The Battle of the Oats – Ep. 37[Podcast]

Summary:

In this episode of Stuff You Should Know About IP, Thomas Colson and Raymond Guarnieri welcome special guest Mark Caddle to discuss a trademark infringement case involving Oatly and Glebe Farm. Oatly sued Glebe Farm for infringement after Glebe released an oat milk called PureOaty. “Oatly” is a registered trademark, Oatly has a registered trademark for its packaging, and Oatly also has unregistered, common law rights. Oatly alleged that Glebe Farm’s PureOaty would be confusingly similar in the marketplace to Oatly’s product. Oatly lost in court. The only commonality between “Oatly” and “PureOaty” is in the descriptive element “oat.” Initially, Glebe Farm just used the descriptive term “Oat Drink” to refer to its oat milk product, but later re-branded their product as PureOaty. Before going to market with a product, a company can benefit from searching for trademarks that already exist so that the company can minimize its risk of committing trademark infringement. Mark Caddle argues that the best trademarks are ones that are unique or fanciful, and that set the owners’ products apart from competitors’ products. Both Oatly and Glebe Farm have referenced the court’s decision in this case on their respective websites. This case gained notoriety, and an online petition in support of Glebe Farm garnered 130,000 signatures. Oatly is a much larger company than is Glebe Farm.

References: 

https://www.glebefarmfoods.co.uk/about-us/

https://www.bbc.com/news/uk-england-cambridgeshire-58102252

https://www.forbes.com/sites/chloesorvino/2021/05/20/backed-by-oprah-and-blackstone-oatlys-10-billion-ipo-hits-the-market/?sh=495c8e8b542b

https://www.greenqueen.com.hk/oatly-loses-glebe-pureoaty-lawsuit/​  (Good side by side comparison of the two packages)

https://whatallergy.com/2021/06/shame-on-you-oatly/

http://emisgoodeating.com/2021/06/14/oatly-vs-pureoaty/

Transcript:

When I wake up in the morning, the first thing I do is reach for a fresh, cold glass of oat milk. But choosing the right brand of oat milk is becoming challenging with more and more companies entering into this multi-billion dollar industry. Cue The Battle of The Oats on this week’s episode of Stuff You Should Know About IP. Today’s episode of Stuff You Should Know About IP is brought to you by The Trademark Lawyer Magazine. If you want to stay up to date with everything that’s going on in the world of IP and trademarks, go to www.trademarklawyermagazine.com. Each issue is free to read for up to eight weeks. That’s trademarklawyermagazine.com for global news in the world of trademarks. Okay, so Tom, Mark, please explain the Battle of The Oats to the listeners at home.

Thomas Colson:

Okay. Before we do that though, you have to explain, I understand that Mark drinks oat milk, but do you really reach for a glass of oat milk in the morning?

Raymond Guarnieri:

No, but I thought it would be entertaining.

Thomas Colson:

Okay. Good. Okay. All right.

Raymond Guarnieri:

I like oat milk. I prefer regular milk, but I’ll drink a glass of oat milk.

Thomas Colson:

I have a carton of oat milk in my fridge. My daughter drinks it all the time. I have yet to try it though. But after this podcast, just like when we did the Impossible Burger and I went right out to Burger King and bought the Impossible Burger, I’m getting a glass of oat milk after this.

Raymond Guarnieri:

Now I want some. I want to taste both. We can do a little taste testing.

Thomas Colson:

Yeah, exactly. Hey, so anyways, so we have Mark with us because Mark is our guru. He’s our resident guru at Oatly versus Glebe Farm, and basically just to give a high level of this, Oatly is this big giant company. They’re a $12.5 billion US dollar valuation, even though they’re, I think they’re out of Malmo, Sweden. And Glebe Farms is literally a brother-sister combo. It’s Rebecca and Philip Rayner and they’re out of the UK, which is a home to the great Mark Caddle. Is that I say your name correctly Mark?

Mark Caddle:

Yeah, that’s correct. Mark Caddle, yes.

Thomas Colson:

Mark Caddle. The great Mark Caddle is in the UK right next door to Rebecca and Philip, and when I say next door, I mean they’re on the same little plot of land. But anyway, so apparently, Oatly did not like the fact that Glebe Farm came out with an oat milk and called it PureOaty, so they sued them for trademark infringement and here we are. Mark, what is going on?

