Sale of US-made 'Greek yoghurt' held to constitute extended passing off
In Fage UK Ltd v Chobani UK Ltd ( EWCA Civ 5), the Court of Appeal has heard an appeal in a passing-off case about the use of the term 'Greek' to describe yoghurt which was not made in Greece. The court upheld the first instance decision prohibiting this use. It also considered the inter-relationship between domestic law as applied to goodwill in geographical names and Regulation 1151/2012 on geographical indications.
Having reviewed the facts and the authorities, the court held as follows:
- Geographical names can be protected in an action for passing off if they have acquired secondary meaning and so have become distinctive of the goods of one or more traders. So-called 'extended passing off' (applying to goodwill of a class of traders) is no different in principle from conventional passing off. A member of that class of traders is entitled to protect himself against erosion of that distinctiveness.
- Passing off has at its heart the three requirements of goodwill, misrepresentation and damage.
- The claimant must establish a likelihood of confusion among a substantial number of persons. There is no higher standard in an extended passing-off case - that is, no need to show that all members of the relevant public understand 'Greek' in the same way.
- The class of traders entitled to protection must be capable of being defined with reasonable precision (but not necessarily defined by law or regulation). The larger the class, the harder it may be to show that the term has come to define goods having particular characteristics, as opposed to being a generic descriptor.
Chobani challenged whether the word 'Greek' lacked the "necessary singularity" or was too "multi-valent" for extended passing off. It claimed that the word did not adequately define a class of products nor a class of traders who could use it.
These arguments failed. It was not fatal that the specification for 'Greek' yoghurt was not defined by law or regulation and, on the facts, the class of traders entitled to use it could be identified with reasonable precision. It was also not fatal that not all potential customers understood the term in the same way, so long as a significant section of the public understand it (in the case of a geographical description) as defining specific product characteristics rather than merely the geographic description. In this case, the parties appeared to be in agreement that 'Greek yoghurt' was understood to mean a yoghurt of a creamy and thick texture achieved by straining (or, possibly, by addition of thickeners). The dispute was around whether it also had to have been made in Greece. The finding that there was a practice of describing similar yoghurt not made in Greece as 'Greek Style' and that 'Greek' yoghurt attracted a higher price than 'Greek style' showed that British consumers perceived Greek origin for that type of yoghurt as adding value and not as merely descriptive.
Chobani attempted to raise a new argument that the test for the level of consumer deception risk was the "average consumer" test of European trademark law. The court did not allow this new argument at the appeal stage. However, Kitchin LJ noted that future passing-off actions may need to consider whether the approach taken to date is consistent with the average consumer test in European trademark law.
Chobani also sought leave to run a second new argument that the finding against them resulted from an impermissible application of a parallel system of protection under national laws. It argued that Regulation 1151/2002 has created a uniform and exhaustive system for the protection of protected designations of origin and protected geographical indications.
In Warsteiner (Case C-312/98), the Court of Justice of the European Union had confirmed that the code established by the regulation and its predecessors was exhaustive so as to preclude application of national laws to products within the scope of that regulation, but that it was only exhaustive as to things falling within its scope. The court had held that the regulation does not preclude legislation prohibiting potentially misleading use of the geographic indications of source where there is no link between the characteristics of the product and its geographic provenance. The purpose of the regulation was to ensure uniform protection within the Community of geographic designations within its scope, and it did not preclude national law protecting geographic designations which do not meet the requirements for protection under the regulation.
On the facts, 'Greek yoghurt' was a term with secondary meaning used in the United Kingdom, but did not have the same meaning in Greece. The procedures under the regulation would require that the application commence with the applicable national authorities, which in this case would be the Greek authorities. Absent local secondary meaning, the term was out of scope of the regulation. It would be strange to allow protection across the European Union under the regulation to a denomination not used in the country of origin. There was therefore no conflict with the system under the regulation.
Accordingly, even if the court were to allow this new ground of appeal to be introduced under doctrines allowing new arguments concerning the court's jurisdiction, it would fail.
This is not the first case exploring the boundaries of the exhaustive scope of the regulation, as compared with other forms of protection. This will get even more interesting if and when an EU certification mark is introduced, as has been proposed. Meanwhile, Chobani has publicly stated it is intending to seek permission to appeal to the Supreme Court.
Vanessa Marsland and Catherine Cotter, Clifford Chance LLP, London
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