Mondelēz International is suing German retailer Aldi over private label packaging the former claims “blatantly” copies its own.
Disputes over the protection of the overall look and feel of a product’s packaging - known in law as a ‘trade dress’ case - are not uncommon in the food world.
But this particular case is about as high-profile as they get: a snack giant vs one of the biggest retailers in the world.
Looking at the side-by-side comparison of the companies’ products, Mondelēz’s case is convincing. So how might the retailer defend itself, while the rest of the industry watches?
Mondelēz makes ‘compelling’ case against Aldi
Mondelēz claims Aldi is selling own-brand snacks that resemble the “look and feel” of its well-known brands, including Oreo, Wheat Things, Nutter Butter, Chips Ahoy!, Nilla Wafers, Ritz Crackers, and Premium Saltine Crackers.
Based on a side-by-side comparison of the products in question, Mondelēz presents a strong argument, according to Michael Kelber, partner and chair of the Intellectual Property group at law firm Neal Gerber Eisenberg.
“It appears that Aldi has gone beyond just copying the packaging colouring, but has also adopted font styles and colouring very similar to Mondelez’s trade dress.”
But Mondelēz still has some homework to do - they’ll need to clearly spell out what makes their packaging unique and show just how recognisable it is.
To work out how strong its trade dress really is, the business will look at the market. Do other brands use similar features in their packaging? If so, that could weaken or dilute Mondelēz’s case.
If it’s indeed unique and distinctive, consumer recognition should be gauged via surveys, advertising, and social media. The court or jury will also need to work out how much of that trade dress has been used by Aldi.
“The case will also likely turn on survey evidence by which the parties will try to show that consumers are likely to be confused by Aldi’s packaging,” says Kelber.
How will Aldi defend its position against Mondelēz?
While on the surface it appears that Mondelēz has a strong case against Aldi, we’re yet to hear the discount retailer’s defence.
For Aldi to defend its position, the retailer may argue that the packaging style is common in the market, making it less distinctive, explains the Neal Gerber Eisenberg partner.
It could be that Aldi argues the brand names are so different - ‘Chocolate Chip’ versus ‘Chip’s Ahoy!’ - that they don’t confuse consumers.
“While based solely on a comparison of the packaging suggests that Aldi has a tough case, it could very well prevail if it is able to muster these types of evidence.”
The other obvious outcome is that the case never makes it to court. The high cost of a trial, coupled with the uncertainty of a win on both sides, could mean the companies decide to settle - which Kelber says happens more often than not.
“The vast majority of these cases settle with the defendant agreeing to make modifications to its packaging, often in exchange for a sell-off period and other compromises.”
Are consumers confused by Aldi’s ‘copycat’ packaging?
That Aldi is being accused of copying four of Mondelēz’s products could help the snack giant establish there was intent to create confusion.
That’s the view of Kelber’s colleague Andrew Fraker, counsel at Neal Gerber Eisenberg and member of the firm’s Intellectual Property and technology Transactions practice group.
So how do courts determine whether consumers are confused by Aldi’s packaging, buying ‘chocolate sandwich cookies with vanilla filling’ instead of Mondelēz’s Oreo?
It depends on the court. But to help understand if Aldi’s products are confusing consumers, it’s likely several factors will be weighed up. These include:
- The plaintiff’s trade dress - in this case, that of Mondelēz;
- The similarity of both companies’ trade dress;
- the similarity of the goods;
- the similarity in consumers;
- where products are sold;
- intent to confuse consumers;
- and any actual confusion by consumers - for example, if a shopper returned a product to the other company.
What does Mondelēz v. Aldi mean for private label brands?
Trade dress cases come up all the time. In the nearly thirty years that Kelber’s been practicing, the lawyer’s seen numerous cases of market leaders looking to “expand the scope of their branding rights” and “establish fences around them”.
In the same breath, he regularly sees rivals who maintain that allowing similar packaging across brands helps consumers quickly recognise related types of products - that such visual overlap is a natural and acceptable part of healthy market competition.
The lawyer advises private label producers to watch this case closely, so they understand where the court draws the line.
If these main issues get sorted out, the outcome could help other companies figure out how to design their own competitive packaging.
