Tesco faces being ordered to stop using its Clubcard Prices logo, following a High Court ruling the design was copied from Lidl’s yellow circle branding.
The court ruled Tesco was taking unfair advantage of Lidl’s discounter reputation with its design, which also uses a yellow circle and appears throughout stores to highlight special prices for loyalty scheme members.
The Clubcard logo was “plainly intended (amongst other things) to convey value and thereby to influence the economic behaviour of supermarket shoppers”, said Mrs Justice Joanna Smith in a ruling handed down today.
While she found “no specific intention to free-ride on Lidl’s reputation” on Tesco’s part, the effect was nevertheless a “subtle but insidious transfer of image” in the minds of some consumers, she said.
“This will have assisted Tesco to increase the attraction of their prices,” the judge added.
She said evidence of a link being made by consumers between the two logos “establishes the existence of deception”.
The judge accepted Lidl’s case that Tesco’s evidence appeared to have been designed to obscure the involvement of its design agency so as to distract from the attention it gave to looking at how competitors including Lidl signalled value.
She found the agency had “copied the background to the Lidl logo as part of its exploratory work” as a natural consequence of the brief provided by Tesco.
Tesco provided instructions “which plainly invited them to focus on achieving a perception of value and, amongst other things, to look at how Lidl (amongst other ‘discounter’ competitors) went about doing this,” she said.
The agency then “produced a design which Tesco’s employees immediately appreciated was likely to cause confusion with Lidl, but Tesco went ahead with the Clubcard Prices promotion in any event”.
She added that the copying was a function of “the strong desire on the part of Tesco” to “stop the switching away of financially squeezed customers looking for everyday low prices and to convey the message of ‘value’, a message which Lidl’s Logo already conveyed so effectively”.
A Lidl spokeswoman said: “Over the last three years, Tesco has been using its Clubcard logo to deceive many customers into believing that Tesco was price-matching against Lidl or was able to offer the same great value as us. We asked Tesco to change their Clubcard logo, but they refused, making it necessary to bring this case.
“Having seen the evidence, the court has now ruled that Tesco’s Clubcard logo was copied from Lidl’s logo, and it infringes Lidl’s trademark rights and copyright. This infringement allowed Tesco to take unfair advantage of our long-standing reputation for great value, misleading their customers at a time when they should have been supporting them. We are pleased that the court has agreed with us and that it will now order Tesco to stop using the Clubcard logo.”
A Tesco spokeswoman said: “We are surprised and disappointed by the decision today in relation to the claim brought by Lidl against our Clubcard Prices logo. Clubcard Prices has always been about offering great value to our Clubcard customers, across thousands of products, as part of our commitment to keeping the cost of the weekly shop as affordable as possible. Nothing in today’s decision changes that.
“This claim brought by Lidl was just about the colour and shape of the Clubcard Prices logo. The judge’s ruling concluded that there was no deliberate intent on Tesco’s part to copy Lidl’s trademark. It has no impact on our Clubcard Prices scheme, which we will continue to run in exactly the same way. We intend to appeal.”
The ruling marks the latest chapter in a battle that began in 2020, with Lidl launching a passing off lawsuit on claims Tesco was trying to “ride on [its] coat-tails”.
John Coldham, intellectual property partner at the law firm, Gowling WLG, said the outcome was a “comprehensive victory” for Lidl and “the end result will be that Tesco will have to find a new logo for the Clubcard Prices promotion”.
“Tesco did also achieve a minor victory, with the court finding that Lidl had registered its logo without words within it, in bad faith,” he added.
“Following a period in which budget supermarkets have been on the losing end of many disputes with their non-budget competitors, this marks a significant pendulum shift in the other direction and demonstrates that whilst they may sell cheaper products, the value of an established, consistently used and protected brand when it comes to enforcement is enormous.”
No comments yet