Fage Uk Ltd and Another v Chobani Uk Ltd and Another

JurisdictionEngland & Wales
CourtChancery Division
JudgeMr Justice Briggs
Judgment Date26 Mar 2013
Neutral Citation[2013] EWHC 630 (Ch)
Docket NumberCase No: HC12C03788

[2013] EWHC 630 (Ch)

IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

Mr Justice Briggs

Case No: HC12C03788

Between:
(1) Fage Uk Limited
(2) Fage Dairy Industry S.A.
Claimants
and
(1) Chobani Uk Limited
(2) Chobani Inc
Defendants

Mr Daniel Alexander QC and Mr Joe Delaney (instructed by Winston & Strawn) for the Claimants

Mr John Baldwin QC and Mr James Tumbridge (instructed by Gowlings (UK) LLP) for the Defendants

Hearing dates: 19, 20, 21, 22, 25, 26, 27 February 2013

Approved Judgment

I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.

Mr Justice Briggs

Introduction

1

This is an extended passing-off case about yoghurt. The main issue is whether, by the beginning of September 2012, the phrase "Greek yoghurt" had, when used in the UK marketplace, come to have attached to it a sufficient reputation and goodwill as denoting a distinctive type of yoghurt made in Greece, so that the use of the same phrase to describe yoghurt not made in Greece, however otherwise similar, would involve a damaging misrepresentation sufficient to support a claim in passing-off.

2

The claimants FAGE UK Limited and FAGE Dairy Industry S.A. are respectively the UK distributor and Greek manufacturer of yoghurt sold in the UK under the claimants' brand name Total, using the phrase Greek yoghurt on their labelling as part of their description of their product. By September 2012 they had been doing so continuously since the mid 1980s and were for most of that period the dominant suppliers of yoghurt described as Greek yoghurt to the UK market. Sales of the claimants' yoghurt amounted in 2012 to more than 95% by value of all yoghurt sold in the UK as Greek yoghurt.

3

The second defendant Chobani Inc. (known until January 2012 as Agro-Farma Inc) was established in 2005 in the USA by a Turkish owner and quickly gained a substantial market share in the manufacture in the USA of yoghurt sold there as Greek yoghurt. In 2012 the second defendant decided to bring the same product, manufactured in the USA, to the UK market and for that purpose formed or acquired the first defendant Chobani UK Limited as its UK distributor. It commenced selling and promoting its yoghurt as Greek yoghurt in the UK in September 2012, until restrained from doing so by an interim injunction which I granted on the claimants' application at the beginning of November, shortly thereafter replaced by undertakings to the court, which took effect on 1 December 2012 after a short period designed to enable the defendants to adjust their labelling. At the same time, and by consent, I directed a speedy trial of all issues other than quantum. I shall refer to the claimants and the defendants respectively as FAGE and Chobani, since no issue arises from their having used wholly owned subsidiaries for the purposes of distributing their products to retailers in the UK.

4

It is common ground that both FAGE's and Chobani's yoghurt is of the general type which may loosely be described as "thick and creamy", by comparison with other yoghurt, to which I will refer without intending to be pejorative as ordinary yoghurt.

5

At its simplest, yoghurt is a form of fermented milk, usually (now) from cows. It may be sold on its own, usually called "plain", mixed or layered with fruit, honey, nuts or other products, or in twin-pots where the yoghurt and the flavouring are kept separate. Thick and creamy yoghurt is derived from ordinary yoghurt by two main processes. The first, generally called straining, involves the separation and removal of the watery whey. The second involves the use of thickening agents, such as concentrated or dried milk products. Traditionally, straining was achieved by the use of cloth bags through which the fluid but not the solid elements in the fermented milk were able to pass. More modern industrial processes include ultra-filtration and separation by centrifuge. They are perhaps less appropriately described as straining than is the cloth bag method. Nonetheless, like Chobani's expert Mr Michael Hickey, I shall refer to all yoghurt made thick and creamy by the extraction of fluid as strained.

