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In the recent appeals in the case of (1) Lidl Great Britain Limited and (2) Lidl Stiftung & Co KG v (1) Tesco Stores Limited and (2) Tesco plc [2024] EWCA Civ 262, the Court of Appeal has ruled in relation to Tesco’s appeal against the first instance findings that its Clubcard Prices logo infringed Lidl’s trade marks and copyright and constituted passing off, and Lidl’s appeal against findings of bad faith in respect of its ‘wordless’ trade marks, which were invalidated as a result.
In 2020, Lidl the well-known discount supermarket, brought a claim against Tesco for:
The claim was brought in relation to Tesco’s Clubcard Prices logo (referred to throughout the case as the “CCP Signs”) which Lidl alleged infringed its intellectual property rights in two forms of its Lidl logo (referred to as “The Mark with Text” and “The Wordless Mark”). Comparison images are included below:
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Lidl’s trade marks: The Mark with Text |
The Wordless Mark |
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Tesco’s CCP Signs:
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Tesco counterclaimed that Lidl’s Wordless Mark was invalid due to it having been registered in bad faith (as a consequence of Lidl never actually making use of it as filed) and/or that it lacked distinctiveness. Tesco also put forward arguments that Lidl had sought to evergreen its Wordless Mark because of making repeat filings for the same over many years.
In a first instance decision handed down in April 2023, Judge Joanna Smith held that the Wordless Mark (bar the most recent) was invalid for reasons of bad faith, but that Tesco was, nevertheless, liable for trade mark and copyright infringement, and passing off.
Both Lidl and Tesco appealed aspects of the first instance decision. The appeal hearing took place in February 2024 before Arnold, Birss and Lewison LLJ.
The Court ultimately dismissed each party’s appeals except that Tesco was successful in its appeal in relation to copyright. The Court held that Tesco did not infringe Lidl’s copyright in the work because the scope of protection was narrow and Tesco did not use the same shade of blue or replicate the distance between the circle and square. Tesco had not therefore reproduced a substantial part of the work.
Lord Justice Lewison’s comment in his part of the judgment is perhaps revealing: “I have found the trade mark claim and the passing off claim very difficult, at the outer boundaries of trade mark protection and passing off.”
Their lordships felt bound to accept the first instance judge’s assessment of the evidence that was before her, while at the same time indicating it was a somewhat surprising decision. In the absence of any determination that it was a rationally insupportable assessment the findings had to stand. This was important because many of the issues came down to the evidential question of what the average consumer would perceive by Tesco’s use of the CCP Signs. This was relevant to both the section 10(3) Trade Marks Act claim for trade mark infringement and the passing off claim when it came to the misrepresentation that was said to be made by the CCP Signs (namely that Tesco had price-matched with Lidl).
The section 10(3) Trade Marks Act claim was a claim that the use of the CCP Signs gave rise to a link with Lidl’s trade marks in the mind of the average consumer such that it caused detriment to the mark or took unfair advantage of the trade mark (without due cause). This was not a claim to ‘classical’ infringement on the basis of the use of an identical mark with identical goods, or use such as to give rise to a likelihood of confusion on the part of the consumer.
Seemingly, most key was that Lidl had two witnesses from the public who attended trial and gave evidence that they thought the use of the Signs meant that Tesco had price-matched the Lidl prices and/or were intending to convey some value quality linked to Lidl. The judge was entitled to give that evidence the weight that she had in reaching her conclusion that the CCP Signs conveyed that message even if not directly intended by Tesco.
Their lordships indicated that there might continue to be an open issue relating to the question of whether the establishment of due cause was a step that should come after establishing unfair advantage or detriment or whether it was actually a part of the step in determining whether or not there was unfair advantage. However, that issue was not determinative of the appeal and remains to be dealt with in a future case.
While Tesco managed to succeed in overturning the decision relating to copyright infringement (and arguments about a separate injunction relating to this issue which was put in place became moot), this is likely to be of limited practical importance to Tesco which now faces the usual injunction which follows a finding of trade mark infringement and passing off. It remains to be seen if Tesco and/or Lidl will seek to appeal to the Supreme Court, but – given the careful approach of the Court of Appeal judges to their task of review as opposed to re-hearing – it would be surprising if there is much scope for a further appeal.
If you have any queries regarding this topic, or would like assistance creating or implementing an IP strategy, please contact Daniel Byrne and Fergus Brown of our team.
Category: News | Author: Fergus Brown, Daniel Byrne | Published: | Read more
