Winning the battle; but not the war: A lesson in strategic litigation

By Chris Brand on 16 November 2023

A pyrrhic victory is much less a victory, and much more a consolation with dire repercussions. Perhaps hyperbole considering the results in the case of Lidl v Tesco [2023] EWHC 873 (Ch), but a lesson none the less must be taken from this judgment. 

The case concerns two consolidated claims between two well-known European supermarket chains, namely Lidl and Tesco. Lidl alleged infringement by Tesco of its registered trade marks.  Lidl also instituted a claim for passing-off of its marks, as well as a claim for copyright infringement.  Tesco pursued a counterclaim alleging that several of Lidl’s trade marks, on which its claims are based, are liable to be declared invalid on the grounds that they were registered in bad faith, and/or they should be revoked for non-use, and/or they have no distinctive character. 

Trade mark infringement

In its claim for trade mark infringement, Lidl relied on two registered marks, both the round Lidl device mark, one without the text "Lidl" and the other with the text included ("Lidl trade marks").

The device mark with text appears throughout Lidl’s stores, on their advertising material and on their products. 

Although Lidl admits that the graphical device forming part of the wordless device mark has never been used in the United Kingdom other than as a background to the device mark with text, it argues that the device is still distinctive of its goods and services apart from the name "Lidl" and that it has generated a huge reputation and goodwill in both the wordless device mark, as well as the device mark with text.  Central to Lidl’s case is its contention that the reputation and goodwill attaching to such marks concerns its status as a "discounter" supermarket that offers value in relation to quality goods at low prices. 

The complaint by Lidl concerned Tesco’s blue and yellow Clubcard Prices device, which Lidl argued infringed its logo. Examples of Tesco’s sign could be seen in the judgment referenced below.

It is worth noting that confusing similarity was not pleaded in this case.  Rather, Lidl alleged that Tesco was "free riding" off, and/or diluting, the reputation of its Lidl trade marks (i.e., section 10(3) of the Trade Marks Act, 1994 (UK)). This section states that 

"a person infringes a registered trade mark if he uses in the course of trade, in relation to goods or services, a sign which is identical with or similar to the trade mark where the trade mark has a reputation in the United Kingdom 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".

It is worth noting that the South African Trade Marks Act, 194 of 1993 ("Trade Marks Act"), has a similar provision at section 34(1)(c). 

As such, Lidl had to show that: 
  1. the Tesco sign is identical or similar to Lidl’s trade marks; 
  2. the Lidl trade marks has the requisite reputation in the United Kingdom; and 
  3. the use by Tesco of the alleged offending signs would take unfair advantage of, or be detrimental to, the distinctive character or the repute of the Lidl trade marks. 
In comparing the marks, the judge found that despite the obvious differences between them (i.e., the red circle outline, the stylized Lidl mark in blue and red lettering in respect of the Lidl trade marks), as well as the predominance of the LIDL mark on the one hand, and the Clubcard mark on the other, they were sufficiently similar to each other. 

Tesco further acknowledged that the Lidl trade marks had the requisite reputation and that they were extensively used by Lidl. 

On whether the average consumer would make a link between the Tesco mark, and the LIDL trade marks, the judge found that this would occur based on one of Tesco's internal pre-launch survey, which showed that in relation to a certain billboard advertisement, 8% of the 276 customers who saw it thought it was for Lidl, and also on the basis that of all the people who had complained to either Tesco or Lidl, some made a connection between the registered mark and the Tesco sign.

Lidl went on to allege that Tesco intended to cause detriment to the distinctive character of the Lidl mark or take unfair advantage of it. 

In terms of "detriment" to Lidl as a result of the Tesco use, Lidl sought to persuade the court that it had to launch a counter advertising campaign called "Unmatched Value". Though the campaign was in fact launched against several supermarkets (not just Tesco), the judge found that to be sufficient because the Tesco Clubcard Prices scheme was one of the targets of the campaign. The court further found that Tesco were, in addition, taking unfair advantage of the Lidl trade marks due to the resemblance between them (noted above) even though there was no subjective intention by Tesco to achieve this.

In response to the abovementioned and to address the defense of 'due cause', Tesco alleged that they were using their house blue colour and a yellow circle to denote value (which a number of other supermarkets also did). The judge, however, found this reasoning unconvincing. 

In light of the above, the Court concluded that trade mark infringement, as provided in section 10(3) of the Trade Marks Act, had occurred. Having passed the first hurdle, the court then considered the claim for passing-off. 


Lidl alleged that Tesco were also passing off their goods as being price matched against Lidl by use of their sign. The judge found that the fact that there was a link being made by consumers between the Lidl registration and the Tesco device was sufficient for her to find that there was passing-off of the kind alleged.

Finally, the court turned to consider the claim for copyright infringement. 

Copyright infringement 

Lidl alleged that it owned copyright in its logo and that Tesco had copied it. The Lidl logo itself had been designed in various stages over a 30-year period. The work alleged to be copied was the final version which differed from the previous version only by the inclusion of a blue background. The judge found that ‘by its combination of text colours and shapes’, the logo was protected by copyright and that there was a statutory presumption that Lidl owned it (s 104 of UK’s Copyright, Design and Patents Act). In considering the claim that Tesco had copied the work, the judge found that Tesco itself had not copied the work but that an external design agency, engaged on a different project months before work began on the device, had produced a design which the judge considered to be sufficiently similar to constitute copyright infringement.  By Tesco adopting that infringing work, Tesco had themselves infringed. 

Counterclaim by Tesco

Having found that Lidl succeeded on all its claims, the court now turned to consider where Tesco’s counterclaim for revocation of the wordless device mark on the basis of (i) non-use and (ii) bad faith, had any merit. The court found that, although the counterclaim could not succeed on the basis of (i) non-use, the counterclaim should succeed on the basis of (ii) bad faith and ordered that the wordless device mark be partially revoked. 


Lidl was not able to achieve a flawless victory. In taking formal litigious action against Tesco, its action resulted in the partial revocation of its wordless device mark.   

This judgment, therefore, serves as an important lesson in ensuring that one does not rush to court without considering the risks associated with taking such action. 

Application to South Africa

In any opposition to a trade mark application, or claim for trade mark infringement, the first issue to always consider is whether opponent/claimant's trade mark registrations are vulnerable to expungement and/or revocation.  This can be done either, in the case of non-use of the subject mark, in terms of section 27(1) of the Trade Marks Act, or by way of rectification in terms of section 24, as read with section 10, of the Trade Marks Act. 

A successful counterclaim could mean the difference between success or failure, especially in the case of oppositions where the onus to prove the registrability of the mark falls on the trade mark applicant. Should the counterclaim for expungement and/or rectification be successful, the opposition or infringement claim may very well fail. 

It is, therefore, imperative that, prior to taking any formal litigious actions, a global appreciation of all the facts, legal position, and possible risks are accounted for. Failure to plan accordingly may result in detrimental consequences.  

*Link to case: 

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