Supreme Court sours Oatly’s 'Post Milk Generation'

Supreme Court sours Oatly’s 'Post Milk Generation'

Last week, the UK Supreme Court handed down its unanimous judgment in Dairy UK Ltd v Oatly AB, declaring  Oatly's UK trade mark registration for 'Post Milk Generation'  invalid in respect of plant-based food and drink products. 

Oatly secured the registration in 2021, but Dairy UK, the trade association representing the dairy industry, appealed to the IPO seeking to invalidate the mark, arguing that the phrase breached legislation governing the use of dairy terms. The dispute progressed through the High Court and the Court of Appeal, ultimately reaching the Supreme Court.

The judgment concludes the longstanding dispute between the dairy-alternative manufacturer and Dairy UK, and provides important clarification on the scope of EU-derived agricultural marketing regulations retained in UK law. 

More broadly, the decision illustrates the close intersection between the UK's intellectual property regime and brand strategy, and the extent to which even highly creative marketing approaches may be curtailed by regulatory constraints.

Regulatory framework

Section 3(4) of the Trade Marks Act 1994 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 other than law relating to trade marks'.

EU Regulation No 1308/2013 'establishing a common organisation of the markets in agricultural products' (the '2013 Regulation') was retained in UK law following Brexit and restricts the use of certain protected 'designations', including 'milk', in relation to the marketing of non-dairy products, subject to limited exceptions.

Oatly argued that 'designation' referred only to the name of a product, or the name used at all stages of marketing, and therefore that use of 'Post Milk Generation' in respect of oat-based food and drink products did not fall foul of the prohibition. The Supreme Court however rejected this argument, adopting a broader interpretation of 'designation' which it determined, in its natural meaning, referred to use in respect of a relevant product, rather than the naming of it. The Court found that interpretation consistent with the Regulation's purpose of ensuring fair conditions of competition.

The Supreme Court also rejected Oatly's reliance on the 2013 Regulation's limited proviso, which permits use of the designation where clearly describing a characteristic quality of the product, in this case, that it is milk-free. The Court considered it unclear that 'Post Milk Generation' described any characteristic of oat-based products, finding instead that the phrase was focused on describing the targeted demographic, particularly younger consumers who increasingly have widespread concerns about milk production and consumption.

Accordingly, the Supreme Court held that the statutory restriction rendered the trade mark invalid for food and drink in classes 29, 30 and 32. 'Post Milk Generation' was however accepted as valid for T-shirts in Class 25, which fell outside the scope of the 2013 Regulation.

Practical implications

The ruling has significant implications for businesses operating in the dairy-alternative market and beyond. It emphasises that brand messaging, even when not functioning as the product name, may fall within the scope of regulatory restrictions that directly determine trade mark registrability and, in turn, shape brand positioning and strategy.

Companies active in the alternative food and drink markets, including dairy, meat, and alcohol substitutes, should therefore carefully assess whether commonly used terminology in their branding may expose them to regulatory risk. 

Looking ahead

The Oatly case underlines the benefit of considering the full regulatory landscape when developing and protecting brand assets. Early and strategic planning informed by sector-specific regulation can mitigate potentially costly legal implications. 

Withers advises clients on trade mark strategy, helping businesses protect and develop their intellectual property in complex and regulated markets.