Allergan Australia Pty Ltd v Self Care IP Holdings Pty Ltd  FCAFC 163 (7 September 2021)
Successful appeal by Allergan against a judgement by the primary judge, Stewart J rejecting its claim for trade mark infringement and many of its claims under the Australian Consumer Law.
Allergan’s Botox product relaxes the muscles at the site of injection. It has a therapeutic effect in the sense of having a physiological or pharmacological action and is used for various medicinal therapeutic indications. It has also been used in Australia since April 2002 for cosmetic indications following approval by the Therapeutic Goods Administration (TGA) and needs to be administered by authorised health professionals.
There are Australian trademark registrations for BOTOX in classes 3 and 5, as well as a Defensive Registration covering various classes including class 3 goods.
The primary judge accepted the BOTOX mark has a strong and widespread reputation, but this reputation was in the context of an injectable anti-wrinkle product administered by healthcare professionals. His Honour also accepted that the general understanding of the use of the word “botox” is not necessarily as a reference to Allergan’s product which is branded BOTOX, but is also understood in a generic sense as referring to an anti-wrinkle injection which could be Allergan’s product or one of the other botulinum toxin products on the market.
Self Care has, since July 2009, marketed various anti-wrinkle skincare products in cream or lotion form under the ‘freezeframe’ brand which is used as a house brand in conjunction with various other sub-brands.
The PROTOX product has been marketed since October 2014 and the packaging is reproduced below:
On 20 October 2014, Self Care applied to register the trade mark ‘freezeframe PROTOX’ for anti-ageing serum and anti-wrinkle serum in class 3. That application was accepted and Allergan was unsuccessful in its opposition before the Registrar and before the primary judge.
Allergan was unsuccessful in its claim for infringement of its registered BOTOX mark and largely unsuccessful in its claims under the Australian Consumer Law and passing off. It was also unsuccessful in preventing registration of Self Care’s ‘freezeframe PROTOX’ trade mark. Self Care was successful in its cross claim for removal of Allergan’s class 3 registration for BOTOX on the ground of non-use, but unsuccessful in its cross claim seeking cancellation of Allergan’s Defensive Registration for the BOTOX mark insofar as it covered class 3 goods.
Allergan alleged Self Care infringed its BOTOX registered marks by use of PROTOX as well as by use of various composite phrases containing Botox including “instant Botox alternative”, “overnight Botox alternative” and “long term Botox alternative”.
Stewart J concluded that the use of PROTOX was use as a trade mark but did not constitute infringement because PROTOX was not deceptively similar to BOTOX. Also, the composite phrases were not being used as trade marks and did not infringe. Further, the use of the word Botox in these phrases was not use of this word itself as a trade mark.
The associated marketing materials included use of language making reference to Botox. The lead message was initially that the product prolonged the effect of Botox, but that message was subsequently changed to Protox being an alternative to Botox.
Self Care has, since July 2009, also marketed an INHIBIBOX skincare product with similar packaging including the ‘freezeframe’ house brand with language referring to it as an alternative to Botox. It also marketed various other products with language referring to them as alternatives to Botox.
Unsurprisingly, Stewart J concluded that PROTOX was being used as a trade mark. His Honour noted “The fact that FREEZEFRAME is the umbrella brand and that PROTOX denotes a product within the Freezeframe range does not detract from the use of PROTOX as a trade mark in respect of the Protox product.”
Stewart J considered that PROTOX was not deceptively similar to BOTOX. An important factor was the ubiquitous reputation of BOTOX which necessarily impacted a consumer’s recollection of it. His Honour noted: “First, there is not likely to be an imperfect recollection of the mark and, second, even if there is, such a consumer is not on seeing or hearing PROTOX likely to mistake it for BOTOX; they are more likely to be reminded of BOTOX.” Further, the manner of use of the PROTOX mark was unlikely to deceive or cause confusion, particularly as “the PROTOX mark is almost always used in proximity to the FREEZEFRAME mark which identifies a range of products that include marks having no similarity at all with the BOTOX mark.”
Further, to the extent Allergan relied on infringement under s120 (2) arising from use of the PROTOX mark for different goods to its registered goods, Stewart J commented, by way of obiter, that the manner of use of PROTOX by Self Care is not likely to deceive or cause confusion. This was “usually in circumstances where it is distinguished from the BOTOX mark because both marks are mentioned and the goods are distinguished by one being described as an alternative to the other, and the PROTOX mark is usually used in combination with or in proximity to the FREEZEFRAME mark.”
Since deceptive similarity was not established, it was not strictly necessary for Stewart J to consider whether Self Care’s skincare products were the same or similar to the BOTOX registered goods. Nonetheless, his Honour did express the view that these products were the same or of the same description as those covered by the BOTOX registrations in class 3. However, they were not of the same description as those covered by the BOTOX registrations in class 5.
