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Lidl and Tesco will face each other in £2.35m lawsuit over alleged trademark infringement

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Rival supermarket giants Lidl and Tesco are set to spend £2.35 million to fight each other in court over claims that Tesco defrauded Lidl’s logo to promote their Clubcard.

Lidl alleges that Tesco misuses the background of their trademark logo – a blue square with a yellow circle with a thin red border – to promote Clubcard discounts.

The German supermarket says the yellow circle with a red border on the blue background is a ‘wordless’ trademark, even without the Lidl name on it, and is trying to ban Tesco from using a similar background on their ‘Clubcard prices’ signs in their stores.

It says Tesco is ‘deliberately trying to capitalize on Lidl’s reputation as a ‘discounter’ by using the background of the Lidl logo to promote the Clubcard’s price reductions.

As part of the evidence supporting their claim, Lidl presented the results of a survey to London’s High Court in which interviewees were shown the controversial background without the Lidl name and asked what it was, with “countless answers” providing a connection with Lidl.

Lidl and Tesco to spend £2.35m to fight each other in court over claims Tesco ripped off Lidl’s logo – a yellow circle on a blue box with a thin red outline

Tesco's Clubcard logo features a yellow circle on a blue square, as well as a shape thinly outlined in red - which Lidl claims is a 'wordless trademark' associated with their brand

Tesco’s Clubcard logo features a yellow circle on a blue square, as well as a shape thinly outlined in red – which Lidl claims is a ‘wordless trademark’ associated with their brand

Lidl accuses Tesco (shop pictured) of 'riding along' of their reputation as value-for-money discounter supermarket

Lidl accuses Tesco (shop pictured) of ‘riding along’ of their reputation as value-for-money discounter supermarket

At a hearing between the two supermarket giants, Ms Judge Joanna Smith ruled Tesco’s request to dismiss the investigative evidence at trial.

The judge outlined the form of the case: ‘Basically, Lidl argues that Tesco’s use of a new sign in their ‘Clubcard prices’ marketing is an infringement.

‘When submitting the claim, Lidl invokes its trademark rights to two versions of the Lidl logo: a logo with the word ‘Lidl’ and a logo without that word, ‘the wordless brand’.

‘The Wordless Mark is a graphics device consisting of a blue square background with a yellow disc on top, bordered by a thin red line.’

She said Lidl’s lawyers say the background to the supermarket logo is “capable of and perceived by the public in the UK as distinctive of the Lidl group of companies.”

Essentially, Lidl says Tesco is deliberately trying to capitalize on Lidl’s reputation as a ‘discounter’ supermarket known for delivering value.

‘It argues that Tesco’s use of the sign in connection with Tesco’s discounted prices is intended to remind the public of Lidl’s business and the brands, and that it does, including to suggest that the prices of goods offered by Tesco for sale under or in connection with the sign are offered at the same prices, or lower prices, than could be obtained for the same or equivalent goods in Lidl stores,” the judge explained.

She explained Tesco’s defense and continued: ‘Lidl’s use of the wordless mark is disputed.

“Specifically focused on the wordless brand, it advocates… The wordless brand is a figment of Lidl’s legal imagination and a product of its trademark filing strategy.

“It doesn’t exist in the real world…Lidl never used the wordless mark and never intended to use it.”

Tesco’s lawyers tried to argue that the investigation results should not be included in the evidence during the upcoming trial, saying, among other things, that the way the questions were asked was guiding.

During the study, participants were shown the wordless logo and were asked ‘What do you think this image is?’ and ‘Now imagine if this image was used as a company’s brand…Which company would you expect it to be?’

The judge, who allowed the investigative evidence to be included during the trial, said: “If we look in detail at the answers to the investigation… you will see numerous comments that read “Lidl” or “Lidl logo” or “Lidl- sign” or even “It looks like Lidl’s background”, or “Part of the Lidl logo without the words” or “Brand image for Lidl supermarket”.

Tesco's estimated cost to the lawsuit is £1,185,976, while Lidl's is £1,170,244 - 'a reflection of how important this trademark dispute is to both sides,' said Ms Justice Joanna Smith

Tesco’s estimated cost to the lawsuit is £1,185,976, while Lidl’s is £1,170,244 – ‘a reflection of how important this trademark dispute is to both sides,’ said Ms Justice Joanna Smith

‘This seems to me to be proof of recognition by the participants that the Wordless Mark is a logo or trademark.’

The judge went on to say that Tesco’s estimated cost to the trial, even without addressing the matter of the disputed inquiry, is £1,185,976, while Lidl’s fee is £1,170,244.

“The combined multi-million-pound legal costs appear to be a reflection of how important this trademark dispute is to both parties,” she noted.

The judge also dismissed Tesco’s counterclaim, which claimed that some of the Lidl brands in question should be invalidated on the basis of bad faith.

The case will go to court at a later date.

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