On May 11, 2026, the Fourth Chamber of the Supreme Court issued a replacement judgment in Docket No. 4,843-2024 ("APROVAL v. The Not Company SpA"), after quashing on its own motion the ruling of the Valdivia Court of Appeals. The Court declared that NotCo incurred in acts of unfair competition under article 4, letter b), of Law No. 20,169, ordered it to cease the use of the word "milk" and of any labeling, distinctive sign, drawing, or image typical of the dairy industry on the packaging and advertising of NotMilk, and referred the records to the National Economic Prosecutor's Office. The registered trademark NOT MILK is preserved. The visual and communicational ecosystem with which it was sold is not.
What happened
APROVAL —the trade association that brings together the milk producers of Los Ríos— sued The Not Company SpA in a summary proceeding on December 16, 2020, denouncing unfair competition for the way NotCo marketed its plant-based drink: a white tetra-pak-type package with the word "milk" as the dominant element, the silhouette of a crossed-out cow, placement in supermarkets within the dairy aisle, and advertising campaigns with phrases such as "it's milk, but not," "We took the cow out of milk," and "It's like milk, tastes like milk, and cooks like milk, but NOT."
The First Civil Court of Valdivia upheld the claim on May 26, 2023. The Valdivia Court of Appeals rejected the cassation appeal on form filed by NotCo, reversed the first-instance judgment on January 16, 2024, and dismissed the claim. APROVAL filed cassation appeals on form and on the merits before the Supreme Court.
The Fourth Chamber issued two resolutions on May 11, 2026. First, the cassation on its own motion: it invalidated the Valdivia ruling for a formal defect of article 768 No. 5 of the Code of Civil Procedure in relation to article 170 No. 4, for lack of reasoning. The Court reproached that the appellate judgment generically discarded the evidence —alluding to "graphic elements" or to a "folio 76" with ten documents without specifying which— and omitted analyzing decisive evidence incorporated in the second instance, among them Health Resolution No. 22131832, of February 2, 2022, by which the Metropolitan SEREMI of Health sanctioned NotCo with 60 UF for repeated advertising that misled consumers. Second, the replacement judgment: it resolved the merits without a new hearing of the case.
In the replacement judgment, the Court flatly distinguished the two hypotheses invoked by the plaintiff. It rejected article 4, letter a) —undue exploitation of another's reputation with inducement to confusion—: it reasoned that milk, as a primary good, is not associated with a registered name or distinctive sign that would allow attributing to it a business origin upon which to build commercial recognition. Without an identifiable industrial reputation, there is no exploitation sanctionable under that letter. It upheld, instead, article 4, letter b): inducement to error about the nature, components, and characteristics of the product. The holding of the case operates, then, on the figure of the act of deception, not the act of confusion. The distinction matters: the rule that emerges does not protect the dairy industry for its "fame," but rather the consumer against the risk of being mistaken about what they are buying.
The central arguments of the conviction rest on five supports. First, the visual composition of the package: the word "milk" as the dominant element by size, position, and color, on a white background that covers all sides, with the silhouette of a cow at the bottom. Second, the advertising discourse: phrases such as "it's milk, but not," "It's like milk, tastes like milk, and cooks like milk, but NOT," and "We took the cow out of milk" seek, according to the Court, to generate a direct association with cow's milk. Third, the channel: marketing in the same shelves and aisles as liquid milk in physical supermarkets and online platforms reinforces the association. Fourth, the evidence provided by the defendant itself: the CADEM report submitted by NotCo found that 65% of respondents answered that NotMilk "is milk without specifying" and 19% that it is "milk of plant origin." Fifth, the statements of NotCo's legal representative in the examination of positions on May 31, 2022: when answering two questions he spontaneously catalogued his own product as a "dairy drink" before correcting himself to "plant-based drink." The Court reasons by an a fortiori argument: if the defendant company's own representative incurs in a lapsus linguae like that, all the more reason there is a risk of inducement to error in the average consumer regarding the nature, provenance, and components of the drink.
To that evidentiary picture the Court added the regulatory connection. The Sanitary Code reserves the name "milk" to products of animal origin and prohibits labeling plant-based products as such (arts. 105 bis and 105 ter). Law No. 19,496 sanctions advertising that misleads about relevant characteristics of the good (art. 28, letter c). And the prior sanitary sanction —60 UF imposed by the Metropolitan SEREMI in February 2022 for repeated advertising that misled— functioned as hard proof of the risk, in addition to evidence that the Valdivia ruling had discarded without analysis.
