Fage UK Ltd v Chobani UK Ltd

CourtCourt of Appeal
Docket NumberCase No: A3/2013/0936
JudgeLord Justice Kitchin, Lord Justice Lewison, Lord Justice Longmore
Judgment Date28 Jan 2014
JurisdictionEngland & Wales
Neutral Citation[2014] EWCA Civ 5

[2014] EWCA Civ 5

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE HIGH COURT OF JUSTICE

CHANCERY DIVISION, INTELLECTUAL PROPERTY

MR JUSTICE BRIGGS

[2013] EWHC 630 (Ch)

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

Lord Justice Longmore

Lord Justice Lewison

and

Lord Justice Kitchin

Case No: A3/2013/0936

Between:
(1) Fage Uk Limited
(2) Fage Dairy Industry S.A.
Claimants/Respond-ents
and
(1) Chobani Uk Limited
(2) Chobani, Inc.
Defendants/Appellants

Geoffrey Hobbs QC, John Baldwin QC and James Tumbridge (instructed by Pillsbury Winthrop Shaw Pitman LLP) for the Appellants/Defendants

Daniel Alexander QC, Mark Hoskins QC and Joe Delaney (instructed by Winston & Strawn) for the Respondents/Claimants

Lord Justice Kitchin

Introduction

1

This is a passing off case concerning the use of the phrase "Greek yoghurt". The principal issue at trial was whether, by the beginning of September 2012, this phrase had, when used in the UK, come to denote a distinctive type of yoghurt made in Greece, so that its use to describe such yoghurt not made in Greece would amount to a misrepresentation and cause deception and damage and so amount to passing off.

2

The claimants, collectively "FAGE", have, since the mid 1980s, imported from Greece and sold throughout the UK yoghurt which they have described as Greek yoghurt and which they have marketed under their brand name TOTAL. FAGE's business has been very successful and sales of its yoghurt in 2012 accounted for more than 95% by value of all yoghurt sold in the UK as Greek yoghurt.

3

The defendants, collectively "Chobani", conduct a business which was established in 2005 in the USA by its Turkish owner. In September 2012 Chobani introduced into the UK yoghurt which it described as Greek yoghurt but which it had made in the USA. FAGE thereupon began these proceedings and sought an interim injunction which Briggs J granted in November 2012. Shortly afterwards, that injunction was replaced by undertakings to the court. At the same time, the judge directed a speedy trial of all issues other than quantum.

4

The action came on for trial in February 2013 and lasted for seven days. In his judgment given on 26 March 2013, Briggs J found that a substantial proportion of those persons in the UK who bought Greek yoghurt thought that it was made in Greece and further, that this mattered to them such that the use of the phrase Greek yoghurt to describe yoghurt not made in Greece involved a material misrepresentation. In the result, he found that FAGE's claim to restrain Chobani from passing off its American made yoghurt as and for yoghurt made in Greece by the use of the phrase Greek yoghurt succeeded, and he granted a permanent injunction to that effect.

5

Upon this appeal, Chobani contends that the phrase Greek yoghurt is a general term which is entirely apt to describe a very broad range of products including the yoghurt which it makes in the USA and wishes to sell in the UK. Moreover, it says that, against this background, FAGE wholly failed to prove that the phrase Greek yoghurt had become sufficiently distinctive of a defined category of goods so as to provide a proper foundation in law for a claim in passing off.

6

Chobani also seeks to raise and rely upon a new point which was not argued before Briggs J. It seeks to contend that, having regard to the provisions of Regulation (EU) 1151/2012 of 21 November 2012 concerning the protection of "designations of origin" and "geographical indications" for foodstuffs within the EU ("the 2012 Regulation"), and to the ruling of the Grand Chamber of the Court of Justice in Case C-478/07 Budejovicky Budvar NP v Rudolf Ammersin GmbH [2009] ECR I–7721, the court has no power to grant or is precluded from granting injunctive relief to protect geographical indications, such as Greek yoghurt, other than pursuant to and in conformity with the provisions of the 2012 Regulation or, in the alternative, may only do so subject to the fulfilment of conditions and in circumstances which are equivalent to those prescribed by the 2012 Regulation. Accordingly and on either basis, no relief should have been granted, the claim should have been dismissed and the appeal should be allowed.

