We all remember the battle of the caterpillars –
with Colin launching himself against Cuthbert in an epic trademark dispute brought by Marks and Spencer against discount supermarket Aldi. Happily, that particular legal fisticuffs ended in a deal being stuck last year that both sides seemed pleased with. Indeed, the German retailer cheekily celebrated Cuthbert’s return to shelves by parking an advertising van outside Marks & Sparks with the slogan: ‘Made by bakers. Approved by lawyers.’
Now we have a new row between a ‘mainstream’ supermarket – Tesco – against another German discounter, Lidl. The design in dispute is not as cute as a caterpillar – it is a straightforward yellow circle on a blue background. This is used in Lidl’s main logo, and is also deployed by Tesco to advertise offers for Clubcard members. Lidl’s circle has a red rim around it.
The proceedings started with Lidl suing Tesco for infringement of trademark, passing off, and infringement of copyright. It accuses Tesco of ‘seeking deliberately to ride on the coattails of Lidl’s reputation as a “discounter” supermarket known for the provision of value’.
Tesco then brought a counterclaim challenging Lidl’s trademark of the yellow circle without its name across it. It argues that the German supermarket’s logo contains the word ‘Lidl’ across the circle; and so the trademark of a circle without the name was simply a ‘legal weapon’, without Lidl intending to use that design to trade, it claims.
In a hearing last month, Tesco’s counsel also argued that before Lidl could establish patent infringement, it would need to satisfy the judge that creating the yellow circle involved enough ‘artistic skill and labour to comprise the author’s own intellectual creation’. Tesco further pointed out that Lidl will need to show ‘damage’ caused to it by Tesco’s own design.
How the court will ultimately decide on these arguments remains to be seen; but the issues at the root of the case are very much a sign of the times. Previously, this type of action was all about the more ‘mainstream’ retailers trying to protect themselves from the threat of discounters selling similar-looking products at a lower price. Now, it is the discounters that are taking action, trying to protect their reputation for cost value.
With the cost of living crisis unlikely to go away in the near future, the outcome of this case will be very closely watched in the grocery retail sector and beyond.
March 6, 2023
Insights
