Lidl Great Britain Ltd v Tesco Stores Ltd
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Joanna Smith |
| Judgment Date | 13 June 2022 |
| Neutral Citation | [2022] EWHC 1434 (Ch) |
| Docket Number | Case Nos: IL-2020-000127/IL-2021-000041 |
| Court | Chancery Division |
[2022] EWHC 1434 (Ch)
Mrs Justice Joanna Smith DBE
Case Nos: IL-2020-000127/IL-2021-000041
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INTELLECTUAL PROPERTY LIST
Rolls Building
Fetter Lane
London, EC4A 1NL
Benet Brandreth QC and Tristan Sherliker (instructed by Bird & Bird LLP) for the Claimants
Simon Malynicz QC and Daniel Selmi (instructed by Haseltine Lake Kempner LLP) for the Defendants
Hearing dates: 5 and 6 April 2022
Approved Judgment
This judgment was handed down remotely by circulation to the parties' representatives by email and release to The National Archives. The date and time for hand-down is deemed to be 10.30 am on Monday 13 June 2022.
The claim in these proceedings between two well-known supermarket chains (to whom I shall refer as “ Lidl” and “ Tesco”) involves allegations by Lidl of infringement of registered trade mark rights in Lidl's logo devices, passing off and infringement of copyright. Tesco counterclaims alleging, amongst other things, that some of the trade marks in issue should be declared invalid on grounds of bad faith. Lidl applies to strike out that counterclaim, alternatively for summary judgment (“ the Strike Out Application”). At the same time, Lidl seeks permission from the court to rely at trial upon survey evidence said to go to the issue of distinctiveness of certain of the trade marks (“ the Survey Evidence Application”). Both applications are hotly contested by Tesco, which has itself applied for permission to rely upon expert evidence in dealing with the Survey Evidence Application.
I deal with the Strike Out Application at paragraphs 35–107 and the Survey Evidence Application at paragraphs 108–205 of this Judgment.
The Trade Marks in Issue
In bringing the claim, Lidl relies upon its trade mark rights in two versions of the Lidl logo: a logo which includes the word “Lidl” (“ the Mark with Text”) and a logo without that word (“ the Wordless Mark”). The Wordless Mark is a graphical device consisting of a blue square background bearing a yellow disk, bordered in a thin red line. These marks are reproduced below:
Lidl is the registered proprietor of the Wordless Mark pursuant to the following UK registrations: UK2016658A, UK2016658C and UK2016658D all filed on 4 April 1995. For the purposes of its claim, Lidl also asserts that it is the registered proprietor of the Wordless Mark pursuant to EU trade mark EU004746343, filed on 17 November 2005 (“ the EUTM”), and pursuant to a UK trade mark right no. UK00904746343 created as a result of the UK's withdrawal from the European Union and derived from the EUTM. By its defence, Tesco identifies two additional UK trade mark registrations made by Lidl for the Wordless Mark (UK00902936185 filed on 15 November 2002 and 00906560571 filed on 13 November 2007) which it refers to as “ the Additional Wordless Marks”. Tesco also identifies a further application made for the Wordless Mark in 2021 (UK00003599128).
Lidl is the registered proprietor of the Mark with Text pursuant to UK registration UK2570518, filed on 28 January 2011. It is asserted in Tesco's Defence and was common ground at the hearing that use of the Mark with Text as a logo dates back to around 1987 (although neither party appears to have pleaded or relied upon any registered trade mark in respect of the Mark with Text prior to UK2570518 filed in January 2011 1).
In short, Lidl contends that Tesco's use of a new sign in their “Clubcard Prices” marketing (as shown below in the form used in the Particulars of Claim), which is used by Tesco with text overlaid (“ the Sign”), is an infringement of these marks:
Before I go on to look in more detail at the nature of the allegations, Tesco's response and the grounds for the Strike Out Application, I should first set the claim in its proper statutory context.
The Relevant Statutory Framework
Pursuant to section 9(1) of the Trade Marks Act 1994 (“ the TMA 1994”), the proprietor of a registered trade mark has exclusive rights in the trade mark which are infringed by use of the trade mark in the United Kingdom without his consent. The acts amounting to infringement are specified in section 10.
