Tesco could be forced to stop using its blue and yellow logo for the Clubcard loyalty program after the High Court found that the German discounter Lidl had violated their trademark.
In a written decision, Judge Joanna Smith stated that Britain’s largest grocer took unfair advantage of their rival’s “distinctive” reputation for low prices.
Smith also found that Tesco “deceived a significant number of consumers to believe that Tesco’s price represented the same value than Lidl’s price, when this was not true”. Lidl argued that Tesco was “deliberately subjectively intending to ride on Lidl’s coat-tails”.
The judge wrote, “I agree that Lidl. . . The use of [Clubcard] caused a “subtle, but insidious” transfer of images from [Lidl] to [Clubcard] in some consumers’ minds. This would have helped Tesco increase the appeal of their prices.
Smith will order Tesco to cease using the Clubcard Logo. Tesco announced that it would appeal the ruling.
Lidl filed a lawsuit against Tesco in 2020, shortly after the latter adopted its logo to promote “Clubcard Prices”, a discount scheme. Both companies made allegations during a February trial, which was held amid a price battle between discount supermarkets and traditional supermarkets.
Lidl argued Tesco deliberately copied its trademark in order to mislead customers into believing its prices were similar. Tesco’s attorneys accused Lidl lawyers of hypocrisy, saying they had copied the branding for well-known products such as Oreos cookies.
Lidl GB stated: “Tesco is using its Clubcard Logo to mislead many customers into thinking that Tesco is price matching Lidl. This allowed Tesco unfairly to take advantage of Lidl’s long-standing reputation as a great value.
Tesco stated: “The Judge’s ruling concluded there was no deliberate intention on Tesco’s behalf to copy Lidl’s trademark.”
Yesterday, Tesco’s share price rose by 2 1/2p or 0.9 percent to 276p.