Lidl is entitled to an injunction to stop Tesco using its Clubcard logo, London’s High Court has ruled two months on from the German discounter’s legal victory, which proved the market-leader had copied its design.
Tesco was found in April to have infringed Lidl’s trademark with its blue and yellow Clubcard logo in an attempt to “deceive” customers on price and value. The latest instalment in the ongoing fight comes after Lidl sought an injunction to stop Tesco infringing its trademark.
On Wednesday (21 June), Judge Joanna Smith ruled Lidl is entitled to an injunction, but it will not come into effect until any appeals from either retailer have been resolved. If it is approved Tesco will have to remove all evidence of the offending logo, which could set it back as much as £8m.
“The only certain way to put an end to the loss that Lidl is incurring by reason of the continuing use of the [Clubcard Prices] signs is to grant a final injunction,” Smith said.
Tesco will have nine weeks to remove any marketing around its Clubcard Prices logo once the proceedings conclude, if the retailer is unsuccessful in its appeal. This reportedly includes more than eight million logos across its stores as well as assets used is advertising across TV, print and online.
It could be a long time before we get to this point – if at all – though.
“The next step is for Tesco to seek permission from the Court of Appeal to challenge the first instance decision that Tesco has committed copyright infringement, passing off and trademark infringement by adopting the Clubcard logo it uses,” explains Carl Steele, partner at Ashfords LLP.
“If the Court of Appeal give permission then any appeal hearing is not likely to take place until 12 months from now. So, we are probably looking at another 12 to 18 months before we know what the Court of Appeal says.
“Of course, if the Court of Appeal does not give permission to appeal (and we will likely know this by the autumn of this year) then Tesco will then have only 9 weeks to make the change to their logos in store – but that assumes that Tesco don’t make a separate appeal against yesterday’s Court decision – which is possible. Bottom line – all will go quiet now for several months.”
In April, Tesco said it was “surprised and disappointed” by the result ruling in Lidl’s favour, but emphasised it would have “no impact” on the Clubcard Prices scheme and that it will “continue to run [it] in exactly the same way”.
Lidl’s logo trademark dates to 1994, while Tesco began its Clubcard prices scheme in 2019. This dispute dates back to 2020, when Lidl first raised its concerns about the likeness of its competitor’s logo.
An ‘own goal’ or the right decision? Experts react to Lidl’s victory over TescoWhile the ruling in April was a win for Lidl, not all see it that way. As Geoff Steward, head of litigation at asset management company Stobbs told Marketing Week at the time: “Lidl has scored a spectacular own goal in the battle against lookalikes.”
“They have established beyond doubt that the brand name is far less important than colour and appearance, something which consumer behavioural science has been saying for years.”
“It’s important to note that this case wasn’t about whether customers were confused between Lidl and Tesco,” Ewan Grist, partner for Intellectual Property Group at Bird & Bird, who represented Lidl in the case, also told Marketing Week.
“Instead it was about whether Tesco’s use of the Clubcard logo took unfair advantage of Lidl’s reputation for great value by making some customers think that Tesco was price matching against Lidl, when Tesco wasn’t actually doing any price matching,” he added.