Dairy UK Ltd v Oatly AB [2026] UKSC 4

Oatly registered POST MILK GENERATION as a trade mark for oat-based foods and drinks. The Supreme Court held it invalid because ‘designation’ in the 2013 Regulation covers any use of ‘milk’ for non-dairy products, not merely naming them, and the characteristic-quality exception did not apply.

Background

Oatly AB, a Swedish manufacturer of oat-based alternatives to dairy products, registered the trade mark POST MILK GENERATION in April 2021. The registration covered oat-based food and drink (classes 29, 30 and 32) and T-shirts (class 25). Dairy UK Ltd, the trade association for the UK dairy industry, applied for a declaration of invalidity under section 3 of the Trade Marks Act 1994. It relied on section 3(4), which provides that a trade mark shall not be registered “if or to the extent that its use is prohibited in the United Kingdom by any enactment or rule of law other than law relating to trade marks.”

The enactment relied on was Regulation (EU) No 1308/2013 (the “2013 Regulation”), which is now assimilated law. Point 5 of Part III of Annex VII provides:

“The designations referred to in points 1, 2 and 3 may not be used for any product other than those referred to in that point. However, this provision shall not apply to the designation of products the exact nature of which is clear from traditional usage and/or when the designations are clearly used to describe a characteristic quality of the product.”

Point 1 defines “milk” as “exclusively the normal mammary secretion obtained from one or more milkings without either addition thereto or extraction therefrom.”

Procedural history

The IPO hearing officer upheld Dairy’s application for the food and drink classes. She refused it for T-shirts, which are not agricultural products and so fell outside the Regulation. She reasoned:

“The wording of point 5 is strict. The use of ‘milk’ is prohibited for non-milk products under point 5 of the Annex, regardless of how the mark as a whole may be viewed by consumers, which is not a consideration under point 5.”

She also rejected a separate deception ground under section 3(3)(b). She found that the average consumer would view the mark “as an ironic way of saying its goods have moved on from conventional milk and are for consumers of a ‘post-milk generation’.”

Richard Smith J allowed Oatly’s appeal. He held that the hearing officer had read “designation” too widely:

“it is the use of the term ‘milk’ for products to identify them as being milk, not merely its use in their marketing, that constitutes their designation as such.”

The Court of Appeal (Arnold, Snowden and Jeremy Baker LJJ) reversed him. Arnold LJ held that a designation includes, but is not limited to, a description of a product. The Court of Appeal also held that the proviso did not save the mark. The judges divided on one obiter point: whether a product must be listed in Annex I to Commission Decision 2010/791/EU (the “2010 Decision”) to benefit from the second limb of the proviso. Snowden LJ said listing was not required, and the parties accepted his view as correct.

The issues

• Ground 1: What does “designation” mean in Article 78(2) and Part III of Annex VII? Does POST MILK GENERATION fall within Point 5 because it uses “milk” as a designation?
• Ground 2: What does the second limb of the proviso in Point 5 mean? Is the mark saved because it is “clearly used to describe a characteristic quality of the product”, namely that the product is milk-free?

The parties’ submissions

Oatly

Michael Edenborough KC argued that “designation” means the name of a product, or the name used at all stages of marketing. Milk, cream and cheese are designations because they name foods. POST MILK GENERATION does not name a food or drink; the product’s name would be “oat-based milk”. He relied on:

• earlier versions of the Regulation, which used “names”;
• the absence of any signal that the 2013 wording was meant to change the law;
• the hearing officer’s unchallenged finding that consumers would not be deceived.

On Ground 2, he argued that the mark clearly described the products as milk-free.

Dairy

Tom Moody-Stuart KC argued that “designation” means any use of the term in referring to a relevant product. The legislation sets rules of fair competition as well as protecting consumers, so whether consumers would be deceived is beside the point. On Ground 2, he argued that the phrase is ambiguous and most obviously refers to the younger generation of consumers being targeted, not to a quality of the product.

The Court’s reasoning

Interpretive approach

Lord Hamblen and Lord Burrows, with whom the rest of the Court agreed, applied the modern approach to domestic statutory interpretation. This means ascertaining the meaning of the words used in the light of their context and purpose. They noted that, for assimilated law, “the EU origin of the legislation may be relevant in considering the context and purpose of the provision(s).”

Ground 1: the meaning of “designation”

The Court rejected the “name of a product” interpretation, mainly because of the structure of the text:

• Point 2(a) and (b) use the word “names”, so it “naturally follows” that “designation” does not mean the same thing.
• The opening of Annex VII defines “sale description” as “the name of the food”, again pointing to a different meaning for “designation”.
• Recital 76 and the heading to Annex VII refer to “designations and sales description” side by side, indicating that the terms differ.

