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Tesco vs Lidl – Going in circles

March 2023

The full trial between Tesco and Lidl started before the High Court in February 2023. With the parties battling over their use of their yellow circle logos, we look at what has happened so far, where we are at and what to look forward to.

What happened:

Lidl launched proceedings against Tesco in 2022 alleging trade mark and copyright infringement. The dispute ‘circles around’ a yellow circle device on a blue background, used by Tesco for its “Clubcard Prices” loyalty discount scheme as well as Lidl’s main logo.

Tesco counterclaimed that Lidl’s registration for its ‘wordless’ logo was invalid on the grounds of bad faith and evergreening, claiming that the wordless mark was deployed as a ‘legal weapon’. Tesco also claimed that the wordless logo should be revoked as it has never been used in the UK in its registered form – i.e. without the LIDL mark.

In an interim decision, the High Court dismissed Tesco’s claims as merely drawing inferences from conduct that could otherwise be legitimate. Building on an assessment of the current law on bad faith (including Skykick), the Court concluded that Tesco had not sufficiently pleaded their assertions to overcome a presumption of good faith.

Tesco appealed and in late November, the Court of Appeal overturned the High Court decision, finding that Tesco had substantiated their pleadings sufficiently, especially at the stage of proceedings where disclosure had not yet taken place. Lidl had an opportunity to put forward evidence showing that Tesco’s claims were manifestly wrong, but Lidl did not do so.

Where are we at:

Having gone ‘full circle’, Tesco’s counterclaim of bad faith is back on. The full trial commenced at the High Court on 7 February with the parties making their opening statements.

It is reported that Lidl claimed that the “protection available to Lidl’s core brand” is “at the heart of this claim”. While Tesco argued that Lidl need to show that “creating a yellow circle involves sufficient artistic skill and labour to comprise the author’s own intellectual creation”, arguing it does not.

With the Supreme Court expected to hear Sky v Skykick in June 2023, the case is even more interesting and both decisions will be eagerly anticipated.

What to look forward to:

The case is likely to be of interest for many reasons, including:

  • bad faith and the threshold to be met;
  • evergreening and the lack of intention to use a mark;
  • the use (or not) of wordless marks;
  • the use and weight of survey evidence.

The Court of Appeal decision already showed that although proving bad faith may remain challenging, the bar for introducing the allegation is not as demanding as perhaps previously thought. It remains to be seen whether the claim will prove Tesco’s own ‘legal weapon’.

It is also an opportunity to gleam the High Court’s views on repeat filings and evergreening following Hasbro’s defeat before the [EU] General Court on the MONOPOLY case.

Lidl’s wordless logo and the question of whether its use as part of Lidl’s mark with the LIDL text echoes the 2014 Specsavers v ASDA case, where use of a mark with text was held to constitute use of the wordless mark. It will be interesting to see if the High Court reaches the same conclusion almost a decade later.

Finally, as the debate continues the costs, value and reliability of survey evidence, it would be helpful to see the court’s approach on the probative value of such evidence.

The case certainly has great potential; let’s hope it delivers!

High Court decision here.
Court of Appeal decision here.
2014 Specsavers Court of Appeal decision here.

This article was prepared by HGF Trade Mark Director Apostolos Dakanalis.

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