The High Court has ruled in favour of Lidl over its claim of ‘trademark infringement’ relating to Tesco’s Clubcard Prices logo and text, ‘passing off’ and ‘copyright infringement’.

However, Justice Joanna Smith found in favour of Tesco on its counterclaim of ‘bad faith’ relating to its use of a yellow circle set in the middle of a blue square.

The supermarket giant has now been ordered to stop using the Clubcard logo. However, it said there will not have any impact or change to its Clubcard Prices scheme for shoppers. Further, it plans to appeal the ruling.

This latest change to Tesco Clubcard comes after it already confirmed it was closing the Clubcard app, will reduce the value of exchanging points to rewards vouchers with third parties, reduced points earned on fuel spends and will introduce a higher minimum order value for deliveries.

Tesco Clubcard Prices

In September 2020, Tesco launched its Clubcard Prices scheme offering shoppers with a Clubcard discounts on groceries, compared to the prices paid by customers without the loyalty card.

In December 2020, Lidl, which first came to UK shores in 1994, brought a court action against Tesco, claiming that it had infringed its trademark rights, took advantage of the Lidl’s logo and that there was a copyright breach because of the very similar shapes and colours used – a yellow circle in a blue square.

The Justice stated the logo is “simple, striking and memorable in their simplicity”.

As part of the 100-page judgment, the Justice wrote: “Against the background of my findings so far in this judgement, I consider that due to the resemblance between the Clubcard Prices signs and the Lidl marks, Tesco has taken unfair advantage of the distinctive reputation which resides in the Lidl marks for low price (discounted) value.

“That is the objective effect of the creation of the link between the CCP Signs and Lidl’s reputation, even though I have already accepted that there was no subjective intention to achieve this end.”

Smith added: “Through Clubcard Prices, Tesco wanted to reward brand loyalty and encourage new customers to become members of the Clubcard loyalty scheme, but a ‘tertiary’ objective was to improve Tesco’s value perception.”

Two Tesco shoppers were included as witnesses at the High Court where they remarked on the ‘coincidence’ between the logos, and the ‘comedy double take’ made when one shopper was confused as to whether he was on the Tesco website as planned or Lidl, due to the similarities.

A statement from the ruling read: “In my judgment, the [Clubcard logo] were plainly intended (amongst other things) to convey value and thereby to influence the economic behaviour of supermarket shoppers, notwithstanding that I have found no specific intention to free-ride on Lidl’s reputation.

“I agree with Lidl that…. the effect of the use of the [Clubcard logo] was to cause a “subtle but insidious” transfer of image from the [Lidl logo] to the [Clubcard logo] in the minds of some consumers. This will have assisted Tesco to increase the attraction of their prices.”

‘Deceiving customers’

A Lidl spokesperson said: “Over the last three years, Tesco has been using its Clubcard logo to deceive many customers into believing that Tesco was price matching against Lidl or was able to offer the same great value as us.

“We asked Tesco to change their Clubcard logo, but they refused, making it necessary to bring this case. Having seen the evidence, the Court has now ruled that Tesco’s Clubcard logo was copied from Lidl’s logo, and it infringes Lidl’s trademark rights and copyright. This infringement allowed Tesco to take unfair advantage of our longstanding reputation for great value, misleading their customers at a time when they should have been supporting them.

“We are pleased that the Court has agreed with us and that it will now order Tesco to stop using the Clubcard logo.”

‘Clubcard Prices about offering great value’

A Tesco spokesperson said: “We are surprised and disappointed by the decision today in relation to the claim brought by Lidl against our Clubcard Prices logo. Clubcard Prices has always been about offering great value to our Clubcard customers, across thousands of products, as part of our commitment to keeping the cost of the weekly shop as affordable as possible. Nothing in today’s decision changes that.

“This claim brought by Lidl was just about the colour and shape of the Clubcard Prices logo. The judge’s ruling concluded that there was no deliberate intent on Tesco’s part to copy Lidl’s trademark. It has no impact on our Clubcard Prices scheme which we will continue to run in exactly the same way. We intend to appeal.”