Lidl v Tesco [2024] EWCA Civ 262
The Court of Appeal has just handed down its much anticipated judgment in Lidl v Tesco. This was an appeal from the decisions of Mrs Justice Joanna Smith in [2023] EWHC 873 (Ch) (liability) and [2023] EWHC 1517 (Ch) (form of order), concerning the use by Tesco of the blue and yellow Clubcard sign and Lidl’s earlier rights in the Lidl logo. At first instance, Lidl succeeded in its claim for trade mark infringement, passing off and copyright infringement, however several of its Wordless Mark Registrations were invalidated on the ground of bad faith. The Judge also held that Lidl should be granted an injunction to restrain copyright infringement in any event.
The appeal was heard by Lewison, Arnold and Birss LLJ, and focused primarily on Lidl’s contention that the Clubcard signs conveyed the message of price matching with Lidl. Arnold LJ gave the main judgment, in which he dismissed Tesco’s appeal against the findings of trade mark infringement and dismissed Lidl’s appeal against the Judge’s finding of bad faith. The Court allowed Tesco’s appeal on the issue of copyright infringement. Birss LJ gave a short judgment in which he adopted a different analysis on detriment for the purposes of s.10(3), and in particular reinforced the proposition that a case of infringement for detriment to distinctive character cannot be made out solely on the basis of a “pure dilution” argument.
The judgment contains a useful summary of the applicable law in relation to all causes of action. Further, Arnold LJ engaged in a detailed consideration of the role and proper assessment of different types of evidence in trade mark and passing off cases. The judgment raised several interesting points:
- surveys carried out prior to litigation and for non-litigious purposes can be relied on without the permission of the court and even if they are not statistically significant;
- a judge is entitled to rely on evidence given by real consumers insofar as they assist the court in ascertaining the perception of the average consumer;
- the judge is entitled to rely on evidence the admissibility of which is not objected to by the other side;
- it is reasonable to infer, in the absence of an alternative explanation, that a price-matching perception was due to the similarity of the respective signs, despite this not being expressly stated by the evidence;
- Arnold LJ agreed with the proposition that innocent adoption of the sign complained of is not, in and of itself, sufficient for a finding of due cause – something more is needed;
- it was confirmed that, where objective circumstances give rise to a prima facie case of bad faith, the evidential burden shifts to the applicant to explain its intentions at the time of making the application. This is a legitimate approach regardless of the length of time passed since the application was made; and
- the case of Ladbroke v William Hill was held not to be relevant to the question of whether a derivative work is original over an antecedent work.
Lastly, Lewison LJ expressed his view that there cannot be a finding of due cause under s.10(3) where the judge finds that the defendant’s sign took unfair advantage of a registered trade mark. However, the issue thus remains to be clarified by the courts at a later date.
Finally, the Court emphasised the importance of restricting appeals to a review of first instance decisions.
Benet Brandreth KC and Edward Cronan appeared for Lidl, instructed by Bird & Bird. Iain Purvis KC and Hugo Cuddigan KC appeared for Tesco, instructed by Haseltine Lake Kempner LLP.