Every 'Lidl' Helps / Big on Quality, 'Tesco' on Price

A decision of interest to the retail industry and retailers, but also to trade mark attorneys and lawyers on the everchanging topic of bad faith.

Lidl filed infringement proceedings against Tesco for their "Clubcard Prices" loyalty discount scheme which was launched in September 2022. Lidl claimed that the scheme, using a yellow circle on a blue square constituted infringement on the basis of the similarity with Lidl's logo and that Tesco were attempting to "ride on [Lidl's] coat-tails as a discount supermarket" by using the logo.

Tesco counterclaimed for invalidity and revocation of Lidl's registration for its 'wordless' registration, which has never been used in the UK in the form registered, citing bad faith, as well as "evergreening" with Lidl refiling the wordless logo every 5 years to avoid non-use provisions.

In an interim decision, the High Court dismissed Tesco's counterclaims on the basis that Tesco had not sufficiently substantiated their assertions and had not done enough to defeat a presumption of good faith. The judge assessed the case law on bad faith, including Sky v Skykick, noting that the trade mark system had to be used in a manner consistent with honest practices or acceptable commercial behavior with objective evidence and not merely inferences drawn from conduct that could otherwise be legitimate.

The Court of Appeal has now overturned the High Court decision, and allowed Tesco to pursue the bad faith actions and that their pleadings had a real prospect of success.

The case will now continue, with a full trial expected in 2023.

The case will be interesting for a number of reasons, not only in terms of the bad faith claims. The High Court decision also allowed Lidl to rely on survey evidence, which Tesco had criticised on the basis of its value and reliability, and provides a useful refresher on the case law on such evidence and how to assess its probative value. The court was of the opinion that under the Whitford guidelines, the survey results were likely to be of real value to the court in assessing recognition and distinctiveness, especially in instances where judges were not necessarily IP specialists.

It will also be interesting to see how the case is decided in respect of Lidl's wordless mark in light of the earlier 2014 Specsavers case, where use of a mark with text was deemed to constitute use of the registered wordless mark.

So much to look forward to with this decision, so watch this space!

High Court decision here.

Court of Appeal decision here.

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