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Tesco have lost their legal battle with Lidl after the Court of Appeal held that the Tesco Clubcard logo constituted trade mark infringement. Consequently, Tesco will drop the blue and yellow Clubcard logo, a rebrand that could cost the company about £8 million.
Background
Tesco had appealed against the High Court’s verdict last year that it had infringed Lidl’s trade mark and was liable of “passing off” by misleading consumers into believing that products under the Clubcard prices were supplied at the same or cheaper prices than those in Lidl.
The dispute arose after Tesco began using a yellow circular design with a blue background to promote offers which were only accessible to Tesco Clubcard members. Lidl’s main logo is based on the same design, with the addition of a red outline around the circle and the brand name.
In the decision this week, the judges held that Tesco’s appeal against trade mark infringement and passing off should be dismissed, however the judges agreed with the High Court that there had been no copyright infringement.
Tesco do have the right to take the case before the Supreme Court, but it is understood that company has accepted the Court of Appeals’ decision and will replace the Clubcard logo in the near future. During legal proceedings, Tesco estimated that the cost of rebranding might be as high as £7.8 million.
Tesco’s perspective
A representative for Tesco issued the following statement: “We are disappointed with the judgement relating to the colour and shape of the Clubcard Prices logo but would like to reassure customers that it will in no way impact our Clubcard Prices programme.”
Lidl’s perspective
A spokeswoman for Lidl stated, “Last year, the High Court ruled that Tesco’s Clubcard logo was copied from ours and infringed our trademark rights, allowing them to unfairly benefit from our longstanding reputation for value while misleading its customers.”
Conclusion
In summary, Tesco will face a monumental challenge with their Clubcard rebranding. In addition to the rebranding costs, Lidl will be able to pursue compensation for trademark infringement, which will potentially cost the UK’s largest supermarket millions of pounds more.
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