“29. As regards, in particular, detriment to the distinctive character of the earlier mark, also referred to as ‘dilution’, ‘whittling away’ or ‘blurring’, such detriment is caused when that mark’s ability to identify the goods or services for which it is registered and used as coming from the proprietor of that mark is weakened, since use of the later mark leads to dispersion of the identity and hold upon the public mind of the earlier mark. That is notably the case when the earlier mark, which used to arouse immediate association with the goods and services for which it is registered, is no longer capable of doing so. … 67. The more immediately and strongly the earlier mark is brought to mind by the later mark, the greater the likelihood that the current or future use of the later mark is taking unfair advantage of, or is detrimental to, the distinctive character or the repute of the earlier mark. 68. It follows that, like the existence of a link between the conflicting marks, the existence of one of the types of injury referred to in Article 4(4)(a) of the Directive, or a serious likelihood that such an injury will occur in the future, must be assessed globally, taking into account all factors relevant to the circumstances of the case, which include the criteria listed in paragraph 42 of this judgment. 69. … the stronger the earlier mark’s distinctive character and reputation the easier it will be to accept that detriment has been caused to it … … 77. … proof that the use of the later mark is or would be detrimental to the distinctive character of the earlier mark requires evidence of a change in the economic behaviour of the average consumer of the goods or services for which the earlier mark was registered consequent on the use of the later mark, or a serious likelihood that such a change will occur in the future. 78. It is immaterial, however, for the purposes of assessing whether the use of the later mark is or would be detrimental to the distinctive character of the earlier mark, whether or not the proprietor of the later mark draws real commercial benefit from the distinctive character of the earlier mark.”
“42. Admittedly, Regulation No 207/2009 and the Court’s case-law do not require evidence to be adduced of actual detriment, but also admit the serious risk of such detriment, allowing the use of logical deductions. 43. None the less, such deductions must not be the result of mere suppositions but … must be founded on ‘an analysis of the probabilities and by taking account of the normal practice in the relevant commercial sector as well as all the other circumstances of the case’.”
“41. As regards the concept of ‘taking unfair advantage of the distinctive character or the repute of the trade mark’, also referred to as ‘parasitism’ or ‘free-riding’, that concept relates not to the detriment caused to the mark but to the advantage taken by the third party as a result of the use of the identical or similar sign. It covers, in particular, cases where, by reason of a transfer of the image of the mark or of the characteristics which it projects to the goods identified by the identical or similar sign, there is clear exploitation on the coat-tails of the mark with a reputation. … 43. It follows that an advantage taken by a third party of the distinctive character or the repute of the mark may be unfair, even if the use of the identical or similar sign is not detrimental either to the distinctive character or to the repute of the mark or, more generally, to its proprietor. 44. In order to determine whether the use of a sign takes unfair advantage of the distinctive character or the repute of the mark, it is necessary to undertake a global assessment, taking into account all factors relevant to the circumstances of the case, which include the strength of the mark’s reputation and the degree of distinctive character of the mark, the degree of similarity between the marks at issue and the nature and degree of proximity of the goods or services concerned. … the more immediately and strongly the mark is brought to mind by the sign, the greater the likelihood that the current or future use of the sign is taking, or will take, unfair advantage of the distinctive character or the repute of the mark …”
“45. It follows that the concept of ‘due cause’ may not only include objectively overriding reasons but may also relate to the subjective interests of a third party using a sign which is identical or similar to the mark with a reputation. 46. Thus, the concept of ‘due cause’ is intended, not to resolve a conflict between a mark with a reputation and a similar sign which was being used before that trade mark was filed or to restrict the rights which the proprietor of that mark is recognised as having, but to strike a balance between the interests in question by taking account, in the specific context of Article 5(2) of Directive 89/104 and in the light of the enhanced protection enjoyed by that mark, of the interests of the third party using that sign. In so doing, the claim by a third party that there is due cause for using a sign which is similar to a mark with a reputation cannot lead to the recognition, for the benefit of that third party, of the rights connected with a registered mark, but rather obliges the proprietor of the mark with a reputation to tolerate the use of the similar sign. 47. The Court thus held in paragraph 91 of the judgment in Interflora and Interflora British Unit (a case concerning the use of keywords for internet referencing) that where the advertisement displayed on the internet on the basis of a keyword corresponding to a trade mark with a reputation puts forward – without offering a mere imitation of the goods or services of the proprietor of that trade mark, without being detrimental to the repute or the distinctive character of that mark and without, moreover, adversely affecting the functions of the trade mark concerned – an alternative to the goods or services of the proprietor of the trade mark with a reputation, it must be concluded that such a use falls, as a rule, within the ambit of fair competition in the sector for the goods or services concerned and is thus not without ‘due cause’.”
