Lidl Great Britain Ltd v Tesco Stores Ltd
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Joanna Smith |
| Judgment Date | 19 April 2020 |
| Neutral Citation | [2023] EWHC 873 (Ch) |
| Docket Number | Case No: Claim No. IL-2020-000127 |
| Court | Chancery Division |
[2023] EWHC 873 (Ch)
Mrs Justice Joanna Smith DBE
Case No: Claim No. IL-2020-000127
Claim No. IL-2021-000041
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INTELLECTUAL PROPERTY LIST (CHD)
Rolls Building
Fetter Lane
London, EC4A 1NL
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INTELLECTUAL PROPERTY LIST (CHD)
Mr Benet Brandreth KC and Mr Tristan Sherliker (instructed by Bird & Bird LLP) for the Claimants/Defendants
Mr Hugo Cuddigan KC and Mr Daniel Selmi (instructed by Haseltine Lake Kempner) for the Defendants/Claimants
Hearing dates: 7, 8, 9 and 14 February 2023
APPROVED JUDGMENT
This judgment was handed down remotely at 10.30am on Wednesday 19 April 2023 by circulation to the parties or their representatives by email and release to the National Archives.
Introduction
The two consolidated claims in these proceedings between two well-known supermarket chains (to whom I shall refer as “ Lidl” and “ Tesco” 1) involves allegations by Lidl of infringement of registered trade mark rights in Lidl's logo devices, passing off and infringement of copyright. Tesco pursue a counterclaim alleging that some of the Lidl trade marks are liable to be declared invalid on the grounds that they were registered in bad faith, and/or that they should be revoked for non-use and/or that they have no distinctive character.
In bringing the claim, Lidl relies upon its trade mark rights in relation to 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”). Together, I shall refer to these as “ the Lidl Marks” or “ the Lidl Logo”. The Wordless Mark is a graphical device consisting of a blue square background bearing a yellow circle, bordered with a thin red line. The Lidl Marks are reproduced below:
Lidl is a German supermarket business established in 1973 which opened its first store in the UK in 1994. It has always operated in the UK under the Mark with Text.
Lidl is the registered proprietor of UK registration 2570518, filed on 28 January 2011, in respect of the Mark with Text. Lidl is also the registered proprietor of four UK registrations: UK2016658A, UK2016658C and UK2016658D all filed on 4 April 1995 (“ the 1995 Registrations”) and UK 904746343 (originally filed as an EU trade mark on 17 November 2005 and created as a result of the UK's withdrawal from the European Union) (“ the 2005 Registration”) in respect of the Wordless Mark. By its defence, Tesco identifies two additional UK trade mark registrations made by Lidl for the Wordless Mark (UK00902936185 filed on 15 November 2002 (“ the 2002 Registration” and 00906560571 filed on 13 November 2007 “ the 2007 Registration”) which it refers to as “ the Additional Wordless Marks”. Tesco also identifies a further application made for registration of the Wordless Mark in 2021 (UK00003599128) (“ the 2021 Application”).
The Mark With Text appears throughout Lidl's stores, on their advertising and on their products.
Lidl contends that the graphical device forming the Wordless Mark (which it accepts has never been used in the United Kingdom other than as a background to the Mark With Text) is distinctive of its service and goods quite apart from the name “Lidl” and that it has generated a huge reputation and goodwill in both the Mark With Text and the Wordless Mark. Central to this case is Lidl's contention that such reputation and goodwill is specifically that Lidl are a “discounter” supermarket that offers value; specifically quality goods at low prices – a reputation that it says has been encapsulated since 2017 in its marketing slogan “Big on quality, Lidl on prices”.
Lidl's complaint concerns what Lidl describes as the use by Tesco of an identifier for its Clubcard Prices promotion. In the Amended Particulars of Claim (“ the PoC”) this is identified as “ the Sign” and consists of a graphical device formed of a blue square background and a yellow circle (as shown below in the form used in the PoC):
Tesco Clubcard is a scheme that launched in 1995 and was created as a loyalty scheme to reward customers for shopping at Tesco. It is widely acknowledged to have set the gold standard for customer loyalty schemes globally. The Clubcard Prices promotion, about which Lidl complains, is a discrete advertising strategy which launched in September 2020. It was designed to promote the Tesco Clubcard in a new way, by providing discounts to clubcard holders at the point of sale on selected goods. It is Tesco's case that pursuant to the Clubcard Prices initiative, it uses the Sign in various guises, always with text overlaid and always as a signifier of its Clubcard Prices promotion.
