Arnott's Biscuits has issued a legal ultimatum to doughnut maker Krispy Kreme, alleging that its "Iced Dough-Vo" is too similar to Arnott's "Iced Vo-Vo".

Arnott's lawyers have asked Krispy Kreme to stop using the name Iced Dough-Vo no later than 5:00pm (AEST) today (24 April).

Arnott's says that Krispy Kreme's product visually resembles the Iced Vo-Vo biscuit, and the Iced Dough-Vo tag is phonetically almost identical.

It says this is clearly misleading and deceptive, and violates the trademark on the Iced Vo-Vo name, which it has held since 1906.

The Arnott's biscuit is topped with pink fondant, a strip of strawberry jam and sprinkled with coconut, while the Dough-Vo is also covered in pink fondant and coconut.

Arnott's is alleging breaches of the Trade Marks Act and Trade Practices Act, and says it could seek injunctions, damages and an account of profits, and orders for corrective advertising and costs.

But, while it reserves its right to take legal action, Arnott's says it may not take action if the offending doughnuts are renamed.

Won't rename

Krispy Kreme doughnuts says it will not remove its Iced Dough-Vo product from sale, despite the threat of legal action by Arnott's biscuits for a breach of the Trade Practices Act.

The chief executive of Krispy Kreme, John McGuigan, says the product attempts to pay tribute to an Australian icon.

"We did receive a request from lawyers representing Arnott's that we withdraw these from the shelves in our stores because we were allegedly in breach of various trademarks," he said.

"We've taken advice on that of course, and that advice is, that's not the case, and that Krispy Kreme customers are pretty smart and they can tell the difference between a doughnut and a biscuit."