6

Virtually all the yoghurt sold to the public in the UK (and all the examples shown to me by samples or as portrayed in documents) is packaged in plastic pots. It is not seriously in dispute that, with one modest exception, all yoghurt sold to the public in the UK during the 25 years or so before September 2012 with descriptions including "Greek yoghurt" in the labels on the pots was strained yoghurt made in Greece. As I shall describe in due course, this appears to have come about by way of an unwritten industry-wide labelling convention. It is not suggested that this is anything other than a UK convention. FAGE sells its yoghurt in Greece under labels which (when translated) do not describe it as Greek yoghurt. Both FAGE and Chobani sell as Greek yoghurt in the USA product which they make in the USA, rather than in Greece.

7

Much larger quantities of thick and creamy yoghurt are sold in the UK as "Greek style yoghurt". None of it originates from Greece, and its thick and creamy texture is usually achieved by the use of thickening agents rather than by straining.

8

The central factual issue between the parties is whether the labelling convention which I have described, pursuant to which thick and creamy yoghurt was labelled Greek yoghurt only if it both came from Greece and was thickened by straining, was reflected in any similar consistent understanding on the part of the yoghurt eating public, or of a sufficient proportion of it. FAGE's case was that buyers of thick and creamy yoghurt generally believed that Greek yoghurt came from Greece and that (without necessarily being aware of the method) it was made in a way which gave it a distinctive thick and creamy texture. Further, FAGE claimed that it mattered to buyers of Greek yoghurt that it was made in Greece. By contrast Chobani's primary case was that the description Greek yoghurt denoted no clearly identified distinctive class in the minds of the yoghurt buying public. Alternatively they submitted that, consistent with their marketing objectives in the USA, Greek yoghurt defined a type of yoghurt by reference to its mode of manufacture (i.e. straining) but not by reference to its place of origin. In the further alternative, Chobani's case was that, even if a significant proportion of the yoghurt buying public in the UK believed that Greek yoghurt came from Greece, this was not a matter of any significance to them, and denoted no specific cachet or other feature capable of giving rise to reputation or goodwill of the type protected by the law of passing-off.

9

During a seven day trial (exclusive of judicial pre-reading time) the parties deployed very substantial forensic effort and ingenuity in seeking to persuade the court to their rival views about the meaning and significance (if any) of the labelling of thick and creamy yoghurt in the UK as Greek yoghurt, in the minds of the yoghurt eating public. By contrast the parties were largely ad idem as to the applicable law, established as it has been by a series of decisions, beginning with cases about Champagne and ending with one about Vodka. The legal point in issue concerns the identification of the requisite section and proportion of the public which, as consumers of the product in question, must be shown to have a common understanding of the meaning or reputation alleged to be attributable to the phrase or other get up sought to be protected, for the purpose of establishing the existence of proprietary goodwill warranting protection from damage caused or threatened by misrepresentation.

10

Before leaving this introduction I must briefly mention Chobani's counterclaim. On 14 September 2012, shortly after Chobani's launch of its product in the UK market, solicitors instructed by FAGE wrote to the Trading Standards Team of the London Borough of Camden asserting breaches by Chobani of applicable EU regulations. The letter included the allegedly false statements that Chobani's product was not marked with a requisite identification of its place of manufacture, and that Chobani had failed to make clear that it could not confirm that its yoghurt was free from artificially introduced bovine growth hormone. These falsehoods were alleged to have been stated recklessly and therefore maliciously, and in a manner calculated to cause Chobani pecuniary damage, in particular because FAGE's letter requested Camden Trading Standards to order the removal of Chobani's product from retail sale pending investigation of FAGE's allegations.

11

FAGE's defence to this counterclaim may be summarised as follows:

i) The untruth of the statement that there was no sufficient indication of place of manufacture is admitted, but the statement was said to have been the result of an honest and reasonable mistake, since corrected.

ii) The statement about bovine growth hormone is alleged to have been true.

iii) Malice and pecuniary damage or other loss is denied, in relation to both statements.

The Evidence

12

The court was provided with a wealth of samples, both of yoghurt pots and photographs of pots showing how Greek and Greek style yoghurt is labelled in the UK. Pictorial evidence also showed how yoghurt is presented for sale, both physically on supermarket shelves and electronically, in on-line catalogues. That material provided a reasonable picture of the way in which, by September 2012, both types of yoghurt were presented to the public for sale, although there were no reliable statistics about the prevalence (if any) of any particular mode of presentation.

13

The parties' disclosure provided a wealth of...

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