The Lidl-Tesco Logo Clash

The Lidl logo lawsuit against Tesco last year was the subject of a Court of Appeal decision last month.

Lidl had registered a ‘wordless mark’ as well as the mark with its name Lidl written inside the circle as shown below.

It had consistently been using its trademarked circle with its name or other writing inside the circle and was widely recognised by its identifying sign.

In my LinkedIn piece last year, I expressed surprise that Tesco felt the need to move away from its own blue tile background (shown below).

Why didn’t Tesco just double down on using its own tile logo to consistently educate consumers about its value offerings, instead of making this change?  

The presence of text in Tesco's yellow circle didn’t change the fact that the yellow circle sitting in the middle of the blue square created a strong impression of similarity to Lidl’s logo. 

Lidl claimed that this design was similar to its Wordless Mark and Mark with Text, and that Tesco’s use of identical parts amounted to trademark infringement, passing off, and copyright infringement too. 

The fact that Tesco decided to use a similar sign to Lidl’s did shortcut the process. As such it was riding on Lidl’s coat tails to benefit from Aldi’s reputation as a “discounter” known for value. 

This case was far from straightforward for Lidl. Unlike most trade mark cases, which normally turn on whether there is a likelihood of confusion between the claimant’s mark and the defendant’s sign, Lidl wasn’t suggesting that consumers were confused as between Tesco and Lidl.

Lidl’s case was brought on the basis that the Tesco’ CCP Sign conveyed a false price matching message to consumers and/or caused some other change in economic behaviour.

Lidl was ultimately successful in satisfying the demanding hurdles of Section 10(3) of the Trade Marks Act 1994 thanks to the comprehensive evidence it showed the trial judge to demonstrate the real life effects of Tesco’s use of the CCP Signs. In the unique environment of supermarkets battling to win and retain customers they had a significant impact.

So the finding of trademark infringement and passing off by Tesco weren’t changed. The Court of Appeal dismissed Tesco’s appeal, finding that Tesco did infringe Lidl’s Prices promotion trademark, and was passing off. The Tesco signs were found to have conveyed the message to consumers that it was price-matching Lidl. 

However, the Court of Appeal disagreed with the lower court over whether Tesco was infringing Aldi’s copyright. 

Essentially, the court thought that although the Mark with Text was original, the degree of creativity was low. But it was not purely mechanical nor was it dictated solely by technical considerations. As such it was protected by copyright, albeit the scope of the copyright protection conferred was narrow.    

Tesco had not copied at least two of the elements which made the Mark with Text original, namely the shade of blue and the distance between the circle and the square. All Tesco had copied was the visual concept. The Court therefore found that Tesco had not infringed copyright.

The fact that Tesco’s logo was found not to infringe copyright was a huge win for Tesco. It means the company doesn’t have to remove every instance of its logo. Provided its use of the logo isn’t causing trademark confusion then it can remain in use. In practice the lack of copyright infringement means Tesco will save a lot of time and money.

The dispute demonstrates the importance of trademarks in managing competition. Among other things, trademark rights enables a business to take action against competitors that copy its name or distinctive brand assets.

The case also demonstrates the different protections afforded by trademarks and copyright.


Best Regards,