English court finds trade mark valid for oat-based drinks despite use of the term 'milk'

The High Court in Oatly AB v Dairy UK recently overturned a UK Intellectual Property Office (UKIPO) decision and ruled that it was wrong to declare Oatly's "Post Milk Generation" mark invalid. The High Court held that the UKIPO had construed too broadly the prohibition of the use of the term "milk" in retained EU law.

The High Court found that it is the use of the term "milk" to identify a product as being milk (as opposed to the mere use of the term in marketing) that is prohibited by retained EU law and the UKIPO had interpreted the prohibition too widely. Although Oatly's mark was registered in various classes and may have been used in the marketing of oat-based drinks, the trade mark did not purport to market the goods as milk and, therefore, the prohibition was not engaged.

This decision serves as an important reminder that although there are regulations prohibiting the use of certain terms relating to certain agricultural products, there are limits to this prohibition. For example, in relation to milk, it is only when the use of the term designates the goods as milk that the prohibition comes into effect. This gives producers of alternative products a degree of flexibility in their branding and trade marking practices.

UKIPO decision

The UKIPO held that Oatly's trade mark Post Milk Generation  was invalid as its use of the word "milk" for its product was prohibited by retained EU law. This conclusion was reached on a strict application of the retained EU regulation, which exclusively defines "milk" as "the normal mammary secretion…" and prohibits the use of the word "milk" in the designation (the name used at all stages of marketing) of products that do not fit this definition.

The hearing officer followed a previous non-trade mark decision from the Court of Justice of the European Union, which had found that the use of the word "milk" was prohibited from being used to designate purely plant-based products in marketing or advertising, even where the word was expanded upon by clarifying or descriptive terms (such as "plant-based cheese"). The UKIPO concluded that since trade marks are used in marketing, Oatly's mark was within the scope of the regulation and as a result was invalid.

High Court decision

Oatly appealed the UKIPO's decision, arguing that the regulation only prohibited the use of "milk" in relation to "definitions, designations and sales descriptions" and so did not cover trade mark use. The High Court held that although the mark contained the word "milk", it would not be used to market and sell the product as milk so it was permissible when used in conjunction with an oat drink product.

The hearing officer had construed the prohibition too widely so as to encompass the mark, but mere use of the mark in marketing did not constitute the use of the designation for milk within the regulation's definition. For the regulation to be engaged, the actual use of the word "milk" to identify the product as being milk is necessary. In this case, the mark was registered for a variety of goods in different classes so was not descriptive of a particular product and "did not purport to market [the goods] as any particular product, let alone as milk". Consequently, the appeal was allowed and the UKIPO's decision was overturned.

Osborne Clarke comment

This is a particularly helpful decision for those involved in producing and marketing plant-based alternatives to traditional dairy products. It is an important reminder that there are limits to the regulations limiting the use of certain terms to certain agricultural products. The relevant retained regulation will only be engaged when the specific term is being used to identify a product as meeting the relevant definition. Oat-based drinks cannot be marketed as "oat milk" but, as was the case, here the term "milk" may still be used in the marketing of products, provided they are not held out as being milk.

That being said, brands should remember that this case specifically concerns a mark that was used to market the product to consumers who no longer consume dairy milk. Brands should therefore not consider this decision as a "green light" to use the word "milk" generally in marketing for plant-based products. Any such use of the term "milk" should be very carefully considered in the full context of the advertising in question to ensure that it doesn't purport to market the product as milk.

This is a positive decision for brand owners of plant-based alternatives to traditional dairy-based products. However, brand owners should continue to assess whether their marks might be considered to be deceptive, which is another ground that is increasingly being used to prevent registration or invalidate marks in this space.

Despite the UKIPO's original invalidity finding in this case, it had also made a finding that Oatly's mark was not deceptive and that the average consumer would view the mark as "for consumers…who no longer consume dairy milk". As this finding was favourable to Oatly and didn’t affect the UKIPO's decision to invalidate the mark, it was not appealed and, therefore, was not considered further by the High Court. However, it remains a potential basis of attack of which brand owners should be aware.

Ore Laniyan, a Trainee Solicitor with Osborne Clarke, contributed to this Insight.