Lidl Great Britain Ltd v Tesco Stores Ltd
| Jurisdiction | England & Wales |
| Judge | Lord Justice Arnold,Lord Justice Birss,Lord Justice Lewison |
| Judgment Date | 19 March 2024 |
| Neutral Citation | [2024] EWCA Civ 262 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case Nos: CA-2023-001115/001117/001290 |
[2024] EWCA Civ 262
Lord Justice Lewison
Lord Justice Arnold
and
Lord Justice Birss
Case Nos: CA-2023-001115/001117/001290
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE, BUSINESS AND PROPERTY
COURTS OF ENGLAND AND WALES, INTELLECTUAL PROPERTY LIST (ChD)
Mrs Justice Joanna Smith
[2023] EWHC 783 (Ch) and [2023] EWHC 1517 (Ch)
Royal Courts of Justice
Strand, London, WC2A 2LL
Benet Brandreth KC, Tristan Sherliker and Edward Cronan (instructed by Bird & Bird LLP) for the Claimants
Iain Purvis KC, Hugo Cuddigan KC and Daniel Selmi (instructed by Haseltine Lake Kempner LLP) for the Defendants
Hearing dates: 19–21 February 2024
Approved Judgment
This judgment was handed down remotely at 10.30am on 19 March 2024 by circulation to the parties or their representatives by e-mail and by release to the National Archives.
Introduction
This is a dispute about supermarket logos. The Claimants (“Lidl”) are a German supermarket operator and its United Kingdom subsidiary. Lidl's business model involves an emphasis on own-brand products and a carefully curated selection of goods, which enable them to achieve low prices. For this reason Lidl are often referred to as a “discount” (or “discounter”) supermarket. Having entered the UK market in 1994, Lidl have established a significant presence in the supermarket sector with a market share of 7.2% in 2022. Lidl's nearest competitor is Aldi, another “discount” supermarket of German origin, but Lidl also compete with (among others) the Defendants (“Tesco”). Tesco are the largest supermarket chain in the UK with a market share of 26% in 2022. Since 1995 Tesco have operated a well-regarded customer loyalty scheme under the name Tesco Clubcard to reward customers who sign up for the scheme and obtain a card. By 2021 there were around 16 million Clubcard members in the UK.
Since about 1987 Lidl have used a logo consisting of the word LIDL within a yellow circle edged in red on a square blue background. Lidl own a number of trade mark registrations for both the logo including the word LIDL (“the Mark with Text”) and the logo without that word (“the Wordless Mark”) (collectively, “the Trade Marks”). (Strictly speaking, the earliest registration of the Wordless Mark depicts the logo by means of black-and-white heraldic shading and a statement of the colours claimed; but it is common ground that it may be treated as if it were a registration of the coloured logo.) Lidl have never used the Wordless Mark in the form in which it is registered, but contend that use of the Mark with Text constitutes use of the Wordless Mark. The Trade Marks and an example of how they are used by Lidl are shown below.
The causus belli in these proceedings is Tesco's use in their marketing since September 2020 of signs comprising a yellow circle on a square (or sometimes rectangular) blue background (“the CCP Signs”) as part of a promotion called Clubcard Prices, in which Tesco Clubcard holders are charged lower prices than shoppers who are not Clubcard holders. The particular shade of blue which features in the CCP Signs has formed part of Tesco's corporate livery for some time. The CCP Signs also incorporate text: either the words “Clubcard Prices” or the words “Clubcard Price” together with a price. Examples are shown below.
The CCP Signs have been used extensively at Tesco stores, where they have been used on banners of various sizes both inside and outside the stores and on shelf edge labels. The CCP Signs have also been used in print media, on Tesco's website, on social media channels and at so-called out-of-home (“OOH”) locations such as bus stops and in a television advertisement. In some instances the CCP Signs have been used in a cropped form in which the yellow circle is not fully surrounded by the blue background.
Lidl claim that Tesco have thereby infringed the Trade Marks, committed passing off and infringed Lidl's copyright in the Mark with Text as an artistic work. As well as denying these claims, Tesco counterclaimed for a declaration that the Wordless Mark was invalidly registered, alternatively for an order for revocation on the ground of non-use.
