How Aldi's Sweet Savings Led to a Legal Battle (Authored by Faruki Law Clerk Macy Gates)

When does imitation stop being the sincerest form of flattery and start crossing the legal line into infringement?  For Mondelēz International, the trademark owner of Nabisco, producer of the Oreo^®, Nutter Butter^®, and Chips Ahoy! ^®, that day is here._[1]

On May 27, 2025, Mondelēz filed a federal lawsuit against Aldi in the United States District Court for the Northern District of Illinois alleging four claims of action:  (1) federal trade dress infringement, (2) federal trademark dilution, (3) unfair competition, and (4) common-law dilution under Ohio law.  Mondelēz International, Inc., v. Aldi, Inc., No. 1:25-cv-05905 (N.D. Ill. 2025).

Federal Trade Dress Infringement

First, Mondelēz is claiming federal trade dress infringement pursuant to 15 U.S.C. § 1125(a).  Mondelēz alleges they acquired trade dress protection prior to Aldi's use.  For Mondelēz to succeed in a trade dress infringement claim, they must prove three key elements:  (1) the inherent distinctiveness or secondary meaning of its trade dress, (2) its non-functionality, and (3) the likelihood of consumer confusion.

1. Secondary Meaning
   In its Complaint, Mondelēz alleges that they have "acquired distinctiveness through extensive and long-standing, exclusive use."  Id. at ¶ 15.  This prong generally requires that consumers associate the trade dress directly with the product's source.  The first Oreo cookie, introduced by Nabisco, was sold in 1912.  Nabisco then introduced Chips Ahoy! in 1963, followed by Nutter Butter in 1969.  The court will be forced to ask if consumers think of an original Mondelēz product when they see a blue film with a small tab that reveals sleeves of stuffed cookies.

2. Non-functionality
   The Complaint also notes that these trade dresses are non-functional.  Id. at ¶ 106.  If a product feature is essential to the product's use or affects the quality of the product, it will generally be considered functional.  Mondelēz is sure to argue that the packaging of these popular cookies serves more as a means of brand identification and consumer association, rather than as a functional component of the cookies themselves.

3. Likelihood of Consumer Confusion
   Lastly, Mondelēz claims that these dupes are "likely to cause confusion, mistake, or deception in the minds of the public as to affiliation, connection, or association of Mondelēz."  Id. at ¶ 109.  Customer confusion can be demonstrated in the obvious case where a brand directly copies another product, but it can also be established by showing that the public is likely to associate the defendant's use of the trademark with the plaintiff's brand.  Courts will typically consider several factors to determine whether consumer confusion is likely including the degree of similarity, the strength of the owner's mark, evidence of actual confusion, intent of the defendant in adopting the mark, and the extent to which the targets of the parties' sales efforts are the same.

Federal Trademark Dilution

Second, Mondelēz is claiming federal trademark dilution pursuant to 15 U.S.C. § 1125(c).  Trademark dilution occurs when one uses a mark that is sufficiently similar to a famous brand, which may, by association, diminish public perception and dilute the distinctiveness of the famous mark.  In its Complaint, Mondelēz claims that the cookies are "distinctive and "famous" within the meaning of Section 43(c) of the Lanham Act, 15 U.S.C. § 1125(c)."  Id. at ¶¶ 116, 118–19.

Mondelēz is bringing a second dilution claim under Ohio common law as they believe some of the alleged dupes are manufactured and distributed nationally to Aldi stores from a supplier located in the State of Ohio.

Unfair Competition

Third, Mondelēz is claiming unfair competition under 815 Ill. Comp. Stat. 505, et seq., which protects against unfair methods of competition and deceptive practices.  Aldi has built their brand on developing dupes and delivering them to consumers at a lower price point.  Mondelēz alleges in the Complaint that Aldi is, once again, trying to use the reputation and consumer awareness that Mondelēz has built to make an identical product and then undercut the price, resulting in unfair competition.

A dupe allows a consumer to access products that may otherwise only be available to them at a higher, brand name price point.  Additionally, the existence of dupes can put pressure on mega brands to innovate, improve, and demonstrate why their brand name product is superior.  While dupes offer valuable benefits to consumers, they also create a sea of legal confusion and uncertainty for brands.  For example, Costco is currently facing a federal trade dress infringement lawsuit filed by Deckers Outdoor Corporation, the company behind UGG, which claims Costco's Kirkland brand dupe of the UGG Tasman slipper creates customer confusion.  Deckers Outdoor Corp. v. Costco Wholesale Corp., No. 2:25-cv-04174 (C.D. Cal. 2025).

When a dupe stays behind the legal line of infringement, brands may notice a hit, but it is a loss that both society and courts have generally accepted as fair competition.  However, when a dupe crosses the line of infringement it becomes a detriment to the brands that pioneered the original product. Courts continue to grapple with this legal line, even as consumer demand for affordable alternatives reaches new heights.  Based on Aldi's seemingly identical branding, Mondelēz has a solid argument that Aldi has crossed the line.  While Aldi's low prices might win at the checkout, they could lose in court, but we will just have to wait and see.

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^[1] Kraft Foods acquired Nabisco in 2000, giving them ownership of many popular snacks. In 2012, Kraft Foods split its company into two.  Kraft Heinz became the brands grocery business, while Mondelēz retained the company's snack food products.  Matthew DiLallo, What Companies Does Mondelez Own?,  THE MOTLEY FOOL (June 4, 2025).