Lidl has won the first skirmish in its trade mark infringement case against Tesco concerning the latter’s use of a yellow circle on a blue background.
In a judgment on 13 June 2022, Mrs Justice Joanna Smith DBE granted Lidl’s application to strike out Tesco’s counterclaim which had alleged that some of Lidl’s marks should be declared invalid on ground of bad faith. She also granted Lidl permission to rely on its survey evidence at trial.
The case is now set to go to a full trial, where Lidl’s trade mark and copyright infringement and passing off claims will be heard.
Bad faith
Lidl’s action is based on two versions of its blue/yellow logo, one including the word Lidl and one that is wordless.
Tesco argued that the wordless mark should be revoked or declared invalid for bad faith, drawing on arguments from the SkyKick and Hasbro cases.
In particular, Tesco said that the wordless logo was merely a legal weapon: a figment of Lidl’s legal imagination and a product of its trade mark filing strategy that does not exist in the real world. It also accused Lidl of evergreening, by filing successive trade mark applications, and said the wordless mark had not been used.
Joanna Smith J said that, even if there was no use of the wordless mark (on the basis that it was only used with the text mark), that does not indicate bad faith – which depends on the evidence.
In this case, she said the allegation that the word mark is merely a legal weapon “is no more than assertion”. She concluded:
“Tesco has pleaded no particulars whatever to explain what it is about the individual re-registrations or the mere existence of the Mark with Text which raises the spectre of bad faith … absent such detailed particulars, Tesco’s Bad Faith Allegation does not get off the ground, given the need fully and properly to plead the charge of bad faith. A mere allegation of duplication of ‘various goods and services’ does not appear to me to be sufficient.”
She added that Tesco had not pleaded all the relevant factors to show bad faith, and had not indicated that it wished to amend its pleading to provide more detail.
The judge therefore struck out the bad faith application on the ground that it had no real prospect of success.
Survey evidence
Lidl’s survey was conducted by YouGov among 1,540 random shoppers and concerned recognition of the wordless mark. Tesco questioned the value of the survey and argued that it could not be relied upon.
However, the judge found that “the Survey Evidence has real value in the context of this case and Lidl should be entitled to rely upon it at trial”. Moreover, she said it would not be disproportionate or unreasonable from a costs perspective to permit Lidl at trial to rely on the survey evidence.
The judge’s conclusion that the survey did have real value was based on her findings that:
it did not use the wrong stimulus and was not conducted under artificial circumstances;
it will likely be of value to the court in assessing both recognition and whether the participants understood the mark as an identifier or origin; and
it complied with the Whitford guidelines.
But she also granted Tesco’s application to rely upon its own report criticising the survey for being unreliable and of no real value.
What’s next?
This dispute between two leading supermarkets is going to be hard fought and it has already shed light on two of the most contentious issues in UK trade mark law: what constitutes bad faith and the admissibility of survey evidence.
It is likely there will be further interesting developments as the case proceeds to full trial and/or the findings are appealed, and we will continue to monitor developments!
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