Background
Lidl owns (and has done for several years) a number of registered trade marks for its logo, including a predominantly used logo consisting of the word “LIDL” inside a yellow circle with a red border on a blue square. In order to obtain a wider protection, Lidl registered its logo in several variations which includes the logo (as described above) and the same logo but without the word “LIDL” in the middle.
Since the Clubcard Prices signs consist of a yellow circle on a blue square with prices of Tesco’s products in the middle, Lidl alleged that this amounts to trade mark infringement, copyright infringement and passing off. Unsurprisingly, Tesco denied any allegations and issued a counterclaim against Lidl alleging that Lidl’s trade mark without the word “LIDL” was invalidly registered, or alternatively that it should be revoked on the grounds of non-use. This was on the basis that Lidl, despite having a registered trade mark for its logo without the word “LIDL”, has never used it in that manner. In other words, Tesco alleged that Lidl have only ever used their logo with the word “LIDL” in the middle and therefore, its registration of the logo without it intended to obtain a wider legal monopoly.
High Court Judgment
In April 2023, the High Court held that Lidl was successful in its claims against Tesco for trade mark infringement, passing off and copyright infringement. At the same time the High Court also upheld Tesco’s counterclaim that Lidl’s registration of its logo without the word “LIDL” has been applied for in bad faith and therefore, should be invalidated.
Court of Appeal Judgment
Tesco did not, however, give up without a fight and appealed the High Court’s judgment. Likewise, Lidl appealed the finding that its registration of the trade mark without the word “LIDL” was invalid.
Whilst the Court of Appeal disagreed with some of the reasonings provided by the High Court, it has upheld its findings in the most part. However, where the Court of Appeal disagreed and overturned the High Court’s finding is in relation to Tesco’s appeal against the copyright infringement. The Court of Appeal agreed that simplicity of design does not necessarily preclude originality, nor is artistic merit required to attract copyright. However, since creation of Lidl’s logo was achieved in 3 stages over a period of time, first by creation of the stylised word “LIDL”, then by adding a yellow circle with a red border and finally by adding the blue square background, the Court of Appeal held that Tesco could not have infringed Lidl’s copyright in the final version of the logo since it was a combination of the 3 earlier logos (or stages).
The full judgment can be found at: https://caselaw.nationalarchives.gov.uk/ewca/civ/2024/262
Conclusion
What does that mean for Tesco? Well, from a practical point of view, it will have to change how it markets its Clubcard Prices signs (unless it applies for permission to appeal to the Supreme Court). However, Tesco could see this as an excellent opportunity to design something distinctive and perhaps go to work with the PR team to come up with a great campaign when it launches (it only has to look to how Aldi utilises its PR team to get some tips)!
From a legal point of view, this case also illustrates that entities need to be careful and selective about what trade marks they register as registering a trade mark which is not used in that manner (such as Lidl’s trade mark without the word “LIDL”) will become vulnerable to attack by others. The judgment also helps practitioners apply quite difficult bad faith arguments (although practitioners and brand owners are still waiting for the Supreme Court’s decision in Skykick, which will – hopefully – provide further assistance with quite complicated issues).