Background
High Court decision
Appeal
Court of Appeal decision
Comment


The Court of Appeal has 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 party in a class of traders sharing the collective goodwill in a mark.

Background

Since the mid-1980s, FAGE UK Limited and FAGE Dairy Industry SA have imported from Greece and sold throughout the United Kingdom yoghurt described as 'Greek yoghurt' under the brand name Total. By 2012, FAGE had a 95% market share for all yoghurt sold in the United Kingdom labelled as Greek yoghurt. The defendants (Chobani UK Limited and Chobani, Inc) manufactured and sold yoghurt in the United States as 'Chobani Greek yoghurt'. In mid-2012 Chobani introduced its product into the UK market and labelled it as 'Greek yoghurt'.

In September 2012 FAGE brought proceedings for extended passing off 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 United Kingdom and that any yoghurt described as Greek yoghurt must:

  • be manufactured in Greece;
  • be made using the Greek method of straining the cow's milk to remove the whey; and
  • contain no added sugars, sweeteners or additives (including non-milk thickening agents).

While Chobani's product used the Greek method of straining, it was not made in Greece.

High Court decision

In the High Court proceedings both Chobani and FAGE adduced evidence on what constitutes 'Greek yoghurt' or 'Greek-style yoghurt'. Expert evidence adduced by FAGE illustrated that for over 25 years, yoghurt producers in the United Kingdom have adhered to a uniform understanding that the phrase 'Greek yoghurt' denotes thick and creamy yoghurt that is made in Greece. As a result, there is a clear price difference in UK supermarkets between 'Greek yoghurt' and 'Greek-style yoghurt'.

On the evidence submitted, the High Court held 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 United Kingdom under the description 'Greek yoghurt'.

Appeal

Chobani appealed the High Court decision on the following grounds:

  • FAGE had not proved that the phrase 'Greek yoghurt' had a sufficiently distinctive meaning among consumers to support a claim in extended passing off.
  • The court has no power to grant, or is precluded from granting, injunctive relief to protect geographical indications other than those protected in accordance with the 2012 EU regulations on the protection of designations of origin and geographical indications for foodstuffs.(1)

Court of Appeal decision

Distinctiveness and deception
The Court of Appeal held that an extended passing-off claim is no different from a classic passing-off claim. The court found the following general points on distinctiveness and deception to be significant in this claim:

  • In a claim for extended passing off, the allegation is that the defendant misrepresented its goods as those of a class of traders of which the claimant need only be one.
  • There is no need to establish a public understanding of how the goods are made.
  • When using a geographical denomination to describe products (eg, Swiss chocolate), the class of traders using that denomination do 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, there was a clearly defined class of traders that sold yoghurt in the United Kingdom which was made in Greece using a straining method to separate the cow's milk from the whey, and which was 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 United Kingdom had complied with this denomination.

2012 EU regulations
The purpose of the 2012 EU regulations is to assist producers in the protection of the characteristics of their goods that arise due to a geographic denomination and to communicate these attributes to consumers. The regulations define 'protected geographical indication' as a description of a product which:

  • originates in a specific place, region or country;
  • has a given quality, reputation or other characteristic that is essentially attributable to its geographical origin; and
  • has at least one production step that takes place in the defined geographical area (eg, Champagne, Scotch whisky and Parma ham).

To fulfil these requirements, the product merely has to show that its quality, reputation or other characteristics are essentially attributable to its geographical origin.

Chobani argued that the phrase 'Greek yoghurt' (in the United Kingdom) is essentially attributable to its Greek origin and has 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 its product should be protected by its geographical denomination.

FAGE countered that the phrase 'Greek yoghurt' could not be protected as a protected geographical indication under the 2012 regulations, and that the correct remedy was under passing off. The 2012 regulations provide that to be considered a protected geographical indication, the phrase that denotes the product must be used in the geographical area of origin and registered in the languages which are or were used to describe that product. The phrase 'Greek yoghurt' is not used in Greece – rather, στραγγιστ? γιαο?ρτι ('strained yoghurt') is used; therefore, Chobani's argument must fail.

The Court of Appeal considered the European Court of Justice decision in Budvar(2) and held that the 2012 regulations do 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.

Comment

This case provides important guidance on the requirements that a claimant must meet to bring a successful claim for extended passing off by trade associations.

Notably, the Court of Appeal confirmed the importance of survey evidence in passing-off claims, especially given the courts' recent criticism of such evidence in relation to trademark cases.

For further information on this topic please contact Clive Thorne or Elena Shemilt at RPC by telephone (+44 20 3060 6000), fax (+44 20 3060 7000) or email (clive.thorne@rpc.co.uk or elena.shemilt@rpc.co.uk). The RPC website can be accessed at www.rpc.co.uk.

Endnotes

(1) EU Regulation 510/2006 on the protection of geographical indications and designations of origin for agricultural products and foodstuffs.

(2) Budejovicky Budvar NP v Rudolf Ammersin GmbH [2009] ECR I-7721, Case C-478/07.