Mark Caddle:

Yeah, that’s a great introduction to this, the Battle of The Oats, Oatly and Glebe Farm. I mean, this is a classic David and Goliath battle with some common topical trends around the shift from dairy products to oat milk and the way that has become a big market here in the UK and by the sounds of things, in the US as well, if you’ve got some situated in your fridge. But here we have Oatly trying to enforce their trademark registrations in Oatly against Glebe’s use of PureOaty and the decision …

Thomas Colson:

So they actually have a trademark registration for Oatly?

Mark Caddle:

Yes, the word Oatly.

Thomas Colson:

For oat milk?

Mark Caddle:

For oat milk, that’s correct. And they also have, you may have seen their product, they have trademark registrations for the front of their packaging as well, which includes [crosstalk 00:03:26].

Thomas Colson:

We call it trade dress in the US.

Mark Caddle:

That’s it. Yeah.

Thomas Colson:

You call it that in the UK as well, Mark?

Mark Caddle:

We tend to call that [inaudible 00:03:33] packaging design or a logo trademark for how something looks applied to particular product. But yeah, trade dress is the right term for the US, at least in my experience. They tried to stop Glebe Farm foods using the trademark PureOaty based on their registrations and their reputation, and also their unregistered user rights, which we have in the UK, a bit like in the US for PureOaty. So that’s [crosstalk 00:04:00].

Thomas Colson:

Okay, so we have a registered trademark for Oatly?

Mark Caddle:

Mm-hmm (affirmative).

Thomas Colson:

Do we have a registered trademark for the packaging as well?

Mark Caddle:

Correct.

Thomas Colson:

And then we also have something unregistered. In the US, we call that common law rights.

Mark Caddle:

Yeah.

Thomas Colson:

And what’s that for? We have Oatly that’s registered. We have the packaging on the front of the carton, but then we have this unregistered thing. What is that?

Mark Caddle:

Yeah, so in the UK, we also call them common law rights. Our systems traditionally are quite aligned in the UK and in the US. We tend to refer to this as being the Law of Passing Off, where you try and hold your product out as being related to someone else when that’s not the case, and there’re certain tests for that. One of which is that the trademark that you’re relying on the unregistered rights for as goodwill, so it’s become quite popular. People know it, and you, the trademark infringer or the person that is defendant in the case, has used that trademark and in a way to deceive the public. People are confused. They’re buying Glebe’s products thinking they’re Oatly products, and that’s where that unregistered part [inaudible 00:05:06]. That might be quite similar to the US but it’s an additional [crosstalk 00:05:09].

Thomas Colson:

I think we had a momentary pause.

Mark Caddle:

Yeah, something in addition to what [inaudible 00:05:14] their registered rights.

Thomas Colson:

All right. So Mark, what I understand then is, it all comes down to confusing similarity, right? That’s what we’re talking about? The marketplace is confused, or Oatly is alleging that by watching a new oat milk product, which is the same product, right? I mean, same basic product line with the name PureOaty, it’s going to be confusingly similar in the marketplace to Oatly, which is a registered trademark, and maybe the box itself might even be confusing depending upon how people weigh in on that.

Mark Caddle:

Yeah, that’s a great summary. The test is whether or not people are likely to be confused. Oatly says the registered trademark Oatly is too close. Sorry, PureOaty trademark is too close to Oatly. People will be confused. The registered trademark rights kick in. That was the basis of the confusing similarity claim.

Thomas Colson:

What did the court say? What happened?

Mark Caddle:

The court was quite dismissive of Oatly’s position. Oatly were unsuccessful on all grounds, so likely the confusion and the common law rights that we spoke about before and also the reputational ground as well, which was that their trademark is so famous that use of PureOaty would tarnish and dilute that reputation, a bit like you have in the US. The court said that none of those particular tests were satisfied, and as you’ve alluded to already, the fact that Oatly is consumed by the word oat and the only similarity in the PureOaty trademark is oat, their commonality was in their descriptive elements. Oat for oat milk, and because the ‘ly’ ending for Oatly wasn’t present in Glebe’s trademark, there was no confusion. No one would think that PureOaty and Oatly were related, so it couldn’t apply and Oatly were unsuccessful for that reason, particularly.

Thomas Colson:

I am wondering, Mark, how did Oatly get a trademark on Oatly for oat milk, which seems descriptive to me? Now in the US, we have four categories of trademark significance. We have fanciful, arbitrary, suggestive, and then we jump the line to descriptive, and unless you have something called secondary, meaning you can’t get protection on descriptive marks in the US, but it seems like they got a mark for Oatly for oat milk. That seems unusual to me.

