Dairy UK Ltd v Oatly AB

Factual and Procedural Background

The Appellant (Company A) manufactures and sells oat-based food and drink products as alternatives to dairy products. The Respondent (Company B) is a trade association for the dairy industry.

In April 2021, Company A registered the trade mark POST MILK GENERATION for use in relation to oat-based food and drink (classes 29, 30 and 32) and for use in respect of T-shirts (class 25).

In November 2021, Company B applied to invalidate the registration under section 3 of the Trade Marks Act 1994, relying on Parliament and Council Regulation (EU) No. 1308/2013 (the “2013 Regulation”), which restricts the use of dairy terms such as “milk.”

The Intellectual Property Office hearing officer held the mark invalid for oat-based food and drink under section 3(4) of the 1994 Act (use prohibited by an enactment), but refused invalidity for T-shirts because they were not agricultural products and were outside the scope of the relevant regulation. Company A appealed on the oat-based goods only. Judge Smith in the High Court held the registration valid. The Court of Appeal (Judge Arnold giving the leading judgment, with Judges Baker and Snowden agreeing) reversed Judge Smith and held the mark prohibited for the oat-based goods. Company A appealed to the Supreme Court.

The Supreme Court treated the 2013 Regulation as “assimilated law” post-Brexit and applied the modern approach to statutory interpretation (text, context, and purpose), noting that the EU origin may be relevant to context and purpose.

Legal Issues Presented

1. What is the proper interpretation of the term “designation” in Article 78(2) and Part III of Annex VII of the 2013 Regulation, and does POST MILK GENERATION fall within Point 5 of that Annex by using “milk” as a prohibited designation in relation to oat-based food and drink?
2. If Point 5 applies, is the mark saved by the second limb of the Point 5 proviso because it is “clearly used to describe a characteristic quality of the product”?

Arguments of the Parties

Appellant's Arguments

• On Ground 1, “designation” in Point 5 means the name of the product (the name used at all stages of marketing). The mark POST MILK GENERATION is not the name of any food or drink and therefore is not a prohibited “designation.”
• This reading is said to be supported by the natural meaning in context, earlier versions of the regime, and the absence of an indicated substantive change.
• Company A also relied on the IPO hearing officer’s finding (in the context of section 3(3)(b) of the 1994 Act) that consumers would not be deceived by the mark.
• On Ground 2, even if the mark is a prohibited “designation,” it is saved by the second limb of the proviso because it clearly describes a characteristic quality of the goods—namely, that they are milk-free.

Respondent's Arguments

• On Ground 1, “designation” in Point 5 is broader than the name of a product and covers any use of the protected dairy term (here, “milk”) in referring to relevant goods; it is irrelevant that the composite phrase is not used as the product’s name.
• The regime aims not only at preventing consumer deception but also at ensuring fair competition, so the prohibition is not contingent on whether consumers are misled.
• On Ground 2, the phrase POST MILK GENERATION is ambiguous and most naturally describes a cohort of consumers, not a characteristic quality of the product, and therefore is not “clearly” used to describe a product characteristic such as being milk-free.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
R (Project for the Registration of Children as British Citizens) v Secretary of State for the Home Department [2022] UKSC 3; [2023] AC 255	Modern approach to statutory interpretation: meaning from text in light of context and purpose.	Cited to confirm the interpretive approach applied to assimilated legislation.
News Corp UK & Ireland Ltd v Revenue and Customs Comrs [2023] UKSC 7; [2024] AC 89	Modern approach to statutory interpretation (context and purpose).	Cited as further authority for the interpretive methodology.
R (N3) v Secretary of State for the Home Department [2025] UKSC 6; [2025] AC 1473	Modern approach to statutory interpretation.	Cited as part of the court’s statement of the applicable approach.
Darwall v Dartmoor National Park Authority [2025] UKSC 20; [2025] AC 1292	Modern approach to statutory interpretation.	Cited as part of the court’s statement of the applicable approach.
X v Lord Advocate [2025] UKSC 44; [2026] 2 WLR 43	Modern approach to statutory interpretation.	Cited as part of the court’s statement of the applicable approach.
Case C-422/16 Verband Sozialer Wettbewerb eV v TofuTown.com GmbH (“TofuTown”)	EU law approach to restricting use of dairy terms for purely plant-based products, even with clarifying/descriptive qualifiers.	Discussed as not directly in point because it concerned plant-based products using “milk/cheese/cream” as product names; the Supreme Court rejected the inference that the case confined “designation” to product naming.

