Can product names be trade marked? Lessons from the “POST MILK GENERATION” Supreme Court case

We have a rare lesson from the UK Supreme Court on words precluded from trade mark protection, where those words are controlled via another law. The issue arose from Oatly AB, a Swedish company that markets dairy alternatives, being opposed in its trade mark application by a UK trade association. The argument concerned section 3(4) of the Trade Marks Act 1994 which precludes a trade mark from registration ‘if or to the extent that its use is prohibited in the UK by any enactment or rule other than law relating to trade marks’. There was also a link to retained EU law in the preclusion found in Article 78 of Parliament and Council Regulation (EU) No. 1308/2013 (as amended) (the ‘2013 Regulation’).

Background

The application was made by Oatly, a company that produces alternatives to dairy products, including oat-based drinks. The Respondent, Dairy UK Ltd (Dairy UK), is the trade association for the UK dairy industry. Oatly filed an application to register ‘POST MILK GENERATION’ as a trade mark. The UK Intellectual Property Office (IPO) initially registered the trade mark, but then Dairy UK filed an application for a declaration that the trade mark was invalidly registered under section 3 of the Trade Marks Act.

Section 3(4) provides 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…”.

Dairy UK argued that the trade mark was prohibited by Article 78(2) of the 2013 Regulation. The 2013 Regulation has been retained since Brexit, and it sets controls for when ‘designations’ such as ‘milk’ can be used for products. The IPO concluded the trade mark was prohibited under Article 78 of the 2013 Regulation and, consequently, section 3(4) of the 1994 Act. Oatly appealed to the High Court, which overturned the IPO’s decision on the basis that a term is only a ‘designation’ under the 2013 Regulation if it is a generic description of the product, which the trade mark was not. The trade mark was neither a ‘designation’ nor prohibited by the 2013 Regulation. The Court of Appeal disagreed with this analysis, holding that the trade mark was a ‘designation’ and prohibited under the 2013 Regulation. Oatly appealed to the Supreme Court where we learnt the exposition in the Court of Appeal of the law by Lord Justice Arnold was correct and Oatly therefore lost.

Decision

There were two issues to be determined:

(1)        Is the term ‘POST MILK GENERATION’ a ‘designation’ for the purposes of Article 78 of Parliament and Council Regulation (EU) No. 1308/2013 (as amended) (the “2013 Regulation”) such that Oatly could not register it as a trade mark?

(2)        If considered a ‘designation’ of ‘milk,’ does the term ‘POST MILK GENERATION’ clearly describe a ‘characteristic quality of the product’ so that its use is not prohibited by the 2013 Regulation?

The Supreme Court confirmed that it all turns on interpretation, and the interpretation of ‘designation’ within the Regulation must be construed according to the meaning of the words used in light of their context and purpose of the provision.

Focusing on Article 78(2) and Part III of Annex VII of the 2013 Regulation, specifically Point 5, the Court rejected Oatly’s argument that ‘designation’ means the name of a product. When read alongside Point 2(a) and (b) of Part III, the Court noted that the word ‘names’ is used, which does not have the same meaning. A reference to ‘sale description’ meaning the name of the good further suggests ‘designation’ does not have the same meaning as the ‘name of a product’.

The Supreme Court then held that whilst ‘POST MILK GENERATION’ does use the term ‘milk’ as a ‘designation’, it was not clearly being used to describe a characteristic quality of the contested products. The trade mark was therefore invalid.

Specifically on issue (2), the Court held that the term ‘POST MILK GENERATION’, when used in relation to oat-based food and drink, does not clearly describe a characteristic quality of oat-based food and drink products and therefore falls outside the proviso. The trade mark was focused on describing the targeted consumers who are interested in such products. It was found that the trade mark was not clearly describing any characteristic of the contested products, even the characteristic of being milk-free was found to be a reference in an oblique and obscure way, and it is certainly not doing so “clearly”. The Court noted it does not make clear whether the product is entirely free of milk, or only that the milk content is low. Consequently, the trade mark was not saved by the proviso to Point 5, with the result that the trade mark “POST MILK GENERATION” is invalid in respect of oat-based food and drink.

This case shows that applicants need to be aware that some words and descriptions can simply never be trade marks, and the purpose for which a trade mark might be used should be considered so that it is not prohibited by law.

If you have questions or concerns about trade mark registration, please contact James Tumbridge.