Spilt Milk: UK Supreme Court Rejects Oatly’s Trade Mark

On 11 February 2026, the UK Supreme Court handed down its much-anticipated decision in Dairy UK Ltd v Oatly AB [2026] UKSC 4, providing important guidance on the use of dairy-related terms in the marketing of plant-based products. The Supreme Court dismissed Oatly’s appeal, confirming that its trade mark ‘POST MILK GENERATION’ is invalid for oat-based food and drink products, but remains valid for T-shirts.

Procedural Background

Oatly AB, a Swedish company known for its oat-based alternatives to dairy, registered the trade mark ‘POST MILK GENERATION’ in April 2021 for use in relation to oat-based food and drink (classes 29, 30, and 32) and T-shirts (class 25). Dairy UK Ltd, the trade association for the UK dairy industry, challenged the registration, arguing that it breached EU Regulation No. 1308/2013 (the “2013 Regulation”) (now assimilated into UK law), which regulates the use of dairy terms such as “milk” in relation to the marketing of agricultural products.

The Intellectual Property Office (IPO) initially found in favour of Dairy UK, invalidating the mark for food and drink but not for T-shirts (as they are not agricultural products covered by the 2013 Regulation). Oatly appealed the decision with respect to oat-based food and drink to the High Court, which reversed the decision, but the Court of Appeal subsequently reinstated the IPO’s original finding. Oatly then appealed the decision of the Court of Appeal to the Supreme Court.

There has been no cross-appeal by Dairy UK against the IPO’s decision to allow Oatly’s trade mark application for T-shirts.

Key Legal Issues

Oatly’s appeal to the Supreme Court concerned the proper interpretation of the 2013 Regulation. Point 5, in Part III of Annex VII of the 2013 Regulation provides that: “designations referred to in points 1, 2 and 3 [i.e. milk and products derived from milk, such as cheese and butter] may not be used for any product other than those referred to in that point”.

The Court of Appeal took the view that Oatly’s trade mark (as it applied to oat-based food and drink) is a designation of milk, which is prohibited under this section. Oatly contested this on the basis that the term “designation” relates to the name of the product and given that ‘POST MILK GENERATION’ was not being used to name the product, the mark does not fall foul of the 2013 Regulation.

Oatly also argued that, even if ‘POST MILK GENERATION’ constitutes a prohibited designation under Point 5 due to the mark including the word “milk”, that the mark is exempted under the same provision on the basis that ‘POST MILK GENERATION’ describes the characteristic quality of the milk-free goods applied for in classes 29, 30 and 32. Point 5 also provides that "[the] provision shall not apply to the designation of products the exact nature of which is clear from traditional usage and/or when the designations are clearly used to describe a characteristic quality of the product.”

The Supreme Court was, therefore, asked to consider two main issues:

1. Whether the use of “milk” in the trade mark ‘POST MILK GENERATION’ constituted a prohibited “designation” under the 2013 Regulation; and

2. Whether the trade mark could be saved, by an exception in the 2013 Regulation for designations: “clearly used to describe a characteristic quality of the product.”

The Supreme Court’s Decision

The Supreme Court unanimously dismissed Oatly’s appeal.

Interpretation of “Designation”

Oatly sought to argue that the term “designation” refers to the name of the product, with terms such as “milk”, “butter” and “cheese” being the names of types of product, whereas, ‘POST MILK GENERATION’ is not the name of the product to which the mark is applied. Rather, the products in this case are oat-based foods and drinks.

The Supreme Court dismissed this argument and held that the term “designation” in the Regulation is not limited to the name of a product. Instead, it encompasses any use of the term “milk” in relation to food or drink products, regardless of whether it is used as the product’s name.

Accordingly, the inclusion of the term “milk” means that ‘POST MILK GENERATION’ falls within the scope of Point 5 and so Oatly’s appeal failed on this ground.

Notably, the Supreme Court also, in obiter, addressed a question which was posed to the Court of Appeal but not answered, namely, whether the hypothetical trade mark MILK-FREE for oat milk would be prohibited under Point 5. The Supreme Court took the view that the term would constitute a “designation” under Point 5. However, they also considered that the term would be saved by the second limb of Point 5, as the term would be used, to describe the milk-free quality of the product.

Application of the Second Limb of Point 5

The Supreme Court also rejected Oatly’s argument that, even if the prohibition applied, the mark should be saved by the proviso allowing designations “clearly used to describe a characteristic quality of the product.” The Supreme Court found that ‘POST MILK GENERATION’ did not clearly describe a characteristic quality of the oat-based products (such as them being milk-free). Rather, the phrase was found to be describing the consumers targeted by the products to which the mark is affixed.

The Supreme Court also commented that, even if ‘POST MILK GENERATION’ could be regarded as referring to the milk-free characteristics of oat milk products, that the mark does not describe this characteristic “clearly”, as is required by Point 5 of the 2013 Regulation.

The Supreme Court observed that it was not clear whether the phrase ‘POST MILK GENERATION’ indicated that the products were entirely milk-free or merely contained a reduced amount of milk, drawing an analogy with the ambiguity between “alcohol-free” and “low alcohol” products. Additionally, the Supreme Court considered the fact that ‘POST MILK GENERATION’ was valid for T-shirts as evidence that the phrase is directed at identifying a type of consumer, as opposed to describing a characteristic quality of the product itself.

Implications for Brand Owners

This decision provides important clarity for brand owners in the food and beverage sector, particularly those marketing plant-based alternatives to dairy. The Supreme Court’s strict interpretation of “designation” means that any use of dairy-related terms in connection with non-dairy products is likely to be prohibited, unless it falls squarely within a recognised exception. The judgment also underscores that the exception at Point 5 of the 2013 Regulation for describing product characteristics will be interpreted strictly.

Conclusion

The Supreme Court’s decision reinforces the strict approach to the use of dairy terms for non-dairy products and highlights the importance of careful trade mark selection for plant-based brands. With the increasing demand for dairy alternatives and the rise of alternative milk brands to satisfy this need, it will be interesting to see whether the UK courts choose to diverge from the traditional EU-led approach in time.

You can also see by analogy that other terms regulated in the food or drink industry may also not be available to register as a trade mark on this basis, even if not misleading about the characteristic of the food or drink.

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