“My Lords, A. G. Spalding & Bros. v. A. W. Gamage Ltd., 84 L.J.Ch. 449 and the later cases make it possible to identify five characteristics which must be present in order to create a valid cause of action for passing off: (1) a misrepresentation (2) made by a trader in the course of trade, (3) to prospective customers of his or ultimate consumers of goods or services supplied by him, (4) which is calculated to injure the business or goodwill of another trader (in the sense that this is a reasonably foreseeable consequence) and (5) which causes actual damage to a business or goodwill of the trader by whom the action is brought or (in a quia timet action) will probably do so.”
"In seeking to formulate general propositions of English law, however, one must be particularly careful to beware of the logical fallacy of the undistributed middle. It does not follow that because all passing off actions can be shown to present these characteristics, all factual situations which present these characteristics give rise to a cause of action for passing off."
“Although your Lordships were referred in the course of the argument to a large number of reported cases, this is not a branch of the law in which reference to other cases is of any real assistance except analogically. It has been observed more than once that the questions which arise are, in general, questions of fact. Neither the appellants nor the respondents contend that the principles of law are in any doubt. The law of passing off can be summarised in one short general proposition — no man may pass off his goods as those of another. More specifically, it may be expressed in terms of the elements which the plaintiff in such an action has to prove in order to succeed. These are three in number. First, he must establish a goodwill or reputation attached to the goods or services which he supplies in the mind of the purchasing public by association with the identifying ‘get-up’ (whether it consists simply of a brand name or a trade description, or the individual features of labelling or packaging) under which his particular goods or services are offered to the public, such that the get-up is recognised by the public as distinctive specifically of the plaintiff’s goods or services. Secondly, he must demonstrate a misrepresentation by the defendant to the public (whether or not intentional) leading or likely to lead the public to believe that goods or services offered by him are the goods or services of the plaintiff. Whether the public is aware of the plaintiff’s identity as the manufacturer or supplier of the goods or services is immaterial, as long as they are identified with a particular source which is in fact the plaintiff. For example, if the public is accustomed to rely upon a particular brand name in purchasing goods of a particular description, it matters not at all that there is little or no public awareness of the identity of the proprietor of the brand name. Thirdly, he must demonstrate that he suffers or, in a quia timet action, that he is likely to suffer damage by reason of the erroneous belief engendered by the defendant's misrepresentation that the source of the defendant's goods or services is the same as the source of those offered by the plaintiff.”
“Having regard to all the circumstances of use, Tesco’s use of the Sign is so to suggest that the prices of those goods that are offered by Tesco for sale under or in connection with the Sign, are offered at the same prices or lower prices than could be obtained for the same or equivalent goods in Lidl stores (or are otherwise ‘price matched’ with Lidl) contrary to fact …”
“(b) The use of the Sign has and will serve to dilute the ability of the Marks to identify the source of goods or services for which they are registered. This is particularly the case where the Marks, having been so distinctive as to arouse immediate association with the Claimant’s business, have or may become no longer capable of doing so. (c) Tesco’s use of the Sign is liable to be detrimental to the distinctive character of the Marks in that use of a similar sign to indicate that a price is a ‘discount’ price is liable to alter the distinctive character of the Marks. (d) Tesco’s use of the Sign is liable to alter the economic behaviour of consumers in that consumers are liable to associate its features, which are features of the Marks and with which the reputation is associated, with discounted prices generally and, in consequence, purchase Tesco’s goods and services as being discounted. Further, the use of the Sign is intended to and/or does incentivise customers to switch away from purchasing the Claimant’s services to those of the Defendants. … ”
“… the Defendants have misrepresented that products sold by Tesco share the qualities of those of Lidl, including in particular that the goods offered for sale by Tesco in connection with the Sign are of equivalent good standard, and sold at the same or equivalent price, as similar goods sold in the course of the Lidl business; or that Tesco has otherwise ‘price matched’ the prices of its products with those of Lidl; in each case contrary to the fact.”
“The visual similarity is here the significant feature and, whilst I accept that the text represents an important point of difference, nonetheless I do not consider that it has the effect of extinguishing the strong impression of similarity conveyed by their backgrounds in the form of the yellow circle, sitting in the middle of the blue square. This was an impression that I formed myself upon seeing the Mark with Text and the CCP Signs.”
