Logos do not need to confuse to infringe a competitor’s trade marks
The judge noted that both Lidl’s trade marks and the Tesco Clubcard Price signs (CCP) are similar, as both are made up of a yellow circle set within a blue square and both have writing in the centre of the blue circle. The main difference was the word(s) used on Tesco signs and the graphically stylised “LIDL” included in the Lidl marks, but this did not negate the similarities or prevent infringement.
Lidl’s claims relied primarily on Tesco’s unfair advantage taking under section 10(3) of the Trade Marks Act 1994 (TMA 1994). The TMA 1994 was designed to implement EU trade mark legislation. The leading case on infringement by unfair advantage taking (which resulted in guidance from the CJEU) is L’Oreal v Bellure, which demonstrated the potential scope of this form of infringement. For example, it does not require there to be any likelihood of confusion between the asserted trade mark and the defendant’s sign for infringement to be established.
Lidl presented a collection of comments from the public including from Tesco’s customer communication database. These were an important evidential strand in this case as they showed that a significant number of shoppers encountering the CCP signs in real life were, unprompted, making a connection to Lidl and/or had assumed that Tesco was price matching against Lidl.
As a result of this linking and in a similar way as House of Fraser was found to infringe in the Jack Wills case, Tesco were found to have taken unfair advantage of Lidl’s marks due to the objective effect of their use of the Clubcard Price signs (the “insidious image transfer” to Tesco of Lidl’s mark’s connotations of quality goods at low prices). This was despite the Judge's rejection of any “intentional evocation of the Lidl Marks by Tesco”.
Even simple logos can be protected by copyright
Copyright is a right which arises automatically on the creation of original artistic and literary works and other specified types of work. In this case, the judge rejected Tesco’s argument that Lidl’s logo was too simple and didn’t involve sufficient skill and labour to be an original work and attract copyright protection.
Lidl were unable to identify who the author of their relevant logo was. However, the Judge accepted the work qualified for protection by copyright which Lidl owned due to sections 104 (4) and (5) of the Copyright Designs and Patents Act 1988. These sections mean that in the absence of contrary evidence where a work bears a name purporting to be that of the publisher (here Lidl), that person/legal entity is presumed to be the owner of any copyright in the work and the work is deemed to qualify for copyright protection on the basis of the country where the claimant asserts it was first published (here Germany).
The situation where the details of a logo’s creation are lost in the mists of time is very common and Lidl would have saved itself a lot of risk and trouble had it kept records of which of its employees created the logo and where it was first published. This is a good practice all businesses should adopt if possible.
Additionally, although not an issue in this dispute, where a business hires an external designer agency to create or contribute to a new logo or logo update, it should obtain an assignment of the copyright and other rights in the logo. In this situation the design agency or its contractor will be the owner of the copyright in the logo until it is contractually assigned to the commissioning business. Businesses that commission design agencies should also consider carefully whether the terms under which any work is being undertaken include a sufficient indemnity from the agency against liability for infringement of third party rights which result from the business use of the new work.
In this case, it eventually became clear that Tesco had used a design agency to help create its Clubcard Price signs and the agency and Tesco both had access to Lidl’s logo. Tesco had instructed its design agency to look at how to convey value with reference to competitor branding. In view of this access, the Judge also concluded that Tesco’s signs were sufficiently similar “that they are more likely to be the result of copying than mere coincidence”. This meant an inference of copying arose, which Tesco needed to answer. However, Tesco’s in-house evidence on the creation of its Clubcard Prices sign was, in the Judge’s view, “inaccurate evidence which appears to have been designed only to obscure [Tesco’s external design agency’s] involvement”. Tesco did not call anyone from their design agency to give evidence of independent design and the Judge drew an adverse inference from this, which ultimately led to her finding that Lidl’s logo was copied by Tesco’s design agency “as part of their exploratory work commission by Tesco and thereafter adopted by Tesco”
This emphasises the need to ensure that new or updated logos are not copied in whole or in part from any existing works and also that clear evidence of the independent design process are kept (eg records of who did what and dated first drafts and rough sketches) so as to be able to defend against a possible copyright infringement claim in the future.
Related expertise
You may be interested in...
Legal Update
Utilising prime retail sites to improve the health of our nation
Legal Update
A new era of opportunity for high street regeneration?
Legal Update
Subsidy control lessons to be learnt from Bulb
Legal Update
Vicarious liability – don’t overlook the importance of close connection
Opinion
New bill reaches tipping point: bill on allocation of tips at final stages
Press Release
Browne Jacobson advise on merger of leading UK frozen food wholesalers Hopwells and Windsor Foodservice
Press Release
Browne Jacobson’s North-West banking specialists advise ThinCats on £10m facility to arcade bar operator NQ64
Opinion
Practical points from High Court ruling that Tesco has infringed Lidl’s IP rights in its famous yellow circle logo
Published Article
O Shaped mindset when working with witnesses
Opinion
Mediation – remote or in person?