The Court held:

“The prohibition bites where the designation has been used for a relevant product, and it is not necessary that it has been used as the name of the product. That is a broad meaning which encompasses, but is wider than, and different from, the narrower ‘name of a product’ meaning, argued for by Mr Edenborough.”

On purpose, the Court read recital 76 as showing that Point 5 aims to set fair conditions of competition. That aim is “distinct from protecting consumers from being deceived”, and it is “no objection that the conditions of competition impose a strict prohibition in protecting the use of the term ‘milk’.” The hearing officer’s analysis was endorsed as “very clearly and correctly stated”. It followed that the finding of no consumer deception could not narrow the prohibition.

The Court found Oatly’s review of earlier legislative versions “unhelpful”:

“The legislation must be interpreted as it now stands and the present Point 5 uses the word ‘designation’ which is to be contrasted with other references to the name of products. The provisions of legislation must be read in their particular context and it is therefore potentially misleading to look back at previous versions of legislation which are significantly different.”

Further points under Ground 1

• Hypothetical mark MILK-FREE: Used for oat-based products, this would be a prohibited designation under Point 5. Both parties accepted, and the Court agreed, that it would be saved by the second limb of the proviso because it clearly describes a characteristic quality: that the product contains no milk.
• Other legislative material: Article 5 of Directive 2000/13/EC and the abandoned Amendment 171 did not take matters any further.
• TofuTown (Case C-422/16): The CJEU held that terms such as “tofu butter” and “plant cheese” could not be used for purely plant-based products unless listed in the 2010 Decision. Oatly argued this implied that “designation” is confined to names. The Court disagreed: “The facts concerned a designation that named the product but the CJEU was not saying that the meaning of ‘designation’ is so confined.”

Ground 2: the characteristic-quality proviso

The Court treated Snowden LJ’s view (that listing in the 2010 Decision applies only to the first limb) as correct for the purposes of the appeal. It expressly did not decide the point, having not heard full argument and because the outcome did not depend on it.

The decisive word was “clearly”. Agreeing with the Court of Appeal, the Court held:

“it is far from clear that that trade mark is describing any characteristic of the contested products. Rather, on its face, it is focussed on describing the targeted consumers… In so far as it is describing a characteristic quality of the product, it is doing so in an oblique and obscure way and is certainly not doing so ‘clearly’.”

Two further points supported this conclusion:

• Ambiguity: Even if the mark referred to the absence of milk, it did not make clear whether the product was entirely milk-free or merely low in milk. The Court compared a hypothetical mark POST ALCOHOL GENERATION, which would not indicate whether a drink was low-alcohol or alcohol-free.
• The T-shirt registration: The mark plainly makes sense on a T-shirt “precisely because it is most obviously describing a type of young consumer who might proudly wear a T-shirt proclaiming that he or she is a member of the anti-milk POST MILK GENERATION. But that has nothing to do with a characteristic quality of the T-shirt.”

Practical significance

• Wide prohibition: Point 5 reaches beyond product names. It covers any use of a reserved dairy term “for” a non-dairy product, including within slogans and composite trade marks that do not purport to name the goods.
• Deception is irrelevant: The aim of fair competition is separate from consumer protection. Evidence that consumers would not be misled cannot save a non-compliant mark.
• The proviso is narrow: Allusive, ironic or consumer-focused uses of dairy terms will not qualify. Only unambiguous descriptions of a product quality, such as “MILK-FREE”, are likely to succeed.
• Unresolved point: The Court left open whether listing in the 2010 Decision is needed for the second limb of the proviso.
• Assimilated law: The judgment confirms that domestic interpretive principles apply to assimilated EU legislation. It also signals reluctance to rely on earlier, significantly different legislative versions to narrow current wording.

For plant-based brands, the decision limits the use of reserved dairy terminology in branding for agricultural products, while leaving such marks available for non-agricultural goods such as clothing.

Verdict: The Supreme Court unanimously dismissed Oatly’s appeal on both grounds. Ground 1 failed because POST MILK GENERATION uses the term ‘milk’ as a ‘designation’ within Point 5 of Part III of Annex VII to the 2013 Regulation. Ground 2 failed because the mark is not clearly used to describe a characteristic quality of the products. The Court of Appeal’s decision therefore stands: the registration is invalid under section 3(4) of the Trade Marks Act 1994 for goods in classes 29, 30 and 32. It remains valid for T-shirts (class 25), which were not in issue on appeal.

Source: Dairy UK Ltd v Oatly AB [2026] UKSC 4