Top 3 UK trademark cases of 2023

A battle of the blues and yellows: Lidl v Tesco EWHC 873

Lidl, the German supermarket giant, successfully sued Tesco in the English High Court for trademark infringement, passing off, and copyright infringement.

Lidl is the proprietor of UK trademark registrations for a yellow circle outlined in red and on a blue square background, (the ‘wordless mark’) and a mark with text.

Lidl complained of Tesco’s use of a sign depicting a yellow circle on a blue square background to indicate its clubcard prices promotion, which launched in September 2020.

Lidl argued that Tesco infringed its trademarks under section 10(3) of the Trade Marks Act which provides that a person infringes the trademark when using a sign identical or similar to the trademark which has a reputation in the UK, and the use of the sign, being without due cause takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the mark.

Tesco accepted that the mark with text had the requisite reputation in the UK for retail services but contested this in relation to the mark without text. Moreover, Tesco highlighted the differences between how it used its yellow circle and Lidl’s mark, such as the inclusion of the word ‘clubcard’ and the absence of the thin red rim.

The judge rejected Tesco’s arguments relying instead on evidence such as the fact that Tesco’s internal team were aware of the similarities. For example, one Tesco witness had stated: “I did think that the yellow and the blue were similar to Lidl.”

The judge also relied on Twitter posts such as: “when I see the Tesco advert with all the blue and yellow, all I think of is Lidl” among other evidence, to hold that Tesco’s sign was similar to the mark with text.

The judge further held that the average consumer would make a link between the mark with text and the sign based on several pieces of evidence, including Tesco’s pre-launch survey which concluded that 8% of the 276 customers in a report commissioned by Tesco considered that Tesco’s sign was for Lidl.

Based on the evidence, the judge found that Tesco had not intended to ‘freeride’. However, this is not a prerequisite to a finding of infringement under section 10(3).

Under section 10(3), for a mark that has reputation there are three types of potential injury: (1) detriment to the distinctive character of the mark also referred to as ‘dilution’; (2) detriment to the repute of the mark or ‘tarnishment’; and (3) taking unfair advantage of the repute or ‘free-riding’.

If detriment or unfair advantage is established, it is for the defendant to establish that there is ‘due cause’. ‘Due cause’ is a concept based on ‘good faith’ and can act as a defence for a defendant.

Following Tesco’s use of its sign, Lidl, had to launch a separate price comparison advertising campaign. Therefore, the judge was persuaded that Lidl had established ‘detriment’ as it had ‘found it necessary to take evasive action in the form of corrective advertising.’

The judge also found that Tesco had taken ‘unfair advantage’ due to the resemblance between the mark with text and the sign. Tesco argued that it was using their house blue colour and a yellow circle to indicate value as other supermarkets do. Rejecting this argument, the judge found that because the yellow circle on a blue background is unique to Lidl, that Tesco did not have ‘due cause’ which would have given Tesco a defense under section 10(3).

Tesco counterclaimed that Lidl’s wordless mark should be invalidated on the basis of bad faith because Lidl had no bona fide intention to use the wordless mark. Rather, it was filed solely to be used as a ‘legal weapon’ and that subsequent filings were made in order to ‘evergreen’ Lidl’s original filing. In response, Lidl presented evidence of good faith. The judge was however not persuaded by Lidl’s argument and rendered the wordless mark invalid.

For the tort of passing out to be made out under English law, the claimant must prove that it has the requisite goodwill, that the defendant has made a misrepresentation and that the claimant suffers or is likely to suffer damage as a result of the defendant’s misrepresentation. In this case, Lidl’s claim that Tesco was passing off was also made out. The judge found that Lidl had established goodwill. Further, the judge relied on Lidl’s evidence on ‘link’ made by consumers between the Lidl registrations and the Tesco sign under the section 10(3), to hold that misrepresentation was made and therefore that Lidl had suffered damage.

Lidl also prevailed on its copyright claim. The court held that the mark with text was an original artistic work subject to copyright protection. The court further found that Tesco’s design agency had impermissibly copied the mark with text. The judge concluded that by adopting and using the copy, Tesco had infringed Lidl’s copyright.

This decision has raised eyebrows within the IP community and has been appealed. The appeal will be heard by the Court of Appeal in February 2024, so this battle of the blues will indeed proceed to the next round.

Lifestyle Equities CV v Royal County of Berkshire Polo Club EWHC 1839

Lifestyle Equities brought proceedings against the defendants for trademark infringement under section 10(2) and 10(3) of the Act in the English High Court. The proceedings were brought in respect of the claimant’s trademarks in the UK, EU, Panama, Peru, Mexico and the United Arab Emirates (UAE). The parties had agreed that the English courts would consider infringement of the claimant’s non-UK trademarks.

In relation to the UK infringement under section 10(2) of the Act which concerns the likelihood of confusion between the mark and the sign on the part of the public, the judge considered the mark and the sign to be composite marks and that no particular component dominates in either the mark or the sign. He also considered that the horse and rider motif does not retain an independent distinctive role in the mark and held that the mark and the sign had a low to medium degree of visual similarity.

The judge considered many factors including that the average consumer in the UK has a greater ability to recognise the place name contained in the mark and the sign and held that there is no likelihood of confusion and dismissed the claim under section 10(2).

Further, the judge held that infringement under section 10(3) was not made out in respect of the UK infringement claim, as the average consumer would not make the link between the mark and the sign.

The judge found that where there are many clothing brands depicting polo club themes that consumers were less likely to make a connection simply on the basis of the words ‘Polo Club’ and a picture of a rider on a horse.

This was an unusual case in that the parties agreed that infringements of the non-UK marks would be considered by the English courts including any defences available under national law had the infringement claims succeeded.

Match Group v Muzmatch EWCA Civ 454

Match Group had been offering online dating services in the UK since 2001 using a variety of branding which included the word ‘Match’. The defendants offered online dating services directed to the muslim community since 2011 using the sign ‘Muzmatch’. The claimant brought trade mark infringement proceedings.

The judge at first instance held that the defendant had infringed the claimant’s marks under sections 10(2) and 10(3) of the Act. He held that the claimant’s Match.com mark had acquired a high degree of distinctiveness, that the word ‘match’ was the dominant element and that the average consumer would have considered that ‘Muzmatch’ to be a sub-brand of the claimant’s business.

The judge dismissed the defendant’s ‘defence’ of honest concurrent use on the basis that the defendant’s activity was infringing from the start.

The judge’s decision was appealed to the Court of Appeal on several grounds including that the judge erred in taking into account the absence of evidence of actual confusion despite the parties’ having traded for more than 10 years side by side and that the defendants ought to have a defence for trade mark infringement by virtue of “honest concurrent use”.

The Court of Appeal dismissed the appeal and held that most of the relevant class of consumers would not have been educated to understand that Muzmatch was unrelated to Match. The Court of Appeal also clarified that honest concurrent use is not a separate defence but is a “factor in the infringement analysis”. This decision highlights the difficulty in relying on honest concurrent use as a defendant.

Varuni Paranavitane is an of counsel of Finnegan in London. She can be contacted at: varuni.paranavitane@finnegan.com