Rival supermarket giants Lidl and Tesco are set to spend £2.35m fighting each other in court over claims Tesco have ripped off Lidl’s logo.
Lidl claim that Tesco are exploiting the background to their trademarked logo - a blue square containing a yellow circle with a thin red border - to promote Clubcard discounts to their own customers.
The German supermarket says the yellow circle with red border on the blue background is a “wordless” trademark even without the Lidl name on it and are seeking to ban Tesco from using a similar background on their “Clubcard Prices” signs at their stores.
It says Tesco is “seeking deliberately to ride on the coat tails of Lidl’s reputation as a ‘discounter’” by using the background to the Lidl logo to promote its Clubcard price cuts.
As part of the evidence backing their claim, Lidl have put before London’s High Court results from a survey, in which interviewees were shown the disputed background without the Lidl name and asked what it was, with “numerous responses” identifying a connection with Lidl.
Giving judgment in a pre-trial skirmish between the two grocery giants, Mrs Justice Joanna Smith handed victory to Lidl, throwing out Tesco’s bid to have the survey evidence ruled inadmissible at trial.
Setting out the shape of the case, the judge said: “In short, Lidl contends that Tesco’s use of a new sign in their ‘Clubcard Prices’ marketing is an infringement.
“In bringing the claim, Lidl relies upon its trade mark rights in two versions of the Lidl logo: a logo which includes the word ‘Lidl’ and a logo without that word, ‘the Wordless Mark’.
“The Wordless Mark is a graphical device consisting of a blue square background bearing a yellow disk, bordered in a thin red line.”
She said Lidl’s lawyers argue the background to the supermarket logo is “capable of being, and is, perceived by the public in the United Kingdom as being distinctive of the Lidl group of companies”.
“Essentially, Lidl says that Tesco is seeking deliberately to ride on the coat tails of Lidl’s reputation as a ‘discounter’ supermarket known for the provision of value.
“It pleads that Tesco’s use of the sign in connection with Tesco’s discount prices is intended to, and does, cause members of the public to call to mind Lidl’s business and the marks, including being suggestive of the fact that the prices of goods offered by Tesco for sale under or in connection with the sign are offered at the same prices, or lower prices, than could be obtained for the same or equivalent goods in Lidl stores,” the judge explained.
Setting out Tesco’s defence, she went on: “Lidl’s use of the Wordless Mark is disputed.
“Focusing specifically on the Wordless Mark, it pleads...The Wordless Mark is a figment of Lidl’s legal imagination and a product of its trade mark filing strategy. It does not exist in the real world....Lidl have never used the Wordless Mark and never intended to use it”.
Tesco’s lawyers sought to argue that the survey results ought not to be included in the evidence at the forthcoming trial, saying amongst other things that the way the questions were phrased had been leading.
During the survey, participants were shown the wordless logo and asked “What do you think this image is? and “Now, please imagine that this image was used as a company’s brand...Which company would you expect it to be?”
The judge, allowing the survey evidence to be included at trial, said: “Looking at the answers to the survey in detail... one sees numerous responses that say ‘Lidl’ or ‘Lidl logo’ or ‘Lidl sign’or even ‘It looks like the background of Lidl’, or ‘Part of the Lidl logo without the words’ or ‘Brand image for Lidl supermarket’.
“This appears to me to be probative of recognition on the part of the participants that the Wordless Mark is a logo or trade mark.”
The judge went on to say that Tesco’s estimated costs to trial, even without dealing with the issue of the contested survey, “amount to £1,185,976, while Lidl’s amount to £1,170,244
“The multi-million pound combined legal costs appear to be a reflection of how key this brand dispute is to both parties,” she remarked.
The judge also struck out Tesco’s counterclaim alleging that some of the Lidl trade marks in issue should be declared invalid on grounds of bad faith.
The case will go forward to trial at a later date.
