High Court frowns on BOTOX’s competitor concerns
Earlier this year, the High Court made a rare foray into the vexed area of comparative marketing, finding that, on the facts presented to it, a claim that was 'too good to be true' was not capable of misleading a reasonable consumer. The High Court’s unanimous judgment in Self Care IP Holdings Pty Ltd & Anor v Allergan Australia Pty Ltd & Anor considered questions of trade mark infringement and breaches of the Australian Consumer Law (ACL). In declining to find that Allergen, a manufacturer of a competitive product to Botox, had breached the ACL, the High Court shed light on how courts should apply the knowledge of the hypothetical 'reasonable consumer' to the assessment of whether conduct was misleading.
The proceedings concerned a dispute between Allergan, the owner of ‘BOTOX’ trade mark registrations, and Self Care, who market a range of anti-wrinkle skincare products under the umbrella brand name 'Freezeframe'. The Freezeframe line of products includes:
- 'PROTOX', a skincare product advertised as an injection-free solution to 'prolong the look of Botox®'; and
- 'Inhibox', a skincare product advertised to be an 'instant Botox® alternative'.
While the High Court was asked to consider several questions, including two concerning the correct application of aspects of trade mark law, in this article, we will focus on the Court’s consideration of whether the claims made by Self Care on the packaging of its PROTOX and Inhibox products were false or misleading in contravention of the ACL. The High Court’s treatment of the trade mark issues is covered in our earlier article by Maddocks partner Ben Miller.
Principally, the High Court was asked by Allergen to determine whether the makers of Inhibox falsely represented on its packaging and website that its product had the same or similar long-term efficacy to Botox (Long-term Efficacy Representation). In doing so, the Court examined various claims on two different versions of Inhibox’s packaging and its website.
As pictured above, Innhibox packaging includes the phrases 'instant Botox alternative', 'freezeframe', 'with INHIBOX' and 'Clinically proven to ease wrinkle appearance in 5 minutes'. On the back of the packaging, Inhibox was described as “The world’s first Instant and Long Term Botox Alternative”. A further description on the back of the packaging described Inhibox as having an effect that “lasts for hours.” Since September 2016, the front of the Inhibox packaging prominently displayed the words 'freezeframe' and 'INHIBOX', as well as the phrase 'instant Botox.' Allergen argued that, in totality, the various packaging claims represented that Inhibox had the same long term effects as its injectable Botox product.
The High Court’s findings
In analysing the product packaging and assessing whether it not it was misleading or deceptive, the High Court assessed the following factors:
- What was the relevant ‘conduct’ ?
- Was the identified conduct was ‘in trade or commerce’?
- What meaning was conveyed by the relevant conduct?
- In light of that meaning, was the conduct misleading or deceptive or likely to mislead or deceive?
In this e-alert, we will focus on only the final two of the above four questions The 'conduct' examined by the Court was the production of Inhibox packaging and the publication of the website with the phrase 'instant Botox alternative'. Critical to this analysis was the fact that both parties accepted that Inhibox produced instant results that didn’t last longer than 4-8 hours, while Botox lasted up to 4 months. In assessing the 'conduct' as a whole, the High Court diverted from the usual practice adopted by courts when assessing misleading conduct, which commonly starts with the identification of the “representation” that arises out of the conduct and then an evaluation of whether or not it is misleading or deceptive.
What meaning was conveyed?
In order to assess the meaning that was conveyed, the High Court considered the meaning that would have been hypothetically attributed to the conduct by an ordinary, reasonable consumer having regard to the packaging, the circumstances in which the two products could be bought and consumers’ knowledge of the two products. As stated above, the High Court did not focus on the alleged representation, but rather considered the conduct more holistically.
