Have Oatly gone O(a)TT with this recent trade mark infringement action?

The popularity of plant-based milk alternatives has increased exponentially in recent years and there are a huge variety of dairy free milk-alternative drinks made from oats, almonds, coconuts and soya.

Oatly, the globally renowned giant of the oat milk- alternative market, has recently taken legal action against Cambridgeshire based Glebe Farm in relation to its oat milk-alternative alleging trade mark infringement.

Oatly has a net worth of over $15 billion as a result of the huge success of its products in over 20 countries worldwide. Comparatively, Glebe Farm is a family run, independent business that produces locally farmed, gluten-free oats and oat-based products, including its PureOaty drink.

On Wednesday 9th June in the London High Court, Oatly claimed that the PureOaty brand name and packaging is too similar to its own and that Glebe Farm were therefore infringing the registered trade marks owned by Oatly.

Oatly owns a host of registered trade marks including the word marks ‘OATLY’ and ‘OAT-LY’ and a number of marks relating to the design of their oat drink cartons. Oatly accused Glebe Farm of also passing off PureOaty as an Oatly beverage. Oatly is seeking damages and costs from the local business as well as demanding that Glebe Farm stops selling the PureOaty brand and radically change its name and packaging.

A key aspect of the Oatly legal claim is that Glebe Farm launched its original Oat Drink in September 2018 and then rebranded the Oat Drink in 2020 to PureOaty. Oatly’s representatives contended that the rebrand by Glebe Farm to PureOaty takes advantage of the reputation of Oatly’s trade marks as it brings to the minds of customers the Oatly brand. Moreover, it was suggested that the blue packaging of the carton along with the image of the coffee cup and the irregularity of the font bear ‘more than a passing resemblance’ to the Swedish brand.

Glebe Farm deny the allegations and responded that the only common features of the branding were ‘generic features’ such as the coffee cup and the block base colour of the carton. Glebe Farm also argued that the use of the word ‘OATY’ is descriptive of oat-based products. Glebe Farm specialise in gluten free oats, and interestingly, this is a product that is not currently supplied by Oatly in the UK. In their defence, the representatives of Glebe Farm stated that the brand name PureOaty is a nod to the purity of their product, as purity of oats is an absolute requirement for the gluten-free certification that Glebe Farm holds.  PureOaty is also a play on the word PURITY. Glebe Farm agreed that Oatly hold significant goodwill and reputation in relation to the word ‘OATLY’ but that this does not extend, implicitly or otherwise, to the word ‘OATY’.

The key question for the judge in this case is whether there is a likelihood that the average consumer will be confused between the two brands. There is no requirement for Oatly to show that there has been actual confusion by the public only that there is a likelihood that consumers may mistake PureOaty for Oatly. One argument put forward by Glebe Farm’s legal representatives was that Oatly claims to be the world’s original oat milk company and it is the biggest seller of oat milk in the UK therefore, the average consumer buying oat milk will almost certainly recognise Oatly brand and are unlikely to mistake it for PureOaty. It will be interesting to how this point is decided.

Comment

The action brought by Oatly against Glebe Farm has raised questions as to the company’s intentions behind the legal challenge. Indeed, some commentators have doubted whether Oatly is taking action to stop a genuine, clear infringement of its trade mark rights or whether this a monopolistic claim relating to the descriptive term ‘OATY’ by the large, powerful corporate. Furthermore, Oatly consumers have made it clear on social media channels that they are disappointed that the company chose to pursue Glebe Farm as a small, family run business and have stressed that sustainable companies should work together to solve the current climate crisis rather than taking legal action against one another.

There have been numerous cases over the years where large corporations have attempted to prevent smaller businesses using similar marks and these claims have had varying degrees of success. For example, easyGroup, the parent company of airline easyJet, owns an extensive portfolio of trade marks containing the prefix ‘easy’ for a variety of goods and services and they are renowned for taking legal action against organisations attempting to use the word ‘easy’ in any business capacity. Most recently in 2018, the High Court dismissed easyGroup’s claims of passing off and trade mark infringement by a company called EasyRoommate on the basis that the ‘easy’ mark was descriptive, was not distinctive in character and there was no likelihood of confusion. These factors will also be key for the Court in assessing whether a trade mark infringement has occurred in the current Oatly v. PureOaty action.

The Oatly v Glebe Farm trial lasted two days and concluded in the London High Court at the end of last week. We look forward to finding out the result in mid-July when we will provide our next e-update on the case and our analysis of the outcome.

This article was co-written by Trainee Solicitor, Clare Tuohy.

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