Oatly Loses Trade Mark Battle Against Family Run Business

It’s widely assumed that when a trade mark battle ensues the party with deepest pockets will most often triumph, especially when one is a multi-million pound global brand and the other is a small family-run local business. Recently however in the milk arena there’s been a David v Goliath scenario…

Swedish multi-million pound company Oatly, has lost a trade mark infringement and passing off case against a family-run UK firm from Cambridgeshire, Glebe Farm over an Oat drink.

Lakmal Walawage, an intellectual property associate solicitor from JMW Solicitors gives his opinion on this landmark case…

'“During the hearing in June, it was revealed that Oatly (who are publicly listed) in the year to 27 February 2021 has sold more than £38m worth of its “barista edition” oat milk in the UK, and over £13m of other varieties. To prove detriment and a successful 10(3) claim, Oatly needed to firstly prove a reputation in the UK and detriment.

Lakmal Walawage, Intellectual Property Associate Solicitor at JMW Solicitors

Oatly brought legal action against Glebe Farm Foods claiming Glebe Farm’s brand PureOaty causes confusion with Oatly’s trade marks, and takes unfair advantage and/or damages the reputation in those trade marks. Glebe Farms launched their oat drink called “PureOaty” which was launched in 2020.

Oatly contacted the PureOaty makers in early 2020 claiming infringement of its registered trade marks for the word mark “OATLY” (in various forms), and logo figurative marks over the products packaging. The logo marks are pictured below, and Oatly have sought to protect their “wackaging” (or whacky packaging) marketing model, through their registration:

Oatly’s infringement action can be broadly broken down into the following three separate claims:

that Glebe Farms use of the PureOaty word mark and carton would cause a likelihood of confusion amongst the average consumer that they are the same as, or associated with Oatly;
that Glebe Farm’s use of the PureOaty word mark and carton would take unfair advantage, or damage, the reputation and distinctive character in the Oatly marks;
that by the above acts Glebe Farm was passing themselves off as Oatly, and causing damage as a result.

Farmer Phillips Raynor said the PureOaty name was a “nod to the purity of the product” and therefore was purely descriptive. Further, Raynor stated that when the products are compared to side by side, it is difficult to see similarity and that the legal action was therefore “unnecessary.”

Judge Caddick stated that the similarities between the marks were “at a very general level”. Comparing the various marks with each other, the issues in the case seemed to centre around their descriptive nature. Both Oatly and PureOaty were used in respect of oat milk products.

The similarity that does exist between the various marks was due to the use of the letters ‘OAT’, which ultimately is purely “descriptive of the relevant products.” Further, “Pure” appeared before “Oaty” in Glebe Farm’s brand so was the dominant part of the mark. There was no finding of a likelihood of confusion. Glebe Farms also used the PureOaty mark with the following Glebe Farm logo on its cartons:

Glebe Farms logo

For the above reasons, it was also found that while Oatly undeniably owned a reputation in the Oatly Marks, and the evidence showed consumers did link the two brands, there was no unfair advantage taken or damage done. PureOaty cannot have been unfair in using a descriptive element in marketing its goods.

Finally, the passing off claim also failed as Judge Caddick concluded that Glebe Farm’s conduct did not amount to a “misrepresentation that its good were those of or licensed by Oatly”, for similar reasons.

Glebe Farm’s owner, Phillip Raynor, described the case result as showing that “smaller independent companies can fight back and win” over large firms.

It is reported that Oatly has no plans to appeal the result and have made a statement on their website, as would have been required by the final order of the court.