Tesco has begun a £7m rebrand of its Clubcard Prices logo after losing a trademark battle against rival supermarket giant Lidl last month.
Britain’s biggest supermarket, Tesco, was sued by German supermarket Lidi over its Clubcard Prices’ promotion which used a blue square with a yellow circle with the words ‘Clubcard Prices’ inside the box.
The German supermarket said the promotion infringed its trademark as it uses a blue square with a yellow circle with its name inside for its well-known logo.
The parties went to court last February for a hearing on the issue of trademark, copyright infringement and passing off action. The court sided with Lidl on the point that Tesco infringed on its trademark with words. However, the court said Lidl’s claims of trademarks of the same circle and square with no text were invalid.
Lidl went on to seek an injunction preventing Tesco from infringing its trademark, to which the court agreed with the German brand.
During the litigation, it was noted that it would cost Tesco nearly £7m to remove all of the promotion logos, including those in its stores and app—not including the legal fees.
Tesco tried to appeal the decision, which saw the parties back in court earlier this year in front of Lord Justice Lewison, Lord Justice Arnold and Lord Justice Birss at the Court of Appeal.
In March, the court dismissed Tesco’s appeal against the findings of trade mark infringement and passing off. The court allowed Tesco’s appeal against the finding of copyright infringement. But also dismissed Lidl’s appeal against the trademarks of the same circle and square with no text was invalid. The court added that Tesco’s appeal against the copyright injunction was moot.
After the judgment, Tesco said it would honour the decision and will update its Clubcard Prices logo in the coming weeks.
Tesco has now begun those changes – as noted on its Clubcard app, where the logo has been amended to a full blue square with ‘Clubcard Price’ written inside.
However, its logo still appears in its stores (pictured), which is where the real cost will come into play as the brand has nearly 2,500 physical locations across the UK.
Louise Popple, senior counsel at law firm Taylor Wessing stated that “Tesco’s new logo consists of non-overlapping squares with rounded edges, which is sufficiently far away from Lidl’s house mark.”
“It is broadly consistent with Tesco’s existing branding – blue being Tesco’s corporate colour and yellow having been used by Tesco in the past for price promotions – and the way supermarkets tend to present their prices and promotions using labels and geometric shapes.”
“It looks like Tesco has opted to use its shade of blue rather than Lidl’s – but even if it hasn’t that probably wouldn’t tip them into infringement. The use of a different shade of blue by Tesco helped it to avoid a finding of copyright infringement at the Court of Appeal,” Popple added.
The estimated cost of £7m noted by the company’s head of legal during the court battles doesn’t include the legal fees Tesco will be liable to pay. Those could a few hundred thousand pounds to the total.
Commenting on the move, Charlotte Duly, head of brand protection at law firm Charles Russell Speechlys said: “It is perhaps no surprise that Tesco has looked to retain use of their blue, and the new Clubcard Price logo is very different to their previous branding and far enough away to avoid the transfer of image Lidl complained of in the court proceedings.”
She explained with “Tesco’s head of legal estimating that the cost of replacing all the Clubcard Price signs would be more than £7m, this demonstrates just how expensive a rebrand can be when it needs to be undertaken on a significant scale.”
While Anneka Dalton, partner at Taylor Wessing stated that “whilst Lidl was able to prevent Tesco’s use of a yellow circle within a blue square, Lidl doesn’t have monopoly on the colours yellow and blue.”.
“It remains to be seen whether the ‘blue square, yellow rectangle’ treatment will be deployed across the board by the mid-May deadline for Tesco to complete its rebranding exercise,” she added.
Tesco was contacted for comment.
