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The IP rights of Greek yoghurt

The essence of Greek yoghurt was debated during a recent court hearing. Richard Price of Winston & Strawn discusses why his client won the debate.

Fage wins case against rival Chobani over Grrek yogurt. Brent Hofacker

FAGE, the maker of Total Greek Yoghurt, has chalked up another victory in its extended passing off dispute with rival manufacturer Chobani, with the Court of Appeal upholding a High Court injunction first granted last March.The judgement follows the High Court’s decision last year to grant FAGE an injunction preventing Chobani from describing a strained yoghurt it makes in the USA and launched as “Greek Yoghurt” in the UK. Chobani brought three arguments to the Court of Appeal. It began by arguing that Mr Justice Briggs’s ruling in the High Court did not reflect the fact that “Greek Yoghurt” was a term for a recipe rather than a phrase that specifically indicated the yoghurt was made in Greece.

Chobani also argued that the High Court had used the wrong test of what consumers thought about the phrase “Greek Yoghurt”.  It also then claimed that, under European Union regulation, the UK courts did not have the power to grant an injunction for passing-off.  None of these arguments succeeded, with the Court of Appeal dismissing Chobani’s case. Lord Justice Longmore, Lord Justice Lewison and Lord Justice Kitchin also refused Chobani permission to appeal, though Chobani has subsequently indicated it may seek permission directly from the Supreme Court.

The question of distinctiveness

The Court of Appeal reviewed the High Court’s ruling on the distinctiveness of the phrase “Greek Yoghurt” in the context of a series of leading authorities going back more than four decades. These cases have established tests for whether a claim of passing off should succeed. Above all, a claimant must show the term is sufficiently well known and distinctive that the activities of the defendant in using the same name for goods without the right pedigree amounts to a misrepresentation calculated to cause him damage. The claimant also has to show that substantial numbers of people are likely to be confused.

Cases of extended passing off, where the goodwill invaded is not the claimant’s alone but shared with a group of other proprietors, are, in principle, no different to conventional passing off ones, though claimants must be able to define the group affected.

The Court of Appeal ruled that, on the basis of the key points, Mr Justice Briggs had been right to grant FAGE its injunction against Chobani. A substantial proportion of the relevant public do recognise Greek Yoghurt as coming from Greece, the Court of Appeal held, and for these people the term applies to a particular product they consider desirable. Moreover, the group of traders to whose products the phrase applies has been defined precisely as all those whose yoghurt is made in Greece, by a straining method making it thick and creamy, without additives.

The wrong test?

Chobani said European Court rulings in cases such as Warsteiner and Estée Lauder v. Lancaster had established the idea that it is wrong to raise barriers to cross-border trade unless the risk of deception is sufficiently serious. That question depends on the expectations of the average consumer, which was not the test of consumer perception applied in the High Court trial.

However, FAGE objected to this point being advanced on appeal (Chobani said it had been “overlooked”), as it was never heard at the first trial. The Court of Appeal agreed – Lord Justice Kitchin said it would not be right for Chobani to be allowed to make this argument, as FAGE might have called different or additional evidence in relation to the point at the first trial had it been advanced. “It is well established that it requires exceptional circumstances to allow a party to advance on appeal a new case on a different basis,” Lord Justice Kitchin added. “No such circumstances are present in this case.”

A matter of jurisdiction

Chobani’s third argument was that the High Court had no power to grant an injunction preventing use of geographic terms other than in the context of’ protected geographical indications and protected designations of origin. These arise under a 2012 European Regulation (with earlier antecedents) designed to ensure European Union consumers receive clear information about any special characteristics a product may have that are related to its geographical origin.

The Court of Appeal also dismissed this argument. Lord Justice Lewison said it was clear that the Regulation was designed to protect names in the language used to describe the product in the area of geographical origin in question. Since yoghurt producers in Greece do not use the term “Greek Yoghurt” - they refer to it in Greek as ‘strained yoghurt’ – the name “is incapable of registration under the Regulation” Lord Justice Lewison ruled. The argument over jurisdiction therefore did not apply.

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17 February 2014

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