Lidl and Tesco are set to face off in £2.35m court battle over an alleged trademark infringement

Supermarket rivals Tesco and Lidl are set to square off in a multi-million pound legal fight over claims the British giant ripped off the German budget retailer’s logo to promote its clubcard.

Lidl will claim in court that Tesco exploited the background to their trademarked logo – a blue square containing a yellow circle with a thin red border – to promote their hugely popular Clubcard discounts.

Tesco introduced its unique Clubcard loyalty scheme prices three years ago, which uses a yellow circle cropped onto a blue square to promote it.

But now the German grocer says their own yellow, red and blue logo is a ‘wordless trademark’ that has been infringed as it seeks to ban the UK’s largest supermarket from using a similar-looking background on their ‘Clubcard Prices’ signs in-store .

It first claimed Tesco’s marketing ploys were too similar-looking to its own branding in court last year, but now says the supermarket is ‘seeking deliberately to ride on the coattails of Lidl’s reputation as a ‘discounter’ by using the background.

As part of the evidence backing their claim, Lidl have put before London’s High Court results from a survey, in which interviewees were shown the disputed background without the Lidl name and asked what it was.

Tesco has attempted to counterclaim, and described the ‘Wordless Mark’ as a ‘figment of Lidl’s legal imagination’ in documents shown to the court.

Lidl and Tesco are set to spend £2.35m fighting each other in court over claims Tesco ripped off Lidl’s logo – a yellow circle set on top of a blue box with a thin red outline

Tesco's Clubcard logo features a yellow circle on a blue square, as well as a shape thinly outlined in red - which Lidl claims is a 'wordless trademark' associated with their brand

Tesco’s Clubcard logo features a yellow circle on a blue square, as well as a shape thinly outlined in red – which Lidl claims is a ‘wordless trademark’ associated with their brand

Lidl are accusing Tesco (store pictured) of 'riding on the coattails' of their reputation as a discounter supermarket offering good value

Lidl are accusing Tesco (store pictured) of ‘riding on the coattails’ of their reputation as a discounter supermarket offering good value

Giving judgment in a pre-trial hearing between the two grocery giants, Mrs Justice Joanna Smith threw out Tesco’s bid to have the survey evidence ruled inadmissible at trial.

Setting out the shape of the case, the judge said: ‘In short, Lidl contends that Tesco’s use of a new sign in their ‘Clubcard Prices’ marketing is an infringement.

‘In bringing the claim, Lidl relies upon its trademark rights in two versions of the Lidl logo: a logo which includes the word “Lidl” 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.’

She said Lidl’s lawyers argue the background to the supermarket logo is ‘capable of being, and is, perceived by the public in the United Kingdom as being distinctive of the Lidl group of companies’.

‘Essentially, Lidl says that Tesco is deliberately seeking to ride on the coattails of Lidl’s reputation as a “discounter” supermarket known for the provision of value.

‘It pleads that Tesco’s use of the sign in connection with Tesco’s discount prices is intended to, and does, cause members of the public to call to mind Lidl’s business and the marks, including being suggestive of the fact that the prices of goods offered by Tesco for sale under or in connection with the sign are offered at the same prices, or lower prices, than could be obtained for the same or equivalent goods in Lidl stores,’ the judge explained.

Setting out Tesco’s defence, she went on: ‘Lidl’s use of the Wordless Mark is disputed.

‘Focusing specifically on the Wordless Mark, it pleads…The Wordless Mark is a figment of Lidl’s legal imagination and a product of its trademark filing strategy.

‘It does not exist in the real world….Lidl have never used the Wordless Mark and never intended to use it’.

Tesco’s lawyers sought to argue that the survey results ought not to be included in the evidence at the forthcoming trial, saying amongst other things that the way the questions were phrased had been leading.

During the survey, participants were shown the wordless logo and asked ‘What do you think this image is?’ and ‘Now, please imagine that this image was used as a company’s brand…Which company would you expect it to be?’

The judge, allowing the survey evidence to be included at trial, said: ‘Looking at the answers to the survey in detail…one sees numerous responses that say “Lidl” or “Lidl logo” or “Lidl sign” or even ” It looks like the background of Lidl”, or “Part of the Lidl logo without the words” or “Brand image for Lidl supermarket”.

Tesco's estimated costs to trial amount to £1,185,976, while Lidl's amount to £1,170,244 - 'a reflection of how key this brand dispute is to both parties', Mrs Justice Joanna Smith said

Tesco’s estimated costs to trial amount to £1,185,976, while Lidl’s amount to £1,170,244 – ‘a reflection of how key this brand dispute is to both parties’, Mrs Justice Joanna Smith said

‘This appears to me to be probative of recognition on the part of the participants that the Wordless Mark is a logo or trade mark.’

The judge went on to say that Tesco’s estimated costs to trial, even without dealing with the issue of the contested survey, ‘amount to £1,185,976, while Lidl’s amount to £1,170,244

‘The multi-million pound combined legal costs appear to be a reflection of how key this brand dispute is to both parties,’ she remarked.

The judge also struck out Tesco’s counterclaim alleging that some of the Lidl trademarks in issue should be declared invalid on grounds of bad faith.

The case will go forward to trial at a later date.

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