The Battle of the Supermarket Giants – how Lidl defeated Tesco over its logo design
Pannone Corporate

In a trade mark battle of the supermarket giants, Tesco has lost its appeal against a decision that it infringed Lidl’s logo. The supermarket will now have to drop its blue and yellow logo used to promote its Clubcard loyalty scheme, with the subsequent rebrand reportedly set to cost Tesco up to £8 million.

So what did the Court of Appeal rule?

  • Tesco’s appeal against the finding of passing off against it was dismissed. The Court of Appeal accepted the High Court’s finding that a substantial number of consumers would be misled into thinking that Tesco’s Clubcard prices were the same or lower than Lidl’s prices for equivalent goods.
  • Tesco’s appeal against the finding of trade mark infringement was also dismissed. The Court of Appeal found that Tesco’s campaign caused a change in consumer economic behaviour and caused detriment to Lidl. In particular, Tesco’s logo had been successful in slowing the switch from Tesco to Lidl that was otherwise occurring. Lidl also felt obliged to invest in corrective advertising to promote its lower prices compared to Clubcard prices.
  • However, Tesco’s appeal against the finding of copyright infringement was successful. The Court of Appeal held that although Tesco had copied the visual concept of a blue square surrounding a yellow circle that is all it had done, and this was not sufficient to amount to copyright infringement.

What does the ruling tell us?

The case shows how difficult it is to appeal a decision of a lower court. The Court of Appeal would only have been entitled to intervene if findings of facts were rationally insupportable, or if the High Court judge had made an error in law or principle. Although the Court of Appeal found aspects of the High Court’s judgment “surprising”, it was mindful that the High Court had the benefit of being immersed in the evidence, whereas the Court of Appeal is only asked to consider selected parts of the written record.

Although Tesco could look to further appeal to the Supreme Court it is understood the supermarket has accepted the Court of Appeal’s ruling.

To read more about the case, and gain insight on what businesses need to consider when designing logos and where the line is drawn between misrepresentation and inspiration, take a look at our recent Retail Law Update here:

Photo: The Tesco Clubcard Prices design and the Lidl logo. Composite: Rex/Reuters

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