This letter is clearly a marketing ploy, but I'll take the bait. There is quite a bit to unpack from Iceland's letter, with the main points relating to whether Iceland can obtain registered design protection for their king prawn ring or a registered trade mark for “king prawn ring”, and unjustified threats.
Starting with the validity of Iceland's registered design. As Iceland themselves say, Iceland's king prawn ring was first launched in 1991. For Iceland's design registration to hold water, the design submitted for registration must be new and have individual character. Previous versions of Iceland's king prawn ring are therefore citable against their registered design, potentially sinking their registered design application.
Iceland may also find it difficult to obtain registered trade mark protection for “king prawn ring” because the mark is descriptive of the product that will be sold using the mark.
Finally, Iceland's letter seems to sail dangerously close to the rocky shores of unjustified threats. In the letter, it is heavily implied that, if other supermarkets do not remove their king prawn rings from sale and remove from their impending Christmas ranges, Iceland will take action against them. The UK Registered Designs act allows a threat of infringement proceedings to be made if the if it is contained in a “permitted communication”, but expressly states that requesting a person to cease doing anything in relation to a product in which a design is incorporated is not a permitted purpose. In my view, the other supermarkets would have a fairly strong case that Iceland's letter amounts to an unjustified threat. Were one of the supermarkets successful in an unjustified threats action, a declaration that the threat was unjustified would be available as a remedy, which would surely make waves.