Lidl v. Tesco

Can mere colors and shapes—absent of words—carry such brand power that their imitation constitutes trademark infringement and passing off?"

Short Description :

Lidl accused Tesco of infringing its trademark and engaging in passing off by using a yellow circle on a blue square background in Tesco’s "Clubcard Prices" promotion—closely resembling Lidl’s iconic logo. Lidl claimed this similarity misled customers into thinking Tesco’s prices were aligned with Lidl’s discount offerings. The dispute covered claims of trademark infringement, passing off, and copyright violation.

Facts :

⦁ In 2020, Tesco adopted the yellow circle-on-blue-square design for its Clubcard loyalty scheme signage. Lidl argued the design closely mirrored its own logo (with or without the “Lidl” text), which has been a recognized mark for years.

⦁ Evidence, including Tesco’s internal surveys and customer complaints, demonstrated that consumers were confused—mistaking Tesco’s “Clubcard Prices” promotion as connected to Lidl’s pricing or identity.

⦁ Tesco countered by arguing the logo elements were generic to the supermarket industry and challenged the validity of Lidl’s “wordless” marks, citing non-use and bad faith (evergreening).

Findings :

⦁ High Court (2023)

⦁ Found in Lidl’s favor on trademark infringement and passing off, concluding that the similarity created a misleading link and took unfair advantage of Lidl’s discount reputation.

⦁ Also upheld a finding of copyright infringement—acknowledging that Tesco likely copied a substantial portion of Lidl’s logo.

⦁ Deloitte contested Tesco's claims about the validity of wordless marks; the court invalidated the earlier registrations (1995–2007) as filed in bad faith, though later applications (2021) survived.

⦁ Court of Appeal (2024)

⦁ Affirmed: Trademark infringement and passing off rulings. Tesco’s use still created confusion and was unfairly leveraging Lidl’s reputation.

⦁ Reversed: Copyright infringement finding. The Court held that Tesco copied the concept—not a substantial protectable portion—so no copyright violation occurred.

⦁ Ruled: Earlier “wordless” trademark registrations were invalid (bad faith), though the 2021 registration remained valid.

Judgment :

Tesco was found liable for trademark infringement and passing off, but not copyright infringement, after appeal. Consequently, Tesco was required to rebrand its Clubcard Price logo, ditching the yellow-circle-on-blue-square design.

Suggestion / Legal Implication :

⦁ Visual identity matters : Even non-textual elements—colors and shapes—can be protectable under trademark law if they have established distinctiveness.

⦁ Market confusion and reputation play a key role : Consumers' perception, bolstered by internal and public evidence, is central to proving infringement.

⦁ Trademark filings must be genuine : The "evergreening" of marks may backfire if filings lack intent for genuine use at the time.

⦁ Protection limits : Trademark law doesn't extend to ideas; copyright protection for simple designs may be narrow.