On 15 March 2023, the High Court delivered a unanimous judgment in Self Care IP Holdings Pty Ltd & Anor v Allergan Australia Pty Ltd & Anor [2023] HCA 8, a decision that will be welcomed by businesses seeking to engage in comparative advertising.

The High Court allowed an appeal from the Full Federal Court on questions of trade mark infringement and breach of the Australian Consumer Law (ACL) and, in doing so, put to rest the contentious question of whether a trade mark’s reputation is relevant when deciding if it has been infringed.

Background

The proceedings concerned a dispute between Allergan, the owner of BOTOX trade mark registrations, and Self Care, who marketed 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'.

Under s 120(1) of the Trade Marks Act, “[a] person infringes a registered trade mark if the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to goods or services in respect of which the trade mark is registered”.

As summarised in our previous article, 'About face on appeal in PROTOX v BOTOX dispute?', the Full Court overturned the primary judge’s decision that there was no contravention of the ACL and no trade infringement under s 120(1).

The Full Court held that the trade mark PROTOX was deceptively similar to BOTOX because even though consumers might not mistake PROTOX for BOTOX, consumers might be confused as to the source of the products.

Further, the Full Court disagreed with the primary judge that Self Care’s use of the mark in referencing a “Botox® alternative” was descriptive and so not “use as a trade mark”. Even though the word “alternative” implied the two products were different, the phrase did not necessarily imply that the trade source was different. The Full Court held that the phrase was being used by Self Care to denote a trade source connection with Allergan’s products.

The High Court's decision

The questions on appeal to the High Court were:

1. Did Self Care use the phrase 'instant Botox® alternative' as a trade mark and if so, was it deceptively similar to the BOTOX mark?
2. When Self Care used PROTOX as a mark (which was not in dispute), was it deceptively similar to the BOTOX mark?
3. Did Self Care engage in misleading or deceptive conduct or make false or misleading representations in contravention of ss 18(1) and 29(1)(a) and (g) of the ACL?

This update focuses on the first two questions.

Was the phrase 'instant Botox® alternative' used by Self Care as a trade mark?

The High Court highlighted that the correct approach in addressing this question is “to ask whether the sign used indicates origin of goods in the user of the sign”.^[1]

The High Court said that the Full Court had made the 'not uncommon'^[2] mistake of asking whether Self Care had used a sign as a trade mark to indicate a connection between its goods and the owner of the registered mark, namely Allergan.

On the facts of the case, the High Court held that the phrase 'instant Botox® alternative' was not used to indicate the origin of goods in Self Care for reasons including that:

• the phrase was used in inconsistent sizes and fonts and in varying arrangements of the words,
• the phrase appeared alongside two clear badges of origin, FREEZEFRAME and INHIBOX, and
• FREEZEFRAME and INHIBOX were both distinctive and stylised signs.

The High Court noted that while a sign can be both descriptive and serve as a badge of origin, that was not the case here. The High Court concluded that there was no infringement of the BOTOX mark by Self Care’s use of the phrase 'instant Botox® alternative'.

Was PROTOX deceptively similar to BOTOX?

In its summary of the legal principles relevant to this question, the High Court noted that deceptive similarity is, at its heart, a matter of the notional buyer’s imperfect recollection of the mark as registered. The correct approach is, therefore, to:

[c]ompare the impression (allowing for imperfect recollection) that the notional buyer would have of the registered mark (as notionally used on all of the goods covered by the registration), with the impression that the notional buyer would have of the alleged infringer’s mark (as actually used).^[3]

The High Court also clarified that reputation should not be taken into account when assessing deceptive similarity under s 120(1), in light of “the structure and purpose of, and the fundamental principles underpinning, the [Trade Marks] Act”.^[4] The High Court gave a number of reasons for this:

• Inspection of the Register should enable a person to assess the likelihood of infringement.
• Assessing reputation is a complex exercise and would distract from what is otherwise a straightforward test for infringement.
• Reputation is expressly referred to elsewhere in the Act as a relevant consideration in other contexts, reflecting the balance struck between various commercial and public interests.

The High Court went on to find that the Full Court had made the following errors in deciding whether PROTOX was deceptively similar to BOTOX:

• The Full Court relied on the reputation of BOTOX to conclude that PROTOX might be associated with Allergan because some customers “would wonder whether those behind BOTOX had decided to expand into topical cosmetic anti-wrinkle products.”^[5]
• Relatedly, the Full Court assessed the actual use of BOTOX, rather than the notional use of BOTOX on the goods covered by the registration.

In undertaking the correct comparison for deceptive similarity, the High Court found that there was no “real, tangible danger” of confusion or deception.^[6] Their Honours pointed to the following factors:

• The words PROTOX and BOTOX are sufficiently different that the notional buyer would not confuse the marks or the products they denote, even allowing for an imperfect recollection of BOTOX.
• Consumers are used to seeing one trader’s product used to enhance another trader’s product without there being any suggestion of affiliation.
• The PROTOX mark was almost always used in proximity to the FREEZEFRAME mark.
• There was no evidence of actual confusion.

Conclusions

The High Court’s judgment is particularly significant in that it effectively overrules a number of Federal Court authorities on the relevance of reputation in assessing trade mark infringement. There is now an even clearer distinction between actions for trade mark infringement on the one hand and actions for passing off or breach of s 18 of the ACL on the other, which require the trade mark owner to establish reputation and/or goodwill.

Context remains key when it comes to comparative advertising. Businesses should ensure that any references to the marks of others are varied in appearance and clearly distinguished from actual badges of origin.