Deceptive Similarity And Trade Mark Use – A Broad View Established

In the recent decision of Allergan Australia Pty Ltd v Self Care IP Holdings Pty Ltd the Full Court of the Federal Court clarified the law on deceptive similarity, confirming that trade mark infringement can occur even when the infringing mark bears no meaningful similarity to that of the trade marked brand in question. The Court also took a broad view of what constitutes trade mark use, resulting in a string of successful findings for Allergan, Australia’s official Botox sponsor.

Background

Botox is a widely known injectable drug, used in cosmetic surgery to reduce the appearance of facial wrinkles, and also in some therapeutic settings. In Australia, Botox is manufactured and sold by Allergan. Allergan’s “Botox” trade marks are registered for a range of “anti-ageing” and “anti-wrinkle” treatments.

In 2014, cosmetic company “Self Care” launched “Freezeframe”, a range of skincare products that claimed to reduce the appearance of wrinkles. One product in this line was “Protox”, which was marketed as a skin treatment that could be used to “prolong the look of Botox®”, without the use of injections. Another product in the Freezeframe line was “Inhibox”, which was characterised as an “instant Botox® alternative”.

While these products, along with a range of others, were initially sold by Self Care under its trade mark “Freezeframe”, later, following Allergan’s claim, Self Care obtained registration of the trade mark “Freezeframe Protox”.

Allergan commenced proceedings against Self Care, alleging infringement of its Botox trade mark, due to Self Care’s use of both “Protox” and “instant Botox® alternative” – (the phrase used to describe Inhibox).

At first instance, the judge found in Self Care’s favour, holding that “Protox” was not deceptively similar to “Botox”, and that the phrase “instant Botox® alternative” was merely descriptive, rather than deceptively similar. He further found that the word “alternative” in the phrase “instant Botox® alternative”, effectively functioned to distinguish the Inhibox product from the Botox product.

The Full Court’s Decision

On appeal, the Full Court agreed with many of the primary judge’s factual findings, however, ultimately reached a different conclusion, applying a broader interpretation to the concept of deceptive similarity under Section 120 of the Trade Marks Act.

Protox, Botox, and deceptive similarity

In the initial hearing, the primary judge held that “Protox” was not deceptively similar to “Botox” on the basis that consumers would not confuse the two brands, or mistake the goods of one as the goods of the other.

The Full Court agreed that the products themselves were not likely to be confused by the consumer. However, the Court nevertheless disagreed on deceptive similarity, and ultimately held that “Protox” was in effect deceptively similar to “Botox”, not withstanding that the goods were not likely to be mistaken by the consumer. In doing so, the Court clarified that the meaning of “deception” under the Act does not simply relate to whether or not consumers would mistake certain products for others. Rather, it is focused on whether a consumer could assume that the products may have come from the same source. In this case, the court found that it was conceivable that even a savvy consumer could presume that Protox was simply a non-injectable “alternative” addition to the Botox range. It was on this basis that the court held that the trade mark was in fact deceptively similar to Allergan’s Botox trade mark under Section 120 of the Trade Marks Act.

Use of “Instant Botox® alternative” as a trade mark

Under the Trade Marks Act, using a registered trade mark does not in itself necessarily constitute an infringement. What is necessary to establish that an infringement has occurred, is that it be used “as a trade mark”. While the primary judge held that the phrase “Instant Botox® alternative” was in fact descriptive, and that the products were further distinguished by use of the word “alternative”, the Full Court did not agree. Instead, the Full Court found that while use of the word “alternative” demonstrated that the product itself was different and distinguishable from the Botox product, it did not make clear that the products in reality originated from different sources, which is a crucial point in a finding of deceptive similarity.

Further, while the Court agreed that the words “instant” and “alternative” are descriptive in themselves, it concluded that the entire phrase “instant Botox® alternative”, is not. Rather, the Court found that as a whole phrase, it in fact indicated some connection with Botox as a trade source. The Court maintained that this remained the case even though Safe Care had identified Allergan as the owner of Botox on the Inhibox product packaging. The Court found that this too was not enough to make clear the distinct trade source of Inhibox, and instead found that it could in reality lead consumers to conclude that Self Care actually had a licensing or other similar commercial relationship with Allergan.

Consumer law

The Allergan case is significant for a number of reasons, not only because it clarifies the scope of trade use and deceptive similarity under the Act. It also touches a number of issues in separate, but related legal territory.

In addition to the trade mark infringement claim, Allergan also argued that the phrase “instant Botox® alternative” effectively suggested to consumers that Inhibox would deliver results of the same quality as Botox. In addition to the trade mark infringement claim, Allergan argued that this constituted misleading or deceptive conduct under Australian Consumer Law (ACL).

The Court also agreed on this point, finding that the phrase may lead consumers to believe that using Inhibox would result both in a comparable reduction in the appearance of lines and wrinkles, and also that the results would remain for a similar period. Real world studies by Safe Care on the effectiveness of Inhibox actually found that wrinkles would only be reduced over the 28 day application period, while the studies were silent on whether the effects outlasted this period. By contrast, Botox consumers were understood by the Court to know that the results of Botox are effective for four months following treatment.

As such, the Court held that this phrase contravened the ACL.

Other issues, exceptions and defences

While the Trade Marks Act includes an express exception to infringement for “comparative advertising” in Section 122(1)(d), the Court in this case made clear that the scope of this exception can be read extremely narrowly. In Allergan the Court rejected the comparable advertising defence for both technical and substantive reasons. In particular, the Court made a distinction between comparative advertising and using a particular phrase (in this case, “instant Botox® alternative”) in order “to leverage off the reputation of BOTOX, not to advertise Inhibox comparatively”. The earlier finding in relation to potential consumer confusion around trade source influenced this conclusion.

For this reason, it is important for businesses proceed to with caution and awareness if they seek to market their goods or services in relation to those of a competitor. Key in avoiding liability in these circumstances is ensuring that the reality of distinct trade sources is made sufficiently obvious. Because each case will turn on its particular context and facts, simply marketing a product as an “alternative” to another product may, in many cases, not be sufficient to distinguish the trade source of the competitor product. Further, in determining whether or not an exception to the infringement applies, the Court may examine whether or not the conduct in question was carried out in “good faith”.

Another key point arising out of the case is that a defensive mark will not always successfully protect against an infringement claim. In this case, Self Care registered “Freezeframe Protox”, and claimed it as a defense. However, the Court found that the product packaging itself failed to use the mark as a whole. Instead, the words appeared separately on different surfaces, which invalidated the potential protection flowing from defensive registration of the mark.

Implications

The Court’s findings in relation to trade mark use are considered contentious by some, and the possibility remains that Safe Care could appeal to the High Court, if special leave is granted (which is far from guaranteed). Whichever way it proceeds, however, it is clear that businesses must be extremely aware and risk averse when marketing their goods by reference to other existing products. Context and the full range of facts in each case will decide whether a phrase is descriptive, as opposed a conflation of trade sources, or if the mark is capable of being construed as comparative advertising, rather than infringing trade mark use.