Tesco being a Lidl naughty
Tesco’s Clubcard logo may have to undergo a facelift soon. On 19 April 2023, the High Court ruled that Tesco’s Clubcard logo infringes Lidl’s intellectual property rights in its logo. Tesco plans to appeal against the ruling, as well as seek permission to continue using the logo pending the conclusion of any appeal.
According to the court, the immediate problem caused by Tesco’s Clubcard logo is that consumers would perceive it as an indication that Tesco’s price for a given product is the same or slightly lower than Lidl’s, and therefore think that they do not need to check Lidl’s price for that product. The court also identified the longer term problem that Tesco’s value perception would be unfairly improved by association with Lidl’s reputation as a value-for-money “discounter” supermarket (as encapsulated by its slogan “Big on Quality, Lidl on Price”). Although the colour blue has long been associated with Tesco and the colour yellow (including yellow circles) has been used by other supermarkets to indicate value, Tesco could not justify its decision to choose the specific combination of a yellow circle superimposed on a blue background.
The ruling is a salient reminder, especially for businesses in the retail and consumer industry, to be circumspect when trying to take cues from a competitor’s brand assets. In the lead up to the launch of the Clubcard logo in September 2020, some of Tesco’s employees and external consultants had expressed concerns about the similarities between the Clubcard logo and Lidl’s logo. Despite these concerns, Tesco proceeded to spend millions of pounds per month on national advertising campaigns featuring the Clubcard logo. Aside from the legal risk associated with trying to sail close to a competitor’s brand assets, there is also reputational risk. A member of the public had given evidence in the case that what he considered to be “blatant mimicry” on the part of Tesco had made him angry and had not encouraged him to shop at Tesco.
Lidl did not achieve a flawless victory, however. Its trade mark registrations for its wordless logo (without the word “Lidl”) were invalidated on the basis that they were filed without a genuine intention to use it in this manner. As such, before applying to register a discrete element of a brand asset, businesses should carefully consider whether that element will be used on its own.
Discounter Lidl has won a trademark battle against the UK's biggest supermarket chain Tesco.
The High Court ruled that Tesco's Clubcard logo copied Lidl's logo, which both use a yellow circle on a square blue background.
Lidl said Tesco had infringed its copyright, letting Tesco "take unfair advantage" of Lidl's "reputation for great value".
Tesco said it was "disappointed" by the ruling and that it intended to appeal.”
