Lidl accuses Tesco of deceit in legal battle over use of iconic yellow circle

What you need to know (in a nutshell)

1. Lidl and Tesco are in a legal battle over a yellow circle logo that both companies use. The dispute centres on the design of a yellow circle on a blue background used by Tesco for its Clubcard promotions and by Lidl as its main logo.
2. Court Hearing: A high court hearing began on Tuesday, February 7, 2023, and is expected to last about a week. During the hearing, Lidl accused Tesco of “infringement of trademark, passing off, and infringement of copyright.” Tesco filed a counterclaim arguing that Lidl registered a trademark of its logo without its name as a “legal weapon” and with no intention of using it to trade.
3. Evidence and Arguments: The judge is expected to hear evidence from senior supermarket staff and customers during the trial. Lidl argues that Tesco’s actions “must involve some form of deception” and that Tesco deliberately copied Lidl’s branding to achieve the transfer of reputation. Tesco argues that to establish infringement, Lidl needs to prove that creating a yellow circle involves sufficient artistic skill and labour and that Lidl still needs to establish this. Tesco also argues that Lidl needs to prove damage, meaning that customers have been misled or deceived somehow.

Full Article

In an ongoing legal skirmish between Lidl and Tesco, the former has accused the latter of duplicitous conduct concerning the ownership rights to a yellow circle logo. Both companies feature the design in their respective logos, with Tesco using it for Clubcard promotions. This Tuesday, a week-long hearing commenced at London’s High Court as the two supermarkets strive to resolve their dispute. The case revolves around whether Tesco has infringed upon copyright laws by utilising an iconic circular shape with blue hues, a design element prominently featured in Lidl’s branding, ranging from signage and advertising campaigns to product packaging. Given the strong association of these marks with their respective companies, it appears likely that one party will emerge triumphant after the proceedings conclude next week.

Last November, Tesco, Britain’s largest grocer, triumphed in its appeal to argue that Lidl had filed a trademark application for its logo, which features a yellow circle on a blue background, in bad faith. This prompted the German discounter to level accusations against Tesco, alleging copyright, trademark infringement, and unauthorised use of the same design. In retaliation, Tesco lodged a counterclaim last year, highlighting that although Lidl registered the trademarks, it never intended to use them for trading purposes, insinuating that they were exploiting this legal instrument maliciously. During Tuesday’s hearing, Mrs Justice Smith was apprised of these allegations, which encompassed claims related to copyright infringement, violation or misuse of trademark laws, and misappropriation through unscrupulous means.

Tesco’s counterclaim seeks to invalidate several of the contested trademarks. While Lidl’s legal team posited that this must be done with some degree of intent, Tesco argued the opposite and insisted that their actions were justifiable. The judge will evaluate evidence from both supermarket staff and customers throughout the trial; Benet Brandreth KC, who leads Lidl’s representation, declared that defending their brand identity was central to this case against Tesco.

Hugo Cuddigan KC contended that for Lidl to establish trademark infringement by Tesco concerning its logo and brand image, they must demonstrate that adequate artistic skill and labour were invested in creating the yellow circle featured in it. He further proposed that any deception stemming from Tesco’s use of similar branding was not coincidental but deliberate, aiming to transfer reputation from one company to another without consent. Representing Lidl, he informed the judge that his client had registered trademarks for logos, both with and without text, all uniquely representing goods or services sold under their name. As such, when Tesco crafted a nearly identical design, it constituted unfair competition, as customers could be erroneously swayed towards Tesco due to preconceived notions about the value and quality of products associated with Lidl.

Cuddigan maintained that Lidl needed to demonstrate financial harm, specifying in a legal memorandum: “This necessitates demonstrating that the customers who were misled would have gone to Lidl if not for their deception or they took a materially disadvantageous view of them.” A Tesco spokesperson refrained from commenting on the ongoing case but underscored their vigorous defence, asserting no evidence of infringement concerning their Clubcard prices logo. This is not the first instance of retailers resorting to litigation over disputes; last year, Marks & Spencer initiated legal action against Aldi concerning its Colin the Caterpillar chocolate sponge roll cake being replicated by Cuthbert cakes. Both companies ultimately reached an agreement, resulting in the cakes returning to Aldi’s shelves in June 2020.