According to the Court of Appeal, a substantial proportion of the yoghurt-eating public believe that Greek yoghurt comes from Greece and consider this to be an important fact. Yoghurt made elsewhere should consequently not be labelled ‘Greek’.
The Court of Appeal (FAGE UK & Anor v Chobani UK Ltd & Anor) has upheld Briggs J’s decision of last year in which he ruled that Chobani could not call its US-produced yoghurt 'Greek yoghurt’ because it was not made in Greece. FAGE brought a successful action for extended passing off (a form of passing off developed to protect collective goodwill in relation to classes of goods eg Champagne) and in doing so satisfied the judge that it had built up substantial goodwill in the term ‘Greek yoghurt’ and that Chobani’s use of the term caused or would cause substantial damage to that goodwill.
Chobani and FAGE agree that ‘Greek yoghurt’ is a thick and creamy yoghurt whose texture has been achieved by straining techniques rather than any use of additive or thickening agents. However, they disagree about whether it has to be produced in Greece. FAGE, whose Greek yoghurt (made in Greece) accounts for 95% of the UK’s Greek yoghurt market, contests that in the UK it does.
It was significant both at first instance and at appeal that, due to a UK labelling convention, from the mid-1980s until Chobani’s entry into the market in September 2012 all yoghurt sold in the UK as Greek yoghurt had been made in Greece and rendered thick and creamy by straining. Most of the major names in the UK yoghurt market, including those who also sell Greek yoghurt, sell ‘Greek style’ yoghurt, which is not made in Greece and is made thick and creamy either by straining or by other means. Compared to these ‘Greek-style’ products, Greek yoghurt is sold at a premium.
Chobani argued that i) the term Greek yoghurt did not denote a clear or distinctive class of product, or ii) if it did it referred to a production technique rather than location, or iii) if it did mean location then this wasn’t important to buyers in any case. The appeal judges disagreed. The labelling convention had led to a widespread belief among buyers of Greek yoghurt that it came from Greece, and this belief matters to those buyers. Importantly, although the name may have started as purely descriptive, it had built up a reputation such that it had become distinctive.
At the appeal Chobani did raise a new point, relating to an EU Regulation (‘the 2012 Regulation’) which provides for the protection across the Union of geographical denominations for agricultural products and foodstuffs. Chobani’s case was that the UK court had no power to grant injunctive relief other than in accordance with the 2012 Regulation, meaning that FAGE was not entitled to bring its case against Chobani under the UK law of passing off. The appeal judges disagreed, holding that EU law does not preclude them from applying national rules (such as passing off) for the protection of geographical denominations which do not fall within the material scope of the 2012 Regulation; the fact that Greek yoghurt is not called Greek yoghurt in Greece itself means that FAGE would not be able to protect its use of the term under the 2012 Regulation, and so it is entitled to try to protect it in the UK under UK law.
The appeal judges decided that a substantial proportion of the relevant public would be likely to deceived by Chobani’s use of the term ‘Greek yoghurt’; this use of the term was a material misrepresentation and FAGE was entitled to a permanent injunction restraining Chobani. This ruling does not mean that Chobani cannot sell yoghurt as ‘Greek yoghurt’, but if it is to do so the yoghurt must be made in Greece.
This case highlights the importance of vigilance in protection of intellectual property. The judges held that there was a class of traders who had built up goodwill in the term Greek yoghurt, meaning yoghurt made in Greece and made thick and creamy through straining techniques, and as a member of that class of traders, FAGE was entitled to protect against erosion of the distinctiveness of the name and so loss of its goodwill. In comparing this to previous cases on Champagne and Swiss chocolate, Kichin LJ noted that each product which is allowed to trespass on a company’s intellectual property without challenge potentially weakens any future attempt by that company to restrain other such attempts. If FAGE had not restrained Chobani’s use of ‘Greek yoghurt’, it may not have been able to prevent further dilution of the meaning of the name and in future the name may have been used in a much broader sense, threatening FAGE’s domination of the market.