Tesco may have to stop using a blue and yellow logo to promote its Clubcard loyalty scheme after the High Court ruled that it had infringed the trademark of Lidl, the German discounter.
Judge Joanna Smith said in a written ruling that Britain’s biggest grocer had taken unfair advantage of its rival’s “distinctive reputation” for low prices.
Smith also ruled that Tesco was “deceiving a substantial number of consumers into believing that Tesco’s prices represented the same value as Lidl’s prices, when that was not the case”. She rejected Lidl’s argument that Tesco had “the deliberate subjective intention of riding on Lidl’s coat-tails”.
The judge wrote: “I agree with Lidl that . . . the effect of the use of the [Clubcard logo] was to cause a ‘subtle but insidious’ transfer of image from the [Lidl logo] to the [Clubcard logo] in the minds of some consumers. This will have assisted Tesco to increase the attraction of their prices.”
Smith will now order an injunction against Tesco, requiring it to stop using the Clubcard logo. Tesco said it intended to appeal against the ruling.
Lidl sued Tesco in 2020 shortly after its rival adopted the logo to promote its “Clubcard Prices” discount scheme. The two companies traded allegations at a trial in February, which took place amid a price war between traditional supermarkets and their discount rivals.
Lidl had argued that Tesco had deliberately copied its trademark to deceive customers into thinking its prices were comparable, while Tesco’s lawyers accused Lidl of hypocrisy and said it had copied the branding of well-known products, such as Oreo cookies
Lidl GB said: “Tesco has been using its Clubcard logo to deceive many customers into believing that Tesco was price-matching against Lidl. This infringement allowed Tesco to take unfair advantage of our longstanding reputation for great value.”
Tesco said: “The judge’s ruling concluded that there was no deliberate intent on Tesco’s part to copy Lidl’s trademark.”