Mark Caddle:

Yeah. I mean, in the UK, the test isn’t on the similar tiers. A trademark is either distinctive or not distinctive unless it has acquired distinctiveness through its use, but these trademarks were inherently distinctive so when they were applied for, the trademark office took a decision that Oatly, and probably the conjunction of oat and the end in ‘ly’ would be new enough to be registerable. It was distinctive enough, so in the UK, decision was that these trademarks were sufficiently distinctive and go on the registration for that reason.

Mark Caddle:

But what this case demonstrates is that where the common elements of two competing trademarks are in their descriptiveness, so both have an oat, the earlier trademark can not be relied upon to stop the descriptive use by someone else. This might be where this case is interesting because we find a decision from the court that says, “Oatly trademark is well and good, but they can’t monopolize the theme of oatiness around oat milk products, because everyone should be able to do that.” And I think that’s why this has captured some attention and questions, some of the reasons why Oatly brought this case in the first place, trying to protect their position in the market.

Thomas Colson:

I have two other questions that come to mind. One is, PureOaty, they don’t have a trademark on PureOaty, right? They’re just entering the marketplace using it, maybe as a trademark, maybe as a descriptor. But I mean, it’s clearly trying to use it as trademark, PureOaty, but they don’t have a registration.

Mark Caddle:

That’s right. No registration. Interestingly as well, their initial brand when they started those selling oat milk, Glebe Farms was just a term, Oat Drink. They were just purely descriptive. They were so [crosstalk 00:09:20] what they did, and then they rebranded to PureOaty, and that’s when Oatly jumped on them with this lawsuit, this infringement action, but there is still a descriptive term. They’re telling their customers that their oat milk is full of oats, it’s purely oats. You know where this goes, right? That is the descriptive point, and then they were able to say, “Our trademark is just descriptive. The Oatly trademark doesn’t capture it. We should be able to continue as we are.” And that’s what the court said as well.

Thomas Colson:

So they actually, as part of their argument said, “We’re purely descriptive.” They’re not even holding themselves … so if in the future, somebody comes along with a brand, PureOaty, for their trademark or for their milk, their oat milk, wouldn’t PureOaty, I mean, Glebe Farms, have a hard time preventing them from entering the marketplace unless they had acquired distinctiveness through all kinds of popularity and stuff like that?

Mark Caddle:

Yeah, it would be difficult if they didn’t have registered trademark rights, which might be a problem if we’re taking that as a descriptive term. One of the things that we might rely on, though, if we do have someone coming to market after them using the same trademark is the common law rights we spoke about. It could be that someone is trying to pass their brand off as Glebe Farms. In the UK, that might be actionable, and they could try and prevent that from happening if someone’s just trying to copy what they’re doing.

Thomas Colson:

Except they’ve already acknowledged that it’s just descriptive.

Mark Caddle:

Yeah. I mean, it might be more difficult for them to do that.

Thomas Colson:

Mark, the other question that I … this time, you froze. It’s okay. The other question I have for you is, I did a little quick search and found that there’s another oat milk brand called, which is made by a company called Silk, which they play on the theme of “Oh, yeah” but they call it Oat Yeah. O-A-T Y-E-A-H, Oat Yeah. So we have Oatly, we have PureOaty and then we have another brand called, Oat Yeah. There’s no exclamation point, by the way. But I’m wondering, is that another one where oat is clearly usable by everyone in the oat milk business, right?

Mark Caddle:

Yes.

Thomas Colson:

And I would say, they would probably be okay because they’re going to focus their trademark significance if you will, on the “Yeah”. This enthusiastic thing about oats, so they could probably get a trademark on Oat Yeah, and they could probably prevail if they’re either opposed or sued by Oatly, right?

Mark Caddle:

Yeah. And the example there, the same logic applies. Oat has been used descriptively to refer to the product. The distinctive part is the “Yeah” part. And for that reason, Oatly would have a tough time trying to get them to stop using that trademark or registering that trademark as well. It’s one of the things that’s apparent to me here, is that oat is becoming more and more widely used in the particular oat drink sector as you’d expect. And if there is a first big player user like Oatly, it’s going to be hard for them to control the use of oat by other people, given it’s just a descriptor. Their initial, to go back to your point about Oatly being perhaps on the borderline of what’s distinctive or isn’t distinctive, that gives them a harder time trying to enforce the trademark against uses of oat by other people.

