Trade Mark Designations: Is Oatly’s Registration Just Milking It?

The Supreme Court rules on the Dairy UK Ltd v Oatly AB dispute, ending the “Post Milk Generation” saga.

Background

The parties to this dispute were Oatly AB (“Oatly”), a company that sells dairy-alternative products, and Dairy UK Ltd, the trade association for the UK dairy industry.

In November 2019, Oatly filed an application with the UK Intellectual Property Office (UKIPO) to register the trade mark “POST MILK GENERATION.” The mark was registered in April 2021 in classes relating to oat-based food and drinks (classes 29, 30, and 32) and T-shirts (class 25).

In November 2021, after the mark had been registered, Dairy UK Ltd applied for a declaration that the registration was invalid under section 3 of the Trade Marks Act 1994 (“TMA 1994”).

Section 3 provides an absolute ground for refusal where trade marks consist exclusively of signs or indications that may serve, in trade, to designate characteristics of goods or services, such as their kind, quality, intended purpose, value, geographical origin, or time of production.

Dairy UK Ltd’s application in respect of the classes relating to oat-based food and drinks was successful. The mark was held invalid (other than for T-shirts) under section 3(4) of the TMA 1994 because it contained the word “milk,” while the goods in classes 29, 30, and 32 were not milk products.

The decision relied on the Parliament and Council Regulation (EU) No. 1308/2013  (2013 Regulation) specifically, Annex VII of the 2013 Regulation, Part III, paragraph 5, which states:

“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.”

Oatly appealed this decision to the High Court.

High Court Decision

Mr Justice Richard Smith reversed the UKIPO examiners decision and held that the registration was valid. He found that the hearing officer had construed the prohibition in Point 5 too widely by adopting an overly broad interpretation of the term “designation.”

According to the High Court, the regulation does not prohibit the use of the term “milk” in marketing generally; rather, it prohibits using the term to identify products as milk.

Dairy UK Ltd subsequently appealed to the Court of Appeal.

Court of Appeal Decision

The Court of Appeal (Arnold, Snowden, and Jeremy Baker LJJ) overturned the High Court’s decision. It accepted the reasoning of the UKIPO hearing officer that “milk” is a protected designation under Point 1 of Annex VII of the 2013 Regulation and by virtue of Point 5, it cannot be used in relation to products that are not “milk” as defined in the 2013 Regulation (subject to limited exceptions).

Oatly then appealed to the Supreme Court.

Supreme Court Decision

Oatly argued before the Supreme Court that:

1. The trade mark was not a “designation”; and
2. Alternatively, if it was a designation, it fell within an exemption under Annex VII, which provides:

“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.”

The Court addressed each argument in turn.

Designation

The Supreme Court held that the term “designation” in Point 5 must be interpreted in the context of Annex VII of the 2013 Regulation as a whole. While the 2013 Regulation distinguishes between a product’s “name” or “sale description” and a “designation,” the Court emphasised that a designation is not limited to the formal name of a product. Instead, it encompasses the broader use of protected terms in connection with food or drink products.

Accordingly, the prohibition is engaged whenever a protected term, such as “milk”, is used in respect of a product that does not fall within the categories defined in Points 1–3 of Annex VII of the 2013 Regulation. It is therefore irrelevant whether the term forms part of the product’s name, a slogan, or marketing material.

Because oat-based food and drink are not included within those categories, the use of the word “milk” in the trade mark POST MILK GENERATION amounted to the use of a protected designation. The Court confirmed that it is not necessary for consumers to believe the product is milk; the mere use of the protected term in connection with non-dairy products is sufficient to trigger the prohibition.

The Supreme Court therefore concluded that the trade mark falls within the scope of Point 5 of the 2013 Regulation.

Exemption

Having determined that the mark fell within the prohibition, the Court considered whether it was saved by the exemption.

Oatly argued that the designation clearly described a characteristic quality of the product, namely, that it is milk-free.

The Supreme Court rejected this argument for several reasons:

• The trade mark did not describe a characteristic quality of the product. Instead, it appeared to target consumers, particularly younger generations, who may have concerns about the production and consumption of milk.
• Even if the phrase were interpreted as referring to a milk-free characteristic, it did not do so “clearly.” For example, the mark could suggest reduced milk content rather than completely milk-free.

Conclusion

The Supreme Court’s ruling reinforces that the UK will continue to take a strict approach to protected terms set out in the 2013 Regulation even post-Brexit.

The decision confirms that products not derived from animal milk cannot be marketed using terms reserved for dairy products. This may require companies that promote goods as “dairy-free” or “milk-free” to exercise greater caution in their branding and advertising strategies.

For brand owners in the plant-based sector, the judgment serves as a reminder that creative marketing must remain within the boundaries of regulatory protections, even where the intention is to signal the absence, rather than the presence, of dairy.

If you wish to discuss this topic with our team, reach out to Piers Strickland.