You decide: Is German-owned Lidl stealing from Cincinnati-based Kroger?

Expert: Kroger has 'weak case'

CINCINNATI - The Kroger Co. filed new evidence this week in its trademark infringement case against the German discount chain, Lidl. It’s a survey documenting consumer confusion between Kroger’s “Private Selection” brand and Lidl’s store brand, “Preferred Selection.”

Are you confused by these logos?

Kroger brand

Lidl brand

Kroger argues it will be irreparably harmed if consumers have a bad experience with the Lidl brand and then allow that experience that to influence their purchasing decisions about Kroger’s private-label products.

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Both companies are big producers of private-label goods, which many grocery retailers use to boost profits and lower prices. Kroger generates about $20 billion from its private-label offerings, including Private Selection and the Simple Truth organic brand.

Kroger is seeking an injunction to prohibit Lidl’s use of its Preferred Selection branding and damages “including but not limited to” all profits from its sale. A July 25 hearing is scheduled for the requested court order.

Lidl declined to comment about the case. But, in a letter that’s part of the court record, the company identified 35 other trademarked products that had the word, “Selection,” on the label.

“Private Selection is not a strong mark,” wrote attorney Brett August in a letter to Kroger’s attorneys. “It is largely descriptive and therefore has limited scope of protection.”

 

Product shots from Kroger legal filings

Columbus attorney Joseph Dreitler said Kroger’s lawsuit is ironic because Kroger lost a 1983 case in which the Tylenol brand accused the Cincinnati-based grocery giant of violating its trademark by offering Actenol to Kroger shoppers.

Dreitler said courts have grown much more lenient in allowing private-label brands to compete against rivals. But they still consider factors like consumer confusion in deciding trademark infringement cases.

Kroger hired a communication professor at the University of Texas to quiz 422 consumers about the two trademarks in early July. Nearly 25 percent thought the marks came from the same company or from affiliated companies.

“Consumers who are responsible for grocery shopping for their household and who are exposed separately to both the ‘Private Selection’ and the ‘Preferred Selection’ logos are likely to be confused between them,” wrote Isabella Cunningham, chair of the advertising and public relations department at the Moody College of Communications in Austin. A confusion rate of 24.6 percent is “highly significant, especially as one considers that consumers are exposed to thousands of products’ logos when engaging in routine grocery shopping.”

Cunningham’s consumer perception study turned up some interesting responses. One respondent thought they were similar because “they both said private collection.” Another explained: “I believe Private Selection is from CVS.”

Still another: “Because that’s what I think, you idiot. You must have a law degree.”

A fourth respondent was aware of the pending litigation between the companies, while a fifth thought Kroger’s branding implied a lower price than Lidl’s store brand.

“The first (Kroger’s brand) looks like it is for a discount or store brand, probably decent quality with a good price. The second (Lidl’s product) looks like it is for a higher priced item that advertises it as a for the discerning, selective shopper.”

Made up your mind yet? Here are some observations from Joseph Dreitler, who worked for 10 years as a trademark and copyright attorney for Procter & Gamble Co. before moving on to Anheuser-Busch, the Jones Day firm and his own firm, Dreitler True LLC in Columbus.

“It’s a weak case,” Dreitler said, “given the fact that they’re sold at different stores and given the fact that there are so many other products that use this name.”

It’s one thing, Dreitler said, for two similarly branded products like Tylenol and Actenol to be offered next to each other on the same store shelf. It’s quite another for a similarly named product to be offered in a different store.

“If you’re in a Kroger store, you’re not going to see Lidl’s product,” he said.  “How are you going to be confused?”

On the naming issue, Dreitler said judges and juries will be asked to consider: How unique is the name Kroger is trying to defend? Commonly used words like “private” and “selection” won’t help Kroger.

“This is not Kodak,” he said, “or Google, or some other made up word.”

That leads Dreitler to conclude Kroger’s legal action is more about defending its turf than its store brand.

“It’s a shot across the bow,” he said. As WCPO reported in April, Lidl is expected to open up to 1,500 stores in the next four years. Kroger’s court filings identify more than 150 sites – including one in Youngstown – that Lidl has opened or has under development. So, Dreitler thinks Kroger is sending Lidl a message: “We don’t like you and we want you to know that we’re going to make it really rough for you.”

 

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