“… it is possible in this case to address various of the factors identified in Intel … relatively swiftly. The Mark with Text and the CCP Signs appear to me to be similar for all the reasons I have identified above. I have already observed that the goods or services for which the Mark with Text is registered and in respect of which the CCP Signs are used are identical, as is the relevant sector of the public. The Mark with Text has a strong reputation and enhanced distinctiveness, which in itself provides scope for a greater likelihood that a connection will be made….”
“In all the circumstances to which I have referred and approaching the question from a ‘global’ standpoint, I am satisfied that Lidl has established the necessary ‘link’. There is clear evidence of both origin and price match confusion/association together with evidence that Tesco appreciated the potential for confusion. I consider that the average reasonably observant consumer encountering the CCP Signs in the real world at the date of the launch of the Clubcard Price campaign would draw a link between the Uses of the CCP Signs and the Mark with Text and that the available evidence amply bears out my conclusion.”
“Drawing the threads together, I find that Lidl has established detriment to the distinctive character of its Mark, evidenced by the fact that it has found it necessary to take evasive action in the form of corrective advertising.”
“176. In my judgment, the CCP Signs were plainly intended (amongst other things) to convey value and thereby to influence the economic behaviour of supermarket shoppers, notwithstanding that I have found no specific intention to free-ride on Lidl’s reputation. I agree with Lidl that, just as occurred in Jack Wills, the effect of the use of the CCP Signs was to cause a ‘subtle but insidious’ transfer of image from the Mark with Text to the CCP Signs in the minds of some consumers. This will have assisted Tesco to increase the attraction of their prices. The H&P report from November 2020 identified that the Clubcard Prices campaign had produced an increase in value perception of 6% in total and 9% among families; H&P observed that ‘[t]he campaign persuaded current Clubcard holders to use their cards and encouraging (sic) those without a Clubcard to sign up’. 177. Conveying the value proposition which Ms McEttrick accepted was one of a number of objectives of the Clubcard Prices promotion will have been easier and more effective by reason of the connection with the Lidl logo whose reputation was low price value. By way of example, Mr Paulson’s evidence confirmed that he had interpreted the CCP Sign as guaranteeing the same prices as Lidl.”
“With respect, I agree. There is plainly a balancing exercise to be undertaken between, on the one hand, the interests which the proprietor of a trade mark has in safeguarding its essential function and, on the other hand, the interests of other economic operators in having signs capable of denoting their products and services (Comic Enterprises Ltd v Twentieth Century Fox Film Corp[2016] EWCA Civ 41 at [123]), but given the context, the test will be ‘relatively stringent’, as Kitchen J observed in Julius Sämaan at [84]. Thus the mere fact that the sign complained of was innocently adopted is not sufficient to invoke the exception – there must be something more to satisfy the court that the rights of the claimant must yield to the use of the sign.”
“187. … Whilst The Source advised Tesco that the CCP Sign was the optimal choice if Tesco wanted customers to ‘call out’ a message about loyalty and Clubcard, it was not the only choice available to Tesco and it was Ms McEttrick’s evidence that Tesco was not in the habit of slavishly following advice from its external consultants. In any event, the evidence supports the proposition that Tesco had decided upon the CCP Sign before The Source carried out its testing. 188. Furthermore, it is clear that another of Tesco’s external consultants (Mr Mike Follett at Lumen, an attention specialist agency) specifically queried (as a ‘watch out’) why Tesco would remove the yellow price tile it was already using ‘given it has great attention & brand equity’ in favour of a sign which ‘looks a bit like [a] Lidl ad’. The response to this question from Mr Marcus Gilbert, as I have already mentioned was that ‘at this stage it’s a non-negotiable’. Why it might have been regarded as ‘non-negotiable’ was never explained – Mr Gilbert was not called to give evidence by Tesco. There is no suggestion that Tesco could not have used a different sign to launch its Clubcard Prices (including a different sign incorporating the colours yellow and blue if that was thought best to reflect its objectives). …”
“272. I accept Lidl’s submissions that although this court cannot begin to quantify the precise proportion of consumers who are, or have been, deceived, nevertheless the evidence supports the proposition that a substantial number of consumers have been deceived. …. … 274. In my judgment, the evidence to which I have already referred as to the link that is being made by consumers between the Tesco CCP Signs and the Lidl Marks establishes the existence of deception. That evidence is consistent across different sources as to the basis, cause and nature of the deception. Whilst it is clear that many consumers will not be fooled by the similarities between the CCP Signs and the Lidl Marks, it is also clear that a substantial proportion of people will be fooled – the evidence from Messrs Paulson and Berridge (whose views on seeing the CCP Signs were not said by Tesco to be atypical), the evidence of the spontaneous reactions from the Lidl Vox Populi and the evidence from the Source Survey all supports such a conclusion, as does my finding that this is likely to be the tip of the iceberg.”
