Beyond consumer confusion: Statutory bars on dairy terminology

The Supreme Court delivered a unanimous ruling in Dairy UK Ltd v Oatly AB [2026] UKSC 4, dismissing Oatly AB’s appeal. In doing so, it has placed a marker for an increasingly competitive plant-based sector. 

The ruling confirms the critical intersection between regulatory designations, trade mark law, and marketing law. The message is clear: trade marks must align with regulatory definitions.

Relevant law

Section 3 of the Trade Marks Act 1994 (the TMA 1994) lists the grounds for refusing registration of a trade mark. These include marks that will deceive the public (s3(3)(b)) and if “its use is prohibited in the United Kingdom by any enactment or rule of law other than law relating to trade marks” (s3(4)).

Section 3(4) blocks the registration of a mark which is prohibited by another law which means that the case turned on the application and interpretation of an Assimilated Law: Regulation (EU) No. 1308/2013 establishing a common organisation of the markets in agricultural products (generally known to food lawyers as the “CMO” but referred to as the 2013 Regulation by the courts).

The 2013 Regulation states that:

Part III of Annex VII relates milk and milk products, and defines milk at Point 1 as:

‘Milk’ means exclusively the normal mammary secretion obtained from one or more milkings without either addition thereto or extraction therefrom.

Point 5 states that:

The journey through the courts

Round one: The IPO Hearing

The Swedish manufacturer and seller of oat-based food and drink products (Oatly) secured a registration for POST MILK GENERATION (the Mark) in 2021 for food and drink in classes 29, 30, and 32, as well as in class 25 for t-shirts. The UK dairy trade association (Dairy UK) applied to invalidate the marks based on section 3 of the TMA 1994. 

Dairy UK’s invalidation application succeeded in front of the hearing officer for all classes other than class 25 (t-shirts). The hearing officer accepted that the term milk was regulated and given that the goods that Oatly produced did not fall into the definition of milk, that it was invalid. Crucially, the hearing officer was clear that the public would receive the Mark in an ironic manner, understanding that the term was being used to indicate that Oatly’s products had moved on from milk, and went on to find that the Mark contained no actual deceit or possible confusion.

Round two: High Court overturns

This was in turn, appealed to the High Court which overturned the decision, finding that the Mark did not act as a designation of milk, and that the hearing officer had construed the prohibition at Point 5 of the 2013 Regulation, “too widely as to encompass the Mark”.

Round three: Court of Appeal reinstates

The Court of Appeal reinstated the hearing officer’s decision that the Mark was invalid, falling foul of the 2013 Regulation. The Court was not swayed by Oatly’s arguments around imbuing the current iteration of the 2013 Regulation with the meaning of an earlier version.

Nor did the Court of Appeal judges find that the Mark would be saved by the second limb of Point 5, that the designation was clearly used to describe a characteristic quality of the product in question. The ‘milk’ element of the Mark constituted a prohibited designation under the 2013 Regulation.

Final round: Supreme Court clarifies “designation” and “characteristic” terms

The decision was then appealed to the Supreme Court on 2 grounds: 1. whether the Mark used milk as a “designation” in Article 78(2) of the 2013 Regulation and 2. whether the Mark was clearly being used to describe a characteristic quality of the products.

Ground one explained: Meaning

Central to the first ground of appeal was the meaning of “designation” in Article 78(2) and Part III of Annex VII of the 2013 Regulation. Oatly argued that the Court of Appeal’s interpretation was incorrect and submitted that the term concerns the name of the product, and that the Mark was not being used in such a way and would therefore not contravene Point 5, effectively collapsing “designation” to have the same meaning as “sales description”.

The Supreme Court rejected this line of argument. Firstly, the 2013 Regulation separates these terms, indicating that each has a distinct meaning – “designation” cannot be read identical to “name” or “sales description”. Secondly, the term should be read and understood in its natural meaning and encompassing products, and their branding. If not, trade marks would have an automatic carve out from the 2013 Regulation.

Therefore, reading “designation” within its natural meaning and in its current iteration, in line with conditions of fair competition, the Mark was held invalid as it contained a protected term, for a food which was not present in the products sold.

Ground two explained: Characteristic quality

The second ground of appeal was the effect of the proviso that allows the use of a designation where it is being used to describe the characteristic quality of the product. Oatly argued that the Mark was saved by the proviso because the Mark was being used to describe the products characteristic (that it is ‘post milk’).

The Supreme Court found that the Mark, far from “clearly” being used for the requisite descriptive purpose was used in an “oblique and obscure way” and appeared to be describing the consumer targeted rather than the product itself.

What this means for businesses

The sleeping giant of section 3(4) TMA 1994 – this provision is often overlooked, but this case demonstrates its teeth. Brands must assess not only consumer perception risk, but regulatory prohibition risk where these reserved designations intersect with other statutory frameworks. 

The interpretation of section 3(4) is separate to whether consumers are deceived. Further, this extends beyond simply trade marks, and encompasses slogan, branding, and sales descriptions.

A merchandising lifeline?

Oatly is free to use POST MILK GENERATION for class 25 products (t-shirts) where agricultural marketing regulations do not bite. Brands should note that different classes carry different regulatory exposure, and sometimes, different opportunities.