Use of “Milk” in Oatly Trade Mark Held to be Invalid

Oatly has failed in its attempt to register the trade mark ‘POST MILK GENERATION’ in the UK for non-dairy products. The UK Supreme Court dismissed Oatly’s appeal after a lengthy court battle. The case concerned whether Oatly’s use of the word “milk” on non-dairy products was prohibited by an EU Regulation aimed at protecting the agricultural products market. Our Intellectual Property team reviews the decision.

What you need to know

• Oatly was refused permission to register the mark ‘POST MILK GENERATION’ for non-dairy products in the UK.
• Regulation (EU) 1308/2013 was found to restrict the use of the designation ‘milk’ to milk products only.

Parties to the proceedings

The appellant, Oatly AB is a Swedish company. Its business involves the manufacture and sale of oat-based food and drink products as alternatives to dairy products. The respondent, Dairy UK Ltd is the trade association for the UK dairy industry.

The trade mark “POST MILK GENERATION” was registered by Oatly in April 2021. It is registered for categories of oat-based food and drink (classes 29, 30 and 32) and T-shirts (class 25). Dairy UK applied for a declaration under section 3 of the Trade Marks Act 1994 (the UK Trade Marks Act). The application challenged the validity of the registration.

Basis of the proceedings

Under section 3(4) of the UK Trade Marks Act, “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.” Dairy UK argued that the inclusion of the term “milk” constitutes a designation that is prohibited for non-dairy products under Part III, Point 5 of Annex VII of Regulation 1308/2013.

Regulation (EU) No 1308/2013 establishes a common framework for the organisation of the markets in agricultural products. Part III of the relevant Annex provides the following definitions and goes on to states that these designations may not be used for any product other than those referred to:

‘Milk’ means exclusively the normal mammary secretion obtained from one or more milkings without either addition thereto or extraction therefrom.

‘milk products’ means products derived exclusively from milk, on the understanding that substances necessary for their manufacture may be added provided that those substances are not used for the purpose of replacing, in whole or in part, any milk constituent.

However, proviso to Point 5 also makes clear that the provision does not apply where product designations are clearly used to describe a characteristic quality of the product.

Supreme Court Appeal

The hearing officer in the Intellectual Property Office held that the trade mark “POST MILK GENERATION” was invalid for oat-based food and drink. This was because the prohibition in Point 5 of the 2013 Regulation applied. This prohibition, however, was held not to apply for any non-agricultural products, such as T-shirts. Those products clearly fell outside the scope of the 2013 Regulation.

That decision concerning oat-based food and drink was appealed by Oatly and overturned by the High Court.

The Court of Appeal disagreed with the High Court. It held that the registration of the trade mark was invalid.

Oatly then appealed to the UK Supreme Court. The appeal to the Supreme Court raised two issues:

1. Does “POST MILK GENERATION” use the term “milk” as a “designation” within the meaning of Point 5 of the 2013 Regulation?
2. If so, is “POST MILK GENERATION” nevertheless valid when used as a trade mark for those products because it clearly describes a characteristic quality of the contested products and therefore it is saved by the proviso to Point 5 of the 2013 Regulation?

Supreme Court decision

Regarding the first issue, the Supreme Court held that the term “designation” in the 2013 Regulation has a broad meaning and is referring to its use for a food or drink rather than the naming of a food or drink. “POST MILK GENERATION” therefore was found to fall within the scope of Point 5 of the 2013 Regulation on the basis that it uses the term “milk” as a “designation”

Regarding the second issue, the Supreme Court held that the trade mark “POST MILK GENERATION” does not clearly describe a characteristic quality of oat-based food and drink products.Therefore, the trade mark falls outside the proviso.

Instead, the trade mark “POST MILK GENERATION” was found to focus on describing the targeted consumers. Even if the trade mark could be regarded as referring to a characteristic quality of the products, namely, that they are milk-free, it does so only in an oblique and obscure way. It does not clearly describe that characteristic.

Conclusion

This decision is relevant to trade mark law in Ireland as Section 3(4) of the UK Trade Marks Act 1994 contains similar language to Section 8(4)(a) of the Irish Trade Marks Act 1996. The 1996 Act states:

“A trade mark shall not be registered if or to the extent that— (a) its use is prohibited in the State by any enactment or rule of law or by any provision of European Union law including those for the protection of designations of origin…”

Therefore, a similar case may be brought before an Irish court. Further, this decision of the UK Supreme Court would be of persuasive authority in any relevant proceedings in Ireland.

In addition, Part III of Annex VII of Regulation 1308/2013 impacts a broad range of products. It states that a number of product names such as cream, butter, cheese and yoghurt should be reserved exclusively for milk products. This creates an obvious risk around the use of certain descriptive terms such as “oat milk” or “plant-based cheese” by food companies going forward.

For further information and expert legal advice on the impact of this decision and how best to protect your intellectual property rights, please contact a member of our award-winning Intellectual Property team.

The content of this article is provided for information purposes only and does not constitute legal or other advice.