Thomas Colson:

Let’s say PureOaty, Glebe Farm, comes to you 18 months ago and they decide, we’re going to … No, actually I think they launched their own drink 18 months ago. And then sometime thereafter, they decided to adopt the so-called trademark PureOaty or maybe a trademark, PureOaty. They come to Mark Caddle, the great trademark lawyer in the UK, and they say, “Here’s what we want to do.” I mean, would you counsel them and say, “Look, let’s just back off. We don’t have any emotional or financial investment in PureOaty yet. Why don’t we pursue a trademark that you can actually have as a trademark instead of something so descriptive that you could probably be infringed downstream, and by the way, you might be infringing Oatly, which is a 12 and a half billion dollar [inaudible 00:13:19].” I mean, what would you say to them if they came to you?

Mark Caddle:

Yeah, probably two things I would advice there. First off is to conduct some thorough searches about what has already gone before to make sure there isn’t any infringement risks. And perhaps in this case, if we search for PureOatly, the Oatly may have come out in that, and then maybe if we were taking the line that PureOaty was a descriptor, we might have said, this is not going to be an issue because we can’t stop use of descriptive terms. The second thing would be around the point you just described there. The best trademarks are those that are unique, fanciful, that really set you apart from your competitors.

Mark Caddle:

Although we wouldn’t necessarily coach them on their brand selection. It could just be that PureOaty is quite descriptive. You may wish to think about something that you could register for yourself, give you a big slice of the pie, something you’ve got monopoly in that you could then enforce against others to protect your own exclusivity, because as we spoke about earlier, some of the issues about trying to enforce PureOaty may come back to hurt Glebe Farms in the future. Time will tell, but that’s something to bear in mind.

Thomas Colson:

Yeah, I like the way you put that. I like the way you said that, that you wouldn’t counsel them on a brand because that’s not your thing. You counsel them on the rules associated with getting protection and enforceability of a brand, right?

Mark Caddle:

That’s right.

Thomas Colson:

So then they can get all their big brand experts to say, okay, I get it. Let’s try something fanciful or something in that regard.

Mark Caddle:

That’s absolutely right. Yeah. We’re not necessarily brand advisors or an ad agency, but we would say that if this trademark isn’t distinctive, it’s not going to be registrable. And all the benefits of trademark registration, you’ll be able to sue people, having a peace of mind, you can use a trademark [inaudible 00:14:58] and you might want to consider something else over to the trade guys and they pick up there.

Thomas Colson:

Right. Here’s one thing I found funny about this outcome. Okay, so Glebe Farm prevails. They get sued by Oatley. This big giant, they prevail, the court tells them it was not uncertain. It was certain terms. They’re not infringing, right? They’re not infringing. So then, the quote I get from Oatley is, is that, “We wish Glebe Farm the best going forward. We love you. We want you involved in the market. We wish you the best. We just think they should do so in their own unique voice, just like we did.” Okay, so that’s their parting shot, is we just think they should do so in their own unique voice, just like we did. Here’s what it reminds me of. In the olden days, I used to be what’s called an assistant district attorney in my town.

Thomas Colson:

And we prosecuted criminals. And I had this buddy named Rich, and Rich tried this petty larceny case. It was like, guy goes into a store, steals some stuff, runs out, gets caught, goes into court. Rich loses the case. The defendant wins the case. He’s not guilty. As the defendants walking out of the courtroom, Rich says, “And I never want to see you back in that store.” He said, “Dude, you didn’t win. He’s not guilty of committing petty larceny. He can go back to the store.” That’s why I love this quote, which is, they just lost, right? You’re not infringing. We just think they should do so in their own unique voice, just like we did. I just think it’s such a funny, ballsy, maybe slightly not self-aware, I don’t know what I could say about it, but that jumped out at me as funny after the case. But anyway, that’s probably also not for us to counsel on because that’s not a legal matter. That’s more of a branding matter.

Mark Caddle:

Yeah. And you might’ve seen as well on Oatly’s website, and this is true for Glebe Farms as well, they’ve actually published the decision and promoted the fact that the case had happened. Tried to come clean on Oatly’s website. They’ve actually got some of the skeleton arguments from the case, they’ve got decision links that you can go as a member of the public if you want to. It just seems to just say, “This case happened. Here’s everything that was argued. You can make up your own mind about it.” A bit like the court you just said, almost saying, this happened, make your own mind.