Press Release
Browne Jacobson act on the sale of UK’s largest tech enabled confectionery distributor and wholesaler IBG
Legal Update
Knowledge exchange and intellectual property
Opinion
Confirmation of Acas early conciliation in the context of multiple claim forms
Legal Update
Pitfalls for retailers to avoid when offering access to ‘buy now, pay later’ products
Published Article
ClientEarth claim may expand scope of directors' duties
Press Release
Law firm Browne Jacobson appointed to work alongside the Government Legal Department - the Department for Environment, Food & Rural Affairs
Press Release
Browne Jacobson’s Manchester dealmakers advise Spatial Global on its acquisition of Heathrow based freight specialist Hollyport Logistics
Opinion
The Solicitors Regulation Authority has approval to take over from the Solicitors Indemnity Fund
Legal Update
Embargoed Judgments: A Professional Word of Caution
Online Event
Register your interest to join our next Home Delivery Academy
Press Release
Browne Jacobson’s intellectual property lawyers ranked experts in World Trademark Review guide 2023
Opinion
Term-time school worker entitled to national minimum wage for unworked basic hours
Legal Update - Public matters newsletter
Public matters - January 2023
Opinion
Supreme court rules on retail tenant's service charge bill
Opinion
Litigation in 2023 – Reforms on the horizon
Published Article
Consumer duty part 3 - 'The drill-down' into the 'cross-cutting' rules
Press Release
International leading digital disruption expert joins Browne Jacobson
On-Demand
The UK's green agenda - the outcomes of COP27 and actions since COP26
Legal Update
Settlement agreements – what are the limitations?
Settlement agreements are commonplace in an employment context and are ordinarily used to provide the parties to the agreement with certainty following the conclusion of an employment relationship.
Press Release
Browne Jacobson’s retail lawyers advise Wilko on its strategic £48m sale and leaseback of Nottinghamshire distribution centre to DHL
National law firm Browne Jacobson has advised long standing retail client, Wilko on the sale and leaseback of its Nottinghamshire distribution centre in Worksop to logistics specialist DHL for £48m.
Press Release
Court of Appeal makes plea for legally enforceable arbitration for FRAND disputes
In the ongoing complex litigation between Optis Cellular Technology LLC and Apple Inc., the Court of Appeal ([2022] EWCA Civ 1411) has upheld the High Court’s findings that implementers of standard-essential patents (SEPs) cannot refuse to accept a FRAND license and continue activities in the meantime which constitute infringement: that party must commit to accept a court-determined license if it wishes to avoid an injunction.
Press Release
Suzanne Harlow joins Browne Jacobson as Non-Executive Director
Law firm Browne Jacobson is pleased to announce that Suzanne Harlow has been appointed Non-Executive Director of its Retail, Consumer & Logistics sector.
Legal Update
Is this the end for free returns?
Earlier in the year a number of fashion retailers, boldly announced the introduction of a charging fee for returning any product purchased via their online store. Yet, despite this commercial, and perhaps somewhat controversial decision, at least one major fashion giant that adopted this approach has recorded ‘historic highs’ in its September profits. Browne Jacobson partner, Cat Driscoll who heads up the firm’s commercial team in Manchester and is also head of its Fashion & Beauty sector discusses whether this change has put the average consumer off and whether the days of free returns are long gone.
Published Article
AI generated designs on retail products
Every AI will have its own terms of use. DALL·E 2’s Terms of Use dated 3 November 2022 specify that as between a user and Open AI, a user owns their prompts and uploads. Open AI also assigns to the user all rights in any images generated by DALL·E 2 for that user (subject to the user complying with those Terms of Use, and to a licence to use inputs and output to develop and improve the services).
Published Article
Consumer duty part 2 - 'The drill-down' into the 'cross-cutting' rules
Legal Update
Five “takeaways” in claims against mortgage brokers following Taylor v Legal & General Partnership Services Ltd [2022] EWHC 2475 (Ch)
Claims arising from interest-only mortgages have been farmed in volume. Many such claims to date have sought to drive a narrative that interest-only mortgages are an inherently toxic product and brokers were negligent simply for suggesting them. Taylor is a helpful recalibration, focussing instead on what the monies raised by the mortgage product were being used for and whether the client understood the inherent risks.
Opinion
The Future of Mediation
Published Article
Bruce Willis AI and the problem with deepfakes
A deepfake of Bruce Willis is advertising Russian mobile phones. Many great artistic and metaphysical questions are raised by this performance. However, this article is going to look at the intellectual property law implications, from a UK perspective.
Published Article
Luxury brands and sustainability – The challenges and solutions
Legal Update
Trigger happy when directors’ duties are the target?
In a judgment handed down yesterday the Supreme Court has affirmed that a so called “creditor duty” exists for directors such that in some circumstances company directors are required to act in accordance with, or to consider the interests of creditors. Those circumstances potentially arise when a company is insolvent or where there is a “probability” of an insolvency. We explore below the “trigger” for such a test to apply and its implications.