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The Rise of Plant-based Milk: Oatly's trade mark infringement proceedings are dismissed

Posted on 22 September 2021

Swedish brand Oatly has recently been involved in a high profile trade mark dispute, in which it unsuccessfully argued that its OATLY / OAT-LY (word and device) trade mark registrations had been infringed by a product called 'PUREOATY'. The case clearly highlights the hurdles in succeeding in a trade mark or passing off case where the similarity between the two brands lies in a commonality of descriptive elements. Oatly has confirmed that it will not be appealing the decision.

Dairy-alternatives in the food industry are currently booming. Plant-based milk such as almond, soy, and oat are particularly popular amongst consumers as alternatives to dairy milk. The sale of plant-based milk was estimated to be £278m in 2020, according to an article by The Guardian.

Oatly is one of the leading producers of oat milk in Europe and has been producing its oat drink since the 1990s. The Defendant, Glebe Farm Foods, is a family-run farm business established in 2008, specialising in producing gluten free oats, which are used to produce its flour, cereal and milk products. Glebe Farm's previously eponymously named 'Oat Drink' was rebranded to PUREOATY in January 2020.

Oatly brought proceedings in the Intellectual Property Enterprise Court alleging that Glebe Farm's use of PUREOATY (either as a word mark or incorporated on its carton) infringed its UK trade mark registrations for OATLY, OAT-LY and its Oat Drink Cartons, contrary to sections 10(2) and 10(3) of the Trade Marks Act 1994. Oatly also alleged passing-off. Nicholas Caddick QC (sitting as a Deputy High Court Judge) dismissed each of Oatly's claims. A factor in his decision was that the core similarity between the marks was the 'OAT' element, which was entirely descriptive of the goods in question. Therefore, taking into account the other elements in the marks, the Judge found that there was no likelihood of confusion, no damage to the reputation of Oatly's registrations, and no passing off.

Interestingly, Oatly sought to rely upon certain of instances of apparent actual confusion evidenced in documents that had been disclosed by Glebe Farm. One example was the transcript of a promotional interview conducted on behalf of Glebe Farm with the owner of a deli. On several occasions, the deli owner referred to Glebe Farm's product as PUREOATLY instead of PUREOATY. However, there were a number of disturbances during the interview, e.g. background music, a telephone, interruptions by guests, people talking and laughing, etc. Taking the disturbances into account, the Judge was not satisfied that this amounted to the relevant confusion (i.e. of trade origin) for trade mark infringement, given that the deli owner clearly knew they were referring to Glebe Farm's product as opposed to Oatly's.

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