Success for Lidl in the battle of the yellow logos

A decision was issued last week in the High Court battle between Tesco and Lidl regarding Tesco's use of their "Clubcard Prices" logo, which features a yellow circle set against a blue background. Lidl had brought a claim for trade mark infringement based on their existing registrations for the Lidl logo both with and without the word Lidl (the "Lidl Mark" and the "Wordless Mark"), which features a yellow circle encased in a red border, set against a blue background, as well as copyright infringement and passing off.

In a lengthy decision running to over 100 pages, the Court held that the use of the "Clubcard Prices" logo would take unfair advantage of the repute of the Lidl Mark and would be detrimental to the distinctive character of this mark. Mrs Justice Joanna Smith held that the use of the Clubcard Prices logo would constitute trade mark and copyright infringement, as well as passing off, of the Lidl earlier rights. As part of her assessment, Justice Smith noted that a survey commissioned by Tesco demonstrated that there was evidence of actual confusion - 8% of the 276 customers who saw Tesco's advert for its Clubcard Prices promotion believed that it was for Lidl.

Furthermore, Justice Smith dismissed Tesco's counterclaim for invalidity of the Wordless Mark, finding that their use of the mark alongside the word Lidl would be sufficient to maintain this registration given how it was currently being used. 

However, Justice Smith agreed that Lidl's refiling for this mark over time did constitute the bad faith practice of "evergreening", defined by the Court in this instance as the "the periodic reregistration of the Wordless Mark which involved applying for goods/services already covered by the prior Wordless Marks (from which it is inferred that Lidl wishes to avoid sanctions for five years’ non-use)", and was therefore persuaded to revoke earlier registrations owned by Lidl for the Wordless Mark on the grounds of bad faith, in particular, their earliest registration for this mark dating from 1995. This was because Lidl had not shown that they intended to use the Wordless Mark in this form in 1995, even if their use of the Lidl Mark was sufficient to be held as use of the Wordless Mark over time. Justice Smith remarked "the Wordless Mark was registered in order to use it as a weapon to secure a wider legal monopoly than it was entitled to, with no genuine intention to use it. This is sufficient to amount to bad faith and renders the 1995 Wordless Mark invalid". Furthermore, subsequent registrations for the Wordless Mark were found to duplicate largely the same specification, and so were invalidated on the grounds of bad faith.

Tesco has indicated their intention to appeal this decision, so this is unlikely to be the end of the matter, but for the time being, provides some interesting insight on the concept of "evergreening" and bad faith.

A copy of the full judgment is available here.