“Milk” and Other Reserved Dairy Terms in Trade Marks: The Court of Appeal Clarifies that “Designation” Encompasses Trade Marks – Commentary on Dairy UK Ltd v Oatly AB [2024] EWCA Civ 1453

1. Introduction

The meteoric rise of plant-based foods has forced regulators and courts to revisit how “traditional” food terms – particularly dairy descriptors such as “milk”, “butter” and “cream” – may be used in branding and advertising. In Dairy UK Ltd v Oatly AB the England and Wales Court of Appeal (Civil Division) addressed whether the slogan-trade mark “POST MILK GENERATION” can remain on the UK register for oat-based drinks and related products. The central question was narrow but novel: does the word “designation”, as used in Article 78(2) and Annex VII Part III of Regulation 1308/2013 (the “2013 Regulation”), extend to trade marks or parts of trade marks?

If “designation” includes trade marks, the Regulation’s absolute prohibition on deploying dairy terms for non-dairy goods would reach into the trade mark register, invalidating marks such as “POST MILK GENERATION” for oat products. Arnold LJ (with Snowden & Jeremy Baker LJJ concurring) has now confirmed that it does. The ruling reinstates the UK IPO hearing officer’s initial decision to invalidate Oatly’s mark for the relevant classes and sets a clear, binding precedent on the breadth of the dairy-term prohibition in trade mark law.

2. Summary of the Judgment

The Court of Appeal allowed Dairy UK’s appeal and restored the UK IPO’s declaration that “POST MILK GENERATION” is invalid for Classes 29, 30 & 32 (plant-based foods and drinks).
Key holding: the word “designation” in Article 78(2) and Annex VII Part III includes any term used to indicate a product in marketing, and that naturally extends to a trade mark or part of one.
Because “milk” is a reserved dairy term, its appearance inside a mark for purely plant-based goods is per se prohibited unless the product falls within a statutory exception – which Oatly’s goods do not.
The Court rejected Oatly’s fallback argument that the slogan is permitted because it “clearly describes a characteristic quality” of the goods. Even if that limb of the exception were open, “POST MILK GENERATION” describes the consumer cohort, not a product quality.
Snowden LJ offered dicta suggesting the 2010 Commission Decision’s list of “traditional use” exceptions may not be exhaustive for the second limb – but agreed it would make no difference on the facts.

3. Detailed Analysis

3.1 Precedents Cited

VSW v TofuTown (C-422/16)
The CJEU’s 2017 judgment is the cornerstone precedent. It held that using dairy designations (“milk”, “butter”, “cheese”) for purely plant-based products contravenes Article 78 because it misleads consumers and distorts competition. The Court of Appeal treated TofuTown as assimilated law post-Brexit and relied on its purposive reading of Annex VII.

UDL (C-101/98) & Erven Warnink v J Townend (the “advocaat” case) were cited mainly to explain misleading designations and collective / certification marks, illustrating how consumer understanding shapes legality.

3.2 The Court’s Legal Reasoning

Textual Analysis
- The 2013 Regulation defines “sales description” but not “designation”. The absence of a definition means the term bears its ordinary meaning – any mark or indication identifying a product in commerce.
- Comparing the 2007 and 2013 Regulations, Arnold LJ noted that the formal definition of “designation” (as “the name used at all stages of marketing”) was removed in 2013, signalling a broader, ordinary-language application.
- Article 78(2) regulates “definitions, designations and sales descriptions” “for the marketing of a product”. The natural reading is cumulative, capturing every way a product might be styled in the marketplace, including brand names.
Purposive Interpretation
- Recitals 64 & 76 emphasise consumer protection and fair competition. Permitting trade marks as a loophole would vitiate those objectives: a producer could monopolise “MILK” in a mark and sidestep the regulation.
- The Court highlighted examples such as “OATLY MILK” or “I CAN’T BELIEVE IT’S NOT BUTTER!” to show that excluding trade marks would create arbitrary enforcement gaps.
Consistency with TofuTown
- The CJEU treated “Soyatoo Tofu Butter” (a composite trade mark + descriptor) as a prohibited “designation”. That reading – though implicit – supports including marks.
Application to Facts
- “Milk” is expressly protected by Annex VII Part III points 1–3. Under point 5 it cannot be used for non-dairy products, unless a listed exception applies (e.g., coconut milk).
- Oatly’s goods are 100 % plant-based and not on the exception list. Adding “POST” and “GENERATION” does not cure the infraction – TofuTown confirms clarifying words do not legitimise the usage.

3.3 Divergent Judicial Views on the Exception List

Snowden LJ raised an academic but potentially significant point: he doubts the 2010 Commission Decision’s list is exhaustive for the second limb of the Point 5 exception (“designation clearly describing a characteristic quality”). Jeremy Baker LJ, siding with Arnold LJ, would treat the list as exhaustive for both limbs. The majority view did not need to decide the issue because Oatly’s mark fails in any event, but the dicta may invite future litigation on unlisted descriptors like “milk-free”.

3.4 Impact on Future Cases and the Industry

Trade Mark Strategy for Plant-Based Brands: Businesses must avoid embedding “milk”, “butter”, “cream”, “cheese”, etc., in marks for non-dairy goods unless they fall within an enumerated traditional-use exception. Existing marks may be attacked under s.3(4) TMA 1994.
IPO Examination Practice: Examiners will likely object to applications containing reserved dairy terms for non-dairy products outright, even if stylised or combined with other words.
Advertising & Labelling: The decision reinforces that marketing slogans using protected dairy words (e.g., “almond milk”) remain unlawful marketing in Great Britain unless covered by an exception. Different rules continue to apply in Northern Ireland under EU law.
Harmonisation Post-Brexit: The ruling affirms the continuing relevance of assimilated EU law and CJEU jurisprudence in UK agrifood regulation, while underscoring that UK courts can develop national glosses (as with the trade-mark angle).
Potential Legislative Response: The plant-based sector may lobby for statutory clarification or expansion of Annex VII exceptions – especially for standard consumer descriptors like “oat milk”.

4. Complex Concepts Simplified

Assimilated Law: EU regulations retained in UK law post-Brexit under the European Union (Withdrawal) Act 2018. They retain the same legal force unless amended.
Section 3(4) Trade Marks Act 1994: Bars registration if using the mark would be unlawful (e.g., prohibited by other statutes).
“Designation” vs “Sales Description”: A designation is any term (generic, brand or otherwise) identifying a product in commerce; a sales description is the legal name of the food for labelling purposes. Both are policed by Article 78(2).
Point 5 Exception: Allows reserved dairy words for non-dairy products only where the term is (i) traditional (e.g., “coconut milk”) or (ii) clearly describes a characteristic quality – but only for items on the Commission’s list (per the majority view).
Notional Fair Use: In trade-mark validity, courts consider all predictable ways the mark might be used, not merely the proprietor’s current branding.

5. Conclusion

Dairy UK v Oatly delivers an unequivocal message: the UK’s implementation of the EU dairy-term regime bites not only on packaging and advertising copy but also on the trade mark register itself. By holding that “designation” embraces trade marks, the Court has closed what many saw as a loophole for eye-catching plant-based branding. Brands must now craft slogans and marks without reserved dairy words unless they squarely fit within the narrow statutory exceptions. The judgment harmonises UK trade-mark practice with consumer-protection goals, while leaving open – for another day – the intriguing question of how flexible the exception list might become.