“Pausing there, Lidl has adduced no evidence whatever either as to the reputation and goodwill enjoyed by the Mark with Text in 1995 or as to the perception of the average consumer at that time. Furthermore, it has no evidence as to its intentions at the time of the 1995 Application. … despite extensive investigations, Lidl has been unable to shed any light on its intentions and rationale at the time of filing the applications for the Wordless Marks. There is no one still within the Lidl business who has any personal recollection of, or involvement in, the filings made in 1995, 2002, 2005 or 2007 and Lidl is not prepared to waive privilege over communications with its external trade mark attorneys and lawyers (a perfectly legitimate stance which does not entitle the court to draw any inferences one way or another). As for Lidl’s current filing practice, Mr Unterhalter’s unchallenged evidence is that Lidl’s approach to trade mark protection ‘in general’ is, in summary, that (i) it always tries to register brands it uses as part of its distinct identity; (ii) it updates trade marks when there is a change in brand assets, such as the introduction of a new logo or a tweak to an existing logo; (iii) it tries to obtain trade mark coverage in all the countries/markets that it operates in and (iv) it seeks to ensure that its trade mark registrations cover the business it is actually doing.”
“The trouble with this pleading, however, is that without any evidence whatever to establish Lidl's knowledge or belief at the time, it does not appear to me to be sufficient to displace the inference of use of the Wordless Mark as a legal weapon (considered by Arnold LJ to be a legitimate inference). I agree with Tesco that this really amounts to little more than a submission. There is no evidential basis for the underlying contention that Lidl knew or thought that it was using the Wordless Mark by using the Mark with Text. In this context the fact that the registration involved goods that were consistent with a supermarket business takes matters no further.”
“… given the inference legitimately raised by Tesco’s pleading, I do not see that this is sufficient on its own to establish good faith – as Tesco correctly points out, there is nothing akin to a statement of truth in making the application for the registered trade mark and so this exercise is little more than ‘bureaucratic box-ticking’.”
“It does not (without more) evidence a subjective intention on the part of Lidl to use the Wordless Mark and nor does it support the proposed inference; the letter is the only available evidence and it appears to be concerned with acts of trade in the real world rather than with the minutiae of trade mark law.”
“… a finding of use is not sufficient to protect against a finding of bad faith – the question for the court is the subjective intention of the proprietor of the trade mark at the time of registration. The fact that a registered mark is later found to have been used as a component part of another mark does not (without more) evidence the existence of the necessary subjective intention.”
“Given that I have been unable to accept any of the points made by Lidl in its Statement of Good Faith, I am bound to find that in the absence of any evidence of the type I have already identified, Lidl has been unable to displace the prima facie inference raised by Tesco that, at the time of the 1995 Application, the Wordless Mark was registered in order to use it as a weapon to secure a wider legal monopoly than it was entitled to, with no genuine intention to use it. This is sufficient to amount to bad faith and renders the 1995 Wordless Mark invalid. Furthermore, in my judgment, Lidl has been unable to rebut the inference that later applications appear to have been applying the same policy (in so far as they were applying for an extension of goods and services which went beyond merely reproducing existing protection).”
“254. As for the 2002, 2005 and 2007 Registrations, I do not consider that Lidl has adduced evidence of subjective intention capable of rebutting the charge of bad faith having regard to the objective indicia of evergreening – in respect of which there is no dispute on the facts that these registrations duplicate, at least in part, goods and services from earlier registered Wordless Marks. Mr Unterhalter is unable to explain why this approach was taken at the time and I have already explained why I do not consider his evidence to have any probative value in respect of registrations occurring long before the date of that evidence. … 255. Further and in any event, the inferences of good intention which Lidl invites the court to draw in its Statement of Case on Good Faith are not inferences which I consider appropriate from the matters pleaded. In so far as Lidl seeks to rely on the fact that the 2002, 2005 and 2007 Registrations were EU registrations, that is not now open to them in light of paragraph [57] of the judgment of Arnold LJ. In so far as Lidl relies upon statements made to (i) the United States Patent and Trademark Office (‘USPTO’) for registration of the Wordless Mark in the USA (at around the time of filing the 2002 Application); and (ii) the USPTO for registration of the Wordless mark in the USA in 2012, I agree with Tesco that such statements are no more than assertions and carry no evidential weight. … 256. In all the circumstances, I am once again bound to find that the 2002, 2005 and 2007 registrations were designed in part to ‘evergreen’ so as to avoid sanctions for non-use (an abuse of the trade mark system) and in part to further the policy of registration of the Wordless Mark as a legal weapon. This was in bad faith and I find that these marks were invalid.”
