Big takeaways from a LIDL dispute

Overview of the case

In 2024, Lidl secured a win in a high-profile trademark dispute in the United Kingdom. The dispute was launched in 2020, with Lidl claiming that Tesco had infringed its trade mark rights, copyright, and committed passing off under UK law. Namely – Lidl, a supermarket chain originating from Germany, is the proprietor of several trademarks (with and without text) which depict a yellow circle with red edges and a blue background: Tesco is Lidl’s competitor and one of the most popular supermarket chains in the UK. In 2020, Tesco opted to use the following yellow-and-blue sign as an identifier for its Clubcard Prices promotion which is a widely recognized loyalty scheme for Tesco’s customers:

Lidl commenced proceedings against Tesco, arguing that the latter was:

• infringing its trade mark rights by seeking to deliberately take advantage of the reputation of Lidl as a “discounter” supermarket; • infringing its copyright by copying the artworks that comprise the Lidl trade marks; • passing off by misrepresenting that its goods were price matched with Lidl products. Tesco subsequently filed a counterclaim against Lidl, arguing that its trade mark registrations for the Lidl wordless mark should be invalidated. Namely, Tesco claimed that Lidl had filed several applications for the same mark in the hopes of “evergreening” protection (i.e., new applications filed before the older marks become subject to the use requirement and can be cancelled due to non-use). The High Court rendered its decision in 2023 – consisting of a whopping 102 pages! – with Lidl being successful overall as the court satisfied Lidl’s claims outlined above. However, the court also found in favour of Tesco on its counterclaim of bad faith regarding the re-filings of the Lidl wordless trade mark. The Court of Appeal judgement from March this year further solidified the findings of the High Court.

Key takeaways

This case serves as a strong reminder to protect your brand and be mindful of the intellectual property rights of other market players. Considering the key points from the case, here are some valuable reminders for brand owners: 1. Protect your brand identity. While it is common practice to register your core trademark, obtaining additional protection for your visual brand elements can be highly beneficial. You may want to consider which design elements (whether colours, shapes, or others) are vital for shaping your brand identity within the relevant market – a legal advisor can help you narrow down the distinctive elements that can be registered. 2. Steer clear of misusing third party trademarks. Whether in the context of corporate rivalry or not, you should always be mindful of third party intellectual property rights. Considering the increased significance of intellectual property rights for businesses, most trade mark holders are vigilant in enforcing their rights. As can be seen from the case at hand, even the use of a similar sign in trade can prompt the rightsholder to take action. 3. Avoid refiling the same trade mark without due cause. The judgement reinforces the principle brought forward in the groundbreaking Monopoly case from 2021: re-filing trade marks to circumvent the proof of use requirement is deemed to be in bad faith, as it constitutes an abuse of the trademark system. If you plan to re-file existing trade marks in the same territory and for the same goods and/or services, be ready to justify this action. Source: [2023] EWHC 873 (Ch)