Kroger Sues Lidl Over Copycat Private Label

You might not want to get too attached to the products offered by the country’s newest grocery chain. They might be due for a facelift – if the country’s largest grocery chain has its way.

Just weeks after its U.S. launch, Lidl has been hit with its first copycat lawsuit. Kroger is suing the grocer over its store-brand “Preferred Selection” product line, which Kroger says is a knockoff of its own “Private Selection” brand.

“Lidl’s actions have been done with the intent to capitalize on and benefit from the goodwill in Kroger’s PRIVATE SELECTION marks by causing confusion with Lidl’s PREFERRED SELECTION mark,” the lawsuit claims.

The German-based Lidl opened its first U.S. stores in Virginia, North Carolina and South Carolina last month, and plans to expand across the country in the coming years.

Like its rivals ALDI and Trader Joe’s, Lidl sells mostly store-brand products. And like ALDI and Trader Joe’s, those store-brand products are often designed to look very similar to their brand-name counterparts, so there’s little ambiguity about what you’re going to get if you buy them.

And when stores give their knockoff products cheeky names like “Krispy Rice” cereal, “Toaster Tarts” or “Wow! I Totally Thought It Was Butter!”, they’re all but admitting they know that you know that they’re ripping off a competitor’s product – but hey, it’s all in good fun.

But not to Kroger.

There’s not necessarily any indication that Lidl purposely styled its “Preferred Selection” brand to look like Kroger’s “Private Selection” brand. But Kroger is objecting nonetheless.

Kroger says it owns the “Private Selection” trademark, and has been using it on its store-brand products for at least 20 years. In that time, the lawsuit says, Kroger has generated “billions of dollars of sales of thousands of PRIVATE SELECTION products to millions of United States households.”

So Kroger was alarmed to find that Lidl applied to trademark “Preferred Selection” last September. Kroger says it expressed its concerns to Lidl that the name and associated logo “would be likely to cause confusion, likely to cause dilution, and constitute unfair competition,” but that “Lidl rejected Kroger’s objections.”

So Kroger filed a formal complaint with the Trademark Trial and Appeal Board in March, then followed up with a lawsuit against Lidl on Friday.

Kroger is demanding that Lidl abandon its trademark application, “deliver up for destruction” all packages and promotions that display the Preferred Selection logo, pay damages, and turn over to Kroger all profits from all sales of Preferred Selection products.

Whether the similarity is intentional or not, lookalike packages can get their creators in a lot of legal hot water. Big brands like Procter & Gamble frequently sue competitors who sell products using names and packages similar to its own.

ALDI itself has been sued at least a couple of times in recent years. And when that happens, it tends not to put up much of a fight. ALDI quickly settled cases brought by the maker of Angel Soft toilet paper, and by the maker of King’s Hawaiian bread, agreeing to change its allegedly infringing product names and packaging.

Lidl is unlikely to back down quite as easily. The packages in this case aren’t for a single product, but for an entire product line. Preferred Selection is meant to be an upscale international brand, with the label displaying the flag of the product’s country of origin beneath the logo.

So get ready for a fight. For a store that sells a lot of familiar-looking store-brand products, this is the first lookalike lawsuit Lidl has faced in the U.S. And as it expands across the country – it may not be the last.