Tesco may have to stop using its Clubcard logo in its current form after discounter Lidl won a trademark lawsuit against the UK grocer over the use of a yellow circle on a blue square.
London’s High Court has ruled in Lidl’s favour and is expected to issue an injunction ordering the UK’s largest supermarket to cease using its Clubcard logo, Lidl said in a statement.
Lidl had sued Tesco for infringement, passing off and copyright, claiming that the group had used a blue square with a centred yellow circle to promote its Clubcard scheme, which was too similar to its own Lidl logo. Tesco had disputed the claim and brought a counterclaim against Lidl seeking to cancel some of the trademarks and saying some of Lidl’s trademarks were invalid.
The civil trial has highlighted the fierce battle for market share among supermarkets as consumers struggle with the cost of living crisis. Discounters Aldi and Lidl together have 17 per cent of the UK grocery market, although Tesco still dominates, with a 27 per cent slice. In 2015, Lidl had 3.5 per cent of the UK market and 600 stores, but by 2022 it had 7.2 per cent with 920 stores, the trial heard.
The German discounter said: “We asked Tesco to change their Clubcard logo, but they refused, making it necessary to bring this case.
“We are pleased that the court has agreed with us and that it will now order Tesco to stop using the Clubcard logo.”
Tesco said the retailer was “surprised and disappointed” by the decision and it intended to appeal.
“This claim brought by Lidl was just about the colour and shape of the Clubcard Prices logo,” they added. “The judge’s ruling concluded that there was no deliberate intent on Tesco’s part to copy Lidl’s trademark. It has no impact on our Clubcard Prices scheme, which we will continue to run in exactly the same way.”
In her ruling handed down on Wednesday, Justice Joanna Smith ruled in favour of Lidl on its claims of trademark infringement in respect of the yellow and blue sign and also ruled in favour of Lidl in copyright infringement and passing off.
However, she ruled in favour of Tesco for its counterclaim of bad faith in respect of the logo, rejecting Lidl’s argument that Tesco had done so deliberately.
In her ruling the judge found that this was “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 . . . to stop the switching away of financially squeezed customers”.
“Put another way, the fact that there was no deliberate intention positively to evoke Lidl does not mean that the design was not copied with the focus being on the message that a blue and yellow background would convey for the Clubcard campaign,” she concluded.
In the trial, Lidl had accused Tesco of seeking deliberately to ride on the coat-tails of its reputation as a “discounter”. It also alleged that the Clubcard Prices promotion was adopted by Tesco as part of a campaign to help it compete with discounter supermarkets such as Lidl.
Tesco had vigorously defended the case at trial and claimed there was “no significant similarity” between its Clubcard Prices sign and Lidl’s logo.