“287. … the Mark with Text involves a combination of elements. Tesco conceded in opening that if an act of combination is artistically significant then copyright will protect that artistic combination. This much is clear from Ladbroke (Football) Ltd v William Hill (Football) Ltd[1964] 1 WLR 273 … 288. In my judgment, the act of bringing together the Lidl text with the yellow circle and the blue background was an act which involved skill and labour – the combination of colours and shapes and the orientation of the various elements. Tesco’s real complaint … appears to be that the combination consists of insufficient skill and labour because it is too simple.”
“288. … simplicity of design and/or a low level of artistic quality does not preclude originality (see Karo Step Trade Mark [1977] R.P.C. 255 per Whitford J at page 273 and IPC Magazines v MGN[1998] FSR 431 per Richard McCombe QC at 438). … 289. Someone in the employ of Lidl took the Lidl text and the yellow circle with the red border and superimposed them on a blue background to create the Mark with Text. On balance, I consider that this is likely to have involved time, labour and creative freedom (even if the artistic quality involved is not ‘high’). Tesco's own evidence as to the various combinations of apparently basic shapes and colours considered by its own designers in arriving at a decision as to the CCP Signs tends, in my judgment, to bear this out.”
“In my judgment (considering the question quantitively rather than qualitatively) the blue background with the yellow circle plainly forms a substantial part of the Mark with Text.”
“iv. In making his decisions the trial judge will have regard to the whole of the sea of evidence presented to him, whereas an appellate court will only be island hopping. v. The atmosphere of the courtroom cannot, in any event, be recreated by reference to documents (including transcripts of evidence). vi. Thus even if it were possible to duplicate the role of the trial judge, it cannot in practice be done.”
“The judge must consider the evidence adduced and use his own common sense and his own opinion as to the likelihood of deception. It is an overall ‘jury’ assessment involving a combination of all these factors, see ‘GE’ Trade Mark [1973] R.P.C. 297 at page 321. Ultimately the question is one for the court, not for the witnesses. It follows that if the judge’s own opinion is that the case is marginal, one where he cannot be sure whether there is a likelihood of sufficient deception, the case will fail in the absence of enough evidence of the likelihood of deception. But if that opinion of the judge is supplemented by such evidence then it will succeed. And even if one’s own opinion is that deception is unlikely though possible, convincing evidence of deception will carry the day. … Reckitt & Colman … is a recent example where overwhelming evidence of deception had that effect. It was certainly my experience in practice that my own view as to the likelihood of deception was not always reliable. As I grew more experienced I said more and more ‘it depends on the evidence’.”
“16. Mr Paulson first encountered the CCP Signs in September 2020 at the outset of the CCP promotion. It was his evidence that he had seen (on his phone) a tweet from Tesco which included a short clip from a tv advert showing price drops and that he had then tweeted a response in the following terms ‘Suppose it’s no coincidence that the offer notices appear to resemble a certain other supermarkets logo’. He used the hashtag ‘cleveradmen’. Below his tweet he included an image of the Lidl Mark with Text, pointing out in his statement that this tweet was intended to be a reference to Lidl. In summary, his evidence was that the Tesco advert reminded him of Lidl because the ‘offer notices’ (by which he meant the CCP Signs) were ‘uncannily similar to the Lidl logo’ and that he had used the hashtag ‘cleveradmen’ because he ‘got the impression’ that the ad men for Tesco had looked at budget supermarket signs ‘and tried to hint at Lidl, to say their prices were also as low as Lidl's’. He went on to say that his understanding of the CCP Sign is that ‘it is saying that on the products that have been given a ‘Clubcard’ price, the prices you can get for those products is the same or perhaps a bit better than the prices at Lidl’. Under cross examination, he accepted that he had realised that the advert was not for Lidl, and he acknowledged that the Tesco promotion had not deterred him from shopping at Lidl. 17. Mr Berridge, who was a frequent shopper with Lidl, had visited the Tesco website in November 2021 looking for a specific product. Upon visiting the website he described his confusion, saying he thought he had visited the Lidl website and that this caused him to do a ‘comedy double take’ at the screen. He checked and saw that it was the Tesco site but the logo had tripped him up because it was ‘so similar to the Lidl logo’. Under cross examination, Mr Berridge said that he had not initially seen the writing on the logo but that even when he did see it he remained confused, even though he noticed that Lidl was not referenced. He observed that what he considered to be ‘blatant mimicry’ had made him angry and that it had certainly not encouraged him to shop at Tesco.”