Court's Reasoning and Analysis

Interpretation framework: The court (Judge Hamblen and Judge Burrows, with Judges Hodge, Briggs and Stephens agreeing) applied the modern approach to statutory interpretation to the 2013 Regulation as assimilated law: ascertain the meaning of the words used in light of context and purpose, with EU origin potentially relevant to that context and purpose.

Ground 1 (“designation”): The court rejected the Appellant’s submission that “designation” in Point 5 means the “name of a product.” It held that “designation(s)” must be read in its statutory context:

• Point 2 of Part III uses “names,” suggesting “designation(s)” is not synonymous with “names.”
• Annex VII defines “sale description” as “the name of the food,” again supporting that “designation” has a different meaning from a product name.
• Recital (76) and the Annex VII heading refer to “designations and sales description,” indicating distinct concepts.

On the natural meaning in context, “designation(s)” refers to use in respect of a food or drink, not only to naming it. Accordingly, since oat-based food and drink are not “milk” as defined in Point 1 (nor within Points 2 or 3), the use of “milk” in relation to such goods (including within the composite phrase POST MILK GENERATION) is prohibited by Point 5, subject to the Point 5 proviso. The prohibition is not limited to cases where the protected term is used as the product’s name.

Purpose: The court considered that Point 5 serves, in relation to “milk,” the purpose of setting fair conditions of competition, which is distinct from (and not dependent upon) preventing consumer deception. Therefore, the Appellant’s reliance on the absence of consumer deception did not answer the statutory prohibition.

Earlier versions and additional materials: The court found examination of earlier versions of the legislation unhelpful and emphasised interpreting the legislation “as it now stands.” It also stated that certain additional legislative material and a proposed (but abandoned) amendment did not assist in resolving the issues.

Result on Ground 1: The appeal failed on Ground 1 because the mark fell within Point 5 by using “milk” as a designation for non-milk products.

Ground 2 (second limb of the proviso: “clearly used to describe a characteristic quality”): The court proceeded on the assumption (accepted by the parties) that the list in the 2010 Decision is required only for the first limb of the proviso (traditional usage) and not for the second limb (characteristic quality), and treated that as correct for the purposes of the appeal.

The court agreed with the Court of Appeal that POST MILK GENERATION is not “clearly” used to describe a characteristic quality of the oat-based goods. On its face, it focuses on describing targeted consumers (a “generation”), and any suggestion that it denotes milk-free content is, at best, oblique and obscure rather than clear.

The court gave two supporting points:

• Even if the phrase were taken to allude to being milk-free, it would not clearly convey whether the product is entirely milk-free or merely low in milk; the court used an analogous hypothetical mark (POST ALCOHOL GENERATION) to illustrate the ambiguity.
• The mark’s accepted validity for T-shirts suggested the phrase naturally operates as a message about the wearer/consumer cohort, not as a description of a characteristic of the goods (which would make little sense for T-shirts).

Result on Ground 2: The appeal also failed on Ground 2 because the mark was not saved by the second limb of the Point 5 proviso.

Holding and Implications

DISMISSED. The Supreme Court dismissed the Appellant’s appeal, holding that POST MILK GENERATION, as applied to oat-based food and drink, uses “milk” as a prohibited “designation” under Point 5 of Part III of Annex VII to the 2013 Regulation and is not saved by the proviso for designations “clearly used to describe a characteristic quality of the product.”

Implications: The immediate effect is that the Court of Appeal’s outcome stands: the mark’s registration is not upheld for the oat-based food and drink goods challenged in these proceedings, while the unchallenged position on T-shirts remains as decided below. The court’s reasoning clarifies (in this context of assimilated law) that “designation” in Point 5 is broader than product naming and that the “characteristic quality” proviso requires clear descriptive use, not an oblique or ambiguous allusion. No broader implications beyond these interpretive conclusions were stated in the opinion.