In April 2023, we reported Mrs Justice Smith’s judgment in favour of Lidl in relation to its trade mark infringement, pasting off and copyright claims against Tesco. The case concerned Tesco’s use of a yellow circle in a blue square for its Clubcard Prices (CCP) promotion.
The same judge has now ruled that, in addition to an injunction based on trade mark infringement and passing off, Lidl is entitled to a final injunction regarding the copyright infringement, an issue over which the parties disagreed. In particular, they had different views on whether it would be “proportionate” to grant injunctive relief.
Copyright injunction
Taking all the relevant factors into account, the judge decided she was not persuaded that she should exercise her discretion to award damages in lieu of an injunction in this case. She said:
“Lidl has a legitimate interest in seeking a final injunction to prevent use of its artistic work in the form of the Lidl Logo and it would be neither oppressive nor disproportionate to grant such an injunction … this is not a case in which the injury to Lidl is small, capable of being estimated in money and adequately compensated by a relatively small money payment. I agree with Lidl that the only certain way to put an end to the loss that Lidl is incurring by reason of the continuing use of the CCP Signs is to grant a final injunction.”
Here analysis was based on the four factors identified in Shelfer v City of London Electric Lighting Company:
The injury to Lidl’s rights was not small. On the contrary, given that Tesco wishes to make continuing and indefinite use of the copyright work throughout its sizeable business, any licence fee would be substantial.
It is very unlikely that it will be possible to determine with certainty the extent of damage done to Lidl’s rights by the infringing acts: “Permitting the infringement to continue would be to countenance a situation in which consumers are capable of being misled by the similarity between the CCP Signs and the copyright work” with considerable benefit to Tesco.
Tesco has made millions of copies of the Lidl logo (at least 8 million uses in its stores alone) and wishes to be able to continue these uses without restraint. “In the valuable, and highly competitive, market in which Tesco and Lidl operate … it is unrealistic to think that this could be adequately compensated with a small ‘one off’ payment,” said the judge.
It would not be oppressive to Tesco for the court to grant an injunction, especially in the light of the Part 36 offers made by Lidl during the litigation. Tesco “was aware of the risks attached to [rolling out its CCP campaign] and yet it chose to persist in the unlawful use.”
Stay pending appeal
The parties agreed that the injunctions in respect of trade mark infringement, passing off and copyright infringement should be stayed pending any application to appeal or any appeal findings that justify that relief. But they remained in dispute over the time period for Tesco to comply.
On this point, the judge accepted Tesco’s argument, saying it would be consistent with the overriding objective and the requirement of justice to permit Tesco nine weeks to comply with any injunction, with a carve out of up to 20 weeks for its F&F clothing products (if necessary).
What does this mean?
The judgment provides some useful guidance on when final injunctions are justified in cases of copyright infringement. In this case, the judge clearly felt that the damage done to Lidl was unlikely to be remedied by financial compensation alone.
It is also a reminder that decisions taken during the course of litigation (in this case, refusals of reasonable settlement offers) can come back to bite you when it comes to remedies.
To find out more about the issues raised in this blog contact Rosie Burbidge, Intellectual Property Partner at Gunnercooke LLP in London - rosie.burbidge@gunnercooke.com