Stewart J found that the composite phrases containing reference to Botox were not being used by Self Care in a trade mark sense, that is, as a badge of origin. His Honour noted: “Most of the phrases are narrative or descriptive phrases that include within them badges of origin such as PROTOX, FREEZEFRAME and BOTOX. For the most part, the inclusion of such clearly identifiable badges of origin within the narrative or descriptive phrases counts decisively against the phrases themselves being, or being used as, trade marks.” By way of example, Stewart J considered “the phrase “clinically proven to prolong the effect of Botox®” describes the product to which it relates and makes a claim about its efficacy, but it does not itself serve to say anything about its origin or about trade connection. Neither does it badge or name the product.” His Honour did, however, think that phrases without verbs such as “the accidental Botox Alternative”, “Instant BOTOX® alternative”, “Overnight Botox® alternative” and “Long term BOTOX® Alternative” were in a different category. “These phrases have the quality of being sufficiently short and catchy such as to possibly amount to labels for products and as such serve to distinguish them.” Nonetheless, his Honour ultimately concluded that even these phrases did not amount to trade mark use. For completeness and by way of obiter, Stewart J also commented that these phrases were not deceptively similar to the BOTOX registered mark.
Stewart J then went on to consider whether the use of the word Botox in these phrases was use of this word itself as a trade mark and found in the negative.
Cross claim by Self Care seeking removal of Allergan’s class 3 BOTOX trademark registration on the ground of non-use
Stewart J concluded that Allergan’s BOTOX registration in class 3 should be removed.
The cross claim was filed on 1 December 2017 and so the relevant non-use period was the three years period ending on 1 November 2017.
Stewart J rejected Allergan’s contention that its Botox product was a cosmetic in class 3, even though it is aimed at achieving a particular cosmetic outcome. Rather, it is a pharmaceutical and a toxin. Hence, Allergan could not establish use of its registered mark for the relevant class 3 goods. Allergan then argued that its BOTOX mark should remain on the Register under the court’s general discretion because of the market for so called “cosmeceuticals” but its evidence was insufficient to establish such a market.
Stewart J was not persuaded as to any justification for the exercise of discretion and directed the class 3 BOTOX trademark registration to be removed from the Register.
Cross claim by Self Care seeking removal of Allergan’s BOTOX Defensive Registration for class 3 goods
Stewart J concluded that this registration should not be cancelled because Self Care had not established that use of the BOTOX mark in relation to the class 3 goods would not be likely to indicate that there is a connection between those goods and the registered owner of the BOTOX mark.
His Honour noted that “the reputation of BOTOX is in the same broadly defined or conceptualised area of beauty or appearance treatments as some of the class 3 goods”. Also, “the class 3 goods and pharmaceutical treatments for skin ageing and wrinkling such as Botox share a substantially common market. Moreover, there is ample evidence of complementary use of certain skin care products and pharmaceuticals.”
Appeal by Allergan against Registrar’s decision dismissing opposition to freezeframe PROTOX mark
Stewart J found that Allergan had not established any ground of opposition under ss 42(b), 44, 58, 59, 60 or 62A and so its appeal failed.
Australian Consumer Law (ACL) and passing off
Allergan also alleged Self Care contravened the ACL and engaged in passing off by representing an affiliation with Allergan or the Botox product. It also alleged contravention of the ACL by virtue of certain efficacy representations.
Stewart J concluded that Allergan’s ACL case based on the affiliation and efficacy representations and its passing off case failed, save for one exception which did not relate to the freezeframe PROTOX mark.
His Honour referred to previous case law and noted “the characterisation of advertising as comparative does not of itself have legal significance, or create any kind of presumption in favour of a party alleging misleading and deceptive conduct. There is no basis in the ACL for regarding comparative advertising as an inherently disreputable form of commercial conduct, to be viewed with suspicion by the courts. On the contrary, to the extent that comparative advertising provides consumers with accurate facts about competing products, it assists in the making of better informed consumer choices and thereby results in more effective competition.”
When considering the alleged affiliation representations, Stewart J considered “that Self Care, for the most part, makes it clear that its products are not Allergan’s products; they are advertised and presented as an “alternative” to Botox. Whether or not the word BOTOX as used in that context is understood to be Allergan’s product by that name, or understood more generally as a generic reference to botulinum toxin anti-wrinkle injections, does not matter. The point is that Self Care’s products are an alternative to that other product.“ Further, in instances “[w]here BOTOX is used in such a way that it is clearly a reference to Allergan’s trade mark, such as when it has the registered trade mark ® symbol next to it and when it is stated that BOTOX is the registered trade mark of Allergan Inc, that does not convey sponsorship, approval or association. It is a factual statement that is entirely accurate.” His Honour also reiterated that “the reputation of Botox is as an injectable anti-wrinkle treatment available only from healthcare professionals. It is not a reputation which spreads more broadly into topical creams and serums such as Self Care’s products. In those circumstances, the reputation of Botox is not likely to give rise to consumer confusion between it and Self Care’s products.”