Background

7

The essential background facts relevant to this appeal are not in dispute and the following account is drawn in large part and with gratitude from the judgment of Briggs J.

8

Yoghurt is a form of fermented milk and has been made for around 15,000 years. The scale of its production and use in western Europe substantially increased during the twentieth century with the introduction of pasteurisation of milk and increased interest in the potential health benefits of fermented milk products. For many years yoghurt has been sold in various forms such as plain or sweetened or mixed with various fruit flavourings, and in various textures such as normal, concentrated or diluted and with varying levels of fat.

9

From about 1976, an inter-governmental body called the Codex Alimentarius Commission began developing standards for yoghurt, leading in 2003 to the Codex Standard which, according to Mr Hickey, Chobani's expert on the history and characteristics of yoghurts, identified four main classes of fermented milk products:

i) plain yoghurt, which may be set, stirred or fluid;

ii) concentrated yoghurt, with an increased protein content where the concentration is achieved by ultra-filtration, separation or straining, or by the addition of thickening agents;

iii) flavoured yoghurt where the flavourings (including sugars, fruit, cereals, nuts, honey and chocolate) may be mixed or layered with the yoghurt, or separated from the yoghurt in twin-pots; and

iv) drinks based on fermented milks (including yoghurt).

10

Concentrated yoghurt within the second class was described in these proceedings as being "thick and creamy" by comparison with other yoghurt. As the judge explained, it 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 in the fermented milk was able to pass but the solid elements were not. However, the use of cloth bags has now largely given way to modern industrial processes using techniques such as ultra-filtration and separation by centrifuge. Nevertheless, they are all still referred to as straining.

11

Greece has a particular tradition in yoghurt making. Originally that yoghurt was made mostly from milk derived from ewes and goats. Since the 1940s however, increased demand and a preference for lower fat food products has led to an increase in the production of yoghurt made from cows' milk, and increasingly from cows' milk which has been imported into Greece.

12

Yoghurt made in Greece has always had a characteristically thick and creamy texture. Yoghurt made from ewes' and goats' milk did not require concentration to give it a sufficiently thick texture, but in the case of yoghurt made from cows' milk, this texture was traditionally achieved by straining using cloth bags. As a result it is and has always been sold in Greece under the Greek language equivalent of the description "strained yoghurt". More recently, the yoghurt made in Greece from cows' milk has been strained by means such as centrifugation or ultra-filtration, but it is still described in that country as being "strained". Importantly, it is not described in Greece as Greek yoghurt.

13

FAGE began producing yoghurt in Greece in the late 1920s and it has always had a thick and creamy texture which, so far as it has been made from cows' milk, has been achieved by straining, albeit by more modern industrial methods than straining through bags. FAGE first introduced its yoghurt into the UK market in 1983. As I have mentioned, it has always been described as Greek yoghurt and sold under the TOTAL brand, and it has always been made in Greece.

14

Prior to September 2012, FAGE had three main competitors in the UK market for yoghurt described as Greek yoghurt. The supermarket chains Tesco and Asda each offered an own-label Greek yoghurt. The third, a company called Kolios, sold a product described as Greek yoghurt through the warehouse chain CostCo. The judge was satisfied that all the yoghurt sold in the UK as Greek yoghurt, both by FAGE and its three significant competitors, had been made in Greece, and that its thick and creamy texture had been achieved by straining rather than by the addition of thickening agents. Indeed from the mid 1980s until September 2012, there was a labelling convention in the UK whereby the only yoghurt offered for sale here under the description Greek yoghurt had been made in Greece and rendered thick and creamy by straining.

15

Most of the major yoghurt manufacturers for the UK market have also sold a thick and creamy yoghurt which they have described as Greek style yoghurt. None of this yoghurt has been manufactured in Greece and its thick and creamy texture has generally been brought about by the use of thickening agents rather than straining. As a result, the defining features of Greek style yoghurt sold in the UK are that it is thick and creamy and not made in Greece. Rather strikingly, both Tesco and Asda sell an own label Greek style yoghurt in addition to their own label Greek yoghurt. It is also of note that Greek style yoghurts retail at a substantially cheaper price than Greek yoghurts. In short, Greek yoghurt sells at a premium price.

16

The labelling...

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