High Court accepts claim to restrain Chobani from passing off its American-made yoghurt as 'Greek yoghurt'

By Mark Lubbock

In FAGE & Ors v Chobani,¹ the High Court 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 yogurt believed that it was made in Greece.

Totally Greek?

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 (FAGE) of yoghurt sold in the UK 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 (Chobani).

The dispute arose when Chobani launched its Greek yoghurt range in the UK in September 2012. It marketed its range using, inter alia, the following label:

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 per cent by value of all Greek Yogurt sold in the UK). 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.

Passing off

As set out in the well-known statement by Lord Diplock in Erven Warnink bv v J Townend & Sons Ltd [1979] AC 731, at 742 D-E, (the "Advocaat" case), and confirmed by Lord Oliver in Reckitt & Colman Products Ltd v Borden Inc [1990] RPC 341, (the "Jif" lemon case) 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 are that there is:

• goodwill acquired by the Claimant associated with a name or "get-up" under which his goods/services are sold to the market;
• a misrepresentation by the Defendant to customers as to origin of his goods/services; and
• damage suffered (or likely to be suffered) by the Claimant resulting from this misrepresentation.

Chobani's counterclaim

Chobani 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 they had breached various EU regulations by failing to mark its products with the requisite identification of origin of manufacture and failure to make it clear that it could not confirm that its yoghurt did not contain artificially introduced growth hormones.

High Court decision

The High Court concluded on the wide variety of evidence before it that suppliers of yoghurt to the English 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" yogurt 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 (i.e. that made in Greece) commands a premium price compared to "Greek-style yoghurt" in the UK irrespective of the actual brand name (e.g. TOTAL) of the product. Indeed the evidence showed it was for this reason that the defendants chose to describe its product as "Greek yogurt" as opposed to "Greek style yogurt" 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". 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.

The Court rejected Chobani's counterclaim on the basis that any falsehood in FAGE's accusations was not malicious, and at worst, negligent.

Market perception

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. Chobani have indicated they will appeal the decision.

Please click on the links below for the other articles in the August 2013 Technology & IP newsletter

• M&S's use of Google AdWords infringes Interflora's trade mark
• FRAND determination stay agreed for IPCom v Nokia trial
• EU Commission intervenes in patent wars: the end of injunctive relief for infringement of "essential" patents?
• IP Bill to reform design rights and bring in Unified Patent Court
• Whose right is it anyway? Copyright reforms introduced by the Enterprise and Regulatory Reform Act 2013
• New Commission Regulation seeks to speed up broadband roll out
• Media convergence in the internet age

_Notes:

_{^1. FAGE UK Limited & Ors v Chobani UK Limited & Ors [2013] EWHC 630 (Ch).}