Sometimes the Sign appears together with a price figure, where the price will itself depend upon the corresponding product (in which case the accompanying text says “Clubcard Price”). Alternatively, the Sign is used more generally to indicate the promotion, in which case the accompanying text reads “Clubcard Prices”. One such example appears in the right hand image shown in paragraph 7 above and two others are identified below.
Tesco has referred to all of these icons in its statement of case as “ the CCP Signs”, and it refers to the background (i.e. the Sign as defined by Lidl) as “ the CCP Signifiers Background”.
Lidl's complaint derives from the presence of the common element, the CCP Signifiers Background, in all of the uses made by Tesco of that background (referred to by Lidl as “ the Uses”). Lidl points out that, in common with the Lidl Logo, the CCP Signifiers Background has a blue square containing a centred yellow circle extending towards the edge of that blue square. In the case of the Mark with Text, Lidl points to a further similarity, namely the presence of wording across the middle of the yellow circle. Lidl says that although the words differ, or are absent from the Wordless Mark, the Uses made by Tesco of the CCP Signifiers Background are of a kind where attention to the detail of the wording is often absent or limited. The consequence, says Lidl, is that a substantial number of customers are being deceived; some as to origin, although this is not a case that Lidl has sought specifically to make out in its pleading, but many because they see the CCP Signs, link them to Lidl's brand and reputation and believe that Tesco's prices are being said to be comparable to Lidl's (low) prices and/or that they are price matched to Lidl.
Essentially, Lidl says that Tesco is seeking deliberately to ride on the coat tails of Lidl's reputation as a “discounter” supermarket known for the provision of value. It is Lidl's case that the Clubcard Prices promotion was adopted by Tesco as part of a campaign that was designed to improve Tesco's ability to compete with discounter supermarkets such as Lidl. At around the same time as the Clubcard Prices campaign was launched, Tesco also launched a price matching campaign against Aldi prices (“ the Aldi Price Match”); Aldi being the other recognised ‘discounter supermarket’ in the UK.
Lidl contends that the deception of Tesco's customers is not accidental. They maintain that Tesco deliberately copied the artworks that comprise the Lidl Marks to achieve the transfer of reputation for good value that they maintain is occurring and they also assert a claim in passing off on the grounds that, by their use of the Sign, Tesco has misrepresented that products sold by Tesco share the qualities of those of Lidl, including that they are sold at the same or equivalent price, or have otherwise been price matched with Lidl products.
EVIDENCE AND WITNESSES
Lidl's Witnesses
Lidl called three witnesses to give oral evidence, Mr Andy Paulson, Mr Simon Berridge and Ms Claire Farrant.
Mr Paulson and Mr Berridge are two ordinary members of the public who gave evidence as to their responses to exposure to sight of the CCP Signs. I have no reason to think that they were not giving truthful evidence with a view to assisting the court.
Mr Paulson first encountered the CCP Signs in September 2020 at the outset of the CCP promotion. It was his evidence that he had seen (on his phone) a tweet from Tesco which included a short clip from a tv advert 2 showing price drops and that he had then tweeted a response in the following terms “Suppose it's no coincidence that the offer notices appear to resemble a certain other supermarkets logo”. He used the hashtag “cleveradmen”. Below his tweet he included an image of the Lidl Mark with Text, pointing out in his statement that this tweet was intended to be a reference to Lidl. In summary, his evidence was that the Tesco advert reminded him of Lidl because the “offer notices” (by which he meant the CCP Signs) were “uncannily similar to the Lidl logo” and that he had used the hashtag “cleveradmen” because he “got the impression” that the ad men for Tesco had looked at budget supermarket signs “and tried to hint at Lidl, to say their prices were also as low as Lidl's”. He went on to say that his understanding of the CCP Sign is that “it is saying that on the products that have been given a “Clubcard” price, the prices you can get for those products is the same or perhaps a bit better than the priced at Lidl”. Under cross examination, he accepted that he had realised that the advert was not for Lidl, and he acknowledged that the Tesco promotion had not deterred him from shopping at Lidl.
Mr Berridge, who was a frequent shopper with Lidl, had visited the Tesco website in November...
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