The Supreme Court has handed down a judgment clarifying the limits on using dairy-related terminology in the branding of plant-based products.

The case concerned the attempt by Oatly AB – the Swedish manufacturer of oat-based alternatives to dairy products – to register the trade mark “POST MILK GENERATION”.

The trade association for the UK dairy industry, Dairy UK Ltd (‘Dairy’), subsequently applied for a declaration that the registration was invalid under section 3(4) of the Trade Marks Act 1994, which prevents registration of marks whose use would be prohibited by law. On Dairy’s case, use of the mark for the goods in question would breach a retained EU Regulation from 2013 regulating the use of dairy-related terms in the marketing of certain agricultural products.

The Regulation in question – Regulation (EU) No. 1308/2013 – provides at Part III of Annex VII that “designations referred to in points 1, 2 and 3 [namely reserved dairy designations such as milk and milk products] may not be used for any product other than those referred to in that point”.

The same provision (referred to as ‘Point 5’ in the judgment) contains an exception in the case of “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”.

The Supreme Court’s judgment is, in substance, an exercise in interpreting these provisions of the Regulation, in circumstances where the lower courts could not agree.

Initially, the IPO Hearing Officer found in favour of Dairy, stating that “Point 5 states that ‘milk’ cannot be used for products which are not milk … The wording of point 5 is strict. The use of ‘milk’ is prohibited for non-milk products under point 5 of the Annex, regardless of how the mark as a whole may be viewed by consumers, which is not a consideration under point 5”.

Importantly, Oatly’s application for the mark to be used on T-shirts was allowed on the grounds that those goods are not agricultural products and therefore fall outside the scope of the Regulation.

Oatly successfully appealed the IPO’s ruling in respect of food and drink products, the High Court holding that the mark “does not purport to market [a variety of Oatly’s goods] as any particular product, let alone as milk. Since the Mark does not designate those goods as ‘milk’, point 5 is not engaged and no question of the proviso to point 5 arises”.

The Court of Appeal, however, reinstated the IPO’s decision. It held that a ‘designation’ for the purposes of the Regulation is not limited to the name of a product. Accordingly, subject to the exception in Point 5, the designation of ‘milk’ could not be used in relation to regulated food or drink products which were not milk or milk products.

As for the exception in Point 5, the Court of Appeal held that it did not apply since the phrase ‘POST MILK GENERATION’ “does not describe, clearly or at all, a characteristic quality of any of the products in classes 29, 30 and 32 in relation to which Oatly wishes to use it. Rather, as obviously implied by the use of the words ‘post’ and ‘generation’, the Trade Mark describes the age-related characteristic of a particular cohort of people which Oatly intends should buy or consume its products”.

Oatly appealed to the Supreme Court on two grounds: (1) the meaning of ‘designation’ within the Regulation; and (2) the meaning of the exception in Point 5 of the annex to the Regulation.

The meaning of ‘designation’

As to ground one, Oatly’s position was that ‘designation’ refers to the name of a food or drink, and that ‘POST-MILK GENERATION’ neither names nor describes a product. By contrast, Dairy argued that the concept is broader and extends beyond the mere naming of a product to any use of the word ‘milk’ in relation to a food or drink.

The Supreme Court agreed with Dairy. It held that “the terms ‘designation’ or ‘designations’ in Point 5 on their natural meaning, viewed in the context of Annex VII, are referring to their use in respect of a food or drink rather than the naming of it”. Therefore, the use of the word ‘milk’ within the phrase ‘POST MILK GENERATION’ was prohibited under the Regulation, subject to the exception in Point 5.

The meaning of the exception in Point 5

On ground two, Oatly argued that even if the Regulation did apply to the mark, the exception in Point 5 would come to the rescue since ‘POST-MILK GENERATION’ was being used to describe a characteristic quality of the contested product, namely that it is milk-free. Dairy, on the other hand, argued that the phrase was too ambiguous to clearly describe that characteristic and instead referred to the intended consumer group.

The Supreme Court again found against Oatly. The Court considered that, unlike wording such as “milk free” which would fall within the prohibition but be saved by the Point 5 exception, the phrase ‘POST MILK GENERATION’ did not clearly describe a characteristic of the product. The Court explained:

“we consider that it is far from clear that that trade mark is describing any characteristic of the contested products. Rather, on its face, it is focussed on describing the targeted consumers and, in particular, those younger consumers who may be said to belong to a generation for whom there are, in contrast to past generations, widespread concerns about the production and consumption of milk. In so far as it is describing a characteristic quality of the product, it is doing so in an oblique and obscure way and is certainly not doing so “clearly””.

As a result, Point 5 could not rescue Oatly, and the appeal was dismissed.

To read the judgment, click here.