Legal Updates – Passing Off – Greek Yoghurt

Intellectual Property – Commercial Law – Product Liability – Fage UK Ltd v Chobani UK Ltd – Passing Off – Goodwill – Greek Yoghurt

 

In the recent passing-off case of Fage UK Ltd v Chobani UK Ltd [2013] EWHC 630, the High Court ruled that Fage UK Ltd (“Fage”) only had to show that a section of the public perceived that the relevant trading name “Greek yoghurt” denoted a distinctive class of product, rather than the public as a whole.

 

Background

 

• Fage is a Greek manufacturer of yoghurt and sold its product, described as “Greek yoghurt”, in the UK for many years;
• Chobani UK Ltd (“Chobani”) is a US company that makes and sells a product called “Greek yoghurt” in the US;
• In 2012, Chobani started selling its product in the UK. In response to this, Fage obtained an interim injunction;
• Fage brought a claim for passing-off against Chobani to prevent Chobani from selling a product described as “Greek yoghurt” in the UK;
• The products manufactured by Fage and Chobani were described as “thick and creamy” as compared to ordinary yoghurt;
• The “thick and creamy” texture is achieved by:
  • Straining ordinary yoghurt. This process involves separating and removing the watery whey; or
  • Using thickening agents in ordinary yoghurt.
• Virtually all yoghurt sold s “Greek Yoghurt” in the UK during the 25-year period prior to 2012 was made by the straining method in Greece;
• There were larger pots of thick and creamy yoghurt sold, however these were sold as “Greek style yoghurt”. However these did not originate from Greece and were typically manufactured using thickening agents.
• Fage argued that thick and creamy Greek yoghurt could only be labelled as such if it came from Greece and was thickened by the straining method.
• Furthermore, Fage argued that this is what the yoghurt-eating public understood Greek yoghurt to mean and by using “Greek yoghurt” to describe yoghurts not made in this way involved damaging misrepresentation.
• Chobani’s argument was that Greek yoghurt did not have to be from Greece, but simply the process of manufacture had to be Greek.
• Further, Chobani argued that the description “Greek yoghurt” denoted no clearly identified distinctive class in the minds of the yoghurt-buying public.

 

Issues

 

• Whether by the beginning of September 2012, the phrase “Greek yoghurt” had, when used in the UK marketplace, come to have attached to it a sufficient reputation and goodwill as denoting a distinctive type of yoghurt made In Greece, so that the use of the same phrase to describe yoghurt not made in Greece, however otherwise similar, would involve a damaging misrepresentation sufficient to support a claim in passing-off.
• Whether the requisite perception that the relevant trading name denoted a distinctive class of product needed to be that of the public as a whole, or merely some section of it.

 

The Law

 

The requirements for proving a simple case of passing-off are set out in the Jif lemon case by Lord Oliver. In particular, the claimant must:

 

1. Establish a goodwill or reputation attached to the goods or services which he supplies in the mind of the purchasing public by association with the identifying “get-up” (whether it consists simply of a brand name or a trade description, or the individual features of labelling or packaging) under which his particular goods or services are offered to the public, such that the get-up is recognised by the public as distinctive specifically of the plaintiff's goods or services.
   
2. Demonstrate a misrepresentation by the defendant to the public (whether or not intentional) leading or likely to lead the public to believe that goods or services offered by him are the goods or services of the plaintiff. Whether the public is aware of the plaintiff's identity as the manufacturer or supplier of the goods or services is immaterial, as long as they are identified with a particular source which is in fact the plaintiff. For example, if the public is accustomed to rely upon a particular brand name in purchasing goods of a particular description, it matters not at all that there is little or no public awareness of the identity of the proprietor of the brand name.
   
   
3. Demonstrate that he suffers damage by reason of the erroneous belief engendered by the defendant's misrepresentation that the source of the defendant's goods or services is the same as the source of those offered by the plaintiff.

 

As to the first requirement, in order for Fage to demonstrate ownership of the requisite goodwill in the trade name, “Greek yoghurt”, the public had to make the association between that trade name and a clearly defined class of goods, which are distinguishable from other similar goods by that name.

 

As to the meaning of the requirement that the trade name is associated with a distinctive class of goods, there are a number of extended passing-off cases that assist in this regard:

 

• Chocosuisse case - where the relevant trade name is descriptive of a geographical region or location as the place of manufacture, the claimant will fail if he can establish no more than that.
• Chocosuisse case – in order to demonstrate goodwill in a trade name, it is not a requirement that the consumer must be shown to know what are in fact the manufacturing processes typical of the product in question.
• Vodkat case - The “something more” does not have to consist of a reputation for higher quality.

 

Outcome

 

• Judgment in favour of Fage.

 

Public perception

 

• The Judge agreed with the argument put forward by counsel for Fage that, all that needed to be shown was that a significant section of the public believed that the trading name denoted a sufficiently defined and distinctive class, with the requisite pulling power.

 

Goodwill

 

• FAGE has succeeded in demonstrating that substantial goodwill has become attached to the use of the phrase Greek yoghurt, in the sense that it creates pulling power, rather than merely denotes a geographical origin to which buyers are indifferent
• The evidence of the subsistence of goodwill are as follows:
  • The fact that a labelling convention which respects its Greek place of manufacture as being relevant to customers has been uniformly observed by yoghurt producers in the UK market for over 25 years;
  • Unanimity of the trade witnesses; and
  • On average, it commands a premium price (even when considered as between supermarket own label Greek yoghurt and Greek Style yoghurt).

 

Misrepresentation

 

• It was clear to the Judge that, if a sufficient goodwill is shown to be attached to the phrase “Greek yoghurt” among customers who believe that it is made in Greece, and that this matters to them, then the use of Greek yoghurt to describe yoghurt not made in Greece involves a material misrepresentation.

 

Damage

 

• There are two ways to illustrate actual or threatened damage in passing-off, namely: (i) loss of sales; and (ii) erosion of distinctiveness of the trade name.
• This case illustrates the second type of loss because an injunction was obtained before any evidence of loss of sales.
• The introduction of Chobani’s product in the UK market meant that there was a loss in the distinctiveness of the description “Greek yoghurt” because Chobani’s product was made in the USA, not Greece.
• Customers in the future would not be able to assume that a pot described as Greek yoghurt actually has been made in Greece.

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For any queries on trade mark law, passing off or other IP law issues, you may contact us by email [email protected]. Visit http://www.rtcoopers.com/practice_intellectualproperty.php Please see our article on How to Defend Allegations of Passing Off.

 

© RT COOPERS, 2013. This Briefing Note does not provide a comprehensive or complete statement of the law relating to the issues discussed nor does it constitute legal advice. It is intended only to highlight general issues. Specialist legal advice should always be sought in relation to particular circumstances