide some key points from the case and take home points.

1. Trade Mark Infringement – Tesco’s Clubcard Logo was deemed similar to Lidl’s Logos (the additional red colour and differences in the words used were not enough) and it was held that the average consumer would make a link between the logos.
   
   Tesco accepted that Lidl had a reputation in the UK for the Logo with Text (but not the Wordless Logo as it had not been used) and it was held that Tesco would gain an unfair advantage as it would be easier for Tesco’s Clubcard Logo to signify value by a connection to Lidl’s reputation for low prices.
   
   There was also detriment to Lidl’s Logos as Lidl had responded to Tesco’s Clubcard Logo with “corrective advertising” (e.g. newspaper adverts to stop consumers thinking Tesco’s Clubcard Logo indicated a cheaper price than Lidl for that product).
   
2. Wordless Logo Cancellation– UK trade marks can be cancelled if they have been registered for five years and they have not been put to genuine use in the UK for the goods/services registered over a five-year period. Tesco argued that the Wordless Logo had never been used, was only applied for as a legal weapon and Lidl had been reapplying periodically for the same goods/services to save the Wordless Logo from such a cancellation. The Wordless Logo was cancelled for “bad faith”, but this did not affect the infringement claim which also was based on the Logo with Text.
   
3. Passing Off – Lidl was deemed to have goodwill (and unregistered rights) in Lidl’s Logos, including as a discounter offering low price goods. It was held that Tesco’s Clubcard Logo meant there was a misrepresentation that a substantial number of Tesco customers would believe that Tesco’s price was lower than or equal to Lidl’s price for such goods and this would cause damage as such customers would buy from Tesco instead.
   
4. Copyright Infringement – Tesco accepted there was copyright in the “LIDL” word element of the Logo with Text but argued the remainder was too simple to have copyright. However, copyright was established for the entire Logo with Text (there is a relatively low threshold in the UK). There was infringement as Tesco had known about Lidl’s marks and the similarities were considered close enough to be more likely from copying than coincidence.

Take home points

• It may not be a defence to trade mark infringement to use your main brand name with a logo that is similar to a third party’s trade mark. Tesco’s Clubcard Logo and the Logo with Text were deemed similar despite Tesco’s argument that the words “Clubcard” and “Lidl” are sufficiently well-known that they are the main elements of the logos.

• The evidence in this case included confusion between the logos raised by third party consumer research. Companies should seriously consider any such issues and risks before launching a new brand.

• You have five years to use or lose your UK registered trade mark, which is what happened to the Wordless Logo.

• You should keep detailed records to help prove the subsistence and your ownership of your copyright and/or goodwill (passing off). In some cases, even the simplest of logos can be protected by copyright and this could be used to prevent someone copying your logo. It is important to ensure that you own the copyright (and any other rights) in your logo. If you have commissioned a third party to design your logo, then they may own the copyright and an assignment would be needed.