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Tesco and Lidl square off in yellow on blue trademark row

By Sam Tobin

LONDON (Reuters) - Tesco and its German discount rival Lidl traded allegations of copying brands and deceiving customers at London's High Court on Tuesday in a dispute over Britain's biggest retailer using a yellow circle on a square blue background.

Lidl sued Tesco in 2020, shortly after Britain's market leader, with a 27.5% share, adopted a yellow circle against a blue background to promote its "Clubcard Prices" discount scheme.

The German-owned supermarket group says Tesco deliberately copied the Lidl trademark to deceive customers into thinking its prices are comparable.

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Tesco says it is not using Lidl's trademark, which it says is invalid because Lidl applied for it in bad faith.

Lidl's lawyer Benet Brandreth said on the first day of the trial on Tuesday that consumers are being deceived by Tesco's promotion, meaning that Lidl, which has a 7.1% market share in Britain, is losing customers to it.

"Unless the court takes action, those consumers who believe that 'Tesco price match with Lidl meaning I can just shop at Tesco' will continue to be deceived into paying higher prices as a result," Brandreth said in court documents.

But Tesco's lawyer Hugo Cuddigan accused Lidl of hypocrisy and said it copies the branding of well-known products.

Claire Farrant, Lidl GB's marketing director, told the court in evidence that it is not the company's policy to take advantage of established brands' recognition and reputation.

Cuddigan, however, said it was no coincidence that Lidl's "Neo" cookies are sold in blue and white packaging and that it was "inevitable … that unwary customers will buy Neos off the shelf thinking they are Oreos".

Lidl had not copied the Oreos branding, Farrant said, adding: "Our customers are well-aware of what they are buying".

Oreos are manufactured by Mondelez International.

(Reporting by Sam Tobin; Editing by Alexander Smith)