General Court affirms minimal distinctiveness requirement in Oatly's trade mark appeal

Oatly's word mark at issue (Image: Oatly NL)

Plant-based meat and dairy substitutes have frequently hit the news in recent months, with the EU General Court providing a boost to Oatly on 20 January 2021 by overturning a trade mark refusal decision by the EUIPO in Case T‑253/20. 

Background

Oatly is a producer of oat-based dairy substitutes which sought to register the slogan IT’S LIKE MILK BUT MADE FOR HUMANS as a trade mark in respect of Classes 18, 25, 29, 30 and 32 of goods. The initial application was made on 14 March 2019 and amended in respect of Classes 29 and 30 on 9 April 2019. 

That day, the EUIPO objected to the registration concerning Classes 29, 30, and 32 on account of the sign’s perceived lack of distinctive character under Article 7(1)(b) of Regulation 2017/1001. After Oatly submitted its observations in July 2019, the examiner issued a refusal to register the mark regarding specific goods in Classes 29, 30, and 32 on 5 September 2019. These include dairy substitutes in various forms in Class 29, as well as various other specified oat-based foodstuffs in Class 30, and beverages in Class 32. 

[The registration was, however, granted for a much more limited range of food and beverages in the three categories.]

Initial appeal

Oatly proceeded to file a notice of appeal with EUIPO on 30 October 2019, which was rejected by the Fifth Board of Appeal of EUIPO on 7 February 2020. In the decision, the Board of Appeal found that the goods were aimed at the general public, with the perception of the English-speaking public in the EU to be taken into account. It proceeded to note that the word mark is made up of two parts, with IT’S LIKE MILK, indicating that it referred to a milk substitute, followed by BUT MADE FOR HUMANS, suggesting greater suitability for human consumption than ‘normal’ milk.

Whether the sign should be understood as simply a promotional slogan or as fulfilling the essential function of a trade mark - that is, indicating the commercial origin of goods - was the key question considered. The Board of Appeal considered that consumers who had physiological or ethical objections to consuming milk products of animal origin might be especially attracted to the goods by way of the slogan denoting that the various food and beverage products have the same characteristics as milk.

In the absence of their finding of other elements which could confer a distinctive character on the mark, and due to its long length, the Board of Appeal considered that IT’S LIKE MILK BUT MADE FOR HUMANS would neither be perceived as a trade mark nor fulfil the essential function of one. As a result, it was deemed devoid of any distinctive character, with its registration precluded by Article 7(1)(b). 

General Court

Oatly appealed the decision, arguing that the Board of Appeal had erred in law in two ways: firstly, in the relevant public identification exercise and, secondly, in assessing the mark’s distinctive character. 

The test

The General Court characterised the essential function of a trade mark as having two limbs. A mark must allow consumers to identify the commercial origin of goods and services, which consequently enables future buying decisions, following Sykes v OHIM, Case T‑130/01. If a Kat wishes to repeat the experience of getting a particular type of [plant-based dairy substitute] cream, a distinctive mark will enable her to pick the same one out in future.  

The Article 7(1)(b) assessment therefore takes place firstly by reference to the goods or services to which it is applied, and secondly, according to the relevant public’s perception (Audi v OHIM, Case C‑398/08 P). This is not intended to be an especially high hurdle, with paragraph 22 noting that even a minimal degree of distinctiveness is sufficient. 

A mark may also fulfil various other functions such as advertising or quality indication, without precluding it from indicating goods’ or services’ commercial origin to the relevant public or resulting in a higher distinctiveness standard being applied. Nor is there any requirement that a slogan which successfully indicates commercial origin be striking or imaginative.

Application

The General Court turned to defining the relevant public at hand. At first instance, it had consisted of the public in the EU Member States with English as an official language, Ireland and Malta, who could be characterised as displaying an average level of attention when selecting their preferred products. Oatly did not dispute their inclusion, but sought to add those consumers who are ‘deemed’ English-speaking, in Denmark, the Netherlands, Finland and Sweden, thanks to their high level of English ability. The General Court accepted this submission, agreeing to take evidence of their perception of the mark into account.

So, how might the EU Anglosphere perceive IT’S LIKE MILK BUT MADE FOR HUMANS? EUIPO submitted that the Board of Appeal had seen the words as a promotional slogan of particular appeal to vegans and those with a lactose intolerance or milk allergy, but that the perception of the general public (of which these consumers made up a non-negligible part) had nonetheless been taken into account. 

On their reading, the average consumer of the relevant goods would be aware of the animal milk consumption debate and milk’s biological function of feeding baby animals. To them, the slogan would simply tell them of the relevant goods’ similarity to animal milk and consequent (better) suitability for human consumption - that is, a promotional message only. 

Oatly countered with a characterisation of the relevant public as made up of the average consumer, without ‘extreme or minority opinions’ (apologies to vegan Kat readers), who buys everyday consumer goods. To this consumer, the slogan might challenge their preconceptions of milk - as a substance essentially produced for humans -  and be tied to Oatly products. It buttressed this argument by pointing to a Swedish judgment as well as British and Dutch press reactions to the advertising campaign launch.

The General Court broadly agreed with Oatly, finding that the slogan’s construction with a coordinating conjunction (‘but’) creates tension between its two parts, casting doubt on the commonly-held view that animal-origin milk is good for humans. Aided by evidence of controversy, the mark was deemed to be easy to remember and having at least a minimum degree of distinctive character capable of identifying Oatly’s goods. 

Comment

With this judgment, the General Court confirms that the distinctiveness test is essentially about whether a cognitive process is sparked in the average consumer’s mind, by which she can consistently identify goods marked with the same sign as having a common commercial origin. The dispute between the parties about whether the mark is “original, imaginative, paradoxical, surprising, thought provoking and unexpected” was, as a result, not ultimately of huge consequence. 

This limited view means that considerations of whether a mark will successfully do everything in the marketplace that a firm’s advertising department might like should not come into the registration process. In so doing, it seemed to sidestep the debate about whether these other functions are discrete or derivative from the origin function, perhaps leaning towards the former in its emphasis on non-origin functions also being fulfilled without the suggestion that they are subsidiary.