Toblerone diluted its trade mark when it released a savings-driven redesign of its chocolate bar last year, retail chain Poundland is set to argue in the UK courts.

Poundland announced in June that it was releasing its own similarly mountain-inspired chocolate bar called Twin Peaks, but halted the product's release following the receipt of a legal letter from Mondelez International, the makers of Toblerone.

At the time, the British chain did not deny the influence of Mondelez' famous product – whose shape is protected by a registered UK 3D trade mark – but rather positioned it as a response to a redesign that had not been well received by the store's customers.

The dispute between Poundland and Mondelez has now escalated to the High Court of Justice, according to the Guardian, which has seen the legal documents from both parties.

In Poundland's defence, the company argues that Toblerone's trade mark has been "irretrievably abandoned" by its redesign, which damaged the bar's reputation.

The new-look Toblerone, which hit UK shelves in November last year, saw the gaps between the bar's signature peaks widened. It was dubbed "wrong" and "austerity Toblerone" by tetchy social media users.

UK... What have you done??? #Brexit #Toblerone pic.twitter.com/BmrrJWD8sf

— Enda Conway (@EndaConway) November 8, 2016

Toblerone's redesign was poorly received, and prompted Poundland to launch Twin Peaks

In its claim, Mondelez is arguing that Poundland has infringed its trade mark both through the shape of the bar and its packaging, which sees a gold, prism-shaped wrapper stamped with a mountain logo.

It says that Twin Peaks is "deceptively and confusingly similar" to Toblerone, to the extent that consumers might think it is produced or approved by Mondelez, while Poundland argues "no member of the relevant public would mistake one for the other".

Separate to the rights conferred by its registered trade mark, Mondelez is accusing Poundland of "passing off" its chocolate bar as Toblerone or a related product.

Unlike Toblerone, whose pyramidal shape is said to be inspired by the Alps' iconic Matterhorn, Poundland's chocolate bar has a double peak that the company claims is borrowed from Wrekin Hill in Shropshire, a county in England's West Midlands.

Announcing Twin Peaks in June, Poundland trading director Barry Williams had stated the company developed Twin Peaks in response to customer backlash against the redesigned Toblerone, previously a top-selling item.

"Poundland shoppers are savvy and the change in their favourite chocolate bar last Christmas didn't go unnoticed," Williams said. "That's why we've created a new £1 alternative for them – the size they wanted, with a British taste, and with all the spaces in the right places."

Shortly after Toblerone's redesign, legal experts warned it might have the effect of weakening the bar's trade mark protection, which is famously hard to secure for the shape of designs. Mondelez rival Nestlé recently failed to secure it for the KitKat bar.