Greek yoghurt fights to keep out Americans
In Fage UK v Chobani UK Ltd, the Chancery Division of the High Court of England and Wales has considered whether to issue an interim injunction preventing Chobani UK Ltd from selling ‘Greek’ yoghurt.
Fage UK Ltd held 95% of the British market for Greek yoghurt. Chobani then began to market and sell its own ‘Greek’ yoghurt, which was made in the United States. Chobani, having secured a foothold in the British market for Greek yoghurt with a 1% share, planned to raise that share to 10% within 12 months by offering free samples of its product at British train terminals.
Fage alleged passing off and demanded interim injunctive relief. It claimed that Chobani’s product was not Greek yoghurt, since Greek yoghurt hails from Greece, and that it was no more than ‘Greek-style yoghurt’. According to Fage, real Greek yoghurt is thick and creamy in consequence of the straining process used in its production, and is free from additives. These attributes give Greek yoghurt a different status to Greek-style yoghurt and enabled Fage to charge a higher price due to the inherent goodwill in that appellation. Products labelled ‘Greek-style yoghurt’ did not, however, guarantee the same attributes. Chobani insisted that it used the same straining process for its own product, adding that the statement on its pots that its product was made in the United States negated any misrepresentation.
According to the court, the evidence showed that Fage had a real prospect of establishing that there was inherent goodwill, independent of the maker's name, in products labelled ‘Greek yoghurt’ over those labelled ‘Greek-style yoghurt’ on account of the specific attributes of the products originating from Greece, these being the creamy thickness derived from the straining process and the absence of additives. There was thus a real prospect of Fage succeeding in its claim for extended passing off. It added that passing off could be established even where the mode of processing the product was the same, citing the - arguably bad - decision of the Court of Appeal in Chocosuisse Union des Fabricants Suisses de Chocolat v Cadbury Ltd ( ETMR 1020).
Weighing up the positions of both parties, the court then assessed that the risks of injustice were greater for Fage if no interim injunction were granted than for Chobani if it were, and that it would be easier to calculate the damage suffered by Chobani if Fage failed at trial. In any event, any injustice could be mitigated by delaying the injunction for long enough to give Chobani time to relabel its products without disruption to sales and to ensure products were then advertised and promoted within the terms of the injunction.
With regard to Chobani's offer to amend its current packaging by merely including the words "made in the USA" (where the product was also labelled "Greek yoghurt"), the court stated that this would not be sufficient. If Fage succeeded in establishing that a specific attribute of Greek yoghurt was that products so labelled were made in Greece, that amendment would not have met the essence of Fage's case and would continue to inflict loss till trial.
The judge considered that it would be appropriate to grant the injunction, but to suspend it for five weeks, which would be long enough for Chobani to relabel, re-advertise and resupply its product. In the event, it was unnecessary for him to do so, upon Chobani giving appropriate undertakings. Its product is expected to appear on British shelves as ‘Greek strained yoghurt’ by December 1.
Jeremy Phillips, IP consultant to Olswang LLP, London
Copyright © Law Business ResearchCompany Number: 03281866 VAT: GB 160 7529 10