In doing so, the High Court found that the relevant consumer would:
- know something about anti-ageing and anti-wrinkle treatments;
- know that Botox is an injectable anti-wrinkle treatment that is available to be administered by healthcare professionals while Inhibox is a topically self-applied cream, serum or lotion;
- know that Botox is likely to be more expensive than Self Care’s products because it is required to be professionally administered; and
- not have seen or experienced Inhibox and Botox being available in the same place.
In other words, the High Court held that the ordinary reasonable consumer was knowledgeable about Botox and relatively sophisticated in their ability to assess and compare Botox and Inhibox.
In evaluating Allergan’s conduct as a whole, the Court had regard to the surrounding circumstances and the immediate context of the conduct. This approach required the Court to assess:
- the packaging, which was a box with a clear plastic window through which could be seen a syringe-like applicator;
- various statements made on both the newer and older Inhibibox packaging such as:
- “instant Botox® alternative” on the front of the product;
- “Clinically proven to erase wrinkle appearance in 5 minutes” on the side of the product;
- the phrase “The world’s first Instant and Long Term Botox® Alternative” in bolded words and large font on the back of the product;
- a heading “Freeze wrinkles instantly” on the back of the product, under which Allergan sought to clarify some of the above claims by stating that:
“Why wait for weeks to look dramatically younger when you can wipe away the years this very minute! Freezeframe’s exclusive INHIBOX complex is clinically proven to wipe away visible expression wrinkles around the eyes and on the forehead within 5 minutes, so you get an immediate wrinkle freeze and eye lift that lasts for hours.”
- three further references to the effects of Inhibox being “long term” on the back of the product;
- a comparison of the circumstances in which the two products could be bought and used – specifically:
- Inhibox being an inexpensive (comparatively) topical ointment or cream that could be applied to the face by the consumer without medical assistance and could be purchased off-the-shelf from a pharmacy; and
- Botox being purchased from and injected by a medical practitioner and, therefore being more expensive and not being available as an over-the-counter purchase.
Given the relatively high degree of knowledge of the ordinary reasonable consumer, the circumstances in which the Allergan product could be bought and the effect of the clarifying statement on the back of the packaging, the Court found that the Longterm Efficacy Representation did not actually arise in the minds of the relevant consumer.
Was the conduct misleading?
In assessing the overall conduct, the High Court held that an ordinary consumer would not - despite some of the claims on the packaging - be misled into believing that the effects of Inhibox would last as long as those of Botox. The High Court wasn’t convinced that the references to 'long term' would cause a reasonable consumer with the requisite knowledge and in the relevant circumstances to believe that 'long term' meant an effect equal to a Botox injection. The Court held that the phrase 'long term' would be understood in the context of the statement that the effect of Inhibox 'lasts for hours' and having regard to the consistent use of the word 'instant' on the packaging. Interestingly, the Court reasoned that the fact that the effect of Inhibox was said to be instant made it less likely that the reasonable consumer would believe that those effects would last for as long as those of Botox. Put differently, the reasonable consumer would likely believe it to be “too good to be true” that the effects of Inhibox were both instant and as long-lasting as those of Botox.
What does this mean for your business?
Comparative advertising has always been a tricky business and more of an art than a science. This decision doesn’t really change that position, though it does potentially open up more expensive and established brands to more comparative advertising by competitors (particularly those who sell cheaper products) – even extending to more direct use of product names and the inference of similarities between those products that are 'too good be true'.
Before seeking to challenge a competitor for such conduct, businesses need to give careful consideration to:
- Their customer base and those of their competitors to try to understand their knowledge and experience (particularly, where the two groups overlap). How likely is that overlapping group of customers to believe the claims made by the owner of the cheaper product?
- The key features of their product, how it is purchased and applied and its cost when compared with that of the competitor. Are they substantially different and, if so, will that make the competitor’s claims more or less misleading?
One final matter that deserves comment, is the High Court’s unusual and more holistic approach to the assessment of alleged misleading and deceptive conduct. Potentially, the Court’s approach opens up new lines of argument for those defending such claims.
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