There’s no use crying over spilt (oat) milk

10 August 2021 - Chloe Wright

Emma Emerson, Insurance Director, looks at a recent court ruling on trademark infringement, and whether Intellectual Property insurance cover should be something for businesses to consider.

The past few years has seen a significant increase in the popularity of plant-based diets and there is an expanding worldwide market for alternative dairy drinks. However the Swedish company Oatly, who specialise in oat based dairy substitutes, may be feeling a little sour at the moment having just lost a trademark infringement court case against a family farm in Cambridgeshire.

Oatly, which manufactures a variety of oat-based milks, yoghurts and spreads is best known for its oat milk drink. The firm which has factories in Utah, Holland, Singapore and China,   was valued at $2 billion in 2020. Family-owned Glebe Farm Foods who are based near Huntingdon, has been in cereal production for 30 years, and in 2019 developed an oat milk called Oat Drink, which was then renamed in 2020 as PureOaty.
Oatly then brought legal action against Glebe Farm Foods, claiming that the Cambridgeshire farmers had infringed five of Oatly’s trademarks with the PureOaty name, the packaging of the product and taking “unfair advantage” of  Oatly’s trademarks by “passing off” their product as Oatly’s.

In what was widely regarded as a David versus Goliath court battle, the judge found against Oatly’s claims.  Ruling in favour of the Cambridgeshire farm business, the judge said that whilst there were similarities between the initial PureOaty packaging and the Oatly packaging, including the use of the colour blue and the use of an irregular font for the product name, these were “at a very general level”. He remarked: “It is hard to see how any relevant confusion would arise from the defendant’s use of the sign ‘PureOaty’.” And in conclusion he commented: “On the facts of this case, I do not see that there is any risk of injury to the distinctive character of Oatly’s marks.”

Legal battles to protect food product trademarks are nothing new. In 2019, Cadbury lost an appeal to trademark the use of Pantone 2865c, better known as the shade of purple it uses for the packaging of its milk chocolate bars. In 2018, Nestle lost its EU-wide protected status for the shape of their KitKat four-fingered wafers when the European Court of Justice ruled that KitKat was not sufficiently well known in every EU country to have the shape of the product registered as an EU trademark. And earlier this year the press latched onto the legal action taken by Marks & Spencer to protect their trademark chocolate cake, Colin the Caterpillar, against copycat products which looked and sounded very similar.

Why protect your trademark?
A trademark, whether that is a name, design, colour, logo, wordmark or strapline is an important element of a business, and it is increasingly important for businesses to protect that part of their Intellectual Property (IP). The power of a logo or trademark in defining your business can be something that is taken for granted – until another business imitates that logo or uses words in their advertising that are similar to yours.

Will your insurance cover you?
Whilst you will often see Intellectual Property (IP) cover incorporated into broader business policies such as Professional Indemnity, this may not provide the level of specialist cover you need, particularly for businesses working in media or design. In cases where it could be likely that you might infringe someone else’s copyright, or they infringe on yours, it is recommended that you speak to your broker about a standalone IP insurance policy which could give you greater coverage.

Our insurance team works with businesses of all sizes to ensure they have the correct insurance protection in place, whether that is broad business policies or specialist covers.

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