On 5 August 2021, the High Court (IPEC) handed down its judgment in a case brought by Oatly, the makers of popular Swiss oat drink brand Oatly, against Glebe Farm Foods, in respect of Glebe Farm’s “PureOaty” oat drink[1]. Judge Nicholas Caddick QC found in favour of the defendant.

Background

Oatly’s case was based on trade mark infringement and passing off.

For its trade mark infringement case, it relied on five of its marks under:

• section 10(2) of the TMA: use without consent in the course of trade of an identical or similar sign in relation to a similar sign/identical or similar goods, which leads to a likelihood of confusion on the part of the public;
• section 10(3) of the TMA: use without consent in the course of trade of an identical/similar sign where the trade mark has a reputation in the UK and the use of the sign, being without due cause, takes unfair advantage of, or is detrimental to, the distinctive character or repute of the mark.

For passing off, Oatly had to establish goodwill, misrepresentation and damage.

The claims related to both the defendant’s product name “PureOaty” (in itself and as depicted on the product packaging) and the front panel of the packaging.

Oatly was founded in 1990 and has more recently found huge commercial success, listing in New York with a market capitalisation of over $10 billion USD. As detailed in the judgment, Oatly’s Barista Edition product had sales in the UK of over £38 million and was the best-selling product in the wider dairy- alternative product category.

Glebe Farm Foods is a family business run by two siblings and is based in Cambridgeshire. It specialises in the production of gluten free oats. Around half of its oat production is used for own-brand products sold through its own website and other retailers including Holland & Barrett and Amazon. It released its own oat drink in 2019 and rebranded to “PureOaty” in January 2020.

Decision

In respect of the trade mark claims, there was no dispute as to Glebe Farm’s use in the relevant territory, in the course of trade, without consent, in relation to goods or services that were identical or similar to those of Oatly’s marks.

In respect of the case brought pursuant to section 10(2) of the TMA, the issues were therefore whether the PUREOATY sign was identical or similar to the marks and if not, whether it gave rise to a likelihood of confusion.

The judge considered the claimant’s strongest case as being that the “PUREOATY” sign infringed the “OATLY” mark. However, he found that the average consumer would consider there was a “very modest level” of visual similarity, noting the addition of the “PURE” letters and the lack of “L”; that aural similarity would depend on whether the consumer said “PUREOATY” as one word or two; and that conceptually, similarity was “low to moderate at best”.

With regards to confusion, the judge agreed with the defendant that the distinctive elements of the marks and sign were very different, and that the common component (“OAT”) was entirely descriptive. Attention was brought to case law that “highlight[s] the difficulty in establishing any likelihood of confusion in a case where the similarity lies in a commonality of descriptive elements”.

The use of the mark/sign was also considered in contributing to the finding that “in the setting of the Defendant’s carton taken as a whole, it is hard to see how any relevant confusion would arise from the Defendant’s use of the sign”.

In respect of the case brought pursuant to section 10(3) of the TMA, there was little dispute that the Oatly marks had a reputation. However, as set out above, the judge found there to be “a low, or at best, very modest level of similarity based largely on their common use of the letters “OAT” which would be seen as descriptive”. The judge did agree that a “link” was brought to the mind of the average consumer, including as shown by mistaken references to Pure “Oatly” in evidence that purported (but failed in the eyes of the judge) to show actual confusion for the purposes of the claim under section 10(2).

However, the judge held that there was no risk of injury to the distinctive character of Oatly’s marks nor its reputation; nor was the defendant found to take unfair advantage of Oatly’s marks. In respect of unfair advantage, (on which the most reliance was placed), the judge referred to materials disclosed by the defendant and relied upon by the claimant in which the OATLY brand was mentioned, but held that they showed “no suggestion of a wish or intention to get close to let alone to take advantage of the distinctive character or repute of the Oatly marks or brand”.

Following a relatively detailed assessment of the trade marks case, the passing off claim was dealt with briefly, as the judge had already found in dismissing the section 10(2) claim that the defendant’s conduct could not be said to amount to a misrepresentation that its goods were those of or licensed by the claimant.

Comment

The judgment in this case provides a useful look back at the case law applicable to claims under sections 10(2) and 10(3) of the TMA, in particular in respect of marks and signs with common descriptive elements.

The decision will no doubt serve as encouragement to smaller parties in dispute with big brands.

The decision follows Oatly’s successful appeal in an earlier case to the General Court, which held that Oatly’s application to trade mark its slogan “IT’S LIKE MILK BUT MADE FOR HUMANS” was wrongly rejected by the EUIPO and the Board of Appeal as devoid of distinctive character.

For more information, see here and here.

[1] Oatly AB & Oatly UK Limited v Glebe Farm Foods Limited [2021] EWHC 2189 (IPEC)