In brief

Advertisements comparing a product with a competitive product have been brought before the courts a number of times over the last year, but it seems businesses continue to favour comparative advertising to communicate a strong, simple message – “our product is better than theirs”. However, a recent case, involving AFT Pharmaceuticals (AFTP) and Reckitt Benckiser (Reckitt), highlights why strong and simple is often problematic, particularly in pharmaceuticals. Courts will require adequate scientific foundation for comparative claims.

Background

Reckitt markets and sells Nuromol while AFTP markets and sells Maxigesic – both widely available pain relief products with the same active pharmaceutical ingredients. Each of the companies’ respective advertising campaigns featuring its product contained a number of claims comparing the product to that of its rival, including that one was more effective than the other. Reckitt brought proceedings against AFTP alleging that its claims about Maxigesic amounted to misleading and deceptive conduct. AFTP subsequently cross-claimed on similar grounds against Reckitt but in relation to its competing Nuromol product.

Both parties alleged that the other breached the Australian Consumer Law (ACL) in claiming its product was superior to the other without an adequate scientific foundation. A more detailed recount of the arguments alleged by Reckitt and AFTP in their respective claims at first instance can be found here in our previous update.

The Federal Court at first instance

The Federal Court held that AFTP breached the ACL in two respects:

• AFTP made misleading representations as to the quality, strength and effectiveness of the pain relief offered by its product when the evidence did not substantiate these claims.
• When considering the manner in which AFTP made the relevant representations, such as the use of charts, percentages and footnotes, it impliedly represented that the statements were ‘in the realm of science’, which the Court found was not the case.

Similarly, the Court found that Reckitt had also made misleading representations that Nuromol provided superior pain relief to Maxigesic when it did not have an adequate scientific foundation for those claims. Consequently, both AFTP and Reckitt were held by the trial judge to have breached the ACL for having engaged in misleading conduct.

Basis for the appeal

On appeal, AFTP contended that the trial judge erred in finding that there was an inadequate scientific basis for its claims that Maxigesic provides stronger and more effective pain relief than Nuromol when taken at the maximum dose.

AFTP contended that when assessing the expert evidence, it was clear that many of the reports had differing stances, some being more favourable to AFTP than others. As such, AFTP alleged that the scientific evidence upon which the trial judge relied merely raised the possibility that the representations were false. AFTP argued that the trial judge should, therefore, have found that the scientific evidence provided adequate scientific foundation for its representations.

AFTP also contended that the trial judge misapplied the onus of proof on the basis that Reckitt could not discharge its onus providing evidence that merely raised a possibility of falsity.

The Full Court’s findings

The Full Court upheld the findings of the trial judge that although there were studies that were favourable to AFTP’s position, other studies did not support them. Since the scientific position was not entirely clear, the trial judge had correctly considered the evidence collectively and cumulatively to hold that there was no adequate scientific basis for AFTP’s representations, which were described by the Full Court to have carried with them an "unqualified and definitive statement of scientific fact".^[1]

On the question of the onus of proof, the Full Court held that it was sufficient for Reckitt to prove that the science was inconclusive because AFTP had published a "simplistic statement as to comparative efficacy, which carried with it an unqualified and definitive statement of scientific fact". In short, AFTP framed its claims about Maxigesic in a such a strong, unqualified way that it conveyed that its efficacy claims were supported by the science. While Reckitt could have succeeded by establishing that the science conclusively disproved the claim, all it had to do was show that the science was inconclusive – which the Court accepted was the case.

Key lessons

When considering a comparative advertising campaign, tread very carefully. If claims of superior efficacy are put forward as supported by data (such as charts, percentages, or footnoted research articles), courts will require a higher level of scientific support. While a party challenging such claims (usually the sponsor of the competitive product) still bears the onus of proving the claims false, it need only prove that the science is unsettled in order to establish that the claims are misleading and deceptive.

This article was published in Edition 1 of The Prescription.