Global household name Lidl have brought a trade mark infringement claim against one of its competitors, Tesco.
In September 2020 Tesco launched a new Clubcard campaign whereby a yellow circle on a blue square background with the words ‘Clubcard Prices’ denotes which of their products are discounted with the use of a Clubcard.
The well-known Lidl logo itself is a yellow circle on a blue square background with the word ‘Lidl’ contained within the circle, and is a registered trademark. Lidl also has a registered trade mark of the yellow circle on a blue square background alone.
Lidl alleges that Tesco’s image resembles its trade marks and therefore is in infringement of Lidl’s trade mark as Tesco benefits from the association with “Lidl’s reputation for high quality goods sold at a low price”.
In response, Tesco issued a counterclaim on the following grounds:
- Lidl has never used the image without its name, therefore wordless trade mark should be revoked for non-use.
- Lidl has been ‘evergreening’ (applying to re-register the trade mark of the wordless mark periodically in order to circumvent the necessity to prove commercial use of the trade mark).
- Given the trade mark was registered in bad faith as a defensive trade mark a declaration of invalidity was sought.
Lidl issued a strike out application against Tesco’s counterclaim which succeeded in the High Court in June 2022, but was later overturned by the Court of Appeal in November 2022 on the basis that Tesco’s counterclaim has a fair prospect of success.
The High Court trial commenced on 7 February 2023 before Mrs Justice Joanna Smith.
Lidl’s leading counsel, Benet Brandreth KC, stated that Lidl has generated a huge reputation and goodwill in both the mark with text and the wordless mark and that that goodwill and reputation is specifically that Lidl are a supermarket that offers value for high quality goods sold at a low price.
Hugo Cuddigan KC, leading counsel for Tesco, highlighted that the key mark relied on by Lidl is their well-known logo and that it is common ground that Lidl has only used the wordless mark, if at all, by using it within the logo i.e. with text and that “accordingly, at its high point, the case on infringement would be based exclusively on the reproduction of a yellow circle. Lidl would need to satisfy the court that creating a yellow circle involves sufficient artistic skill and labour to comprise the author’s own intellectual creation. It does not”.
Judgment in this case is pending and intellectual property lawyers and businesses should follow it closely.
It may be significant in the evolution of the meaning of ‘bad faith’ under UK trade mark law. The outcome of this case will also provide invaluable guidance for practitioners and brands on the process of ‘evergreening’ and also the novel treatment of survey evidence at trial to prove distinctiveness of a trade mark.