Lidl v Tesco: Important learnings for in-house counsel

Introduction

The 102-page judgment of Lidl v Tesco is best known for its treatment of intellectual property law, including trade marks, passing off and copyright law.

In addition, the case also puts routine business practices under the microscope, with some of these playing a key role in the judge’s decision.

As a result, it provides useful learnings for in-house counsel and their business colleagues about the impact day-to-day actions can have on future litigation.

The Judgement

The Lidl v Tesco judgment touches on:

INTERNAL EMAILS:  Offering a real-life lesson about the disclosure of emails in litigation and why discussion of IP infringement risk should be ring-fenced within the legal team – see paragraphs 92, 134 – 139

BUSINESS STRATEGY: Reveals the creative repositioning by the lawyers of a commercial decision (sales campaign) to support the legal claim. In this instance, rather than being viewed as a commercially-motivated decision, the court found that the sales campaign amounted to “corrective advertising” taken as an evasive action to avoid brand detriment – see paragraphs 160 – 170

CONSUMER RESPONSE SURVEYS: Demonstrates the impact consumer surveys and other external data can have on a judge’s assessment of trade mark function – see paragraphs 101 – 108, 124 – 133, 201 – 211

EXTERNAL AGENCIES: Illustrates a court’s forensic assessment of a brand’s brief to an external agency, viewed through the IP infringement lens. In this case – see paragraph 308 – 315

CHANGE TO CAMPAIGN TO REDUCE INFRINGEMENT RISK: Shows the impact of a mid-campaign content change (done to reduce the risk of infringement), particularly the adverse way a court may view the change – see paragraphs 101 – 108

WITNESSES: Scrutinises each of the parties’ witnesses in detail and explains why the court accepted or rejected their evidence. Also comments on the ‘missing witness’ and why this leads to an adverse inference – see paragraphs 14 – 44 and 307(ii)

The full judgment is available here:

https://www.judiciary.uk/wp-content/uploads/2023/04/Lidl-v-Tesco-judgment190423.pdf

Comment

The court’s approach in Lidl v Tesco to routine business practices is at times surprising.

For some, it will only reinforce existing views about the court’s understanding of how businesses operate. For others, it will be a shock to discover how business actions can be viewed when examined retrospectively as part of litigation.

Leaving aside views as to the rights and wrongs of the judge’s assessments, one fact is clear – litigation can put business practices to the test, sometimes with serious results.

As a result, this case makes for interesting reading. It may also prove a useful teaching aid for in-house counsel looking to educate business stakeholders about litigation, legal risk and the importance of a well-integrated in-house legal team.