LONDON (Reuters) - Britain's biggest retailer Tesco (LON:TSCO) on Tuesday lost an appeal against a ruling that it infringed German discount supermarket Lidl's trademark over the use of a yellow circle on a square blue background.
The decision likely signals the end of the legal battle between the rival retailers, which began in 2020 when Lidl sued Tesco after Tesco adopted a yellow circle against a blue background for its "Clubcard Prices" discount scheme.
Tesco had previously said that removing all the infringing logos would cost it nearly 8 million pounds ($10.2 million).
Tuesday's ruling comes amid continuing fierce competition between retailers over their share of Britain's 230 billion pound ($292 billion) grocery market, driven by Lidl and fellow German-owned discounter Aldi.
Market leader Tesco has nearly 28% of the market, while sixth-placed Lidl has nearly 8%, according to industry data.
The two retailers had traded allegations of copying brands and deceiving customers at a trial last year, before a judge at London's High Court ruled Tesco took "unfair advantage" of the reputation for low prices held by Lidl's trademarks.
Tesco sought to overturn that ruling, but the Court of Appeal on Tuesday dismissed its appeal that it infringed Lidl's trademark.
The Court of Appeal did, however, uphold Tesco's appeal against a finding that it infringed Lidl's copyright.
A Lidl spokesperson welcomed the decision, saying in a statement: "We expect Tesco now to respect the court's decision and change its Clubcard logo to one that is not designed to look like ours."
Tesco said it planned to update the logo shortly.
"We are disappointed with the judgment relating to the colour and shape of the Clubcard Prices logo but would like to reassure customers that it will in no way impact our Clubcard Prices program," a Tesco spokesperson said.