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Lidl v Tesco: a little yellow circle, advertising little prices, causing a LOT of trouble

Hello everyone,

I hope you’re having a good week.

Today I want to talk a little bit about a case which has the IP fraternity’s ears pricked up for a number of reasons.

The case concerns budget supermarket Lidl and Tesco.

As you may be more than aware – the budget supermarkets (specifically Aldi, and to a lesser degree Lidl) have had a number of different legal spats as it relates to intellectual property – with the likes of the originators of Colin the Caterpillar and the like taking umbridge at the budget supermarkets seemingly closely inspired own brands.

Anecdotally, the success of the new budget supermarkets, when compared to their forebears, has been how close to the line they have been willing to go when it comes to offering the buying public quality goods at low prices – which also have a passable resemblance to the branded goods they offer an alternative to.

The effect in the mind of the consumer is that of a "next best version" – with varying degrees of palpable “bleeding” of goodwill from the genuine into the alternative.

In an economic environment where consumers are becoming more selective, such a proposition has proven to be popular – with many consumers able to enjoy cheaper, albeit quality products that retain some of the feel of the named brands.

In the broader context, the branded products are almost redshifted from genuine to “luxury”, as consumers become more discerning and compromising in their purchasing choices.

Indeed, nowadays you may often see people get certain items from the more expensive supermarkets (Booth’s, Waitrose, M&S) and other less significant items from Aldi or Lidl.

So it goes, and over the past decade or so, there has rarely been a time where a brand or supermarket has found itself without the budget supermarkets in their crosshairs over the proximity of a brand to their own.

In this case, however, the shoe is on the other foot! And it is indeed Lidl who is seeking to enforce against Tesco as it relates to the similarity of a certain visual element to their logo.

Let me explain in a bit more detail.

The yellow circle

So, what does this case concern – when it comes down to it?

Tesco began using a yellow circle within its stores to specifically highlight Clubcard deals being offered for those looking to make savings or operate on a budget.

Lidl saw this and alleged that the use of the yellow circle brought to mind their logo which prominently utilizes a yellow circle with the brand name displayed over it and as such Tesco were positively benefitting from the conscious or unconscious association with Lidl when it comes to use of the yellow circle to demarcate cheaper deals in stores.

(Notably, Lidl do have a registration for the yellow logo on its own… But more on that in a bit.)

It has been quite an interesting back and forth, all things considered, and is representative of how competitors like to take chunks out of each other now and again.

The chronology

European Supermarket Magazine put it better than I could here.

As far as the chronology of the matter up until now, they state:

“The dispute started when Lidl sued Tesco for trade mark infringement of the standard Lidl logo, claiming it was using the same design, albeit without any text.

In 2020, Tesco started using a logo which Lidl alleges resembles its own trade marks, for the marketing of its Clubcard Prices scheme.

Tesco filed a counterclaim that Lidl has never made genuine use of its wordless mark, therefore it should be revoked on the basis of non-use. Tesco also counterclaimed that Lidl’s wordless mark was invalid as it was filed in bad faith, because:
  1. It was filed as a ‘defensive’ mark. Lidl had never used the wordless mark in the form in which it was registered. Tesco suggested that it was filed to extend an unjustified monopoly right over third party use.
  2. Lidl was ‘evergreening’ the mark (periodically re-applying for the mark to circumvent non-use provisions).
Lidl then made an interim application to the High Court to strike out Tesco's bad faith counterclaim. The High Court agreed with Lidl on the basis that Tesco had not produced sufficient evidence to overcome the presumption that Lidl had acted in good faith.

Tesco subsequently appealed this decision to the Court of Appeal and got the decision overturned. That means that for Lidl to succeed at the full trial, it must argue that these registrations were not filed in bad faith.”

So Lidl did have a yellow circle mark registered, but Tesco claimed that this hasn’t been used and as such is not a good faith registration (i.e., it is being registered to cordon off space, and not actually be used in the course of trade, at least not without the other elements of the logo).

From a legal point of view, this is interesting, insofar as it may result in further guidance as it relates to what constitutes a “bad faith” registration moving forward. Ultimately this would also make “non-use” of trade marks a more prominent concern for those sitting on larger portfolios – from a defensive point of view…

My take

From my point of view, there is something else more interesting going on here!

It definitely seems like a case of what’s good for the goose is good for the gander!

Tesco have been quite savvy, and one might argue that the use of a yellow circle does carry an unconscious association with a budget offering – on account of Lidl’s prominence in that particular space.

Despite this, it is my opinion that Tesco’s lawyers have been smart in navigating this issue, and it is unlikely that Lidl will be able to assert their ownership over the yellow circle in a meaningful way.

Ultimately, the upshot of this is that Tesco has given a budget supermarket a taste of its own medicine – albeit in a limited way – as it is essentially the same “fine line” being walked here as when an Aldi or a Lidl produce products which, seemingly by design, edge as close as they can to the mark without crossing it!

But what do you think?

Is this justified? Do you think Tesco had this in mind when they designed their in-store displays?

Let me know what you think – I would be very interested to find out.

As always, if you need anything do not hesitate to get in touch the usual way.

My door is always open.

Have a great week,



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