Thomas Colson:

Good for them.

Mark Caddle:

Yeah. It’s interesting to see that.

Thomas Colson:

Good for Oatly. I love the fact that they did that. So in other words, they’re not hiding. This is what happened. Good for them. I applaud them for doing that. Now, to Glebe Farms’ benefit, it’s probably giving them much needed notoriety because they’re a small company. I read an interesting commentary on this. This person was commenting on why Glebe Farms didn’t just back down when this started. And they said, one reason might be, they want Oatly to buy them because Oatly apparently does not have a processing unit or a factory for processing, or maybe not in the UK or something. What does Glebe Farm get out of it? Could it cost a lot of money? I mean, you litigate, you’re spending … You know what that’s like, Mark, right? I mean, you’re spending a lot of money defending yourself, so even if you win as the defendant, you still lose because you’ve lost a small fortune.

Thomas Colson:

And if you are Rebecca and … who’s our other guy here? Rebecca and Philip Rayner, not a huge company, this came right out of your pockets, but they got notoriety, right? They got to know this company Oatly. Maybe Oatly buys them, and maybe they get investors. I mean, who knows? This could become a big boom for Glebe Farms. I mean, they won, but the money they lost, they might get back in other ways like brand development recognition, sympathy. People say, “Oh my God, the little guy lost. I love the little guy. I’m going to start buying. I’m going to get Glebe Farms PureOaty in my fridge.” Maybe that happens. But Oatly handled it brilliantly because now, I’m not upset about Oatly anymore in light of what you said. They came clean and they put it all out there.

Mark Caddle:

Yeah. I mean, that’s one thing that nowadays, at least in the UK, it probably the same in the US given the same trends on social media platforms and the court public opinion, a lot of PR is generated around this case. I mean, one of the things that happened was that Glebe Farm, they started a petition, or at least someone started a petition on change.org and that had 130,000 signatures. And they ran the [inaudible 00:19:34], “Let Glebe Farms sow their oats.” People that were essentially coming out in support of Glebe, and everything you said there about PR and generating a bit of a storm around this to try and favor the little company. As you said, family [inaudible 00:19:50] farm, basically, farmers running a company in a small part of the UK, all good PR for them, I would say.

Thomas Colson:

Yeah. And out of the 130,000 people that signed the petition, I would guess that 129,996 have no idea what this case is about. They don’t understand the subtleties of what’s actually happening here, but they’re supporting the little guy. They don’t care what it’s about. They’re like, we want to defend the little guy.

Mark Caddle:

Yeah. That’s it. And I think that’s the right conclusion to draw, that they’ve basically created a bit of a hype around the brand by not really doing much other than defend in a court action, which is [inaudible 00:20:30] advice at the start. It may have been, you’ve got a good chance of winning this, let’s see it through.

Thomas Colson:

And they did. They did win.

Mark Caddle:

[crosstalk 00:20:36] some of the good PR and here we are talking about now. They’re still getting spoken about. Now they’re in the US, so great news for them.

Thomas Colson:

And they’re going to have now millions and millions of people that watch our podcast are going to be probably thinking about Glebe Farms and Oatly. They’re both winning.

Raymond Guarnieri:

If you’re not craving a cold glass of milk by the end of this podcast, there’s something wrong with you.

Thomas Colson:

I agree. And as soon as we close, Ray, I’m going into the fridge and getting myself some oat milk.

Raymond Guarnieri:

I know. I’m going to go run to the corner.

Thomas Colson:

But I’m not going to do that. I’m going to go to Wegmans, which is the greatest grocery store in the world and it’s right down the street from me, and I’m going to specifically support Oatly and Glebe Farms and buy milk from both of them today and test both.

Raymond Guarnieri:

We’ll do a follow-up on this episode. We’ll have a blind taste test.

Thomas Colson:

You got it. Mark, it’s been great. Thank you so much for doing this today.

Mark Caddle:

You’re welcome. It’s good to get to speak to you both.

Raymond Guarnieri:

Yeah. And for all of you out there, you millions of listeners, if you enjoyed this podcast, please don’t forget to hit the subscribe button, like, share your comments, send it to your friends, your family, your in-laws and support Stuff You Should Know About IP. Thanks, everyone.