An important intermediate judgment has just this morning been handed down in the long-running Lidl v Tesco dispute. Both sides have filed applications for permission to appeal from the trial judgment, and the Court of Appeal’s response is awaited. In the meantime, the judge has given her ruling on two issues relating to remedies.
First, the parties agreed that the final injunction should be stayed pending appeal, but couldn’t agree on the length of the stay if permission to appeal is refused or Tesco’s appeal fails. Lidl wanted the stay to expire two weeks after permission to appeal is refused or Tesco’s appeal fails. Tesco filed evidence to show that replacement of its Clubcard Prices signifier would take substantially longer – around 9 weeks. If a two-week deadline was imposed, Tesco would have had no choice other than to rebrand now, which would obviate the entire purpose of the stay.
The judge agreed with Tesco’s approach, and has ordered the stay to continue for 9 weeks after permission to appeal is refused or Tesco’s appeal fails. Tesco is able to continue using the current branding in this interim period.
Secondly, the judge has ruled on whether an injunction should be granted in relation to copyright infringement. Tesco accepted that a final injunction should be ordered in relation to trade mark infringement and passing off, should either or both of those findings be upheld on appeal. What, though, should be the position if Tesco’s appeal succeeded in relation to trade mark infringement and passing off, but not copyright infringement? Tesco contended that the damages for copyright infringement alone would be limited to the arms-length licence fee chargeable for use of a simple logo comprising a yellow circle on a blue square backkround. Such a licence fee is easily ascertainable – in the £ tens of thousands at most. In contrast, the cost to Tesco of replacing all its Clubcard Prices signage in stores and online would be very substantial – in excess of £7 million. Tesco contended that the imbalance between the value to Lidl and the cost to Tesco is so marked that granting a final injunction in relation to copyright infringement would be oppressive to Tesco. Tesco therefore sought an order that damages should be granted in lieu of an injunction in relation to copyright infringement.
Lidl disagreed– it contended that the value of the logo to Tesco is substantial, as it denotes value, and that the corresponding damage to Lidl is neither small nor easily ascertainable.
On this issue, the judge agreed with Lidl, and declined to order damages in lieu of a copyright injunction. This may not in the end matter – as stated above, it only becomes an issue if Tesco’s appeal succeeds in relation to trade mark infringement and passing off, but not in relation to copyright. However, Tesco is currently considering whether also to seek permission to appeal on this discrete issue – if permission is granted, the Court of Appeal would be likely to consider it alongside any other issues for which permission is granted.
HLK act for Tesco in this case.
