High Court restrains Chobani from passing off US-made yoghurt as 'Greek yoghurt'
In FAGE UK Limited v Chobani UK Limited ( EWHC 630 (Ch), March 26 2013), the High Court of England and Wales has accepted claims of 'extended' passing off in connection to the use of the phrase 'Greek yoghurt'.
The court decided that the defendants had misrepresented the origin of its yoghurt to consumers who believed that the label 'Greek yoghurt' meant that products had been made in Greece. The court accepted evidence from a variety of sources (including a flawed survey carried out by the defendants) that the majority of consumers of Greek yoghurt believed that it was made in Greece.
The case related to 'extended' passing off – one where the goodwill in question resides in a class of producers or in products sharing a common name or get up. The claimants were the UK distributor and the Greek manufacturer (collectively FAGE) of yoghurt sold in the United Kingdom under the brand name Total, using the phrase 'Greek yoghurt' on their labelling as part of their description of the product. The defendants were group members of a US-based yoghurt manufacturer (collectively Chobani).
The dispute arose when Chobani launched its Greek yoghurt range in the United Kingdom in September 2012. It marketed its range using a label containing the words 'Greek yoghurt'.
FAGE claimed that its use of the phrase 'Greek yoghurt' had attracted to it sufficient goodwill and reputation to denote a distinctive type of yoghurt made in Greece (the evidence showed that FAGE was responsible for more than 95% by value of all Greek Yoghurt sold in the United Kingdom). Chobani argued that the use of the phrase 'Greek yoghurt' was not attributable to the country of manufacture, but to the style of the product or to the method of its manufacture. Following an application from FAGE in November 2012, an interim injunction was granted against Chobani.
The matter then proceeded to a full trial before the High Court, which was heard in February 2013 before Mr Justice Briggs.
As set out in the well-known statement by Lord Diplock in Erven Warnink bv v J Townend & Sons Ltd ( AC 731 at 742 D-E (the Advocaat case)), and confirmed by Lord Oliver in Reckitt & Colman Products Ltd v Borden Inc ( RPC 341 at 406), there are three elements which a claimant needs to prove in order to found a passing-off action (including the 'extended' version of passing off). There must be:
- goodwill acquired by the claimant associated with a name or get-up under which its goods/services are sold to the market;
- a misrepresentation by the defendant to customers as to origin of its goods/services; and
- damage suffered (or likely to be suffered) by the claimant resulting from this misrepresentation.
The defendants counterclaimed on the basis of the tort of trade libel as a result of a letter sent by FAGE to the Trading Standards Team of the London Borough of Camden. This letter claimed that the defendants had breached various EU regulations by failing to mark its products with the requisite identification of origin of manufacture, and failing to make it clear that it could not confirm that its yoghurt did not contain artificially introduced growth hormones.
The High Court concluded on the wide variety of evidence before it that suppliers of yoghurt to the UK market had adopted a labelling convention dating over 25 years limiting the description of 'Greek yoghurt' only to yoghurt made in Greece - as opposed to 'Greek style' yoghurt, which could be made anywhere. It therefore decided that this was sufficient to indicate that a probable majority of buyers ascribe to Greek yoghurt the same meaning. Of particular significance to the High Court was the evidence showing that Greek yoghurt (ie, that made in Greece) commands a premium price compared to 'Greek-style' yoghurt in the United Kingdom irrespective of the actual brand name (eg, TOTAL) of the product. Indeed, the evidence showed that it was for this reason that the defendants chose to describe its product as 'Greek yoghurt', as opposed to 'Greek style yoghurt', which it had been advised to do by its UK market researchers. The High Court therefore ruled that FAGE had succeeded in demonstrating that substantial goodwill had become attached to the use of the phrase 'Greek yoghurt'.
As for misrepresentation, the High Court decided that, in the light of the goodwill attached to the phrase 'Greek yoghurt', the use of the phrase involves a material misrepresentation as to the place of manufacture. It ruled that the print used on the rear of Chobani's pots to indicate its US place of manufacture was not sufficient to change the view of the majority of the yoghurt-eating public who believed that 'Greek yoghurt' has been manufactured in Greece. It was immaterial that the method of manufacture was the same method used in Greece (see also the Chocosuisse case ( RPC 117 at 128)).
In relation to damage, the High Court ruled that the case constitutes an example of an erosion of the distinctiveness of a trade name sought to be protected. It decided that, once a consumer discovers that Greek yoghurt can in fact be manufactured in the United States, the label of Greek yoghurt cannot be assumed to constitute a manufacture of the yoghurt in Greece.
The High Court rejected the defendant's counterclaim on the basis that any falsehood in the claimant's accusations was not malicious, and at worst, negligent.
The ruling is the latest of the relatively rare cases involving extended passing off. Whilst it does not depart from the earlier decisions, starting with the Advocaat case, it does show the crucial part that evidence of market perception plays in such cases and the difficulty of getting survey evidence right. The defendants have indicated they will appeal the decision.
Mark Lubbock, Ashurst LLP, London
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