The High Court has unequivocally put to rest the question of whether a trade mark’s reputation is relevant when deciding if it has been infringed. On 15 March 2023 the High Court of Australia overturned the Full Federal Court’s decision in Allergan Australia Pty Ltd v Self Care IP Holdings Pty Ltd [2021] FCAFC 163, ruling that Self Care did not infringe the Trade Marks Act 1995 (Cth) (TM Act) and the Australian Consumer Law (ACL).

The High Court addressed two issues under section 120(1) of the TM Act, being:

1. Whether Self Care used “instant Botox® alternative” as a trade mark; and
2. Whether the use of PROTOX as a trade mark infringed the registered BOTOX mark.

It was also for the High Court to determine if the phrase “instant Botox® alternative” would convey to reasonable consumers in the target market that the effect of the treatment would last for a period of time equivalent to a Botox Injection, contravening sections 18(1) and 29(1)(a) and (g) of the ACL.

Trade Mark Infringement – “instant Botox® alternative”

The Full Federal Court on appeal held that the use of the phrase “instant Botox® alternative” constituted trade mark infringement on three grounds, namely:

1. that the wording “alternative” implied a choice of products and did not imply the source of products are different;
2. labelling the product as an “instant Botox® alternative” implied an association between the two products; and
3. the displaying of the phrase on the packaging supported the argument of a trade mark.

However, the High Court made it clear that the correct approach is to ask 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 (Allergan).

The High Court disagreed with the Full Court and found that “instant Botox® alternative” was not used “as a trade mark” as the words were inconsistent in size, font and layout and clearly appeared alongside two badges of origin, namely the umbrella brand of FREEZEFRAME and the product name of INHIBOX, dismissing the likelihood of the phrase being objectively understood to indicate an origin in itself.

While the High Court acknowledged a sign can be both descriptive and a badge of origin, this was not the case in this instance. Given this, the use of the phrase “instant Botox® alternative” did not constitute trade mark infringement.

Trade Mark Infringement – PROTOX

The Full Federal Court had found that that although consumers may not confuse BOTOX and PROTOX because of the words being sufficiently different, PROTOX was deceptively similar to BOTOX as there was a real risk of confusion as to whether the products came from the same source. The Full Federal Court relied on the reputation of BOTOX to conclude that a similar mark might be associated with Allergan as some potential customers may wonder whether BOTOX has expanded into topical cosmetic anti-wrinkle products.

The High Court has now clarified that the correct approach in assessing deceptive similarity is to compare the impression (allowing for imperfect recollection) that the notional buyer would have of the registered mark (as notionally used on all the goods covered by the registration) with the impression that the notional buyer would have of the alleged infringers mark (as actually used).

Further, the High Court has made it very clear that reputation should not be taken into account when assessing deceptive similarity under section 120(1) of the TM Act.

The High Court went on to find that whilst the reputation of BOTOX cannot be considered, it did note that the circumstances of the actual use of PROTOX are relevant to the test, as it may suggest PROTOX is a complementary product to BOTOX. However, as observed by the Primary Judge, it is the common experience of consumers that one trader’s product is used in marketing campaigns to enhance another trader’s product without any underlying affiliation.

It was held by the High Court that there was no “real, tangible danger of confusion” as the marks were sufficiently distinctive such that there was no such danger that the notional buyer would confuse the products or make them wonder whether the products came from the same source.

Given this, the use of “PROTOX” also did not constitute trade mark infringement.

Contraventions of the ACL

As noted above, Allergan appealed the decision made by the Federal Court that the phrase “instant Botox® alternative” constituted false, misleading and deceptive conduct contravening sections 18(1) and 29(1)(a) and (g) of the ACL as it was conveying to reasonable consumers in the target market that the effect of the product would last, after treatment, for a period equivalent to that which would be achieved with treatment by a Botox injection.

The High Court determined the Full Federal Court made numerous errors in describing the ordinary and reasonable consumers, in particular, that the consumer in the target market included consumers who considered that Inhibox and Botox have a common trade origin and would make the assumption of the connection between the product and the owner of the trade mark of BOTOX.

The High Court found that a reasonable consumer in the target market would not think a topically self-applied cream obtained from a pharmacy at a relatively low cost would have the same period of efficacy after treatment as an injectable anti-wrinkle treatment that is only available to be administered by healthcare professionals at a higher cost. Interestingly, the evidence suggests that the effectiveness of the Inhibox product as an anti-wrinkle alternative to BOTOX is supported (albeit for a shorter period of time).

Takeaways

This decision provides certainty for the appropriate test when determining a contravention of section 120(1) of the TM Act, but more significantly now clearly establishes that a trade mark’s reputation should not be taken into account when determining if a trade mark has been infringed under section 120(1). The decision also provides further guidance for businesses engaged in comparative advertising.

The High Court’s decision will impact the searching strategy and risk assessment for new brands and may prevent the future use of reputation as a weapon to ensure a finding of deceptive similarity. It may also assist well-known mark owners from being victimized by their own success when combating copycat brands.