Fage, the Greek manufacturer of the famous TOTAL Greek yoghurt brand, has succeeded at the full trial of its High Court 'extended passing off' action against US company Chobani. Fage had been selling their TOTAL brand Greek yoghurt in the UK since the mid-1980s and had 95% of the British market for Greek yoghurt. In 2012 Chobani began to market and sell its yoghurt, made in the USA, as ‘Greek yoghurt’ in the UK. Fage initially applied for and was granted a preliminary injunction pending trial.
At trial the Judge summarised the main factual issue to be determined: whether the phrase 'Greek yoghurt' had, when used in the UK marketplace, sufficient reputation and goodwill 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.
The Judge held that substantial goodwill was attached to the use of the phrase ‘Greek yoghurt’, in the sense that it denoted to a significant section of the public a sufficiently defined and distinctive class of goods. Where, as here, a trade name was descriptive of geographical origin, 'something more' was required to establish goodwill. The evidence showed that a substantial proportion of the actual or potential buyers of 'Greek yoghurt' perceived it as 'in some way special', in the same way that the names 'Champagne' or 'Swiss chocolate' have a pulling power that draws in custom, so that reputation and goodwill can be said to be enjoyed by all producers within the class which use that name for their product. As noted in the vodka / vodkat case it is not necessary that the 'something more' consists of a reputation for higher quality or cachet. Similarly, to demonstrate goodwill it is not necessary to show the consumer knows the manufacturing processes typical of the product in question.
The Judge considered that the best of evidence of such goodwill was
- the existence of a uniformly observed unwritten industry-wide labelling convention adhered to by yoghurt producers for over 25 years in the UK that yoghurt labelled ‘Greek yoghurt’ (as opposed to 'Greek style yoghurt') when offered for sale in the UK was yoghurt made in Greece which had been rendered thick and creamy by a particular ‘straining’ method,
- the unanimity of trade witnesses on that point, and
- that Greek yoghurt commanded a premium price by comparison with that of 'Greek style yoghurts', irrespective of any other brand name used.
The Judge criticised ambiguities in Chobani’s survey questions, but considered that the survey results were not inconsistent with a conclusion that the labelling convention had led to a widespread belief among buyers of Greek yoghurt both that it came from Greece and that this provenance mattered to them. Therefore, to describe yoghurt not made in Greece as ‘Greek yoghurt’ was a material misrepresentation.
The very small print used on the rear of Chobani’s pots to indicate that it was manufactured in the USA was not sufficient to ensure that a substantial part of the yoghurt buying public would not be misled into believing that the product came from Greece. In addition, there was evidence that Chobani had been aware that it would be taking a serious risk of misleading the UK public by describing its yoghurt as ‘Greek yoghurt’.
As the introduction into the market of Greek yoghurt made in the USA would erode the distinctiveness in the description ‘Greek yoghurt’ as meaning yoghurt made in Greece, the requirement to show actual or threatened damage was satisfied.
For these reasons the Judge granted a permanent injunction against Chobani to restrain it from passing off its American made yoghurt in the UK under the description ‘Greek yoghurt’.
In any dispute involving ‘extended passing off’ the assessment of evidence and findings of fact are the key to success. It is interesting to note that the industry-wide convention that ‘Greek yoghurt’ means strained yoghurt of Greek origin was found on the evidence to be unique to the UK market. For example both parties sell as ‘Greek yoghurt’ in the USA product which they make in the USA rather than Greece. The perception of UK consumers as to how they regarded the geographical term ‘Greek yoghurt’ was critical. On the particular facts the tort of extended passing off was established, allowing the protection of a class of goods (typically food or beverages) with specific attributes, as developed in the line of cases such as J Bollinger SA v Costa Brava Wine Co Ltd (No. 3)  in relation to ‘champagne’, Chocosuisse Union des Fabricants Suisse de Chocolat v Cadbury Ltd  in relation to ‘Swiss chocolate’ and Diageo North America Inc v Intercontinental Brands  in relation to ‘vodka’.