Skip to content 
A case between supermarket giants Lidl and Tesco reached a definitive conclusion in the Supreme Court last week. The dispute concerned Tesco’s alleged infringement of Lidl’s blue square background and yellow disk. Tesco misused the colour and shape combination, misleading consumers to believe its Clubcard prices were price-matched with Lidl.
The Infringement
Lidl is known as being a “discount” supermarket store. Hence, it has a significant presence in the market for offering competitive prices. The registered trademark in question is Lidl’s blue square background with a yellow circle and a red border, used since 1987. This was termed its “Stage-3 work”. Lidl owns trademark registrations for both this shape as a logo including its name “Lidl”, and the shape alone named the “wordless shape”.
In 2020, Tesco adopted the same colour scheme and shape to advertise its Clubcard prices. Lidl contended these deceived consumers into falsely believing the Clubcard prices were price-matched with Lidl. Accordingly, Lidl brought a claim against Tesco on the ground it unfairly took advantage of the Lidl brand. However, Tesco counter-claimed the Lidl wrongly sought to register its “wordless shape” to create a legal monopoly, despite having no intention to actually use it.
Previous Course of Action
The decision at the Court of First Instance allowed the claim that Tesco infringed Lidl’s trademarks. However, Joanna Smith J upheld Tesco’s counterclaim that the “wordless shape” registration was invalid due to its intention to be used in bad faith. Nevertheless, an injunction was granted to Lidl to restrain copyright infringement.
Tesco appealed the first judgment, asserting the average consumer would not believe the Clubcard prices were “price-matched” with Lidl due to insufficient evidence. Hence, the judge’s reasoning erred in reaching a conclusion based upon her own common sense. Additionally, Tesco argued the “Stage-3 work” was not original.
The Court’s Decision
The Supreme Court allowed Tesco’s appeal in part. It also dismissed Lidl’s claim that the judge erred in placing the burden on Lidl to prove its good faith when applying for a registration on behalf of the “wordless mark”.
Firstly, the Supreme Court recognised it may only intervene if the original court’s findings were irrationally insupportable. Secondly, the first judgment pertaining to whether a consumer would view Tesco’s Clubcard prices as a price-match to Lidl was groundless. Thirdly, the court held though Tesco used the same shapes and colours as Lidl’s “stage-3 work”, Lidl’s scope of protection was too narrow to hold Tesco infringed its copyright.
Conclusion
This case sets clear boundaries for companies when registering trademarks. The court emphasises the role of bad faith in reaching conclusions within intellectual property disputes.
By Ava Edwards, a student at Southampton University.
