Extended Passing Off - FAGE UK v Chobani
The High Court has allowed a claim for extended passing off brought by FAGE UK Limited and another (FAGE), the makers of "Total Greek Yoghurt", against Chobani UK Ltd and another (Chobani), the manufactures of yoghurt which is produced in the US, but sold in the UK as Greek yoghurt.
FAGE claimed that only yoghurt manufactured in Greece could refer to itself as Greek yoghurt, whereas Chobani argued that Greek yoghurt is defined by a specific manufacturing process, and not by reference to its place of origin.
The yoghurt of FAGE and that of Chobani were both described as being "thick and creamy" in comparison with ordinary yoghurt, and were thickened by a process known as 'straining', rather than by the use of thickening agents. FAGE claimed that an industry labelling convention in the UK meant that thick and creamy yoghurt should only be labelled as "Greek yoghurt" if it both came from Greece and was thickened by straining. It argued that in the UK, the phrase "Greek yoghurt" had come to have significant reputation and goodwill as meaning a distinctive type of yoghurt made in Greece, so that the use of the same phrase to describe yoghurt not made in Greece would involve a damaging misrepresentation sufficient to support a claim in passing off.
Chobani argued that a description of "Greek yoghurt" denoted no distinctive class in the mind of the yoghurt buying public and that alternatively, Greek yoghurt defined a type of yoghurt by reference to its mode of manufacture. Further, Chobani argued 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 signified no special prestige or other feature leading to reputation or goodwill of the type protected by the law of passing off.
The judge held that a substantial proportion of those who purchased Greek yoghurt in the UK had it in mind that it was made in Greece, and that was what mattered to them, even if that group of consumers constituted only a modest proportion of yoghurt eaters as a whole. The established labelling convention with respect to Greece being the place of manufacture was relevant to consumers, and has been uniformly observed by yoghurt producers in the UK market for over 25 years.
The court held that FAGE had succeeded in demonstrating that substantial goodwill had become attached to the use of the term "Greek yoghurt", which created "pulling power", rather than merely denoting a geographical origin to which buyers are indifferent.
As a significant amount of goodwill had been shown to be attached to the phrase "Greek yoghurt" then it followed that the use of the term "Greek yoghurt" to describe yoghurt not made in Greece involved a material misrepresentation. The fact that Chobani had used very small print on the rear of their yoghurt pots to designate that it was manufactured in the US was not sufficient to enlighten the consumer that it was in fact not made in Greece.
In relation to damage, the judge held that the introduction to the market of Chobani's yoghurt would obviously be detrimental to the distinctiveness of the phrase "Greek yoghurt", because once a consumer had discovered that the Chobani yoghurt had in fact been made in the US, no one reading the phrase Greek yoghurt on yoghurt pots in the future would be able to safely assume, without checking the small print, that the product had been made in Greece.
Consequently, FAGE was awarded a permanent injunction restraining Chobani from passing off its US made yoghurt in the UK under the name "Greek yoghurt".
Chobani has appealed the decision.
This case further clarifies the law of extended passing off, and outlines the protection that will be awarded to traders who rely on an industry labelling convention to protect the goodwill in their trade names. It is interesting that when establishing that the name or phrase distinguishes a particular class of goods, what matters is what the relevant section of the public has in their minds, rather than what is in the mind of the whole, or even a majority of the public, for a claim to passing off to be made out.