The EU's appeal court has ruled that Germany's Metro group can register its name as a trademark in Europe, overturning Tesco's sole claim to the name.

The British number one had opposed Metro's original attempt to register the name back in 1998, arguing that it already had trademark protection for the Metro name, which it uses for its convenience stores.

Tesco's sole right to the name expired in July 2000, and the European trademark office OHIM told the British group that it had to provide proof that it had extended protection of the name before March 2003 or face the prospect of a rival registration from Metro.

But Tesco failed to provide that proof, and OHIM gave the go ahead to the German group to register the name, in turn prompting an appeal from the UK market leader.

OHIM's own appeal board backed Tesco's claim, saying that the company's right to the name was still in force at the time that the original request was made by Metro.

The German store took its case to the court of first instance, the EU's main appeal court, which on Wednesday agreed to overturn OHIM's decision.

The EU judges said that the trademark rules were designed to stop conflicts of interest between two registered trademarks - but that since Tesco's registration had lapsed, there could be no conflict, and therefore no grounds for Tesco to appeal.

"There was no period during which both marks co-existed," the court said in a statement.

"Accordingly, the court finds that the protection which [OHIM] recognised the earlier mark as having is not justified by the need to protect its function of identifying origin."

Tesco has two months to appeal against the decision - but can only do so on points of law.