Case update: Dairy UK Ltd v Oatly AB [2026] UKSC 4
This week, the UK Supreme Court handed down a unanimous decision in Dairy UK Ltd v Oatly AB [2026] UKSC 4, dismissing Oatly AB (Oatly)'s appeal and invalidating its UK trade mark registration for "POST MILK GENERATION" for certain goods. This decision followed a series of appeals, culminating in Oatly's appeal to the Supreme Court against the Court of Appeal's judgment, which had overturned the High Court's earlier ruling in Oatly's favour.
The Supreme Court held that the term 'milk' in Oatly's UK trade mark (POST MILK GENERATION) was used as a designation, and therefore prohibited under Regulation (EU) No 1308/2013 ('Regulation') which defines 'milk' as an animal-derived product. The case highlights the risks for alternative food producers when registering and using certain terminology to refer to alternative products in relation to their traditional counterparts.
Background
Oatly is a Swedish company that manufactures oat-based food and drink products, notably oat-based drinks. In April 2021, Oatly obtained a UK trade mark registration for "POST MILK GENERATION", for oat-based food and drink products in Classes 29, 30 and 32, and T-shirts in Class 25 ('Oatly's Registration').
In November 2021, Dairy UK Ltd ('Dairy UK'), the trade association for the UK dairy industry applied for a declaration that Oatly's Registration was invalid under section 3(4) of the Trade Marks Act 1994 ('Act'). Section 3(4) of the Act prohibits the registration of trade marks which are prohibited in the UK "by an enactment or rule of law other than law relating to trade marks". Dairy UK argued that Oatly's Registration was prohibited under the Regulation, which, amongst other things, regulates the use of dairy terms such as milk, cheese and yoghurt in relation to the marketing of agricultural products.
Point 1 in Part III of Annex VII of the Regulation provides that “milk” means "exclusively the normal mammary secretion obtained from one or more milkings without either addition thereto or extraction therefrom”. Point 5 of Annex VII ('Point 5') provides that the "designations" of "milk" and "milk products" (referred to in Points 1, 2 and 3 of Annex VII) may not be used for any product other than those referred to in those points. However, Point 5 does include a proviso in the Regulation stating that the restriction does not apply where the designation is "clearly used to describe a characteristic quality of the product" ('Proviso').
In January 2023, the UK Intellectual Property Office ('UKIPO') invalidated Oatly's Registration for dairy-based goods (but not T-shirts) under section 3(4) of the Act, as the use of "milk" for non-dairy products is prohibited by the Regulation. This decision was overturned on appeal to the High Court, which was in turn appealed to the Court of Appeal by Dairy UK. The Court of Appeal disagreed with the High Court, agreed with the UKIPO, and held that Oatly's Registration was invalid. This decision was appealed to the Supreme Court on the following grounds:
- Ground 1 - what was the proper interpretation of "designation" in Point 5 of the Regulation, and if "POST MILK GENERATION" fell within this on the basis that it used the term "milk" as a designation; and
- Ground 2 – even if unsuccessful on Ground 1, was "POST MILK GENERATION" saved by the Proviso, on the basis it "clearly describes a characteristic of the product"?
The Supreme Court's judgment
The Supreme Court dismissed the appeal. On Ground 1, the Supreme Court unanimously held that "designation" within the Regulation is to be interpreted broadly, encompassing the way a term is used for a food or drink product rather than being limited to the formal naming of such products. Accordingly, the prohibition applies when the designation is employed in connection with a relevant product, regardless of whether it serves as the product's actual name.
On Ground 2, the Supreme Court considered whether "POST MILK GENERATION", when applied to oat-based food and drink, clearly describes a characteristic quality of those products. The Supreme Court held that Oatly's Registration does not “clearly” describe any characteristic of the contested product, namely the oat-based beverage product. In concluding its decision on this ground, the Supreme Court observed that the "POST MILK GENERATION" mark was accepted as valid for T-shirts (in Class 25), which may indicate that it cannot refer to a characteristic quality of the contested products but rather described a type of consumer. Therefore, Oatly's Registration did not fall within the Proviso and consequently was invalid in respect of oat-based food and drink, dismissing the appeal.
Implications
The Supreme Court's ruling establishes that producers of alternative dairy products cannot incorporate dairy-related terminology into their trade marks unless such terminology is clearly used to describe a characteristic quality of the product. While the interpretation of the Regulation was at the crux of this appeal, the decision could have wider implications for alternative food and beverage products, particularly where such products substitute traditional animal-derived foods.
In recent years, driven by sustainability and climate change concerns, the alternative food products industry has experienced significant growth. This judgment raises the question of how lab-grown milk and meat can be marketed, particularly where the product is directly grown from animal cells.
Consumer regulations and food labelling
In addition to trade mark law, businesses need to ensure their use of marks and marketing material does not deceive consumers or in breach of the Food Law Code of Practice (England).
Whilst Oatly's Registration was invalidated on these facts and the Regulation, businesses not seeking trade mark registration should also ensure they are not using terms that may cause consumer confusion under the Consumer Protection from Unfair Trading Regulations 2008 (CPRs). The CPRs prohibit misleading actions which deceive (or are likely to deceive) the average consumer about factors used in their decision making, including the main characteristics of the product. Businesses therefore need to ensure that their use of marks and marketing material do not deceive consumers (i.e. milk, when it contains no milk products/solids).
Similarly, businesses must ensure that product labelling is correct. A recent example is Tyra Banks's 'Hot Ice Cream' in Australia. Under the Food Standards Australia New Zealand (FSANZ), ice cream is defined by milk fat concentration and temperature (as a sweet frozen food). The New South Wales Food Authority determined that the product did not comply with the FSANZ and therefore required rebranding.
Summary of key points
- The term "milk" in a trade mark registration for non-dairy goods may be a prohibited designation under the Regulation, unless the trade mark clearly describes a product characteristic.
- Alternative dairy producers should be cautious about using dairy-related terminology for their products (unless clearly describing a product characteristic) on the basis that a "designation" captures all uses of the designation, not just the product name.
- The ruling has potential implications beyond dairy, signalling caution for alternative food businesses, including those producing lab-grown meat and cultivated products, when using traditional food terminology.
- Businesses must comply not only with trade mark law but also consumer protection regulations and food labelling codes to avoid misleading consumers.
What does this mean for your business?
Businesses in the alternative food and beverage sector should:
- Review existing trade marks and branding: Audit current registrations and marketing materials to ensure compliance with sector-specific regulations (particularly in dairy, meat, and other animal product categories).
- Exercise caution with terminology: Avoid incorporating protected designations (such as "milk", "dairy", "meat", "cheese") into trade marks for alternative products unless the use clearly describes a characteristic quality.
- Assess regulatory risk before filing: Conduct a thorough regulatory due diligence review before applying for trade mark registration, particularly where products substitute traditional animal-derived foods.
Trowers & Hamlins' Intellectual Property team specialises in helping businesses develop and implement trade mark and brand protection strategies. If you would like advice on these issues, please get in touch. We would be happy to assist.
