In a significant and somewhat contentious ruling, Oatly, the Swedish beverage manufacturer known for its plant-based alternatives, has been prohibited from marketing its products using the term "milk" within the UK. This decision came down from the UK Supreme Court, which unanimously sided against Oatly in a protracted legal battle with Dairy UK, a trade association representing the dairy industry.
The conflict began when Oatly sought to trademark phrases linked to the dairy sector, notably the slogan "Post Milk Generation." Laurie Bray, a senior associate and trademark attorney at Withers & Rogers, an intellectual property firm in Europe, remarked on the ruling's implications, noting, "It has taken the highest court in the land to decide once and for all whether a plant-based milk alternative can be branded as ‘milk’ and marketed as such. And the outcome is not what Oatly was hoping for."
According to existing regulations, specific terms like "milk", "wine", and "olive oil" can only be used to refer to the actual products they describe. In this context, milk is defined exclusively as a product derived from animals within the dairy sector. Oatly had initially filed for a trademark of "Post Milk Generation" with the UK’s Intellectual Property Office back in 2019, successfully registering it in 2021. They contended that their use of the word "milk" did not violate regulations as long as it wasn't employed descriptively.
However, in 2023, following a challenge from Dairy UK, the IPO deemed that Oatly's usage of "milk" was misleading. Oatly managed to appeal this ruling in December 2023, but the Court of Appeal subsequently reversed that decision, leading Oatly to escalate the matter to the Supreme Court.
Judith Bryans, the chief executive of Dairy UK, highlighted the importance of the Supreme Court's ruling, stating, "This ruling is an important decision for the sector as it finally provides clarity on how dairy terms can – and cannot – be used in branding and marketing. It brings greater certainty for businesses and helps ensure that long-established dairy terms continue to carry clear meaning for consumers, while allowing appropriate descriptors to be used where the law permits."
The ramifications of this ruling extend beyond just Oatly, potentially affecting other producers of plant-based products. Similar trade organizations across Europe may challenge Oatly's trademark registrations in their countries based on this precedent. Furthermore, the same regulations that apply to dairy terms also extend to products made from milk, such as cream, butter, cheese, and yogurt.
Richard May, a partner at Osborne Clarke, advises that for producers of plant-based alternatives, it’s safer to adopt clearly descriptive terms such as "oat drink" or "plant-based drink." More broadly, this judgment suggests that UK regulators and courts are likely to scrutinize the practice of "category borrowing" across various regulated sectors rigorously. Companies that build their brands around legally defined product names, whether in dairy or other areas, should prepare for close examination and adapt their brand strategies accordingly.
Interestingly, this isn’t the first time Oatly has faced legal troubles regarding trademark issues. Back in 2021, Glebe Farm Foods, a company based in Cambridgeshire that specializes in gluten-free oats, successfully won a trademark infringement case against Oatly for its use of the brand name PureOaty.
As this story unfolds, one might wonder: Should plant-based companies be allowed to use traditional terms like "milk"? Or does this ruling protect consumer interests by maintaining clear distinctions between animal-derived and plant-based products? What are your thoughts on the implications of this decision for both consumers and producers?
