In a thirst-quenching conclusion to long-running litigation, the Supreme Court has found that Oatly's trade mark POST MILK GENERATION cannot be registered in relation to plant-based food and drink. Oatly's mark was found to breach s.3(4) of the Trade Marks Act 1994 ("TMA") due to retained EU regulation (the "Regulation") which provides that the term 'milk' cannot be used in relation to agricultural products which are in fact 'milk-free' unless an exception to the general rule applies.

Oatly's mark did not pass muster, but in obiter comments the Supreme Court suggested that a different sign that actually included the words 'milk-free' may be registerable under an exception which permits the use of the term milk when "clearly used to describe a characteristic quality of the product". 

While the Supreme Court decision may seem bizarre to those of us in the real world who ask for vegan cheese (I've yet to find a nice one) or oat milk (of which I am an occasional partaker), this definitive ruling reaffirms clear boundaries in how specified agricultural terms such as milk can be used in relation to food products. 

Case history

We wrote about the initial decision of the High Court which overturned the UKIPO hearing officer's view that the mark was not permitted. That judgment appeared to open the door to for use of certain restricted terms provided the intended use of the term was not to identify the nature of the product. Whilst this was not a blanket green light that inclusion of restricted terms in a trade mark would be permitted, it was certainly a step in that direction. However, on appeal from Dairy UK, the Court of Appeal disagreed and overturned Mr Justice Smith's decision. The case was then appealed to the Supreme Court.

The law 

This case has concerned a lesser invoked part of the TMA, s3(4): 

A trade mark shall not be registered if or to the extent that its use is prohibited in the United Kingdom by any enactment or rule of law other than law relating to trade marks.

The relevant rule of law is retained EU regulation relating to agricultural products ensuring that "definitions, designations and sales descriptions" may only include specified terms where they meet the corresponding production requirements. One of the two points of appeal to both the Court of Appeal and the Supreme Court centred on whether the trade mark POST MILK GENERATION was caught by the regulation as a 'designation'. The secondary point of appeal concerned whether an exception to the regulation applied i.e. was POST MILK GENERATION permitted use of a designation because the use of 'milk' clearly described a characteristic quality of the product. 

Ground 1: a designation by any other name 

The position of Oatly was that a designation meant the name of the product. As the product in question is a food or drink, the designation should therefore mean the name of the food or drink (milk, cream, yoghurt all being names of products and covered by the Regulation). POST MILK GENERATION however, Oatly argued, did not name or even describe a food or drink and therefore could not be a designation. Oatly also relied on a previous regulation where 'name of product' was more closely linked with 'designation'. 

In contrast Dairy UK argued that designation meant any use of a relevant term (milk) to refer to a relevant product (food or drink) and as a result POST MILK GENERATION could not be used in relation to Oatly's dairy free food/drinks. 

The Supreme Court agreed with Dairy UK. Looking at the rest of the Regulation where terms such as 'names' and 'sales descriptions' are used alongside 'designations' the court found as a matter of statutory interpretation that the terms would not have the same meaning, although they may overlap. They found that the wider definition of 'designation' aligned with the purpose of the regulation that was to set out fair conditions of competition.

The appeal therefore failed on this ground. 

Ground 2: post milk or dairy free 

On the second ground of appeal Oatly sought to rely on a provision of Annex VII, Part III, Point 5 of the Regulation:

The designations referred to in points 1, 2 and 3 may not be used for any product other than those referred to in that point. 

However, this provision shall not apply to the designation of products the exact nature of which is clear from traditional usage and/or when the designations are clearly used to describe a characteristic quality of the product. 

Oatly argued that POST MILK GENERATION was descriptive of a characteristic of their food / drink, i.e. that it would be understood that the products did not contain milk, but instead were an alternative. Dairy UK, alongside both the CoA and Supreme Court judges disagreed; while it was clear that a target consumer was being described (a younger generation that has moved on from milk), the reference to a characteristic of the product was at best oblique. Unlike the term 'milk-free' there is a possibility that a product described as part of the POST MILK GENERATION product range may contain some milk.

The whey ahead

The main purposes of the Regulation are protecting consumers from deception and the rules of fair competition. In respect of plant-based alternatives, the Regulation seems a little out of touch with those lofty aims . Where 'cashew butter' is permitted and 'oat milk' is not (particularly as I'm nearly certain I became aware of both at the same time), it is difficult to understand what rule of fair competition is being preserved or how a consumer is being protected.  

An EU led push from the livestock industry has the potential to add 'sausages' and 'burgers' to the no-go list for the labelling of plant-based alternatives. Through post-Brexit trade deals that are intended to re-open the EU market to British farmers, the UK could be subject to these changes. If this proposed change filters through to our supermarkets, after years of seeing 'bean burgers' and 'veggie sausages' on shelves, it begs the question whether the consumer is really being protected from deception or are they simply inconvenienced when trying to find the ingredients to an inclusive barbeque.

Oatly have come out with fighting talk following the judgment with their general manager stating the prohibition on their mark "solely benefits Big Dairy" and is "a way to stifle competition and is not in the interests of the British public."  They've said they remain committed to getting their POST MILK GENERATION merchandise to consumers. There is a risk that Big Dairy could now look to thin the herd by targeting similar marks that have made it onto the register, including Oatly's mark IT'S LIKE MILK BUT MADE FOR HUMANS, which survived an EUIPO challenge on lack of distinctiveness and remains registered for dairy-alternative food and drink in the UK. However, Oatly is not afraid of a little litigation and as an established agitator to the dairy industry, it is unlikely that this decision will put a dampener on their boundary pushing advertising.