Every Lidl helps…

Daddy, what did you do during the war? Well, like thousands of others caught up in the conflict, when that whistle went, we steadied our nerve and advanced, together, towards the line of rattling tills, tapping our right buttock and reciting the regimental prayer “…every little helps…” placing our faith in technology. We instinctively knew all that was right and good was on our side. We’d seen the adverts, and we had a mighty army. We could hear the low rumble of barristers exchanging opinions in the middle distance but proudly marched on, believing our little Clubcard would shelter us like an iron dome from a firestorm of unexpectedly high-priced staple goods.

Not the answer you expected. That’s probably what Tesco thought a few days ago when they lost to Lidl in the Court of Appeal in the latest battle of the supermarket war.

Their flexible friend

To me and you the supermarket store card is just a wallet-friendly, joyful plastic passport to a cheaper shop – that is if you crack the enigma of online registration. To the stores, it’s many things: a ball and chain around your foot to stop you wandering into enemy territory. It’s also the data harvest opportunity hill to die on and a tool to leverage ‘loyalty’ and profit in equal measure. So, there’s much worth fighting for. Tesco’s favourite fidelity device has just blown up in its face.

Pick your battles

This battle started in 2020 and was first in court early last year. Someone in Tesco must know who ‘signed-off’ on using a yellow circle against a blue background to promote Clubcard prices. Yes – yellow circle and blue background – a bit like Lidl’s logo you might say.

Well Lidl did say, and they claimed Tesco infringed its registered trade marks:

1. The Wordless Mark (just colour and shape)
2. The Mark with Text (colour, shape, and Lidl or some such)

Lidl said this was infringement and passing off. It claimed its trade marks were distinctive and by Tesco using something so similar, it was misrepresenting that its prices were as low as Lidl’s. this, it was said, was confusing the public and Tesco were taking advantage of Lidl’s reputation as a:

“…discounter supermarket known for its provision of value”.

There were counter claims by Tesco, of course, lawyers earning corn. They said the Wordless Mark was lacking in creativity, registered in bad faith and was being used as a convenient artifice to support the claims. That the continual registration of this Wordless Mark was ‘evergreening’ a mark that shouldn’t be registerable in the first place and was possibly only re-registered to pick this fight.

And so, the Court of Appeal had to winnow these pleadings, as it always does, and make some sense of it.

Once more with feeling

It’s probably worth saying at this point that an appeal is not an opportunity for a retrial. Even if the Court of Appeal has issues with the High Court Judge’s findings, it isn’t likely to interfere with findings of fact at the first trial. It’s a common misperception to think an appeal allows a gallop through the same evidence to get a different result. That’s not its function and exemplified well in this case.

In short, the appeal court judgement looks very much like it wasn’t impressed with Lidl’s conduct and arguments, but it found in its favour against Tesco seeing no good grounds to upset the original High court decision or to question the facts upon which it was based. So, a loss for Tesco but a definite shot across the bows for Lidl and its Wordless Mark caper.

Trade mark spats and occasional common sense legal victories aside, there is a growing argument for big-gun, government intervention and scrutiny of supermarket loyalty cards. The current invasion looks as uncontrolled as it is unstoppable.

Out of pocket

According to The Grocer publication, it could cost Tesco £7m to remove all 8 million offending in-store signs. Will anyone turn up to the next Tesco Marketing Board meeting or maybe, they will elect to work from home that day – perhaps on mute?

 Just an old-fashioned girl

So, the next time your trolley is laden to the gunwales with your weekly shop, and as you approach the till you realise you’ve left your store card in the car; don’t panic, you could just ask:

“How much for cash?”. Go on, I dare you.

Murray Fairclough
Development Underwriter
OPUS Underwriting Limited 
+44 (0) 780 145 9940
underwriting@opusunderwriting.com