The High Court has ordered Tesco to stop using its Clubcard logo as it takes “unfair advantage” of Lidl’s trademark yellow circle logo.
High Court Judge Mrs Justice Joanna Smith began overseeing the trial in February, where she heard evidence from senior supermarket staff and consumers before finding that Tesco’s Clubcard logo infringed Lidl’s trademark rights and took “unfair advantage” of its association with lower costs.
Judge Smith also found that Tesco was passing off Clubcard Prices by allowing a substantial number of consumers to believe that it was price matching Lidl, and that the Clubcard logo had been copied from Lidl’s logo.
A formal injunction has now been issued to stop the UK’s largest supermarket from using the logo any longer, although Tesco said it is ‘disappointed’ by the ruling and plans to appeal.
The two logos feature a yellow circle set in a blue square – with Lidl using the design as its main brand logo and Tesco using a similar design to highlight value offers available to members of its Clubcard scheme.
The court stated that the Clubcard logo was “plainly intended to convey value and influence the economic behaviour of supermarket shoppers”, with the design created to cause a “subtle but insidious” association from Lidl to Tesco in the minds of some consumers.
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“This will have assisted Tesco to increase the attraction of their prices,” said Judge Smith, who also commented on the design agency that had created the Clubcard logo, stating that Tesco had “plainly invited them to focus on achieving a perception of value” by looking at competitor brands.
“This is not a case where the position on copying is marginal on the evidence and ultimately, I consider that the copying was a function of the strong desire on the part of Tesco (as evidenced in its internal documents) to stop the switching away of financially squeezed customers looking for Every Day Low Prices and to convey the message of ‘value’, a message which Lidl’s Logo already conveyed so effectively.”
The £multi-million trademark row first began in September 2020, when Tesco launched a new logo for its Clubcard discount scheme. Lidl was concerned that customers would mistakenly think that Tesco was offering the same value as Lidl – a confusion compounded by the fact that Tesco was running an ‘Aldi Price Match’ value campaign for most of that time.
A court action was then bought against Tesco in December 2020, based on Lidl’s’ trademark rights, passing off and the copyright in its logo, in order to ‘prevent customers from being misled’.
The initial case was successful, but then Tesco filed a counterclaim and won the right to appeal in November last year as it argued that Lidl had applied to trademark a yellow circle on a blue background in “bad faith”.
“Over the last three years, Tesco has been using its Clubcard logo to deceive many customers into believing that Tesco was price matching against Lidl or was able to offer the same great value as us,” said Lidl, commenting on today’s decision.
“We asked Tesco to change their Clubcard logo, but they refused, making it necessary to bring this case.
“Having seen the evidence, the Court has now ruled that Tesco’s Clubcard logo was copied from Lidl’s logo, and it infringes Lidl’s trade mark rights and copyright.
“This infringement allowed Tesco to take unfair advantage of our longstanding reputation for great value, misleading their customers at a time when they should have been supporting them. We are pleased that the Court has agreed with us and that it will now order Tesco to stop using the Clubcard logo.”
