Dairy UK Ltd v Oatly AB

This case was a branding dispute with a wider compliance point for food businesses. Oatly, known for oat-based alternatives to dairy, had registered POST MILK GENERATION as a trade mark for oat-based food and drink products. Dairy UK, the trade association for the UK dairy industry, challenged that registration.

The argument was not about whether Oatly sold dairy products. It was about whether the phrase could lawfully use the word milk for non-dairy goods. The challenge relied on section 3(4) of the Trade Marks Act 1994, which blocks registration where use of the mark is prohibited by another rule of law. The other rule here was the dairy-designation regime in Regulation (EU) No 1308/2013, now treated as assimilated law in Great Britain.

The case moved through the IPO, the High Court, the Court of Appeal and then the Supreme Court. That journey matters because the courts disagreed on a practical question many brand owners ask: if a protected word appears in a slogan or campaign line, rather than as the product name, is it still caught?

The first issue was the meaning of designation in the dairy rules. Oatly said designation meant the name of a product. On that view, POST MILK GENERATION was not naming a food or drink product, so it should not be banned. Dairy UK said designation was wider than a product name and covered use of the term milk in relation to a product more generally.

The second issue was whether the phrase could still be saved by an exception. The rules say the prohibition does not apply where a designation is clearly used to describe a characteristic quality of the product. Oatly argued that POST MILK GENERATION clearly conveyed that the products were milk-free. Dairy UK said the phrase did not clearly describe the goods at all and instead pointed to a target audience or lifestyle message.

These are not abstract drafting points. They go directly to how food brands use protected words in trade marks, packaging and advertising.

The Supreme Court rejected Oatly's narrow reading of designation. It said the legislation uses different terms for different jobs. In the relevant context, designation was not limited to the name of a product. Instead, it covered use of the protected dairy term in respect of a food or drink product. That meant the use of milk in POST MILK GENERATION for oat-based food and drink fell within the prohibition.

The court also said the purpose of the rule was not only to stop deception. It was also to set fair conditions of competition for dairy terms. That mattered because Oatly had relied in part on the finding that consumers would not actually think the products were dairy. The court said that did not answer the legal question.

On the exception, the court agreed with the Court of Appeal that POST MILK GENERATION did not clearly describe a characteristic quality of the products. At most, it referred obliquely to non-dairy status. More obviously, it described a generation or group of consumers. Because the wording was not clear enough, the exception did not apply.

For founders and marketing teams, the case is a warning against treating trade mark law and food-labelling law as separate silos. A phrase may look distinctive from a branding perspective but still fail because another body of law prohibits its use. That is exactly what section 3(4) of the Trade Marks Act 1994 is designed to catch.

The decision also shows that context will not always rescue a creative phrase. Oatly argued that the phrase was not a product name and would not mislead shoppers. The Supreme Court still held it was prohibited for oat-based food and drink. So if your campaign line, sub-brand or packaging strapline uses a protected dairy term for a plant-based product, you should not assume it is safe because the overall message is clever, ironic or obviously vegan.

The court's discussion of a hypothetical MILK-FREE mark is also useful. It indicated that such wording would still be a prohibited designation at first instance, but could be saved by the exception because it clearly describes a characteristic quality of the product. That tells businesses that clarity matters more than marketing flair when relying on the exception.

If you sell plant-based food or drink, build a naming review into product development and trade mark clearance. This should happen before packaging is printed, domains are bought and applications are filed. The review should cover the full customer-facing wording, including campaign lines, descriptors, social assets and retailer copy.

Focus especially on protected dairy terms such as milk and the listed milk-product names. Ask not only whether the term is the product name, but whether it is being used for the product in a broader sense. Then test whether any proposed exception really applies. The court's approach suggests that indirect, aspirational or audience-led wording is risky if you are trying to say the product is dairy-free.

This case sat within a specific dairy-designation regime, but the wider lesson applies across regulated product sectors. Some words are protected because legislation reserves them for products meeting defined standards. Where that happens, a business can face problems at more than one level: registration risk, packaging risk, advertising risk and competitor challenge risk.

The judgment also reminds businesses that exceptions are interpreted carefully. The court accepted that the second limb of the proviso was not limited to products listed in the 2010 Decision, but Oatly still lost because the phrase did not clearly describe the goods. In practice, that means a business should separate two questions. First, is the wording prohibited in principle? Second, if there is an exception, is the wording direct and unambiguous enough to fit it?

For SMEs, the commercial cost of getting this wrong can be high: rebranding, wasted filing fees, packaging write-offs, retailer disruption and a public dispute with an industry body or competitor.