Under the efficacy representations, Allergan alleged that certain statements made by Self Care in comparing its products with the Botox product represented that use of its cream products will (i) give results to the same standard or quality as the Botox injectable product and (ii) will achieve the same performance characteristics, uses and/or benefits as the Botox product.
Self Care relied on scientific studies, but the question for his Honour was whether those studies adequately substantiated the claimed effects. While the studies generally provided foundation for claims to reducing the appearance of wrinkles, Allergan argued that none of the studies involved a head-to-head comparison with Botox
Stewart J considered the statements directed to Self Care’s products being an alternative to Botox were made on reasonable grounds. His Honour was not persuaded that “the statements convey that the effect of the product in question will be the same as the effect of Botox. That is not ordinarily how “alternative” would be understood, and given the ordinary and reasonable consumer’s knowledge of the significant differences between the products, the statements would not be understood as saying that the products are the same or that they have the same effect. The statements also do not imply that the products have the same mechanism or mode of action.” Rather, “the statements carry with them the implication, and hence the representation, that Self Care’s products to which they relate achieve a similar aesthetic outcome with regard to the reduction in the appearance of wrinkles to the outcome that Botox achieves.”
There were also statements directed to Self Care’s products having a same or similar effect to Botox, specifically producing a Botox-like visual effect, delivering the results of a Botox injection in 4 weeks, and prolonging the look of Botox. With one exception, Stewart J considered the studies relied upon by Self Care provided sufficient foundation. The exception concerned Self Care’s claim to delivering the results of a Botox injection in 4 weeks. This was specific as to results and time period which meant the absence of a head-to-head comparative study was significant and the claim was misleading.
Liability of Ms Amoroso as sole director and secretary of Self Care
Stewart j rejected Allergan’s allegations that personal liability should attach to Ms Amoroso due to her close personal involvement.
Contravention of Therapeutics Goods Act
Allergan also alleged that statements made by Self Care and Ms Amoroso contravened the Therapeutics Goods Act because they involved claims of a therapeutic use. Significantly, for a product to be a therapeutic good under the that Act it need not actually have a therapeutic use or effect; it need only be represented to have that effect. Stewart J had already considered the relevant statements under the ACL allegations and found they “did not make any representation with regard to the mode of action of the products”. Consequently, his Honour rejected Allergan’s allegations under the Therapeutics Goods Act.
The appeal was confined to infringement arising from Self Care’s use of PROTOX and the phrase “instant Botox ® alternative”, and contravention of the Australian Consumer Law arising from use of the phrase “instant Botox ® alternative”.
Jagot, Lee and Thawley JJ upheld Allergan’s appeal and found infringement by Self Care and contravention of the Australian Consumer Law.
Their Honours dismissed Self Care’s contention that the trade mark being used was the composite FREEZEFRAME BOTOX, not BOTOX. Rather, the packaging showed PROTOX and FREEZEFRAME both being used as independent trade marks.
Having found PROTOX was being used as a trade mark, their Honours then went on to consider whether PROTOX is deceptively similar to Allergan’s registered BOTOX mark and found that it was. Their Honours found the primary judge erred by failing to consider confusion as to the source of the products as opposed to confusion between the marks or products themselves. Hence, it was in order for the Full Court to re-examine the evidence and form its own conclusion.
The Full Court found no error by the primary judge in not applying the “rule” in the Australian Woollen Mills case despite finding that the word PROTOX would have reminded consumers of BOTOX and there was an intention to capitalise on the reputation of the BOTOX brand. Their Honours noted this “rule” is not one of inflexible application and reflects a process of reasoning which depends upon the particular facts. In this case, the issue of deceptive similarity could be answered without reference to subjective intention.
Their Honours considered PROTOX so nearly resembles BOTOX that there is a real risk that PROTOX would deceive or cause confusion as to whether the two might come from the same source. This was despite the respective products being offered through different trade channels and at significantly different price points. The Full Court noted: Some consumers are likely (in the sense of a real and tangible danger or risk) to have wondered whether PROTOX was an alternative product being offered by those behind BOTOX, perhaps targeted to those who did not like injections or who wanted the convenience of a home treatment. Some consumers are likely to have wondered whether PROTOX was developed by those behind BOTOX as a topical treatment to be used in conjunction with Botox treatment, perhaps to improve or prolong results.
