The Swedish-based drinks manufacturer Oatly has been banned from using the word “milk” to market its plant-based products, after a ruling by the UK supreme court.

The alt-milk manufacturer has been in a long-running legal battle with the trade association Dairy UK after Oatly trademarked phrases associated with the dairy sector.

On Wednesday the supreme court unanimously ruled that Oatly can no longer trademark, or use, the slogan “Post Milk Generation”.

“It has taken the highest court in the land to decide once and for all whether a plant-based milk alternative can be branded as ‘milk’ and marketed as such,” said Laurie Bray, a senior associate and trademark attorney at the European intellectual property company Withers & Rogers. “And the outcome is not what Oatly was hoping for.”

Regulations state that certain terms can only be used to denote the actual products they describe, such as milk, wine and olive oil. Milk is defined as coming from the dairy sector and, more specifically, animals.

However, Oatly, which first filed a trademark application for the term “Post Milk Generation” with the UK’s Intellectual Property Office in 2019 – which was registered officially in 2021 – had argued that the use of the term ”milk” in a trademark did not breach regulations if it was not being used in a descriptive manner.

In 2023, after an objection from Dairy UK, the IPO ruled that the use of the word “milk” in this way was “deceptive”; Oatly successfully appealed against the ruling in December 2023, but that decision was then overturned by the court of appeal, prompting it to take the issue to the supreme court.

“This ruling is an important decision for the sector as it finally provides clarity on how dairy terms can – and cannot – be used in branding and marketing,” said the Dairy UK chief executive, Judith Bryans. “It brings greater certainty for businesses and helps ensure that long-established dairy terms continue to carry clear meaning for consumers, while allowing appropriate descriptors to be used where the law permits.”

The supreme court ruling has wider ramifications for producers of plant-based alternatives, and Oatly’s trademark registrations in other European countries could now be challenged by equivalent trade bodies to Dairy UK.

The same regulations apply to terms that are derived from other milk-based products such as cream, butter, cheese and yoghurt.

“For plant-based producers the safer course is to use clearly descriptive alternatives such as ‘oat drink’, or ‘plant-based drink’,” said Richard May, a partner at Osborne Clarke. “More broadly, the judgment signals that UK regulators and courts are likely to take a robust approach to so-called ‘category borrowing’ across regulated sectors. Businesses building brands around legally defined product names, whether in dairy or elsewhere, should expect careful scrutiny and plan their brand strategy accordingly.”

In 2021, Glebe Farm Foods, a Cambridgeshire-based company that specialises in producing gluten-free oats, won a trademark infringement battle brought by Oatly over its use of the brand name PureOaty.