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Tesco concedes final defeat in battle with Levi Strauss

LONDON - Tesco has conceded final defeat in its battle to sell cheap Levi Strauss jeans, following the High Court's decision to back an earlier ruling by the European Court of Justice.

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Tesco went to the High Court in May, having already lost one round against the fashion firm in Europe. However, this time it says it will not be going back to court again -- not for Levi's at least.

Levi Strauss refused to supply Tesco with its clothes on the grounds that selling its products in supermarket aisles alongside tins of baked beans damages its brands. It believes that it has the right to decide where its products are sold.

Tesco had continued to sell the clothes, which it obtained on the grey market from unlicensed suppliers, until it lost a European Court battle in November. The court ruled that the practice broke European trademark laws.

The case was sent back to UK courts where Tesco said it would continue to fight to sell the jeans, arguing that the ruling infringes its rights. Today, alongside Cost Co, it has finally conceded defeat in the three-year battle with the jeans brand.

A spokesman for Tesco said: "It is the end of the legal road for us. It was our last opportunity to challenge the European Court's ruling."

Lawyers representing Tesco claimed that by banning the retailer from selling its jeans, Levi's was infringing "Tesco's right of freedom of expression to own and deal in property and not to be discriminated against".

The latest ruling is bad news for shoppers. Tesco had been selling Levi 501s for £32.99, compared with the recommended retail price of closer to £50.

Levi's began proceedings against Tesco in 1998, threatening to take it to court and claiming that the retailer was breaching Levi's trademark rights by selling the cut-price jeans against its wishes.

In its defence, Levi's argues that its brand reputation is at stake and that staff need special training to sell the jeans. Tesco responded to the threats by suing Levi's. It claims to have saved UK consumers £42m since it began selling the jeans, which are imported through the "grey market".

A spokesman for Levi Strauss said: "The High Court in London decided that Tesco had been selling Levi's jeans illegally. The Levi's brand is the most valuable asset we have. It is a definitive win for brand owners, who are ensured the right to decide how to distribute their products in Europe."

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