'Champagne' goodwill cannot be used to flavour yoghurt

Sweden

In Institut National des Appellations d´Origine v Arla Foods AB (MD 2002:20), the Swedish Market Court has ruled against Arla Foods AB for its use of the term 'champagne' in relation to yoghurt. The court found that the advertising was an obvious case of intentional misappropriation of goodwill, and was misleading in respect of the product's content and flavour.

Arla was marketing yoghurt as 'Yoggi Original Champagnesmak' ('Yoggi Original Champagne Taste'). The Institut National des Appellations d'Origine, a government body that protects France's geographical indications, brought proceedings against Arla on the grounds that the product name:

  • constituted misappropriation of goodwill;

  • mislead consumers in respect of the product's content and character;

  • mislead consumers in respect of the product's geographical origin; and

  • constituted 'unfair comparison' pursuant to Section 8(a) of the Swedish Marketing Practices Act.

The court found Arla guilty on the first two counts. However, it concluded that Arla's use of the phrase 'champagne taste' was not misleading with regard to the product's geographical origin because yoghurt and champagne are different products. It also rejected the claim of unfair comparison on the basis that yoghurt and champagne are not competing products, as is required for a violation of Section 8(a) of the Marketing Practices Act.

Having made these findings, the court ordered Arla to refrain from using the term 'champagne taste', or any other term containing the word 'champagne'. In the event Arla does not abide by this order, a fine of Skr400,000 shall be imposed.

Stefan Widmark, Advokatfirman Vinge, Stockholm

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