The Dispute In A Nutshell:
Oatly is the owner and registered proprietor of a range of EU trade mark registrations relating to the branding of their oat drinks. Oatly has recently accused Glebe Farm Foods, a market competitor, of infringing the brand’s trade marks with their oat drink ‘PureOaty’. Oatly have taken the dispute to the Hight Court, their main claims concern the similarity of the name ‘PureOaty’ and packaging of the competitor’s drink.
Trade Marks: A Quick Breakdown:
What Is A Trade Mark?
Section 1 of the Trade Marks Act 1994 defines a trade mark: “any sign capable of being represented graphically which is capable of distinguishing goods or services of one undertaking from those of other undertakings. In other words, a trade mark is an intellectual property right which helps brand owners protect their brand or product.
A trade mark must be a sign which may be a design, symbol, slogan, sounds or words (although there is a list of exemptions that a trade mark cannot include, such as swear words or if the potential or if the potential trade mark is too common and non-distinctive!) which is capable of distinguishing goods or services of one enterprise from another.
Why Are Trade Marks Important?
One way in which a trade mark provides protection for a brand is by preventing competitors from producing an identical or very similar product. Trade marks are also key in ensuring a business has competitive advantage against competitors. For example, when an enterprise owns a registered trade mark, if another enterprise tries to use or copy the brand without permission, the owner of the trade mark can take legal action against them.
What Is Trade Mark Infringement?
The infringement of a registered trade mark can occur if a company uses the trade mark of another without authorisation. If infringement occurs, the owner of the registered trade mark may seek civil remedies such as an injunction, damages, disposal of the offending products or may even seek criminal remedies.
Oatly v PureOaty:
Oatly is a Swedish food and drinks company founded in 1994, having become the world’s largest oat drink company. As the name suggests, Oatly has significant expertise in all things oats and is the market leader for anything oaty. Apart from being an oatsome alternative to diary, Oatly prides itself on using Oats because of their nutritional qualities and sustainability for our planet.
On the other hand, Glebe Farm Foods is an independent family run farm based in Cambridgeshire. Although Glebe Farm offers a range of products, their PureOaty drink has attracted some recent unwanted attention and has been the subject of an alleged trade mark infringement.
In a recent press release, Glebe Farm contests that the drink was named ‘PureOaty’ in order to infer the purity of the product. Despite this, Oatly claims that Glebe Farm Food’s was aiming to attract more customers by replicating the product in order to “benefit from the huge power of attraction and reputation of Oatly’s branding”.
However, trade mark disputes are not uncommon in the food and drinks sector. Here are a few examples…
*COMMERCIAL AWARENESS BOOSTER 1*: In May 2020, Impossible Foods claimed that the name of Nestlé’s plant-based burger infringed upon their trade mark – the District Court in The Hague agreed. Consequently, Nestlé renamed its Garden Gourmet “Incredible Burger” in order to avoid €25,000 daily fines. Nestlé was merely attempting promote the quality and incredibleness of the product. However, the court has ruled that Nestlé had infringed upon Impossible Burger’s trade mark as the adjectives ‘incredible’ and ‘impossible’ were too similar and may mislead customers. Nestlé has since renamed their burger as the Garden Gourmet Sensational Burger. For more information, click here.
*COMMERCIAL AWARENESS BOOSTER 2*: Another prominent example is the recent High Court dispute over Aldi’s copycat caterpillar cake. Marks & Spencer began a legal battle against Aldi in order to protect their famous ‘Colin the Caterpillar’ cake, claiming that Aldi’s ‘Cuthbert the Caterpillar’ infringes their trade marks. M&S have three protected trade marks on Colin, and are keen to prevent Aldi from eating a slice of the caterpillar cake market and benefiting from his long-standing reputation. However, we shall have to wait for the judgement later this year to see if Colin and Cuthbert can continue to co-exist…
Back To The Oats: The Impact Of This Dispute:
Approximately, one quarter of the UK population have now switched to using a plant-based alternative to cow’s milk. In particular, sales of oat milk have been on an upward trajectory and in recent years. In 2020, sales of oat milk in the UK were around £73 million. This is more than double the previous year. It is no wonder that competitors are after a sip of the action…
The demand for oat milk and Oatly’s expertise in this area has meant that Oatly has become increasingly popular. Last year, Oatly received investment from a private equity group led by Blackstone-Led Group Inc. (Blackstone is a global investment company, who invest capital on behalf of pension funds, large institutions and individuals). Oatly was keen to secure funding from Blackstone in order to encourage other private equity firms to invest into green sustainable investments. Oatly also sold a 10% stake for £200 million and is to use the money to expand into new overseas markets and set up new production plants in places like the US and Asia. Since then, Oatly has been valued at approximately £2 billion, indicative of its popularity and success. However, in July 2021, a hedge fund company accused Oatly of embellishing its sustainability claims and making accounting problems. These allegations caused a drop in Oatly’s share prices on the New York Stock Exchange to the lowest level since they began trading in May.
What Happens Next?
Regardless of the legal decision, Oatly’s bright future may already be tainted. Oatly is entitled to pursue legal redress if its registered trade mark has been infringed, however, its reputation may be the cost of this. Loyal customers have expressed dissatisfaction with the behaviour of the brand and a petition on Change.org has been launched in an attempt to persuade Oatly to renege its injunction against Glebe Farm.
Oatly’s clever marketing and ideals behind the brand have helped it become more than a multi-national corporation. However, customers have condemned Oatly’s action against Glebe farms as ‘aggressive’ and ‘unnecessary,’ arguing that monopolies are not advantageous for the economy. Oatly may be rightly protectionist about its brand and want to maintain its dominant market position, although, it is questionable why this market giant seems threatened by a much smaller company who are far less resourced and developed.
If Oatly is successful and Glebe Farm has to halt production to redesign and repackage its oat milk, where does this leave the current production line and what happens to the waste? How does this sit with Oatly’s commitment to environmental protection?
Glebe Farms has been dragged through the mill with all this oaty business but as we await the court’s judgment, Glebe Farm has decided to take matters into their own hands. They have launched a competition on their website, asking customers to suggest new names for their oat drink. They are onto a best-seller with the name ‘Oaty McOatface’ in my opinion.
Following the two-day hearing that took place in mid-June, a legal decision is expected by 23rd July.
This article was written by Mollie Bailey Hammerton. Mollie is a is Content Writer for According To A Law Student (ATALS) and a penultimate year Law LLB student at the University of Liverpool, aspiring to pursue a career at the Bar. Mollie is particularly interested in Commercial Law.