No use crying over spilt milk: the Supreme Court rules Oatly's trade mark is invalid
Oatly AB' (Oatly), the Swedish company known for its oat-based alternatives to traditional dairy products, recently lost a dispute concerning the validity of one of its trade marked slogans (‘POST MILK GENERATION’) in the context of marketing its non-dairy products. The dispute emphasised how brands must be aware of the risks associated with using terminology which is prohibited from being trade marked.
In this article, trainee solicitor in our commercial team, Megan McCaughey, examines the Oatly dispute and discusses some of the key considerations brands must make when it comes to securing a trade mark.
Defining ‘designation’
In 2019, Oatly filed an application at the Intellectual Property Office (IPO) to trade mark the slogan ‘POST MILK GENERATION’ for them to use on T-shirts and their oat-based food and drinks products. The trade mark was granted by the IPO in April 2021.
In November 2021, Dairy UK Ltd (Dairy), the trade association for the UK dairy industry, applied for a declaration that the trade mark was invalid, on the basis that section 3(4) of the Trade Marks Act 1994 (TMA) applied.
Section 3(4) of the TMA states that a trademark cannot be registered where ‘its use is prohibited in the United Kingdom by any enactment or rule of law’. It was Dairy's case that following Brexit, Regulation (EU) No.1308/2013 (2013 Regulation) became retained EU law (so part of UK law) and contained such a prohibition.
Article 78(2) of the 2013 Regulation provides that ‘designations’ for products referring to beef, wine, milk and eggs (to name but a few), can only be used for the marketing of a product derived exclusively from that source. Therefore, ‘designations’ of ‘milk’ and ‘milk products’ can only be used for a product derived exclusively from milk, and therefore, a trademark containing such designations cannot be used on oat-based dairy alternatives.
Oatly’s position was that ‘designation’ means the name of the product, and as the trade marked phrase, was not the name of the drink, then the 2013 Regulation does not prohibit them from using the trade mark on the oat-based products. Dairy, on the other hand, argued that it is irrelevant whether or not the trademark is being used as the name of the product because ‘designation’ has a wider meaning.
The dispute highlighted the extent to which brands that offer alternatives to dairy or other protected products will be restricted when it comes to the terminology they use to market their product.
Timeline of previous rulings
January 2023 – The IPO held that the trade mark was invalid in relation to oat-based food and drinks due to the prohibition. However, this did not prevent the slogan from being used on clothing.
December 2023 – The High Court overturned the IPO's decision and held that the 2013 Regulation had been applied too broadly
November 2024 – The Court of Appeal overturned the decision of the High Court and held that the trade mark was invalid
February 2025 – Permission to appeal to the Supreme Court was granted.
The Supreme Court
In their appeal, Oatly asked the Supreme Court to consider the following issues:
- Does ‘POST MILK GENERATION’ use the term ‘milk’ as a ‘designation’ within the meaning of the 2013 Regulation?
- If so, is 'POST MILK GENERATION' nevertheless valid when used as a trade mark in relation to those products because it clearly describes a characteristic quality of the contested products such that its use is not prohibited by the 2013 Regulation?
The Supreme Court unanimously dismissed Oatly's appeal on both points and ruled in favour of Dairy.
In relation to the first issue, the court held that the term ‘designation’ in the 2013 Regulation has a broad meaning, and the trade mark containing such a ‘designation’ does not need to be the name of the product for it to be invalid.
In relation to the second issue, the court held that the trade mark 'POST MILK GENERATION’ does not clearly describe the characteristics of the oat-based product.
In paragraphs 40–41 of the judgment, Lord Hamblen and Lord Burrows remarked that the trade mark actually describes Oatly’s consumers, i.e. ‘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’. They added that even insofar as the trade mark refers to the characteristic of being milk-free, it does so in an obscure way that is not clear.
What can we learn?
This case demonstrates that trade marks will not always be granted and can be subject to scrutiny even after registration is approved by the IPO. Brands, particularly those offering plant-based alternatives to traditional food and drink products, need to be aware of the risks associated with using a word or phrase which is prohibited from being trade marked.
Brands should therefore consider alternative strategies to safeguard their intellectual property. For example, if a registered trade mark is declared invalid or contains a prohibited term, could the brand rely on rights available to unregistered trade marks to prevent others from passing off? Alternatively, do copyright principles apply to the intellectual property?
You may be thinking ‘what about Quorn and their famous meat-free chicken nuggets?’
Well, whilst Quorn promotes vegan ‘chicken’ products on its website, it has not registered any chicken-based trade marks with the IPO. Had Quorn attempted to register a trade mark containing the word ‘chicken’ for their meat-free products, then they may have encountered challenges similar to those faced by Oatly. In practice, however, the issue never arose, and Quorn chose to pursue alternative trade marks, such as ‘Quorn. Protein for the planet’ and ‘Quornivore’.
Consulting commercial law experts
This case acts as a reminder for brands that there are laws on trade marking prohibited terms and that ignoring the rules can lead to expensive and unnecessary litigation.
If you want to understand more about how you can protect your brand’s intellectual property, contact Tom Justice using [email protected] or 0191 211 7913.