Not milk? How food labelling regulations may affect UK trade mark registrations

A recent decision in Oatly AB v Dairy UK Ltd sheds some light on how food labelling restrictions may affect UK trade mark registrations for plant-based products.

If you participated in Veganuary this year, you may have noticed that the ‘oat drink’ you poured into your morning coffee did not share the name of its dairy counterpart. But why?

Veganism and plant-based diets are increasingly mainstream – in fact, the 2022 retail sales of vegetarian products and plant-based alternatives in the UK totalled an estimated £1.16bn, according to Statista.

Nevertheless, food labelling regulations still restrict the use of certain words for these products. ‘Milk’, for example, can only be used for products made from ‘mammary secretions’, and this has created a minefield for plant-based businesses and their branding.

A recent case – Oatly AB v Dairy UK LTD [2023] EWHC 3204 (Ch) – demonstrates just how complex this minefield can be.

Background – ‘post milk generation’

On 19 November 2019, Swedish food company Oatly AB filed a UK trade mark application (number UK00003445440) for the word mark ‘POST MILK GENERATION’. Oatly, which produces dairy product alternatives from oats, applied to register the mark in four classes:

• Class 25: T-shirts.
• Class 29: Oat-based drinks such as milk substitutes; oat-based yoghurt substitute; oat-based crème fraiche; and oat-based cooking cream and creamer.
• Class 30: Oat-based vanilla sauce and oat-based vanilla custard; oat-based ice cream; and oat-based food spread.
• Class 32: Oat-based natural energy drinks; oat-based breakfast drinks; oat-based fruit drink beverages; and oat-based smoothie beverages.

Initially, the UK Intellectual Property Office (UKIPO) accepted the application, considering it to meet all the requirements of a trade mark. As such, the application proceeded to registration on 8 August 2020.

Unbeknownst to Oatly, however, observations had been filed by Dairy UK, the trade association for the UK dairy supply chain, during the two-month opposition period. Initially mislaid, the observations raised several objections that, upon resurfacing, caused the UKIPO to rescind registration for the majority of the goods in classes 29, 30, and 32.

Dairy UK’s objections were based on section 3(3)(b) of the UK Trade Marks Act, which state that “a trade mark shall not be registered if it is of such a nature as to deceive the public (for instance as to the nature, quality or geographical origin of the goods or service)” and section 3(4) of the UK Trade Marks Act, which states that “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”.

In response, Oatly filed a request with full written reasons, which allowed the mark to proceed to registration for a second time.

The invalidation action

On 23 November 2021, Dairy UK filed an application for a declaration of invalidity against all goods in the registration. Its grounds matched those on which its earlier observations had been based, with Dairy UK arguing that the mark’s use would mislead consumers into believing a product relating to the mark was a dairy product, and that the mark’s use is prohibited in the UK.

The first ground was quickly dismissed by the Hearing Officer, who considered that the mark neither deceived, nor created a sufficiently serious risk of deception.

Dairy UK’s section 3(4) grounds, however, were based on Directive 2003/13/EC and Regulation (EU) No 1308/2013 (the Regulation), which defines ‘milk’ as “the normal mammary secretion” (point 1, Part III, Annex VII). This also prohibits using ‘milk’ in relation to any products that are neither milk nor milk products.

Previously, these regulations have been applied very strictly. In the TofuTown case, for example, the European Court of Justice decided that the term ‘milk’ could not be used when marketing or advertising purely plant-based products, even those that used the word ‘milk’ as part of a trademarked phrase (Verband Sozialer Wettbewerb eV v TofuTown.com GmbH).

In Oatly’s case, while there was no dispute that the categories of goods within the registration were not milk or milk products, there remained the question of whether its mark ‘POST MILK GENERATION’ was caught by the Regulation.

According to the Hearing Officer, it was. Regardless of how the mark as a whole may be viewed by consumers, the use of ‘milk’ was clearly prohibited for non-milk products, and so the application was refused a second time.

Oatly’s appeal

In its appeal, Oatly was keen to emphasise that the Regulation applied more to the actual name, or description, of a foodstuff or product, rather than its trade mark.

Oatly also pointed to Article 17 of Regulation (EU) No 1169/2011, which says in point 4 that “the name of the food shall not be replaced with a name protected as intellectual property, brand name or fancy name”. This, it argued, indicated further contradistinction between a trade mark and the product’s actual name.

Dairy UK’s opinion here was more black and white. As far as it was concerned, the word ‘milk’ appeared in the mark and could only be used with goods that fell under the following points, according to Regulation (EU) No 1308/2013:

1. the normal mammary secretion obtained from one or more milkings;
2. products derived exclusively from milk;
3. products in which milk is “an essential part” in terms of quantity or characterisation.

The goods contained within Oatly’s application were not applicable to any of these points, and could not, therefore, carry the word ‘milk’ in their associated trade mark.

The decision and its implications

In his final decision, the Judge decided in Oatly’s favour, stating that “the term complained of – ‘milk’ – appears in a trade mark which, by its nature, is distinctive of, indicates a unique trade source for, and is not descriptive of, the goods for which it is registered”. In other words, Oatly’s mark does not identify the products as being milk, even if that word is included in the mark.

While this decision sets a precedent that trade marks for plant-based products containing restricted words in a non-descriptive way do not fall foul of the Regulations, it remains unclear to what extent restricted words may be used in trade marks for plant-based products. Hopefully, more plant-based businesses challenging the bounds of these restrictions will provide further clarity.

Trade mark applications for plant-based foods in the UK are unlikely to be rejected automatically for containing a restricted word, but there is enough uncertainty in this area of law to give both trade mark attorneys and plant-based businesses food for thought.