Tesco settles Aldi trademarks case

Retail giant Aldi is to get €150,000 damages and its legal costs under a settlement of its action against Tesco Ireland over alleged infringement of Aldi trademarks in a alleged misleading Tesco in-store price advertising campaign.

Tesco Ireland has also given various undertakings to Aldi, including not to engage in comparative advertising involving use of Aldi's trademarks in a defined range of circumstances.

It has also undertaken not to use or display comparison of product prices without clearly specifying, where applicable, the Bord Bia Quality Assurance mark or other quality assurance schemes recognised in the State.

Other undertakings require Tesco Ireland not to use or display comparison of product prices unless the products meet defined criteria relating to quality, composition and ingredients.

The undertakings mean Tesco cannot, for example, compare two products which are similar but have significantly different ingredients such as dry dog food and semi-moist/moist dog food. It has also undertaken not to compare prices of entirely different substance such as marmalade and tuna chunks.

Tesco Ireland has also undertaken not to display comparisons of product prices relating to fresh food products such as eggs, meat and bread without clearly specifying Irish provenance, where appropriate.

The two retail giants also agreed Aldi will not seek orders for attachment and committal against Tesco Ireland in relation to any breach of the undertakings unless any such breach is immediately notified by emails within 24 hours and one of three conditions is met, including the breach is deliberate or made in bad faith.

The settlement was announced by Michael McDowell SC, for Aldi, to Mr Justice Peter Kelly at the Commercial Court today.

Brian O'Moore SC, for Tesco Ireland, said his side was happy with the agreement concerning comparative advertising campaigns and had given undertakings. Counsel also noted there was an agreed mechanism between the sides (relating to alleged breaches of the undertakings).

In its action initiated last May, Aldi alleged the Tesco campaign involved inaccurate, misleading and unfair comparison of the prices of products sold by the two companies. Use of the Aldi marks in banners displayed in Tesco stores earlier this year was "the final straw" in circumstances where Aldi had been complaining to Tesco of infringement of Aldi marks since 2009, Aldi director Niall O'Connor said in an affidavit.

Such banners had been displayed at Tesco stores at Rathmines Road, Jervis Street and Parnell Street in Dublin and at Monastervin Road, Kildare, he said.  The banners featured the Aldi trademarks related to various products "without any attempt to use those marks for comparative advertising", he said.

Alid alleged Tesco, in its pricing campaign, failed to compare like with like, misstated the sale price of the relevant Aldi product or the Tesco product and failed to compare the relevant quantity of the Tesco product with an equivalent quantity of an Aldi product.

Tesco, for example, compared the price of mint humbugs sold by it and by Aldi and had stated the weight of both bags was 250g when the weight of the Tesco product was 200g, Aldi complained. A comparison of the price of an Aldi maple syrup product with a Tesco maple syrup product was also inaccurate and misleading as the Tesco product contained only 40 per cent Canadian maple syrup while the Aldi product contained 100 per cent Canadian maple syrup, it claimed.

Aldi Ireland had been writing to Tesco Ireland about the issue since May 2009 and did not accept Tesco's position that certain inaccuracies in price comparison, which Tesco said were due to "human error", did not amount to unfair commercial practices and created no material risk of consumer confusion.

The proceedings by Aldi Stores (Ireland) Ltd and Aldi GmbH & Co KG (owner of the Aldi trademarks) against Tesco Ireland Ltd were transferred on consent to the Commercial Court last May.

Aldi accepted Tesco Ireland was entitled to make use of the Aldi trademark for the purpose of comparing goods with those of Tesco's but argued such use must be in accordance with honest practise and not detrimental to the Aldi trademarks. Any such use must specifically be in accordance with the EC (Misleading and Comparative Advertising) Regulations 2007 and the Consumer Protection Act 2007, Aldi said.

In a statement after the ruling, Aldi said it is "very pleased" with the undertakings given to the court by Tesco.  "Aldi is, of course, fully in favour of comparative advertising but any comparative advertising must be accurate, fair and cannot mislead the consumer," it said.

It said the damages it will receive from Tesco will be donated to the Society of St Vincent de Paul.