Chilean food tech unicorn NotCo can continue using the trademark ‘NotMilk’ on its plant-based milk, but can’t use ‘milk’ and related imagery anywhere else on its packaging, the Supreme Court has ruled.
A glass (of milk) half-full or half-empty?
You can view the Chilean Supreme Court’s decision either way, but it brings an end to a nearly five-year legal battle between the dairy industry and food tech firm NotCo.
Now better known as an AI-powered enabler for the food industry, NotCo originated in Santiago with a plant-based milk that promised to close the taste gap with dairy using ingredients like pea protein, coconut oil, and cabbage and pineapple concentrates.
But the company was sued by the Asociación Gremial de Productores de Leche de la Región de Los Ríos (Aproval), a trade group representing dairy producers, for using the word ‘milk’ and depicting a crossed-out cow on its packaging and marketing materials.
This week, the Supreme Court finally handed down a decision that will please both parties. It kept NotCo’s trademark for the ‘NotMilk’ brand completely intact, allowing it to continue using the term for its milk alternatives, and rejected Aproval’s request for an outright ban on the label.
At the same time, it instructed the company to modify its packaging and marketing materials to remove the word ‘milk’ and any distinctive imagery portraying the dairy industry, ruling that NotCo had “engaged in acts of unfair competition”.
NotCo co-founder and CEO Matias Muchnick struck a positive tone in his reaction. “The most important thing first: NotMilk is still called NotMilk. The brand remains intact. The product remains intact. That was what mattered most to us, and we achieved it,” he said in a LinkedIn post.
NotMilk’s marketing created associations with dairy, court ruled
The dispute began at the end of 2020, when Aproval took legal action against NotCo for unfair competition, claiming that the latter confused consumers and discredited cow’s milk while simultaneously capitalising on the legacy product’s reputation.
In 2023, a civil court in Valdivia ruled against NotCo, prohibiting the use of the NotMilk trademark in its entirety. But the food tech unicorn appealed against the verdict, and in 2024, the city’s appeals court sided with it, revoking the sentence and rejecting Aproval’s anti-competition claim.
Now, though, the Supreme Court has overturned the appeals court’s ruling, stating that the use of the word ‘Not’ and the crossing out of the cow image were insufficient in distinguishing NotCo’s alternative from cow’s milk.
The country’s highest court said the term ‘milk’ was the most prominent element on NotMilk’s Tetra Pak cartons, both due to the size, position and colour of the text, and the presence of the cow at the bottom reinforced the association with the dairy industry.
It also cited certain advertising phrases NotCo used on social media and other platforms to promote the milk alternative, including “it’s milk but not”, “it’s like milk, tastes like milk, and cooks like milk, but NOT, because it’s 100% plant-based”, and “we took the cow out of the milk”.
These, it said, sought to create a direct association with dairy. That is reinforced by the fact that the product was sold in the same aisle as milk in supermarkets, the court added, stating: “The Not Company has disseminated incorrect and inaccurate facts or assertions by referring to its product as ‘milk’.”
During one of his depositions, Muchnick reportedly described the product as a “dairy beverage”, before correcting himself to say “plant-based beverage”. The court used that as a legal argument to reinforce the risk of confusion, suggesting that if a NotCo representative can make that mistake, it’s “logical to assume that there is at least a risk” of the public being misled as well.
Big Dairy celebrates precedent as NotCo flags outdated arguments
The decision could set a dangerous precedent for the plant-based dairy industry in Chile – other companies that use milk-related messaging on non-dairy products could face similar legal challenges.
“This ruling sets an important precedent for any market player intending to follow in NotCo’s footsteps, urging them to act with more caution and not believe that in the name of supposed innovations, they can do or say anything against other market players,” said Aproval president Jaime Heinrich Commentz.
For NotCo, the verdict means there are “some elements of communications” it will have to adjust, which Muchnick said the company would do gladly.
“Five years have passed. The product has evolved. The brand has evolved,” he noted. “Several of the things that the ruling mentions, such as the cow crossed out on the packaging or the fact that supermarkets sold plant-based drinks in the dairy aisles, no longer exist, or are in the process of being eliminated. The rest, as they say, is ‘just getting things right’.”
He added: “So yes, we’re going to make a couple of changes that correspond, and while we’re at it, we’re going to do a couple more that we wanted to do anyway.”
The Chilean case is the latest in a long line of labelling battles for plant-based dairy across the world. Courts in the UK and Switzerland have recently sided with the dairy industry in such cases this year, and the EU has long prohibited the use of dairy-related terminology on plant-based products.
And in the US, a group of Congress members have floated a bill asking the Food and Drug Administration to ban the use of ‘milk’, ‘cheese’, ‘yoghurt’ and other such terms on non-dairy alternatives.
Green Queen has reached out to NotCo after hours for a comment on the story.