“That the evidence of Mr Paulson and Mr Berridge is consistent appears to me to be significant. As I have said, it was not suggested to either witness that he was confusing Lidl with Aldi, or that he was more suspicious than the average consumer. Independently, each man perceived the message portrayed by the CCP Signs in a similar way and was sufficiently annoyed by what he perceived to be underhand tactics on the part of Tesco that he found time to make his views known. [Counsel for Tesco] did not seek to identify any grounds (whether in cross examination or in submissions) on which Mr Paulson or Mr Berridge should be regarded as ‘outliers’ when it came to considering the perceptions of the reasonably observant average consumer. …”
“‘Tesco price match with Lidl meaning I can just shop at tesco. The store provides all the food stuffs I like to purchase.’; ‘tesco price matches against lidl’ (25.10.20 Twitter message); ‘price match Lidl on most things’ (6.11.20 Twitter message); ‘…But I do like how you try to price match places like Lidl and Aldi two stores which are low on prices.’ (5.10.20. message to Tesco); ‘…Still Tesco is using a ripped off Lidl logo for the club card claiming that customers are getting a good deal if they get the club card.’ (11.11.20 Message to Tesco); ‘lidl price match great discounts for club card members good range of products for size of store good reductions on yellow label items’ (12.1.21 Message to Tesco).”
“113. On balance, I accept Lidl’s submissions that the Lidl Vox Populi cannot readily be dismissed in the manner suggested by Tesco. It is representative of spontaneous, unprompted comments from members of the public with, as [counsel for Lidl] put it, ‘no dog in the fight’. Whilst there is clearly evidence from Mr Hing of a small number of occasions when individuals have been confused between Lidl and Aldi (which means that those responses must be discounted as coming from the reasonably observant and circumspect average consumer) I do not consider that the same may be said for the majority of the responses. The Lidl Vox Populi clearly contains instances of connections being drawn between the CCP Signs and the Mark with Text, connections which appear to be prompted by a perception of price matching by Tesco to Lidl. Furthermore, as Lidl correctly submits, the reference to ‘Clubcard’ on the CCP Signs does not appear to be serving to disabuse customers of any value connection with Lidl’s reputation for low prices. On the contrary, it would appear that there is an understanding that the special Clubcard prices are the very prices that are being matched to Lidl: ‘I now like the fact you price match with Lidl and the special price for Clubcard holders is great – I saved quite a bit today’. 114. Tesco points out that a reasonably circumspect and observant consumer will of course know which store she is in, which website she is looking at and whose Twitter feed she is reading and I accept that this is part of the relevant context of Tesco’s use of the CCP Signs. However, in making this submission it appears to me that Tesco has failed to account for (i) the confusion experienced by consumers in respect of OOH advertising (and potentially other low attention forms of advertising such as press advertising where there are no aural or visual prompts to dispel confusion); and (ii) the link to Lidl’s reputation as a discounter supermarket that members of the Lidl Vox Populi have made. For the purposes of Lidl’s case, it is not necessary for it to establish that the average consumer would be confused as to origin, although it appears plain that (at least in some contexts) there would be such confusion, rather that a connection has been made in that consumers think that Tesco products to which the CCP Signs are attached are the same price as the same products when sold at Lidl – the evidence in the Lidl Vox Populi appears to me to bear out the making of such a connection. … 121. Standing back, I am inclined to think that Lidl’s submissions to the effect that the evidence from the Lidl Vox Populi is best understood as representing the tip of the iceberg are likely to be correct. In my judgment, the fact that so many members of the public sent unprompted messages to Tesco or Lidl following the launch of the CCP Signs identifying a perceived link between those signs and the Lidl Logo weighs strongly in favour of Lidl’s case. 122. I bear in mind that evidence of a link being drawn is always going to be difficult to come by. The average consumer seeing the CCP Signs may not appreciate that they have made a subconscious link, or, if they do, that the link is erroneous or that they have some other reason to complain. Of the percentage of people that do appreciate this, relatively few are likely to regard the issue as having sufficient significance to merit spending the time communicating that fact to Tesco or to Lidl. One of the responses is ‘You say you are price matched to Lidl, but your Pepsi Max costs£1.50 and Lidl’s is£1.49 , that's not a price match’. Few consumers will take the time to investigate in this way, understand that there is only a penny difference, but nevertheless send a message. That this individual took the trouble to do so is therefore of some significance, in my judgment. In the circumstances, I reject Tesco’s case ... that in the context of the enormous number of people who were exposed to the first salvo of Tesco’s Clubcard Prices promotion (some 50% of the country) ‘it is perfectly proper to think that all the vox populi are outliers’.”
