Dairy UK Ltd v Oatly AB

A statutory prohibition on using dairy designations for non-dairy agricultural products extends beyond using a dairy term as the product’s name. A designation is used for a product whenever the protected term is used in respect of it, subject to the applicable exceptions.

The exception for a designation clearly used to describe a characteristic quality requires a clear descriptive use. An oblique, obscure or ambiguous implication that a product is milk-free is insufficient. These rules protect fair conditions of competition and operate independently of whether consumers are likely to be deceived.

Oatly AB registered POST MILK GENERATION as a trade mark for oat-based food and drink and for T-shirts. Dairy UK Ltd sought invalidation under section 3 of the Trade Marks Act 1994, relying on the restriction upon dairy designations in Regulation (EU) No 1308/2013.

The Intellectual Property Office invalidated the registration for the food and drink classes. Richard Smith J reversed that decision in [2023] EWHC 3204 (Ch), holding that the mark did not designate the goods as milk. The Court of Appeal restored the invalidity decision in [2024] EWCA Civ 1453.

The Supreme Court considered whether “designation” was confined to a product’s name and, if not, whether the mark was clearly used to describe the products’ milk-free quality within the second limb of the proviso to Point 5 of Part III of Annex VII.

1. The appeal was dismissed unanimously. Lord Hamblen and Lord Burrows delivered the judgment, with which Lord Hodge, Lord Briggs and Lord Stephens agreed.

2. “Designation” in Point 5 of Part III of Annex VII to Regulation (EU) No 1308/2013 is not confined to the name of a product. The legislation distinguishes “designations” from “names” and “sales descriptions”. In context, a protected designation is used for a food or drink when the relevant dairy term is used in respect of that product. It need not be used as the product’s name. POST MILK GENERATION therefore used “milk” as a designation for oat-based food and drink contrary to Point 5 (paras 29–34).

3. That broad construction accords with recital 76 and the provision’s purpose of establishing fair conditions of competition. The prohibition is distinct from consumer-protection rules concerning deception. The absence of actual or likely deception therefore did not prevent the prohibition from applying (para 32).

4. Earlier legislative versions did not justify reading “designation” as “name”. The current legislation had to be interpreted according to its present language and context. Comparison with materially different predecessors was potentially misleading (para 33).

5. The second limb of the proviso requires the designation to be clearly used to describe a characteristic quality of the product. POST MILK GENERATION principally described a targeted generation of consumers. Any suggestion that the products were milk-free was oblique and obscure. The phrase also failed to distinguish between products containing no milk and products containing little milk (paras 38–42).

6. By contrast, the hypothetical designation MILK-FREE would be prohibited in the first instance because of the broad meaning of “designation”, but would be saved because it clearly described the product as containing no milk (para 35).

7. The court proceeded, without deciding the point, on the parties’ common position that listing in Annex I to Commission Decision 2010/791/EU was required only for the traditional-usage limb of the proviso and not for its characteristic-quality limb (para 39).

1. United Kingdom Supreme Court: Dismissed Oatly AB’s appeal and affirmed the Court of Appeal’s conclusion that the registration was invalid for the relevant food and drink classes: [2026] UKSC 4.

2. Court of Appeal: Allowed Dairy UK Ltd’s appeal and restored the conclusion that Point 5 prohibited the mark for oat-based food and drink: [2024] EWCA Civ 1453.

3. High Court: Richard Smith J allowed Oatly AB’s appeal from the hearing officer, holding that the mark did not designate the goods as milk: [2023] EWHC 3204 (Ch).

4. Intellectual Property Office: The hearing officer declared the registration invalid for oat-based food and drink, but not for T-shirts: O/0049/23, 17 January 2023.