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Tesco will stop using its Clubcard logo in its current form in a costly and embarrassing rebranding exercise for the UK’s largest supermarket after it lost a legal case against Lidl.
The grocer on Tuesday lost its appeal against a ruling last year that it infringed the German discounter’s trademark over the use of a yellow circle on a blue square to promote its loyalty discount scheme following a years-long trademark dispute.
Tesco would update its Clubcard Prices logo in the coming weeks, a person familiar with its thinking said on Tuesday.
The number of Clubcard members surpassed 20mn last year and the supermarket has put its money-saving loyalty scheme at the heart of its strategy to attract and retain more shoppers to its stores amid the cost of living squeeze.
The High Court had ruled in April last year that Lidl could have an injunction to stop Tesco using the logo but said that this would not take effect until any appeals were resolved.
Tesco warned at the time that it would cost as much as £8mn to comply, owing to the “extremely widespread use” of the logo, with millions of signs in stores.
Lidl previously accused Tesco of deliberately seeking to ride on the coat-tails of its reputation as a “discounter” and alleged that the Clubcard Prices promotion was adopted by Tesco as part of a campaign to help it compete with discounters such as itself.
On Tuesday, the court said that Tesco’s goal was to promote the value of its own distinctive brand but in the process “it has found itself liable for trademark infringement and passing off”.
Lord Justice Lewison, quoting a Supreme Court judge in an unrelated case, said: “If I could find a way of avoiding this result, I would. But the difficulty is that the trial judge’s findings of fact, however surprising they may seem, are not open to challenge. Given those findings, I am constrained . . . To accept the judge’s conclusion [on trademark infringement and passing off] cannot be faulted in law. With undisguised reluctance, I agree . . . that [Tesco’s] appeal should be dismissed.”
The court, however, upheld Tesco’s appeal against a finding that it infringed Lidl’s copyright.
Following the appeal ruling Tesco said: “We are disappointed with the judgment relating to the colour and shape of the Clubcard Prices logo but would like to reassure customers that it will in no way impact our Clubcard Prices programme.”
Lidl said it was delighted with the outcome and accused Tesco of “prolonging the dispute by appealing”. “We expect Tesco now to respect the court’s decision and change its Clubcard logo to one that is not designed to look like ours,” the company added.
