Victory for NotCo: Court Upholds Appeal in Trademark Battle Against Dairy Union in Chile

The Not Company recently received some encouraging news. The Court of Appeals of Valdivia, Chile resolved to uphold their appeal against the first-instance ruling of the First Civil Court of that city, which had favored the unfair competition lawsuit filed by the Association of Milk Producers of the Los Ríos Region (Aproval).

In a unanimous decision, the appellate court concluded that “the evidence presented by the parties regarding the defendant’s advertising campaign does not in any way suggest that their product is milk, although it highlights particularities similar to cow’s milk. There is a significant effort to inform about the company’s origin and its products, differentiating them from those of animal origin. Therefore, it cannot be presumed that regular consumers of cow’s milk, who prefer a natural product, would opt for a beverage of vegetable origin, created through artificial intelligence, such as Not Milk.”

It added: “As pointed out by doctrine and reflected in jurisprudence, to analyze the hypothesis of confusion, attention must be paid to the group of people to whom the goods and services are directed; it will also be necessary for there to be a positive intentional element of confusing the clientele, with the requirement of the presence of intent being necessary to configure the type, in the demand that there is undue exploitation of another’s reputation, leading to error.”

“The jurisprudence has also expressed that the hypothesis of confusion would not be configured when there are generic elements or expressions used that are unappropriable; as is the case here, with the expression ‘milk,’ or with the figure of the crossed-out cow. These generic elements ‘milk,’ or the figure of the cow, are commonly used in the market in various contexts,” the ruling, accessed by Pulso, noted.

It all began on December 16, 2020, when Aproval filed a lawsuit for unfair competition accusing The Not Company SpA of leveraging the prestige of milk by confusing its product with it and, at the same time, discrediting it to divert clientele. On May 23, 2023, the 1st Civil Court of Valdivia accepted the lawsuit filed by Aproval against The Not Company.

In the lawsuit – sponsored by lawyer José Coz, partner at Coz & Blavi – the dairy guild argued that “the cornerstone of the defendant’s advertising strategy regarding the Not Milk product has been to try to piggyback on the fame of milk and then defame it as a product, alleging that it would be – comparatively – harmful to health and its production would be polluting.”

Originally, the ruling of the first-instance court had ordered that the “defendant must cease to perform acts constituting unfair competition, with a prohibition on performing them in the future.”

Additionally, it established three impediments. Firstly, the “cessation and prohibition of the use of any trademark, labeling, distinctive mark, or image, of any nature (both on the packaging and advertising material) containing the name Not Milk.”