Battle of the supermarkets – Tesco loses legal fight with Lidl

In the war for consumer attention, retailers will stop at nothing to cut through the noise. This week, one retailer won their battle, proving Every Lidl Helps.

The Court of Appeal ruled on Tuesday that Tesco must stop using its distinctive yellow and blue Clubcard logo. Back in 2020, when Tesco first introduced the logo, Lidl launched its legal battle, accusing Tesco of copying its brand and trying to “deliberately ride on the coattails of Lidl’s reputation for great value”. The High Court initially ruled in Lidl’s favour and found that the average consumer, seeing the logo, would believe the prices being advertised had been matched by Tesco with the equivalent Lidl price. Tesco appealed the decision and it was taken to the Court of Appeal.

The Court of Appeal’s ruling this week was noted by legal commentators to be unusual but finely balanced. Lidl is said to be “delighted” by the outcome, after it claims Tesco deliberately “prolonged the dispute” by bringing an appeal and thus “deceiving customers for another year”. The High Court judge Lord Justice Arnold ruled that the blue background with a yellow circle and red outline had become “distinctive of Lidl” and “Tesco could easily have used a different sign to promote Clubcard prices”.

If Tesco decides to lodge a further appeal, the next and final step will be the Supreme Court. However, on the basis that there is no major point of legal principle at stake, Tesco is unlikely to be granted permission by the Supreme Court’s Appeals Committee.

Assuming no appeal is lodged, Tesco will be expected to change its Clubcard logo in the coming weeks; a rebrand that will cost the supermarket almost £8m. In addition to this, Lidl is likely to seek substantial compensation for trademark infringement over a period of four years.

This serves as an important reminder to all businesses on the value of Intellectual Property (IP). It is vital to ensure, when making decisions on branding, that you are careful not to infringe on another’s IP. The consequences can be extremely costly, as Tesco has found out the hard way.

If you have any questions about understanding and protecting your IP, please get in touch.