Lidl has won a legal battle after a judge ruled Tesco was “riding on its coat tails” in using a similar logo to promote its Clubcard deals.
The High Court found in favour of the German chain on claims of trademark infringement, passing off and copyright infringement.
Mrs Justice Joanna Smith made the ruling on Wednesday after a hearing earlier this year between the two supermarket giants.
The clash came with Lidl using a yellow circle for its main logo on a blue background, which was judged to be too similar.
Court documents said: “Central to this case is Lidl’s contention that such reputation and goodwill is specifically that Lidl are a discounter supermarket that offers value; specifically quality goods at low prices.”
“[Lidl believes] many link them to Lidl’s brand and reputation and believe that Tesco’s prices are being said to be comparable to Lidl’s (low) prices and/or that they are price matched to Lidl.”
Tesco had been using the Clubcard logo outside its supermarkets as well as on aisles and on shelves.
“I do not regard that as a niche concern and I have no doubt that Tesco does not either.”— Mrs Justice Joanna Smith
Judge Smith said Tesco had "taken unfair advantage of the distinctive reputation" for low prices held by Lidl and had the “deliberate subjective intention of riding on Lidl’s coat tails".
She added: “I do not regard that as a niche concern and I have no doubt that Tesco does not either.”
It has not been decided as to what, if any, action will be taken against Tesco and if they will need to remove the logos from its shops. The shop has said the Clubcard scheme will continue.
A short statement from Lidl after the result read: “We are pleased that the court has agreed with us.”
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.”
She added that the supermarket intends to appeal.
Legal view
Louise Popple, senior counsel at law firm Taylor Wessing said: "This is an eagerly awaited decision, not just because it represent another in a line of battles between big supermarkets, but because it deals with important fields of trade mark law - bad faith and the scope of protection of wordless marks. It also represents a turning of the tables – this time, It's Lidl, the discount retailer, taking action against Tesco, the established supermarket brand.
“The Court has found that Tesco's logo does infringe because it takes unfair advantage of the famous Lidl logo which carries connotations of low prices. The court has had to weigh up the fame of the Lidl brands against the fact that they consist of relatively simple geometric shapes. It's come out on the side of Lidl this time. Brand owners must be careful in replicating relatively simple geometric shapes of their competitors, where those shapes are well-known, even if they use them with different words.”