The Full Court also found that use by Self Care of the phrase “instant Botox® alternative” on its product packaging and promotional materials was use of this phrase as a trade mark. The critical question is whether the phrase as a whole was used as a trade mark. This involves an assessment of the phrase in the context and way in which it was used. Their Honours observed the word “alternative” implies that the products are different, and there is a choice between them, but it does not necessarily imply that the trade source is different. The use of “alternative” does not necessarily negative use as a trade mark. Their Honours stated: Whilst the words “instant” and “alternative” are descriptive, the phrase “instant Botox® alternative” was not being used in a purely descriptive way to distinguish Self Care’s products from Allergan’s products; rather, the phrase was being used to denote some trade source connection with those products, albeit the product was not Botox. There was use of three trade marks on the packaging, namely FREEZEFRAME, INHIBOX and INSTANT BOTOX® ALTERNATIVE. The use of the ® symbol, and the reference to BOTOX being the registered trade mark of Allergan Inc, did not lead to the conclusion either that there was no implied association with Allergan Inc or that the phrase “instant Botox® alternative” was not being used to denote product origin. Their Honours considered: Even the meticulous consumer who searched the packaging to find out that BOTOX was a registered trade mark of Allergan Inc might reasonably consider there was an association. Such a consumer, noting that Inhibox was Self Care’s product and aware that Self Care was not Allergan Inc, might reasonably think that Self Care must have some form of authorisation or licence to use Allergan Inc’s trade mark or that there was some other association between Self Care and Allergan Inc. Indeed, the typical consumer might reasonably wonder whether, or think that, Self Care and Allergan Inc were related corporations in light of the packaging, in particular the reference to Allergan Inc and Botox®.
Their Honours also found this phrase was deceptively similar to the BOTOX registered mark. The use of the descriptive words “instant” and “alternative” around the dominant word “Botox” make the phrase less similar to BOTOX, but there is still a real risk that use of the phrase “instant Botox® alternative” would cause people to wonder whether the different products come from the same source.
The Full Court commented that Self Care’s reliance on the comparative advertising defence under s122(1)(d) was inappropriate because that provision referred to use of “the trade mark” for the purposes of comparative advertising and that should be construed as a reference to the registered BOTOX mark. Here, the impugned use was use of the phrase “instant Botox® alternative”. Further, even if s122(1)(d) was capable of applying to the use of the phrase “instant Botox® alternative”, that phrase was not used here for the purposes of comparative advertising. Rather, it was used to leverage off the reputation of BOTOX, not to advertise Inhibox comparatively with Botox. Although s122(1)(d) does not include a good faith requirement, this does not mean that subjective motivation is irrelevant. Rather, the subjective purpose, as was the case here, might be inconsistent with a conclusion that the trade mark was used for the purpose of comparative advertising.
Also, their Honours observed that this “defence” does not only come into operation if infringement is otherwise made out. Rather, s122(1)(d) operates by way of contradistinction to s 120: if a mark is used “for the purposes of comparative advertising”, the trade mark will not have been infringed whether or not the use would otherwise constitute an infringement under s 120.
The defence to infringement under s122(1)(b)(i), namely use of a sign in good faith to indicate the intended purpose or some other characteristic of the goods, also could not be established.
The s122(1)(e) defence also failed. Self Care’s trade mark application for ‘freezeframe PROTOX’ had proceeded to registration (because Allergan did not appeal that part of the decision of the primary judge), but that registration did not protect use of PROTOX as a separate trade mark.
The Full Court also upheld Allergan’s appeal under the Australian Consumer Law that, in the context in which it appeared, the statement “instant Botox® alternative” used on Self Care’s Inhibox product constituted a representation that the Inhibox product would give results to the same standard, or of the same quality, as Botox products in contravention of s 18 or s 29(1)(a) or that Inhibox would achieve or had the same performance characteristics, uses and/or benefits as Botox in contravention of s 18 or 29(1)(g).
While it was not in dispute that Inhibox reduced the appearance of wrinkles quickly enough to describe the effect in a non-misleading way as “instant”, the evidence did not establish that Inhibox had long term effects equivalent to BOTOX or that there were reasonable grounds for representing that it did. The statement “instant Botox® alternative”, in context, conveyed to reasonable consumers in the target market that: (a) use of Inhibox would result in a similar reduction of the appearance of wrinkles to that which would be achieved with treatment by Botox; and (b) the effect would last, after treatment, for a period equivalent to that which would be achieved with treatment by Botox injection. Self Care had reasonable grounds for making the former representation, but did not have reasonable grounds for making the latter because there was no scientific or other material from which such a representation could reasonably be made. Hence, the latter representation was misleading or deceptive.
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