Are consumers likely to confuse one of Kroger’s store brands, Private Selection, with one of Lidl’s store brands, Preferred Selection? Kroger filed a lawsuit a few months ago against Lidl, a German chain opening its first stores on this side of the Atlantic, claiming that the store brand names were too similar. Now Kroger has dropped the suit.

Lidl (it rhymes with “needle”) is a popular discount grocery chain in Europe, and is slowly opening stores in the United States. As of this writing, it has locations in North Carolina, South Carolina, and Virginia.

In its United States expansion, the chain is aiming for a little more of an upscale market than Aldi, the German discount supermarket that Americans already love. The stores carry some brand name products, but focus on private-label merchandise.

This week, Kroger and Lidl agreed to dismiss the case [PDF], with each side covering its own legal expenses for litigation over the Private Selection/Preferred Selection trademark.

In its answer to Kroger’s initial complaint [PDF], the parent company of Lidl USA argued that the retailer chose and applied for a trademark for its Preferred Selection products in good faith, without intending for anyone to mistake them for products from Kroger.

The Kroger products sold under the Private Selection brand are high-end items, and Lidl argued that its Preferred Selection products are imports, but not marketed as high-end or competing with the brands sold at Kroger stores. A judge declined to issue an injunction against Lidl that would have prevented the retailer from selling Preferred Selection products in stores, and the case was headed for trial.

When we put the question to Consumerist readers in a poll, 59% of you said that you didn’t really see how customers would confuse the store brands.

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