Joanna Smith J held for the reasons given in her judgment dated 19 April 2023 [2023] EWHC 873 (Ch) (“the main judgment”) that Lidl succeeded in their claims, although she upheld Tesco's counterclaim that the registrations of the Wordless Mark were invalid on the ground that the registrations had been applied for in bad faith. The judge also held in a further judgment dated 22 May 2023 [2023] EWHC 1517 (Ch) (“the supplemental judgment”) that Lidl should be granted an injunction to restrain copyright infringement even if Lidl were ultimately to fail in their trade mark and passing off claims. Tesco appeal with permission granted by Lewison LJ against the findings of trade mark infringement, passing off and copyright infringement and against the grant of the copyright injunction on that hypothesis. Lidl appeal with permission granted by Lewison LJ against the finding that the registrations of the Wordless Mark are invalid.
The Trade Marks
Lidl rely upon the following registration of the Mark with Text: UK registration number 2570518 registered in respect of services in Class 35 with a filing date of 28 January 2011.
Lidl rely upon the following registrations of the Wordless Mark, the first three of which (collectively “the 1995 Registration”) were divided out from a single application with a filing date of 4 April 1995:
i) UK registration number 2016658A registered in respect of goods and services in Classes 1, 3, 8, 11, 18, 21, 28, 31, 32, 33, 35, 36, 41 and 42;
ii) UK registration number 2016658C registered in respect of goods in Class 16;
iii) UK registration number 2016658D registered in respect of goods in Classes 5, 29 and 30;
iv) EU registration number 4746343 registered in respect of services in Classes 35, 36, 39, 40 and 41 with a filing date of 17 November 2005 (in respect of the period up to 31 December 2020) and UK registration number 904746343 derived from that EU registration (in respect of the period after 31 December 2020) (“the 2005 Registration”).
Additional registrations
Tesco counterclaimed for a declaration of invalidity of the four UK registrations listed in paragraph 8 above and of two additional UK registrations of the Wordless Mark derived from EU registrations owned by Lidl:
i) UK registration number 902936185 registered in respect of goods and services in Classes 1, 3, 5, 8, 11, 16, 18, 21, 28, 29, 30, 31, 32, 33, 35, 36, 39, 41 and 42 with a filing date of 15 November 2002 (“the 2002 Registration”);
ii) UK registration number 9064605761 registered in respect of goods and services in Classes 1 to 16, 18 and 20 to 42 with a filing date of 13 November 2007 (“the 2007 Registration”).
In addition, Tesco rely upon the existence of a further application filed by Lidl on 22 February 2021 for registration of the Wordless Mark in respect of goods and services in Classes 1 to 44, UK application number 3599128 (“the 2021 Application”). This application is currently stayed.
Although neither party pleaded it, Lidl own an additional registration of the Mark with Text, namely UK registration number 1410087 registered in respect of goods in Class 32 with a filing date of 28 December 1989.
The relevant law: trade mark infringement
Lidl's claim is brought under section 10(3) of the Trade Marks Act 1994 (extended protection for trade marks with a reputation), not section 10(2) (likelihood of confusion as to trade origin). While the UK was a Member State of the European Union, section 10(3) implemented successively Article 5(2) of First Council Directive 89/104/EEC of 21 December 1988 to approximate the laws of the Member States relating to trade marks, Article 5(2) of European Parliament and Council Directive 2008/95/EC of 22 October 2008 to approximate the laws of the Member States relating to trade marks (codified version) and Article 10(2)(c) of European Parliament and Council Directive 2015/2436/EU of 16 December 2015 to approximate the laws of the Member States relating to trade marks (recast). The case law of the Court of Justice of the European Union prior to 31 December 2020 interpreting these provisions, the corresponding relative ground of objection to registration in the Directives and the corresponding provisions in successive Regulations concerning what are now EU trade marks constitutes assimilated law (formerly known as “retained EU law”).
In order for such a claim to succeed, the following requirements must be satisfied: (i) the registered trade mark must have a reputation in the relevant territory; (ii) there must be use of a sign by a third party in the relevant territory; (iii) the use must be in the course of trade; (iv) it must be without the consent of the proprietor; (v) it must be of a sign which is identical with or similar to the trade mark; (vi) it must be in relation to goods or services; (vii) it must give rise to a link between the sign and the trade mark in the mind of the average consumer; (viii) it must give rise to one of three types of injury, that is to say, (a) detriment to the distinctive character of the trade mark, (b) detriment to the repute of the trade mark, or (c) unfair advantage being taken of the distinctive character or repute of the trade mark; and (ix) it must be without due cause. In the present case the types of injury relied upon by Lidl are detriment to the distinctive character of the Trade Marks and unfair advantage being taken of the reputation of the Trade Marks.
There was no dispute before the judge as to the applicable legal principles, which she summarised...
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