Lidl Great Britain Limited & Anor v Tesco Stores Limited & Anor

Where copyright infringement is established, an injunction remains the prima facie remedy. A defendant seeking damages in lieu must satisfy the court that an injunction would be disproportionate, with the burden becoming particularly heavy where the value of future loss is uncertain.

The Shelfer factors provide a useful framework but are not a statutory test or straightjacket. In assessing a hypothetical licence fee, the court may consider the actual parties, their commercial circumstances, the purpose of the proposed use, the value of that use to the defendant and available lawful alternatives. The court must also consider whether the remedy is effective and dissuasive under Article 3(2) of the Enforcement Directive.

The judgment concerned consequential issues following the trial judgment, [2023] EWHC 873 (Ch). Lidl had established trade mark infringement, passing off and copyright infringement arising from Tesco’s use of signs resembling Lidl’s logo in its Clubcard Prices promotion.

The parties agreed that final injunctions should be granted for the trade mark infringement and passing off claims. They disputed whether copyright infringement should instead be compensated by damages and, if injunctions were granted, how long Tesco should have to comply after final determination, including any appeal.

1. Copyright injunction. The court granted a final injunction in respect of the copyright infringement. The prima facie position was that an injunction should follow, and Tesco had not discharged the heavy burden of showing that damages in lieu would be proportionate.
2. Application of the Shelfer factors. The four factors were useful considerations but did not fetter the discretion. The injury was not small. In assessing the hypothetical negotiation, the court had to consider the actual commercial context, including Tesco’s purpose in using the signs, the value of that use to Tesco, Lidl’s perceived loss of brand value and the unfair advantage sought. Comparable low-cost images and a £25,000 design cost were not appropriate comparators because the design was not fungible.
3. The likely value of future loss was difficult to estimate. Tesco’s continuing use was widespread and indefinite, and the benefit obtained from the signs was closely connected with the copyright infringement. A small one-off payment could not adequately compensate Lidl.
4. The estimated £7.1–7.8 million compliance cost did not make an injunction oppressive or disproportionate. Article 3(2) of the Enforcement Directive required remedies to be effective and dissuasive as well as proportionate and protective of legitimate trade. Damages in lieu would be less effective and dissuasive in the circumstances.
5. The question of Tesco’s compliance period was distinct. The court accepted that replacing the signs required nine weeks, with a possible 20-week carve-out for F&F clothing products. The order therefore allowed nine weeks after the proceedings ended, subject to the carve-out falling away when no longer necessary. The injunctions were stayed pending any permission application or appeal.

This was a consequential judgment at first instance following the main judgment in [2023] EWHC 873 (Ch). The court refused permission to appeal, but the parties could renew their applications to the Court of Appeal. The injunctions were stayed pending any such application or appeal.