Fage UK Ltd & Anor v Chobani UK Ltd & Anor

In an extended passing-off claim, a geographical description can support goodwill where it has independent drawing power for a substantial section of the relevant public. The claimant need not show that the public understands the manufacturing process, or that the product has superior quality or cachet. The relevant public may be a significant section rather than the public as a whole. Goodwill, misrepresentation and damage are matters of fact and degree. Damage includes erosion of the distinctiveness of the protected description. A product made by the same process as the genuine goods may nevertheless involve a material misrepresentation if its geographical origin is falsely conveyed.

FAGE, the UK distributor and Greek manufacturer of Total yoghurt, claimed that Chobani’s yoghurt, made in the United States, was passed off by being marketed in England and Wales as “Greek yoghurt”. FAGE relied on a long-standing UK convention under which “Greek yoghurt” denoted thick and creamy yoghurt made in Greece, while “Greek style yoghurt” denoted comparable yoghurt made elsewhere.

Chobani denied that the phrase denoted a distinctive class with protectable goodwill. It also counterclaimed in malicious falsehood over a letter sent by FAGE’s solicitors to Trading Standards. The central issues were whether the description had sufficient goodwill and whether Chobani’s use caused actionable misrepresentation and damage.

1. Claim in passing off succeeded. FAGE established that a substantial proportion of buyers of yoghurt sold as “Greek yoghurt” understood it to mean yoghurt made in Greece, and that this origin mattered to a substantial proportion of them. The description therefore had independent drawing power and substantial goodwill attached to it. The evidence included the uniform industry labelling convention, trade evidence and the premium price generally commanded by Greek yoghurt.
2. The relevant public was a significant section of the public, not necessarily the public as a whole. Goodwill and deception were distinct requirements, but both involved questions of fact and degree and admitted no precise numerical formula.
3. A geographical description required something more than bare geographical significance. That additional element could be drawing power in its own right; it did not need to consist of superior quality, cachet or a reputation based on regulated manufacturing methods. Consumers also need not understand the actual production process.
4. Chobani’s use of “Greek yoghurt” for yoghurt made in the United States was a material misrepresentation to those who understood the phrase as denoting Greek manufacture and cared about that origin. The fact that Chobani used a straining process did not prevent passing off. Nor did the small-print reference to United States manufacture adequately correct the prominent representation on the front and top of the pot.
5. The threatened damage was principally erosion of the distinctiveness of “Greek yoghurt” as a description of yoghurt made in Greece. A permanent injunction was therefore granted.
6. Counterclaim dismissed. The incorrect assertion that Chobani’s facility was not properly identified resulted, at worst, from negligence and was not reckless or malicious. The allegation concerning bovine growth hormone was not shown to be false or malicious. In any event, under section 3(1) of the Defamation Act 1952, conduct is calculated to cause damage only where damage is objectively likely in the ordinary course of events. A complaint to Trading Standards was unlikely to cause such damage before investigation and response.