The short answer is that lamb of the Shetland Breed can be marketed as Shetland Lamb.
Here is the official word from Defra’s Food Policy Unit: -
“Under the provisions of the legislation for protecting food names, it is not possible for producers to reserve exclusive use of a breed name for themselves. Therefore other producers of lamb from the Shetland breed are able to use the name ‘Shetland Lamb’ where that meat derives from the Shetland breed. If labelling of lamb of the breed ‘Shetland’ not produced on the Shetland Isles is clear about provenance then there is no breach of the protection granted to Shetland Lamb by virtue of its PDO status as the production area of the lamb is clearly identified.”
Since this was written the regulations have been amended, and require all protected food name products to be labelled with the appropriate symbol beside the product name. In the case of Shetland Lamb it is the red and yellow “Protected Designation of Origin” logo
Policed by Trading Standards Officers, The EU Regulations protect a group of more than 40 products from,
• False or misleading indication as to the provenance
• Exploitation of the reputation
• Direct misuse of the name
• Indirect misuse of the name
• Any other practice liable to mislead the consumer!
I interpret this to mean that there must be no suggestion of association with Shetland terrior and the area of production should be unequivocal on my labelling and in my advertising. For my lamb produced in East Lothian, I use the trading name Briggs’ Lamb & Mutton and I state "Produce of East Lothian" next to and in bolder type than “Shetland lamb” on my label.
What I may not do is use the PDO logo on lamb labelling and advertising unless it was born, raised and slaughtered in Shetland.