Section 10(3) provides that:
“A person infringes a registered trade mark if he uses in the course of trade, in relation to goods and services, a sign which
(a) is identical with or similar to the trade mark,
where the trade mark has a reputation in the United Kingdom and the use of the sign, being without due cause, takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark”.
Section 10(4) identifies the circumstances in which a person uses a sign for the purposes of the section, including by offering or exposing goods for sale under the sign and using the sign on business papers and in advertising.
Section 46 TMA 1994 is concerned with revocation of registration of a trade mark. Insofar as relevant, section 46 provides that:
“(1) The registration of a trade mark may be revoked on any of the following grounds
(a) that within the period of five years following the date of completion of the registration procedure it has not been put to genuine use in the United Kingdom, by the proprietor or with his consent, in relation to the goods or services for which it is registered, and there are no proper reasons for non-use;
(b) that such use has been suspended for an uninterrupted period of five years, and there are no proper reasons for non-use;
…
(2) For the purposes of subsection (1) use of a trade mark includes use in a form (“the variant form”) differing in elements which do not alter the distinctive character of the mark in the form in which it was registered (regardless of whether or not the trade mark in the variant form is also registered in the name of the proprietor)…”
Pausing there, trade mark owners therefore have a period of grace after registration in which to make use of the mark before it becomes vulnerable to attack for non-use.
Section 47 TMA 1994, is concerned with grounds for invalidity of registration and insofar as is relevant provides that:
“(1) The registration of a trade mark may be declared invalid on the ground that the trade mark was registered in breach of section 3 or any of the provisions referred to in that section…
…
(5) Where the grounds of invalidity exist in respect of only some of the goods or services for which the trade mark is registered, the trade mark shall be declared invalid as regards those goods and services only.
(6) Where the registration of a trade mark is declared invalid to any extent, the registration shall to that extent be deemed never to have been made…”
Section 3 TMA 1994 contains the grounds for refusal of registration. Section 3(6) provides that “A trade mark shall not be registered if or to the extent that the application is made in bad faith”.
Thus having regard to both sections 47 and 3 of the TMA 1994, a trade mark may be declared invalid to the extent that it was applied for in bad faith. There is a significant public interest objective in this provision “which is that of preventing trade mark registrations that are abusive or contrary to honest commercial and business practices” (see Hasbro Inc v EUIPO (T-663/19) [2021] ETMR 39 (“ Hasbro”) per the General Court of the CJEU at [37])
Section 32 of the TMA 1994 is concerned with the procedure for, and contents of, applications for national trade marks. Section 32(2)(c) requires that the application contain a statement (or specification) of the goods or services in relation to which it is sought to register the mark. Section 32(3) provides that:
“(3) The application shall state that the trade mark is being used, by the applicant or with his consent, in relation to those goods or services, or that he has a bona fide intention that it be so used”.
It is common ground that the applications for registration in respect of the Wordless Mark and the Additional Wordless Marks will have included a statement to this effect.
The Claim
It is common ground that Lidl has made substantial use of the Mark with Text in the United Kingdom and has acquired a substantial reputation in connection with the goods and services for which it is registered. For reasons which will become clear, it is not necessary for me to examine the claim any further insofar as it relates to infringement of the Mark with Text; suffice to say that the allegations to which I shall refer in the context of the Wordless Mark are also made in relation to infringement of the Mark with Text.
Lidl's use of the Wordless Mark is disputed.
In its Particulars of Claim, Lidl relies upon its various uses of the Mark with Text “as uses of the Wordless Mark in a form that does not alter their distinctive character”. Lidl does not assert that the Wordless Mark has been used on its own in the United Kingdom but says that, because it has been used in conjunction with the Mark with Text, it is recognised in the United Kingdom as being distinctive of Lidl's business in respect of those goods and services for which it is registered and that it “is capable of being, and is, perceived by the public in the United Kingdom as being distinctive of the Lidl group of companies”.
Lidl pleads that as a consequence of its use, the Wordless Mark is a trade mark having a reputation in the United Kingdom within the meaning of section 10(3) TMA 1994. Lidl asserts that Tesco has used the Sign within the meaning of section 10(4) TMA 1994 without due cause and that it is taking unfair advantage of the reputation of the Wordless Mark (so-called “free-riding”),...
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