Oatly v Glebe Farm Foods - What We Can Learn from the Case

The recent High Court decision in Oatly AB v Glebe Farm Foods established, among other things, that the name PureOaty is not too similar to Oatly.

There are plenty of articles such as here, here and here, if you want to read about the case itself. Here my aim is to highlight some take away issues for you to consider if you are creating a brand. 

It is worth contrasting the Oatly decision to a fictitious hypothetical case. Say a competing mayonnaise product were to call itself PureHellman’s. Without a doubt, the courts would find such a mark too similar to Hellman’s. Trademarks afford a wide scope of protection - they don’t just protect the exact same name. Hellman’s is a highly distinctive name for a mayonnaise product so it follows that it would enjoy broader protection than a trademark like Oatly which uses the generic term Oat in its name. Oatly is less distinctive than Hellman’s as a brand name.

 Concept of Distinctiveness in Trademark Law

The legal system keeps terms, colours, or shapes that competitors need to use free for all in the category to use. This is a fundamental tenet of trademark law. It’s the reason you cannot register a trademark unless it is distinctive or has acquired distinctiveness through use (which is essential before you can register certain brand identifiers such as colours).

Also, even if you have acquired distinctiveness through use, you cannot trademark a colour that everyone else in your category uses. General Mills tried to do so in the cereal category for the colour yellow and failed even though General Mills had used the colour yellow since 1945.

When a name includes a generic element, it does not get exclusivity over the generic portion of its name. For example, I’ve trademarked Brand Tuned. That means, combining Brand with the word Tuned made the name sufficiently distinctive to register. Had I tried to register a different combination of words, such as ‘Brand New’, my application would have failed. The word ‘New’ lacks distinctiveness when combined with Brand because others in the category might legitimately want to use the word New when describing a brand. The law will ensure they can do so by preventing anyone else in the category monopolising that combination of words. On the other hand, Tuned is not a word that everyone in branding must be free to use. That is why I was able to trademark the name and could legitimately object to certain uses of the word Tuned by competitors. 

Going back to Oatly, it was only the addition of the LY suffix to the word Oat that made Oatly distinctive enough to trademark. Had they tried to use a different name, such as OatMilk the name would have lacked distinctiveness because other suppliers of oat milk might legitimately want to use the word milk to describe their oat milk products. Nobody should be allowed to monopolise a term like milk in that category. It lacks distinctiveness. So, by adding the suffix LY to the generic word OAT, Oatly managed to fall on the right side of the descriptive distinctive boundary.

This latest decision indicates the inadequacy of the name because by adding the pre-fix Pure to the name, as Glebe Farm did, and using the word Oaty, they were able to distance the name from Oatly even though the word Oaty simply leaves out the letter L. The reason for that is that Oaty is a generic word. 

Descriptive/Suggestive Names

Many founders and marketers are drawn to descriptive names because such names require a smaller marketing budget to promote. However, descriptive names are inherently weak for brand protection. They are only advantageous in the early days of a business because they help form a mental association in customers’ minds with what the company sells.

The long-term disadvantages descriptive names entail for a brand are significant and should be borne in mind when a name is being chosen.

A generic business name places a serious limitation on the potential of the brand to survive and thrive. Descriptive names ultimately damage your market share because they cannot function as trademarks. Sales revenues will be lower because consumers will be less able to identify that it’s you and could be confused into buying competing products or services. That’s why lower sales, in the long run, can be the inevitable result of using a generic name.

Having a name that is unique to your brand is key to building brand value. That is why Hotels.com tried hard to register its descriptive name.

I am constantly surprised by how poorly understood the concept of legal distinctiveness is even among branding professionals. How many successful brands do you know that use a purely descriptive name? Very few. The reason to choose names that can function as trademarks is that trademarks are a container of the brand’s value as it grows and succeeds.

 Suggestive Names

Opting for a suggestive name, that is a name that suggests the category without directly describing it, is appealing to many brands like Oatly that are drawn to descriptive names. They avoid the descriptiveness trap and fall on the right side of the descriptive suggestive boundary, so that it is possible to register the name as a trademark. 

The decision demonstrates how weak Oatly’s trademark is because the more successful a business is, the wider the scope of protection its brand name will enjoy. The fact that Oatly got this result in the proceedings despite the wider scope of protection that its fame affords it in the UK, highlights the serious drawback of creating a name around a generic element. 

Suggestive names are not necessarily suitable for every brand because they are not strong enough for brand protection purposes. They are far more expensive to protect. This is something to bear in mind when choosing a name for a brand that aspires to become big. 

If a name is not distinctive enough to function as a trademark you essentially have a colander instead of a container for the brand equity. However, just because it is possible to secure a trademark a name does not mean a particular brand name or identifier is the right choice. This case demonstrates why Oatly was a poor choice of name.

EasyJet spends a lot more than Ryanair on protecting its brand simply because it is so much more expensive to enforce suggestive names than it is to enforce proper names like Ryanair or Hellman's. It is essential to enforce your rights vigorously to defend the protection you do have when you use suggestive names. For example, Easyjet comes down heavily on uses of the word Easy. 

The fact that Oatly was somewhat apologetic about enforcing its rights in its name because it was being called a Bully suggests that before finalising the choice of name it is worth considering some of the drawbacks of using a suggestive name.

A suggestive name might not have been so appealing to Oatly had the company appreciated the wider implications down the line of defending their turf, especially in a category like Oat milk. The PR implications of brand protection actions should be borne in mind. Consumers who are not sophisticated in trademarks and brands would better understand why a competitor using a name like PureHellman’s was taking unfair advantage of the Hellman’s brand than one that is using PureOaty. The first does not lend itself to accusations of bullying while the latter does.

My point is that brand protection and PR issues as well as the ultimate aspirations of a business should be borne in mind when selecting a name.

Traditionally people assume the legal dimension when it comes to choosing names or other identifiers is simply about checking availability and registering trademarks. However, the legal dimension brings insights into the decision-making process that could lead to far better branding decisions. It should be standard practice to consider the brand protection implications of a name before finalising the choice of name, rather than leaving it till later. This is something I discuss in my book Brand Tuned, the new rules of branding, strategy and intellectual property, released on 28 September.

 Conclusion 

The Ehrenberg-Bass Institute’s research has highlighted the importance of distinctiveness in branding.

As a lawyer involved in brand protection, I can see clearly that their findings have wider implications for how brands are created if they are to grow in desired ways.

Distinctiveness is a legal concept that anyone involved in branding would do well to understand thoroughly. Distinctive branding makes it much easier to stop the damaging effects of copying that are inevitable in business.

The way to avoid sameness in branding is to stop choosing brand names and other identifiers based on their meaning, and instead focus on standing out distinctively by choosing names and identifiers that are legally distinctive.

The brands that achieve distinctiveness such as Coca Cola for its distinctive bottle shape, don’t just leave it to chance. They have a strategy. If you’re aiming to trademark brand identifiers like colour, or sounds, or shapes you too need a strategy when you choose the brand identifiers, rather than leaving it till later, or not even considering strategy.

If it is too expensive or unwieldy to involve lawyers during branding, the alternative is for designers and marketers to undergo training in intellectual property. It is perfectly possible for them to learn the essentials they need to know to bring the IP angle into consideration during branding.

I will be running an Accelerator in 2022 on how to develop brands using intellectual property strategically. To be the first to know when the pilot Accelerator will be running, Register Your Interest.