“ii) Second, I reject the suggestion that a proper inference (based on a sample of 8 respondents) is that all of the so-called ‘equivocal’ references to price matching identified by Tesco (running to over 70 examples) must have been intended as references to Aldi. Such an inference would not be consistent … with the fact that, while Ms Farrant candidly accepts that Lidl is sometimes mistaken for Aldi, she does not say that this occurs most of the time, or even a substantial percentage of the time, and nor was this put to her. Indeed her evidence, as I understood it, was that Lidl’s advertising campaign over the last few years has done much to minimise instances of confusion between Aldi and Lidl. iii) Third, it is clear from a significant number of the Lidl Vox Populi that they have not mistaken Lidl for Aldi because they are referring to them both, the inference being that they are clearly capable of distinguishing between them. I accept Lidl’s submission that it may very well be that because the Aldi Price Match Logo is often presented in close proximity to the CCP Signs, that has itself served to reinforce the perception of price matching in relation to Lidl (i.e. in addition to price matching with Aldi). iv) Fourth, it was not suggested to Mr Paulson or Mr Berridge that they had mistaken Lidl for Aldi. v) Fifth, it seems to me to be a reasonable inference that many members of the Lidl Vox Populi who thought there was a price match to Lidl, thought so because of the use of the blue and yellow background to the CCP Signs. I consider that the fact that many other comments from the Lidl Vox Populi specifically draw attention to the similarity in the colours provides clear support for such an inference.”
“vi) … I reject Tesco’s submission that the mere fact that the responses from people who had made the link with [Lidl] and Aldi came at the first stage of Test 1 means that those responses could be ignored, or ‘filtered out’ on the basis that they do not represent the reactions of the reasonably observant average consumer. Tesco has no expert evidence to support such a proposition. vii) Furthermore, I did not understand Mrs Sutton’s cross examination to undermine her evidence in the Annex to her report to the effect that it was ‘a notable result that Lidl was raised spontaneously by respondents to the Test 1 survey’ particularly given its focus on Tesco shoppers. As she said, ‘considering the focus on Tesco…one might consider it surprising or unlikely any other supermarket is mentioned. The connection with Lidl or Aldi also appears to be of significance, in that it was not part of an overall background of “noise” insofar as there was no mention of any other supermarkets in the same way’. viii) Whilst it is true that some of the individuals who had identified Options 3 and 4 with Lidl or Aldi at stage 1 subsequently appear to have appreciated that they were wrong on this score, this required them to pay attention to the text. As Tesco shoppers they would obviously have been familiar with the Clubcard concept and it is unsurprising that when looking at the labels close up and in isolation, this is what they focused on. However, I agree with Lidl that the subconscious message, specifically identified by The Source, had already been conveyed by the time the participants had reached the second stage. That this is so is entirely consistent with the evidence available from the Lidl Vox Populi and, in particular, the evidence of Messrs Paulson and Berridge, both of whom appreciated that they were looking at a Tesco Clubcard sign, but nevertheless drew an association with Lidl’s reputation for value.”
“Standing back, I do not need to decide that the Source Survey is statistically significant or quantitatively sound. Equally I certainly cannot draw from it any conclusion as to the percentage of the population that may have associated the CCP Sign with the Lidl Logo. However, in my judgment the Source Survey is qualitatively significant for the reasons I have identified. As Lidl said in closing, echoing Mrs Sutton's evidence, the respondents to the Source Survey were primed to think ‘Tesco’, but a number of them still answered ‘Lidl’. This appears to me also to be consistent with the evidence from the Lidl Vox Populi, which in itself serves as a cross check in the exercise of determining whether the participants to the Source Survey who identified an association can properly be identified as average consumers.”
