When Look-Alike Products Wind Up in Court

During 2012, Eater said it had “fantastic news for fans of disgusting sandwiches.”  Because the 2nd Avenue Deli won a trademark dispute against the Heart Attack Grill of Las Vegas, it could continue offering its “Instant Heart Attack Sandwich.” Still today, at $40.95, the same combination of corned beef, pastrami, turkey, or salami with 2 large potato pancakes remains on their menu.

Where are we going? About much more than food, the sandwich clash takes us to what we can legally own, buy, and sell.

Look-Alike Products

Similar to the Heart Attack Grill, Mondalez International says the Aldi supermarket chain is copying its packaging. They claim that shoppers could mistake Aldi’s cookies for Nutter Butters, Chips Ahoy, and Oreos.

Below, the top row is from Mondelez while Aldi’s products are below:

Last month, Mondelez told a federal court in Illinois that because Aldi “blatantly copies” its branding, they “irreparably harm Mondelez and its valuable brands.” Citing a list of products, Mondelez says Aldi grocery stores’ graphics and colors can confuse customers. In Australia and the UK, for Baby Bellies and cider copycats, Aldi was found liable. However, with store brands composing 90 percent of the German supermarket chain’s inventory, cheaper look-alike, taste-alike products are basic to the Aldi business model.

Our Bottom Line: Intellectual Property

Think for a moment about Apple’s logo, the shape of a glass Coca-Cola bottle and McDonald’s Golden Arches. All protected by trademarks, they are a firm’s intellectual property. Similarly, copyrights assure authors that they control the books they write while patents ensure inventors’ ownership.

Even for a heart attack sandwich or a box of cookies, in a market economy, we need to know what we legally own. Only when property belongs to us through trademarks, patents, and copyrights can we buy and sell what we own. And, only then do we truly have the incentive to invent and innovate.

However, intellectual property rights can be tricky. In the Mondelez-Aldi case, we have the tradeoff between the benefits of protected property and the competitive strategies that lower prices.

My sources and more: Thanks to the NY Times for reminding me to return to property rights. At econlife, for marijuana, red-soled shoes, and deli sandwiches, we’ve previously looked at property rights.

Please note that several of today’s sentences were in a past econlife post and our featured image is the Heart Attack sandwich.