Lidl accuses Tesco of ‘deception’ in legal dispute over yellow circle logo

<span>Photograph: Paul Childs/Reuters</span>
Photograph: Paul Childs/Reuters

Lidl has accused its bigger rival Tesco of “deception” during the latest round of a long-running legal battle between the two supermarket chains over the use of a yellow circle logo.

The dispute centres on a yellow circular design with a blue background, which is used by Tesco to promote offers available for members of its Clubcard loyalty scheme, as well as being used by Lidl as its main logo.

A high court hearing began on Tuesday and is expected to last about a week.

It comes after Tesco, Britain’s biggest grocer, won an appeal last November granting it permission to argue that Lidl applied to trademark a yellow circle on a blue background in “bad faith”.

The German discounter filed a lawsuit against Tesco, accusing it of trying to “ride on [its] coattails” by using the yellow circle logo on a blue background, saying a trademark and its copyright had been infringed.

Tesco filed a counterclaim last year, arguing that Lidl registered a trademark of its logo without its name as a “legal weapon”, with no intention of using it to trade.

During Tuesday’s hearing, Mrs Justice Smith was told that Lidl alleged “infringement of trademark, passing off, and infringement of copyright”.

The Tesco counterclaim is “seeking to cancel some of the trademarks in issue”.

Lawyers representing Lidl told the judge that Tesco’s actions “must involve some form of deception” that was “not accidental”. Tesco said it was behaving fairly.

The judge is expected to hear evidence during the trial from senior supermarket staff and customers.

Benet Brandreth KC, who is leading Lidl’s legal team, described the “protection available to Lidl’s core brand” as being “at the heart of this claim”.

He told the judge the company had registered trademarks for a logo containing the word Lidl, and also for a logo with no text, which he said was “distinctive” of its services and goods.

“Tesco’s actions must involve some form of deception,” he told the judge in a written case outline, adding that Lidl says “this deception is not accidental”.

“Tesco deliberately copied Lidl’s branding to achieve precisely the transfer of reputation for good value that is occurring.”

Hugo Cuddigan KC, who is leading Tesco’s legal team, said that to establish infringement Lidl would need to satisfy the judge that “creating a yellow circle involves sufficient artistic skill and labour to comprise the author’s own intellectual creation”. He argued that Lidl had not established this.

Cuddigan argued that Lidl had to prove damage, and added in a written argument: “That means that the customers who have been misled would otherwise have gone to Lidl to purchase the goods in issue, or that the deception causes them to take a materially disadvantageous view of Lidl.”

A Tesco spokesperson said they were unable to comment on an ongoing trial, but added: “We continue to strongly defend our position on the basis that our Clubcard prices logo does not infringe any of Lidl’s intellectual property rights.” He said Tesco was not aware of any evidence that this had happened.

It is not the first time Britain’s supermarkets have taken their disagreements to court in recent years, following Marks & Spencer’s decision to launch legal action against discounter Aldi to “protect” its Colin the Caterpillar chocolate sponge roll cake from its imitator and rival Cuthbert. The retailers later reached a deal, and Cuthbert cakes returned to Aldi’s shelves in June last year.