Dairy UK Ltd v Oatly AB

Introduction:

We will be looking at the case, Dairy UK Ltd v Oatly AB, this was recently passed as the Dairy UK Ltd has won the case in this. The Neutral Citation is in [2026] UKSC 4 and the court is within the Supreme Court of the United Kingdom, this was produced in the year 2026. This case was originally applied on the 19th of November 2019.

Legal issues: 

There are 2 very important facts towards this case, the first fact is where the nature of the products descriptions, advertising or regulatory dispute are misleading and not the right products to the other certain products. The second fact is that the actions taken by one party were challenged by these views. The event leading to the dispute is litigation concern labelling, competition or consumer protection.

The dispute centred on EU Regulation 1308/2013 (retained as assimilated law), which restricts the use of dairy terms like “milk” to genuine milk products and The IPO initially found the mark invalid (except for T-shirts), the High Court reversed that decision, and the Court of Appeal restored the invalidity—leading to Oatly’s appeal to the Supreme Court. 

Oatly AB is a Swedish company where it used to provide oat “milk” as an alternative version to dairy milk, they provide from oat milks to other different flavours like matcha and caramel while Dairy UK Ltd is where it presents dairy throughout the whole of the uk. 

Legal reasoning:

The legal issue is whether the so-called alternative products should be called a drink, like a beverage, or should be classified as milk.

Oatly AB views it was always as milk because it was an alternative to it, this can show proof as it states in this website that the Oatly oat drink is  since like milk, but it doesn’t have to go through the digestive system of a cow, it’s made for humans. They also registered the trade mark “POST MILK GENERATION” in April 2021 for various food and drink products as shown on number one. However Dairy UK Ltd sees that it can be classified as a drink towards the public  because they sought to invalidate the mark under s.3 (4) of the Trade Marks Act 1994. Also specified on paragraph [1].   

The court held that the modern approach to statutory interpretation, which is examining the wording, context and purpose of the legislation. Oatly tried to apply and present  throughout the whole case that this argument of “designation” is meant only the name of a product; the court has rejected the idea of this because the term must be broader because of the regulation, which is distinguishing in-between “designation” and “name” or “sale description”. It is properly interpreted, a designation includes any use of protected dairy terms in relation to the product, not as its literal name, for example like Oatlys is made by humans and not cows as mentioned before in my case summary. There was also an argument on paragraph [24], there are designations such as ‘Soyatoo tofu butter’, ‘Plant cheese’, ‘Veggie Cheese’, ‘Cream’, ‘Tofu butter’ and ‘Rice Spray Cream’, this was in the case Verband Sozialer Wettbewerb eV v TofuTown.com GmbH Case C-422/16, ECLI:EU:C:2017:458 However, this case is somewhat relevant because they can use those terms only if it appears on a specific approved list (Annex I to Decision 2010/791), evidence exists that coconut milk has historical significance. This legally defined term, originating from lauric acid, serves as an antiviral, antibacterial, and antifungal agent in the body.

The judge reasoned that the purpose of the regulation was not merely to prevent consumer deception, because it clearly states that it is an alternative to milk, but it also in order to ensure fair competition and protect the dairy sectors reserved terminology and finally since the oat-based products are not “milk” in the mark fell within the statutory prohibition.

Ratio decidendi (legal principal):

The legal principle established is that under the assimilated and fixed EU law regulating agricultural markets, this can be shown on paragraph [11], it is called the EU’s Common Agricultural Policy. These protected dairy terms such as ”milk” and “cheese” cannot be used in trade marks or marketing for non-dairy products where the term is used in relation to those goods, even if it is not the products literal name. Though the EU law is not with the UK anymore because of Brexit, The Regulation has a continuing effect in the UK as retained EU law, because this is common sense and common law. 

The Supreme Court of the United Kingdom also emphasised the practical interpretation of the Regulation. The judges articulated that when courts construe legislation like Regulation 1308/2013, they must take into account not only the explicit language but also the underlying intent of the law. The Court articulated in lines [29]–[31] that interpretation should align with the comprehensive framework of agricultural legislation, rather than permitting technical loopholes in branding.

The Court subsequently analysed the definition of the term “designation” in greater detail. It dismissed Oatly AB’s assertion that the restriction was applicable solely where “milk” was utilised as the product’s true designation. The Court determined that “designation” encompasses any commercial application of the protected term in marketing, slogans, or trademarks associated with the goods. The judges observed in paragraphs [32]–[35] that a restrictive reading would enable firms to circumvent the Regulation by framing dairy terminology as branding instead than product descriptions.

The Court emphasised that the objective of the Regulation extends beyond merely preventing consumer deception. Paragraphs [39]–[41] of the judgement elucidate that the legislation aims to uphold the integrity of the dairy sector and provide equitable competition between dairy producers and plant-based manufacturers. The Regulation safeguards specific traditional agricultural words irrespective of modern consumers’ comprehension of the distinction between dairy milk and plant-based substitutes.