“A person infringes a registered trade mark if he uses in the course of trade, in relation to goods or services, a sign which— (a) 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 trade mark.”
“That is precisely what happened in the present case. The reputation of Lidl’s marks – the image or the characteristic that it projects to the goods – is one of low value prices – “discounted”
“there was a suggestion in Opening that Tesco would not have wanted to be mistaken for Lidl. We accept that. We suggest Tesco intended their CCP Identifier to convey value.”
“Tesco were losing customers to Lidl because the latter was perceived as offering better value. Tesco sought to stem that loss and, in doing so, not only did they inhibit Lidl’s growth but they did so by diluting Lidl’s reputation as a low cost discounter.”
“If detriment or unfair advantage is established then it is for the proprietor of the later sign to establish that there is due cause for the use of the later mark.”
“It is clear from those particular aspects of the selection as internet keywords of signs corresponding to trade marks with a reputation which belong to other persons that such a selection can, in the absence of any “due cause” as referred to in art.5(2) of Directive 89/104 and art.9(1)(c) of Regulation 40/94, be construed as a use whereby the advertiser rides on the coat-tails of a trade mark with a reputation in order to benefit from its power of attraction, its reputation and its prestige, and to exploit, without paying any financial compensation and without being required to make efforts of its own in that regard, the marketing effort expended by the proprietor of that mark in order to create and maintain the image of that mark. If that is the case, the advantage thus obtained by the third party must be considered to be unfair (L’Oréal [2009] E.T.M.R. 55 at [49]).” (Emphasis added)
“…the purpose of the use of a trade mark as a keyword was to take advantage of its distinctive character and repute; … that the competitor derived a real advantage from the distinctive character and repute of the trade mark; and, … the advertiser did not, as a general rule, pay the trade mark proprietor any compensation in respect of that use.
“In my judgment these cases do reveal a development by the Court of Justice of its jurisprudence on the scope of art.9(1)(c) of the Regulation. They establish that a proprietor of a trade mark with a reputation is not necessarily entitled to prohibit the use by a competitor of his mark in relation to goods for which it is registered even though the mark has been adopted with the intention and for the purpose of taking advantage of its distinctive character and repute, the competitor will derive a real advantage from his use of the mark, and the competitor will not pay any compensation in respect of that use. Consideration must be given to whether the use is without due cause. Specifically, the use of a trade mark as a keyword in order to advertise goods which are an alternative to but not mere imitations of the goods of the proprietor and in a way which does not cause dilution or tarnishment and which does not adversely affect the functions of the trade mark must be regarded as fair competition and cannot be prohibited.” (Emphasis added)
“Where the proprietor of the mark with a reputation has demonstrated the existence of one of the forms of injury referred to in art.5(2) of Directive 89/104 and, in particular, has shown that unfair advantage has been taken of the distinctive character or the repute of that mark, the onus is on the third party using a sign similar to the mark with a reputation to establish that he has due cause for using such a sign (see, by analogy, Intel Corporation (C-252/07) [2008] E.C.R. I-8823 at [39]).” (Emphasis added)
“When the proprietor of the earlier mark has shown that there is either actual and present injury to its mark for the purposes of art.4(4)(a) of the Directive or, failing that, a serious risk that such injury will occur in the future, it is for the proprietor of the later mark to establish that there is due cause for the use of that mark.”
“However, it must be borne in mind that this provision only comes into play after it has been found that there is not only a link between the registered trade mark and the sign but also that it has taken unfair advantage or is detrimental to the distinctive character of the trade mark in the sense that the case law has required. That does raise the bar for a defendant to show that the use of the sign is nonetheless with due cause.”
“Clubcard Prices was intended to have brand significance and it was also designed to convey value with a view to rewarding existing loyal customers and attracting new ones, but I do not consider that Lidl has established that Tesco had the deliberate subjective intention of riding on Lidl’s coat tails.” (Emphasis added)
“In my judgment, the CCP Signs were plainly intended (amongst other things) to convey value and thereby to influence the economic behaviour of supermarket shoppers, notwithstanding that I have found no specific intention to free-ride on Lidl's reputation.” (Emphasis added)
“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 that the judge's conclusion cannot be faulted in law. With undisguised reluctance I agree … that the appeal should be dismissed.”