German discounter Lidl has won its High Court lawsuit against supermarket rival Tesco, with the latter now having to change how it markets its Clubcard loyalty programme.
Back in 2020, Lidl sued Tesco for adopting yellow circle symbols to promote its “Clubcard Prices” discount scheme, which allows customers to buy items at a lower cost when using their Clubcard. Lidl claimed the move was an attempt to make shoppers think that Tesco was matching the discounter’s prices.
Today (19 April), Judge Joanna Smith ruled Tesco had “taken unfair advantage of the distinctive reputation” Lidl has for its lower prices, in a “passing off” offence. Despite this, Smith rejected Lidl’s argument that Tesco had the “deliberate subjective intention of riding on Lidl’s coat tails”.
Lidl is “pleased” by the court’s decision to order Tesco to stop using its current Clubcard logo, according to a spokesperson.
However, Tesco plans to refute the ruling with an appeal. In a statement, the supermarket said it is “surprised and disappointed” by the result, but emphasised it has “no impact on our Clubcard Prices scheme which we will continue to run in exactly the same way”.
“In the midst of a cost-of-living crisis and facing intense price competition, this ruling couldn’t have come at a worse time for Tesco,” said Mark Caddle, partner and trade mark attorney at European intellectual property firm, Withers and Rogers.
Noting the potential “costly redesign” of the Clubcard Prices visual identity, Caddle said: “The decision highlights the importance of registering all aspects of a brand’s visual identity, including even the most basic of logos.”
Lidl’s logo trademark dates back to 1994. “It also shows the value of trade mark registrations and how effective brand enforcement is able to prevent brand owners from taking advantage of competitors’ reputable brands,” Caddle added.
Just last week, Tesco boss Ken Murphy said he believes the supermarket’s “relentless focus on providing value” is helping it stave off competition from discounters such as Aldi and Lidl.
Tesco’s focus on price helped drive sales up 7% to £66bn for its 2022/23 financial year, however pre-tax profit plummeted by 51% to £1bn, with the supermarket putting the drop down to price rises from suppliers.