Lidl v Tesco … the Appeal

Followers of trade mark law, and in particular this blog, will be aware that that Lidl was successful last year in a claim of trade mark infringement, passing off and copyright infringement against Tesco and its “Clubcard Prices” signs. The decision was seen as controversial by many and so it came as no surprise that Tesco promptly appealed. In fact, Lidl also appealed an element of the judgment which found that one of its trade marks (it’s logo without the word “Lidl”), was applied for in bad faith.

Disappointingly for Tesco, earlier this month the Court of Appeal largely dismissed Tesco’s appeal and upheld the original trade mark infringement and passing off findings of the High Court.

In particular the Court of Appeal accepted the High Court’s finding that a substantial number of consumers would be misled by the “Clubcard Prices” signs into thinking that Tesco’s prices were the same as or lower than Lidl’s prices for equivalent goods, despite making no reference to Lidl or price-matching. Although the Court of Appeal acknowledged that this was a “somewhat surprising” finding, it found no major fault in how the original judge came to that decision.

Tesco also appealed against the High Court’s finding that is had taken unfair advantage, causing detriment without due cause, but that appeal also failed.

If it’s any consolation for Tesco (and I doubt it is) there were two positives for Tesco as a result of the appeal.

Firstly, on the question of copyright infringement, the Court of Appeal found that the scope of copyright protection in Lidl’s logo didn’t go very far, and Tesco hadn’t actually copied at least two of the elements which made the logo original. On that basis the copyright infringement finding was overturned.

Secondly, Lidl’s appeal against the bad faith finding on its wordless figurative trade mark failed, largely because it has been unable to produce enough evidence to rebut the presumption of bad faith (in circumstances in which it hadn’t actually used the logo in trade and its registration broadened its existing monopoly rights).

Briffa comment

This case is a useful reminder to litigants that outcomes are not always predictable when it comes to IP disputes and even the biggest parties can sometimes get it wrong. Tesco will, of course, live to fight another day but this judgment will prove extremely costly in the short term (they had previously estimated the cost of a rebrand to be around £8 million).

If you would like advice about your new brand, just email info@briffa.com to arrange a consultation meeting.