Regarding the trademark, the reasoning runs in parallel and saves it for a precise reason. The Court recognized the registration of mixed trademark No. 1327133 in favor of NotCo, applied for on March 12, 2020 and granted on August 20 of the same year, for "drink based on plant ingredients" in class 32. And it recognized the exclusive and excluding right to use it in economic traffic (art. 19 bis D, Law No. 19,039). But it specified that this right must be exercised respecting the framework that regulates competitive activity, including Law No. 20,169.
The registration is not annulled. The operative part of the ruling does not touch the trademark: it orders ceasing and prohibiting the use of the word "milk" and of any labeling, distinctive sign, drawing, or image typical of the dairy industry, whether on the packaging or in the advertising material. From the joint reading of Recital Eight and the operative part, a distinction emerges that the Court does not formulate in those words but that structures the result: what is reproached is not the registered trademark itself, but the operational whole with which it was used —the word "milk" as the dominant element of the package, the crossed-out cow, placement in the dairy shelf, advertising claims of equivalence with milk—. That reading of the ruling leaves a clean operative rule: a validly registered sign can be used in a way that constitutes unfair competition without that affecting the subsistence of the registration.
What it may mean for your company
If your company markets plant-based products that replace foods of animal origin —plant-based drinks, analogue cheeses, egg-free mayonnaises, plant-based burgers, dairy-free ice creams— the ruling redefines the perimeter of what you can do with the trademark and the labeling.
Having a registered trademark is not a sufficient shield. The trademark subsists as a registration, but its use in the market must be adjusted so as not to constitute unfair competition. The Court was explicit: the industrial-property right (art. 19 bis D of Law No. 19,039) is exercised within the framework that regulates competitive activity, including Law No. 20,169. A legitimately granted trademark can equally be used in a way that constitutes unfair competition. The examination does not end with the registration; it continues in the packaging, the shelf, and the campaign.
The operative rule that emerges: if the product is plant-based, the entire visual and communicational environment must move it away —not toward— the animal category it replaces. The word "milk" (or its equivalent in another language when it is the dominant element of the package) is out. The icons of the animal industry —cow, udder, milking, grass, milk pail— also, even crossed out, inverted, or stylized. Advertising that affirms that the product "is milk," "tastes the same as milk," or "is milk but" enters the red zone. Placement in a shelf shared with the animal product reinforces the risk and is part of the evidentiary picture.
There is another angle. The Court connected Law No. 20,169 with two regulatory bodies that were already on the table but rarely cited together: articles 105 bis and 105 ter of the Sanitary Code, which reserve the name "milk" to products of animal origin and prohibit labeling plant-based products as such; and article 28, letter c), of Law No. 19,496, which sanctions advertising that misleads about relevant characteristics of the good. The practical consequence: the same marketing strategy can generate simultaneous exposure before the SEREMI of Health, before SERNAC, and before a competitor through the Unfair Competition Law. And in this case, the prior sanitary sanction of 60 UF functioned as decisive proof of the risk of inducement to error.
An important gray area: the Court did not prohibit the category of plant-based drinks nor the use of the prefix "Not." What it disqualified is the whole —a name with "milk" dominant + cow + dairy shelf + claims of equivalence with milk— operating as a unit. The more different the package is from a milk package, the further the point of sale from the dairy aisle, the less comparative the claim, the lower the risk.
Would your packaging and campaigns withstand the same whole-picture examination that the Court applied to NotMilk? A preventive review of labeling, advertising, and point of sale costs a fraction of what it costs to defend an industry-association lawsuit. Coordinate that review here.
What you can do
If you market or are about to launch a plant-based substitute for a product of animal origin, three concrete actions:
- Audit the packaging and graphic trademark of your products. Identify every element that evokes the substituted animal category: the category word (milk, cheese, butter, meat, egg) in the original language or translation, the animal icon (even crossed out), references to milking or rearing, the color palette associated with the category. Document each one with its justification of use or replace it.
- Review the communicational and advertising strategy of the last 24 months. List phrases, social-media posts, and paid pieces that affirm that the product "is," "tastes the same as," or "replaces" the animal product with language of equivalence. Replace them with statements that affirm the plant-based product's own identity without direct comparison.
- Coordinate with your distribution channels the physical and digital placement of the product. Formally ask supermarkets and e-commerce platforms to place the plant-based drinks in a section different from that of dairy products, and keep a written record of the request. The shared shelf was one of the proven facts in this case; documenting your instruction to the retailer helps defend your position if tomorrow a trade association sues you.
If any of these points raises questions about your plant-based portfolio, a 30-minute diagnostic session is enough to size up your labeling and advertising gaps. Schedule here.
If your company markets plant-based substitutes for animal products and you need to assess the risk of unfair competition in your labeling, advertising, or shelf strategy in light of this ruling, schedule a diagnostic meeting with our team.
This content is informational and does not constitute legal advice.