Sometimes we get caught up in lives of companies. We root for them one minute and boo them the next, as if they were real live people. It’s a sensible reaction to scorn a company for egregious things like polluting, discriminating or shameless worker exploitation. For their day to day business decisions or when they’re doing the bare minimum for decency, not so much. The recent Oatly vs “family owned” PureOaty trademark infringement case is getting people upset. What’s the deal here? Should we be angry at Oatly? Does PureOaty deserve sympathy because it’s a small business? Are small businesses special in some way? And what does blueberry pie have anything to do with this? Find out in this brief journey into what it means to run a company in a capitalist world. Please note, this piece is a simplified explainer meant to be widely accessible.
What’s a public company?
Oatly went public (NASDAQ: OTLY) on 20 May 2021. That means the shares of Oatly went from being owned by private individuals (including other companies) to being bought and sold by the public – you and me – on a stock market. Oatly is now owned by public shareholders instead of private shareholders and referred to as a publicly traded company or, simply, a public company. Because of this public ownership there are loads of new regulations Oatly must follow and in many ways a public company has more duties towards its shareholders than they had before.
What are some implications for Oatly?
Oatly will need to pay close attention to anything which might hurt it and their shareholders. How do you hurt a shareholder? Basically, anything that might lower the share prices as a result of Oatly not properly carrying out its business. Should the shareholders believe something Oatly did or didn’t do negatively and significantly affected the share price, then the shareholders might sue Oatly and maybe even its directors.
Properly carrying out its business includes safeguarding Oatly’s intellectual property. Oatly’s name, branding, logos, slogans and that sort of thing would be part of their intellectual property (“IP”). Generally, IP wouldn’t normally include a recipe. If Oatly didn’t look after its IP, people might buy other similar products. That’s the argument, anyway. If people go elsewhere for their oat milk, Oatly’s share price might drop as a result of losing market share, sales and so on. If Oatly didn’t secure its IP, whether from large or small businesses, the shareholders might allege Oatly and maybe even its directors were negligent in discharging their duties by not doing what the system is set up to encourage and even demand of all companies. And, incidentally, not defending one’s IP risks the owner losing or weakening their rights over it, which would be another bit of negligence a shareholder action could allege.
So what’s this mean in practice?
Is it fair or nice? It’s neither. This is reality and the rules we’ve accepted in our capitalist world. Imagine the following: You don’t like blueberry pie. You bake a blueberry pie. And then you’re upset because you’ve got a pie you don’t like. Being upset about the blueberry pie is a bit of a wasted effort, but might lead you to look at what other pies you might want to bake and how things could be different. Using that emotion to lead us to thinking about broader issues is certainly worthwhile. Meanwhile though, you’ve got to deal with the blueberry pie.
What about Pure Oaty?
Up to now, we’ve talked about Oatly, but what about PureOaty (made by Glebe Farm)? They’re a private company and apparently “family owned”. There’s no doubt they received a cease and desist letter from Oatly asking them to change their branding. That would’ve been standard practice. They chose not to change their branding, which is their prerogative. Why might they have done that? Perhaps they believe they will win, or they might be using this moment strategically in hopes Oatly will buy out their gluten free production facility, which Oatly doesn’t have. Or maybe they see this as beneficial in some way because they’re getting loads of free publicity.* I hadn’t heard of PureOaty before. Had you? I’ve no idea what the ultimate outcome of this action will be or how PureOaty will be affected, whether good or bad.
Some thoughts about small businesses
I have one more thing for you to think about. Why do we fetishise or idolise small businesses? Are they always better? If so, why or how? Do they always pay better, treat their workers better or are generally more ethical than large companies? Sometimes, sure. Much regulation doesn’t apply to small businesses, while it will always apply to larger ones. Often small businesses can get away with doing less or being less fair not because they’re inherently bad, but because, again, that’s how we’ve baked the pie.
I don’t know anything about PureOaty and I like shopping from a small business where I might know the people. So it suits me from an aesthetic or personal reason. And I always hope they’re doing the right thing by their employees, suppliers and the environment around them. Ultimately, though, all businesses are vehicles for people to make a living within the construct of the world we’ve built. What we must always continue to question is whether what we’ve built is the right thing or do we want a different kind of pie?
*Update 16 July, from Glebe Farm’s LinkedIn… some publicity, which is clever and funny. Will it be worth it? Will it create sustained increased sales now and after this issue is resolved? Or might it be an own goal and used by Oatly as further evidence of Oaty’s imitating Oatly. After all, Oatly is renown for their cheeky marketing campaigns and barbs printed on their cartons.