Trademark Dispute Between Lidl And Tesco: What Is It About?
Graphic designed by Keon Wong
The trademark battle between the two supermarkets centres around a yellow circular design with a blue background. This is used by Tesco for its Clubcard loyalty scheme to offer promotions for its members, similarly it is also used by Lidl as its main logo. What is being looked at essentially is whether Tesco’s ‘Clubcard prices’ logo infringes on Lidl’s brand logo, since they both appear as text in a yellow circle on a blue background. Will consumers be reminded of Lidl when using their clubcard at Tesco? Is Lidl’s trademark of a yellow circle on a blue background (without its name on the overlay) registered in bad faith?
Earlier last year, in 2021, Tesco had filed for a counterclaim against Lidl in response to Lidl’s lawsuit which stated that Tesco was trying to “ride on [its] coat-tails” by using a similar logo of a yellow circle on a blue background to promote its “Clubcard Prices”. Lidl has accused its rival Tesco of “deception” during the latest round of a long-running battle between the two supermarket chains over the use of a yellow circle logo. To which, Tesco argued that Lidl registered a trademark of its logo without its name as a “legal weapon” to support the trademark over its widely used logo. A lower court dismissed Tesco’s case on bad faith in June, but the Court of Appeal in London ruled that the argument must be considered as part of a trial of Lidl’s initial lawsuit and Tesco’s counterclaim which was heard at the High Court earlier this year in February.
Facts
From the start of September 2020, Tesco has used the yellow circle on a blue square background with the words ‘Clubcard prices’ to advertise their products that have discounts applied.
On the other hand, Lidl have a registered trademark on both the yellow circle on a blue background without the text, and for an identical one with the Lidl test contained within the circle. Lidl alleged that Tesco’s use of this image infringes these trademarks and claims that Tesco is benefiting from Lidl’s established reputation as a value and discount-driven supermarket. Lidl’s argument is based on the reasoning that “many consumers believe the Tesco logo to be the Lidl logo”. Hence, taking advantage of the association with “Lidl’s reputation for high quality goods sold at a low price”. Lidl had to prove damage in its claims against Tesco and added in a written argument “shoppers who have been misled would otherwise have gone to Lidl to purchase the goods in issue, or that the deception causes them to take a materially disadvantageous view of Lidl”.
Tesco’s argument relies on the reasoning that Lidl have trademarked the symbol (the yellow circle with a blue background) in bad faith as a defensive trademark, since this has never been used by Lidl without their name appearing in text on the said symbol and customers have never actually seen it being used in such a manner. Tesco has also accused Lidl of ‘evergreening’ which is the process of applying to re-register the trademark of the textless logo in order to circumvent the necessity to prove the commercial use of a trademark. Furthermore, Tesco reinforced this argument by accusing Lidl of showcasing a novel treatment of survey evidence that was used at trial. This comes after a successful application by Lidl to rely on survey evidence in order to prove the distinctiveness of its trademarks. Tesco’s legal team said that to establish infringement, Lidl would need to satisfy the judge that “creating a yellow circle involves sufficient artistic skill and labour to comprise the author’s own intellectual creation.” Lidl had failed to establish this.
Conclusion Remarks
In any case, given that the marks are not identical, the claim will most likely rely on the likelihood of a confusion. This will be to the extent that any Tesco customer might get confused as to think that the Tesco marketing is very similar to Lidl’s, surely, they will not be confused on which store they are entering into. This is likely to be the main consideration in the High Court case.