Previous European authority, notably the TofuTown case, was referenced to substantiate this interpretation. The Supreme Court referenced the decision as persuasive authority, clarifying that plant-based producers are prohibited from utilising restricted dairy terminology unless a specific statutory exception is applicable ([42]–[44]). This illustrated the continuity between EU jurisprudence and UK law post-Brexit.

The Court clarified that Regulation 1308/2013 remains integral to domestic law as assimilated EU legislation. This was affirmed in paragraphs [26]–[28], where the judges indicated that notwithstanding the UK’s departure from the European Union, the Regulation remains in effect unless modified by Parliament. Consequently, the Court was obligated to extend its protections to dairy nomenclature.

The designation “milk” is legally inapplicable to oat-based beverages, rendering its use in the trademark “POST MILK GENERATION” invalid. According to section 3(4) of the Trade Marks Act 1994, a trade mark is invalid if its utilisation contravenes another legal provision. The Court deemed the mark invalid for food and beverage items, as elucidated in paragraphs [45]–[47].

This underscores that plant-based products can still be advertised and sold, provided they refrain from utilising protected dairy terminology unless they comply with one of the narrowly defined conventional exceptions acknowledged by law. The ruling so affirms that legal definitions, rather than promotional terminology, dictate the manner in which such products can be characterised in the market.The Supreme Court of the United Kingdom emphasised the practical interpretation of the Regulation. The judges articulated that when courts construe legislation like Regulation 1308/2013, they must take into account not only the explicit text but also the underlying intent of the law. This was addressed in paragraphs [29]–[31], where the Court asserted that interpretation should align with the comprehensive framework of agricultural policy, rather than permitting technical loopholes in branding.

The Court subsequently analysed the definition of the term “designation” in greater detail. It dismissed Oatly AB’s assertion that the prohibition was applicable solely when “milk” was employed as the product’s genuine designation. The Court determined that “designation” encompasses any commercial utilisation of the protected term in marketing, slogans, or trademarks associated with the goods. The judges articulated this reasoning in paragraphs [32]–[35], indicating that a restrictive reading would enable enterprises to circumvent the Regulation by using dairy terminology into branding instead of product descriptions.

The Court emphasised that the objective of the Regulation extends beyond merely preventing consumer deception. In paragraphs [39]–[41], the judgement elucidates that the regulation aims to uphold the integrity of the dairy sector and provide equitable competition between dairy producers and plant-based manufacturers. The Regulation safeguards specific traditional agricultural words irrespective of modern consumers’ comprehension of the distinction between dairy milk and plant-based substitutes.

Previous European authority, notably the TofuTown case, was also cited to substantiate this interpretation. The Supreme Court referenced the case as persuasive authority, indicating that plant-based producers are prohibited from utilising reserved dairy terminology unless a particular statutory exception is applicable ([42]–[44]). This illustrated the continuity between EU jurisprudence and UK law post-Brexit.

The Court clarified that Regulation 1308/2013 remains integral to domestic law as assimilated EU legislation. This was affirmed in paragraphs [26]–[28], where the judges indicated that notwithstanding the UK’s departure from the European Union, the Regulation remains in effect unless modified by Parliament. Consequently, the Court was obligated to extend its protections to dairy nomenclature

The designation “milk” is legally inapplicable to oat-based beverages, rendering its use in the trademark “POST MILK GENERATION” invalid. According to section 3(4) of the Trade Marks Act 1994, a trade mark is invalid if its utilisation contravenes another legal provision. By applying this concept, the Court deemed the mark invalid for food and beverage items, as elucidated in paragraphs [45]–[47].

This underscores that plant-based products can still be produced and marketed, provided they refrain from utilising protected dairy terminology unless they comply with one of the narrowly defined conventional exceptions acknowledged by law. The ruling so affirms that legislative definitions, rather than promotional terminology, dictate the manner in which such products can be characterised in the market.

Obiter Dicta:

The court also suggested that a hypothetical mark such as “milk-free” might still fall within the prohibition but could be saved the regulation’s proviso if it clearly described a product characteristic (i,e. , absence of milk) this shows on paragraph [37] as they want to show certain terms and names constituting the designations of milk and having any milk products in any other products. 

For my understanding, I do not know what a proviso is, so I will explain what it is. A proviso is a particular condition, limitation, or stipulation incorporated within a legal instrument, such as a contract, statute, will, or deed. It generally specifies that a particular event must occur or not occur for another section of the agreement, or the entire document, to attain validity, take effect, or be implemented in a specific manner. It frequently presents an exception to a broad principle or stipulates a particular condition that must be fulfilled.

Outcome:

the Supreme Court ruled in favour of Dairy UK Ltd, they have dismissed Oatly’s appeal. This is because they were holding the mark “POST MILK GENERATION” was caught by the statutory restriction and therefore, this is invalid for the relevant food and drink products. Following this court case, oat milk will now be announced as an oat drink since it is not produced from a cow.