The Court of Appeal has recently handed down judgment in one of only two recent cases concerning a claim for extended passing off. Unlike a classic passing off claim, an extended passing off claim is brought by at least one of a class of traders sharing the collective goodwill in a mark.
The claimants (FAGE UK Limited and FAGE Dairy Industry S.A., together "FAGE") have, since the mid-1980's, imported from Greece and sold throughout the UK, yoghurt described as 'Greek yoghurt' under the brand 'Total'. By 2012, FAGE had a 95% market share for all yoghurt sold in the UK labelled as 'Greek yoghurt'. The defendants (Chobani UK Limited and Chobani, Inc. together, "Chobani") manufactured yoghurt in the US which was sold in the US as 'Chobani Greek yoghurt'. In mid-2012 Chobani decided to introduce their product into the UK market and label it as 'Greek yoghurt'.
In September 2012, proceedings for extended passing off were brought by FAGE against Chobani on the grounds that there was goodwill in the phrase 'Greek yoghurt' and that FAGE owned a share. FAGE argued that 'Greek yoghurt' had a specific meaning in the UK and any yoghurt described as Greek yoghurt must: (i) be manufactured in Greece, (ii) be made using the Greek method of straining the cow's milk to remove the whey, and (iii) contain no added sugars, sweeteners or additives (including non-milk thickening agents). Whilst Chobani's product did use the Greek method of straining, it was not made in Greece.
The High Court Decision
In the High Court proceedings both Chobani and FAGE adduced evidence on what constituted 'Greek yoghurt' or 'Greek style yoghurt'. Expert evidence adduced by FAGE illustrated that there was a uniform understanding that yoghurt producers in the UK had adhered to for over 25 years whereby the phrase 'Greek yoghurt' denoted thick and creamy yoghurt that was made in Greece. The result was that in UK supermarkets there was a clear price difference between 'Greek yoghurt' and 'Greek style yoghurt'.
The High Court held, on the evidence submitted, that Chobani's description of its yoghurt was a misrepresentation likely to result in the dilution of the phrase 'Greek yoghurt', and granted FAGE a permanent injunction preventing Chobani from selling its yoghurt in the UK under the description 'Greek yoghurt'.
Chobani appealed the High Court's decision on the grounds that: (i) FAGE had not proved that the phrase 'Greek yoghurt' had a sufficiently distinctive meaning amongst consumers to support a claim in extended passing off; and (ii) that the court had no power to grant or was precluded from granting injunctive relief to protect geographical indications other than those protected in accordance with the provisions of the 2012 Regulations on the protection of designations of origin and geographical indications ("PGI") for foodstuffs within the EU (the "2012 Regulations").1
Distinctiveness and deception
The Court of Appeal held that an extended passing off claim was no different to a classic passing off claim. The following general points on the issue of distinctiveness and deception were held by the court to be significant in this claim:
- in a claim for extended passing off the allegation is that the defendant has misrepresented his goods as those of a class of traders of whom the claimant need only be one;
- there is no need to establish a public understanding of how the goods were made; and
- when using a geographical denomination to describe products (for example Suisse chocolate) the class of traders using that denomination did not need to be defined and/or controlled by reference to a law or other regulation.
The Court of Appeal rejected Chobani's appeal. In this case on there evidence, there was a clearly defined class of traders who sold yoghurts in the UK that were made in Greece, using a straining method separating the cow's milk from the whey and were marketed and labelled under the phrase 'Greek yoghurt'. It was irrelevant that consumers did not know how Greek yoghurt was made. What was important was that a class of traders had given the phrase 'Greek yoghurt' a distinctive denomination and all traders in the UK had complied with this denomination.
The 2012 Regulations
The purpose of the 2012 Regulations is to assist producers in the protection of the characteristics of their goods that arise due to a geographic denomination and communicate these attributes to consumers. The 2012 Regulations define a PGI as a product which: (i) originates in a specific place, region or country, (ii) whose given quality, reputation or other characteristic is essentially attributable to its geographic origin, and (iii) at least one of the production steps takes place in the defined geographical area (examples include Champagne, Scottish Whiskey and Parma Ham). To fulfil these requirements the product merely has to show that its quality, reputation or other characteristics is essentially attributable to its geographical origin.
Chobani argued that the phrase 'Greek yoghurt' (in the UK) was essentially attributable to its Greek origin and had acquired its reputation and goodwill as a consequence of this. Therefore, Chobani argued, that FAGE should have brought its claim under the 2012 Regulations as it was a product which should be protected by its geographical denomination.
FAGE countered that the phrase 'Greek yoghurt' could not be protected as a PGI under the 2012 Regulations and its correct remedy was under passing off. The 2012 Regulations provide that to be protected as a PGI the phrase that denotes the product must be used in the geographic area of origin and registered in the languages which are or were used to describe that product. The phrase 'Greek yoghurt' was not used in Greece rather the phrase 'στραγγιστό γιαούρτι' is used which means strained yoghurt therefore, Chobani's argument must fail.
The Court of Appeal considered the CJEU's decision in the Budvar case2 and held that the 2012 Regulations did not preclude national courts from preventing the use of potentially misleading geographical denominations. The Court of Appeal rejected Chobani's argument and agreed with FAGE that the phrase 'Greek yoghurt' could not be protected under the 2012 Regulations as the phrase had no reputation in Greece.
This important case provides important guidance on the requirements a claimant needs to prove to bring a successful claim for extended passing off by trade associations.
It is notable that the Court of Appeal confirmed the importance of survey evidence in passing off claims especially given the Courts' recent criticism in other cases to such evidence in relation to trade mark cases.