Last year, we reported on the battle between the supermarket giants Lidl and Tesco over the large yellow circle used by both as a sign to identify their goods and services (see https://maclachlan.ie/the-case-of-the-yellow-dots-lidl-v-tesco/ ). Justice Joanna Smith found in favour of Lidl concerning their claims of trade mark infringement, passing off, and copyright infringement. The Court issued an injunction ordering Tesco to stop using its Clubcard logo.
Tesco inevitably appealed that decision, and yesterday, it culminated in a final decision being issued. The real-world effect of the decision is that Tesco’s stores up and down the country will soon be redecorated with a new logo for the Tesco Clubcard, as the previous decision and injunction were upheld, forcing Tesco to rebrand.
The court cases have taken many years, with both parties incurring vast costs in terms of time and resources. Tesco has the price of rebranding and a damaged reputation. In light of this, some may ask whether it was worth it and why Lidl felt it necessary to take action against Tesco’s use of a yellow dot when they use so many other signs to identify their brand.
It is said that imitation is the sincerest form of flattery, but in the world of business the imitation of those signs, i.e. trade marks, which are used to distinguish the goods and services of one business from those of another leads to confusion in the marketplace and dilution of the brand.
Lidl recognises the importance of its trade marks. It invests in them, educating the public about their meaning and building up their reputation. When consumers saw a yellow dot in connection with supermarket services, they thought of Lidl, good value, and low costs.
Tesco’s use of a yellow dot as part of their branding may have diluted that effect, making consumers unsure of whose services are being offered. Additionally, the court found that Tesco had taken an “unfair advantage” of the reputation that Lidl had built up in the yellow dot mark.
When consumers can no longer rely on a trade marks to identify the goods and services they are looking for, they lose trust in those brands. Imitation of another’s trade marks, whether intentional or not, can do untold damage and, like Lidl, businesses should take steps to adopt unique trade marks and protect them.
When adopting a new trade mark, the best practice is to conduct clearance searches to ensure your proposed trade mark differs from those already in the marketplace and then to file applications to register the trade mark in the territories where use is to be made. We’re sure that Tesco has already started finding a new logo, has conducted clearance searches to ensure that they do not end up in the same position again, and are filing if they have not already filed, trade mark applications to protect their new logo.
Do you have a sign that can be used to identify your goods and services? Are you launching a new product under a trade mark? Why not make an appointment to speak with one of our experienced trade mark attorneys to find out how you could best protect your brand by protecting your trade marks.
Cherrie Stewart, Director and Trade Mark Attorney