Oatly has hit a brick wall in its attempt to stop third parties from selling oat milk using the word "OAT" plus the letter "Y".
A decision in the IP Enterprise Court (IPEC) that the use of the PUREOATY name does not infringe registered trade marks for OATLY demonstrates the difficulty of enforcing marks that include a descriptive element. The case is Oatly AB v Glebe Farm Foods.
Swedish company Oatly brought the action for infringement of five registered EU (now comparable UK) trade marks – three word marks and two device marks – after the defendant, Glebe Farm Foods Limited, rebranded its gluten free oat drink to PUREOATY.
In addition to alleging infringement under Sections 10(2) and 10(3) of the Trade Marks Act 1994, Oatly argued that the use of PUREOATY amounted to passing off.
Similarity and confusion
In his judgment on 5 August 2021, Mr Nicholas Caddick QC said the key issues for Section 10(2) infringement were whether the defendant’s sign was identical or similar to Oatly’s registered marks, and whether that gave rise to a likelihood of confusion. He found there was a modest level of visual similarity between the sign and the word marks, limited or slightly greater aural similarity, and low to moderate conceptual similarity, which derived from the presence of the descriptive word ‘OAT’.
The judge noted that there was very little evidence of actual confusion, so the question was whether there was a likelihood of confusion. Reviewing the case law, he commented on “the difficulty in establishing any likelihood of confusion in a case where the similarity lies in a commonality of descriptive elements” and said: “Here the distinctive elements of the marks and of the sign are very different and the only other component of the marks and the sign is the word ‘OAT’ which is entirely descriptive.” (emphasis added)
The case regarding Glebe Farm’s cartons was even weaker than that regarding the PUREOATY sign. Overall, he concluded that there was no likelihood of confusion between the PUREOATY sign and carton and any of the Oatly marks.
No advantage
Regarding Section 10(3) infringement, the judge accepted that Oatly’s marks have a strong reputation and that there is an identity of the parties’ goods, and that use of PUREOATY was likely to bring the Oatly marks to the minds of many average consumers. But he said that there was limited similarity between the sign and the marks and “the similarity is due to the presence in both the sign and the mark of the letters ‘OAT’ that are descriptive of the relevant products”.
Moreover, the judge rejected Oatly’s argument that Glebe Farm Foods intended to take advantage of the distinctive character or repute of the Oatly marks and intended to cause consumers to make a link between the products. He said that, despite mentioning Oatly, the defendant’s internal documents showed no suggestion of a wish or intention to get close, let alone take advantage, of the Oatly brand: “I am fully satisfied that the Defendant did not have that intention attributed to it by Oatly.”
Concluding thoughts
Passing off was dealt with very briefly. The judge found that there was no misrepresentation based on his finding that there was no likelihood of confusion.
Glebe Farm Foods described the judgment as a “complete victory”, while Oatly has reportedly said it accepts the decision and will not appeal.
Strangely enough, when the case first came out, the only place it was easily accessible online was Oatly's website. Typically litigants don't share the judgments where they are not successful but with an increasing focus on transparency in business, will this trend start to change?
This sort of decision is one which might not have been litigated before IPEC was modernised just over a decade ago. IPEC's simplified and cost effective dispute resolution process has made it a popular forum for many people who previously might have thought twice about commencing or defending trade mark infringement proceedings in the UK.
To find out more about the issues raised in this case contact Rosie Burbidge, Intellectual Property Partner at Gunnercooke LLP in London - rosie.burbidge@gunnercooke.com
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