use as a

Previously on IPwars.com we looked at why the High Court held PROTOX did not infringe BOTOX. The High Court also ruled that “instant BOTOX® alternative” did not infringe and overturned the Full Court’s ruling that the phrase was misleading or deceptive contrary to the ACL.

A recap

You will recall that Allergan has registered BOTOX as a trade mark for “[p]harmaceutical preparations for the treatment of … wrinkles” in class 5. The product Allergan makes and sells under the BOTOX trade mark is an injectable pharmaceutical which must be administered by a health professional. One treatment of BOTOX preparation can last for up to several months.

Because of its “overwhelming” and “ubiquitous” reputation in BOTOX, however, Allergan has also achieved registration of BOTOX in class 3 for anti-ageing and anti-wrinkle creams.

The second FREEZEFRAME product Self Care sells is INHIBOX. The INHIBOX product is a cream which the user can apply themselves at home and which lasts for up to a few hours to reduce the visible signs of ageing.

The INHIBOX product was sold in two forms of packaging:

Old packaging – Packaging A

New packaging – Packaging B:

Both forms of packaging included the phrase “instant BOTOX® alternative”. You will also notice that the back of both forms of packaging includes a longer declaration: “The original instant and long term Botox® alternative”.

Why “instant Botox® alternative” did not infringe

Self Care’s INHIBOX product being an anti-wrinkle cream falling squarely within the scope of Allergan’s BOTOX registration in class 3, the High Court had identified at [22] that the trade mark owner had to prove two things to establish trade mark infringement under s 120(1):

1. that the impugned sign was being used as a trade mark; and
2. that the impugned sign was substantially identical or deceptively similar to the registered trade mark.

At [23], a sign is being used as a trade mark when it is being used as “a badge of origin” to indicate a connection between the goods and the user of the mark.[1]

And whether that is the case is to be determined objectively in the context of the use without regard to the subjective intentions of the user. To repeat the High Court’s explanation at [24]:

Whether a sign has been “use[d] as a trade mark” is assessed objectively without reference to the subjective trading intentions of the user[50]. As the meaning of a sign, such as a word, varies with the context in which the sign is used, the objective purpose and nature of use are assessed by reference to context. That context includes the relevant trade[51], the way in which the words have been displayed, and how the words would present themselves to persons who read them and form a view about what they connote[52]. A well known example where the use was not “as a trade mark” was in Irving’s Yeast-Vite Ltd v Horsenail[53], where the phrase “Yeast tablets a substitute for ‘Yeast-Vite’” was held to be merely descriptive and not a use of “Yeast-Vite” as a trade mark. Therefore, it did not contravene the YEAST-VITE mark. (citation omitted)

Applying that test, the High Court held that Self Care was not using “instant Botox® alternative” as a trade mark. There were a number of reasons contributing to this conclusion.

First, Self Care did not present the phrase in a consistent style.

Secondly, the phrase was presented alongside two obvious trade marks – FREEZEFRAME and INHIBOX – so that the phrase was less likely to be taken as a trade mark.

And thirdly, while FREEZEFRAME and INHIBOX were presented as trade marks, the phrase “instant Botox® alternative” was a descriptive phrase which in context was used only with that descriptive purpose and nature.

As to the first consideration, the High Court explained at [55]:

The presentation of “instant Botox® alternative” was inconsistent in size, font and presentation on each of Packaging A, Packaging B and the website, indicating “instant Botox® alternative” was not being used as a badge of origin to distinguish Self Care’s goods from those dealt with by another trader[126]. On Packaging A the phrase was presented vertically, marked out by four vertical lines separating each of the words. On Packaging B and on the website the phrase was presented horizontally without any lines separating the words. The arrangement of the words differed. On the packaging, each word in the phrase occupied its own line. On two website pages the phrase occupied a single line. On two other website pages the words “Instant” and “Botox®” shared a line and the word “ALTERNATIVE” appeared on the next line. The font was inconsistent. The packaging used a different font to the website pages, and one website page used a different font to the other website pages. The capitalisation was inconsistent. Three different forms were adopted: “instant Botox® alternative” on the packaging, “INSTANT BOTOX® ALTERNATIVE” on one website page and “Instant Botox® ALTERNATIVE” on three other website pages.

Then, the High Court explained at [56] that the likelihood “instant Botox® alternative” would be taken as a trade mark was diminished because its use was not as dominant as the use of FREEZEFRAME and INHIBOX:

…. This diminishes the likelihood that the phrase “instant Botox® alternative” could be objectively understood to indicate origin in itself[127]. This is because its use was not as dominant as the use of the other signs, FREEZEFRAME and INHIBOX. This is most evident on the packaging. On both Packaging A and Packaging B, “instant Botox® alternative” appeared only once, on the front of the box, in much smaller font than FREEZEFRAME and INHIBOX. FREEZEFRAME and INHIBOX were also featured prominently on the left and right sides of each box. Further …. (citations omitted)

At [57], the High Court recognised that a sign can be both descriptive and used as a trade mark (see also [25]) but the phrase “instant Botox® alternative” was not in this case:

The FREEZEFRAME and INHIBOX script style and presentation is also significant. FREEZEFRAME and INHIBOX were both distinctive and stylised signs that were apt to be perceived as brands. In contrast, “instant Botox® alternative” was a descriptive phrase that had an ordinary meaning and included within it the trade mark BOTOX (identified as such with a ® symbol). It was descriptive of the product to which it was attached as an alternative product. While a sign can both be descriptive and serve as a badge of origin, the better view is that the use of the phrase, consistent with its ordinary meaning, had only a descriptive purpose and nature[128]. As the primary judge found, the phrase amounted to “ad?speak”. (citation omitted)

As the phrase was not used as a trade mark, there was no need to consider whether it was deceptively similar to Allergan’s trade mark.

Some aspects of the High Court’s reasons

In reaching its conclusions, the High Court drew on three different uses – the two forms of packaging and the website collectively. At [54], the High Court said it was permissible “to address them together, identifying relevant similarities and differences in use.”

In this case at least, there appears to have been some overlap between Self Care’s use of Packaging A and Packaging B – the latter being introduced on the market in September 2016, the former still being on the market until February 2017. The website of course was contemporaneous with both.

Nonetheless, it might be thought a bit odd that generally the old form of packaging informed the understanding of the new form of packaging. And, if the question is whether or not the particular use on the packaging is use as a trade mark, one might wonder about the relevance of use elsewhere. It must also be acknowledged that the form of use was one only of the factors contributing to the conclusion.

The High Court’s approach therefore reinforces INTA’s longstanding message that the trade mark owner should ensure it presents its trade mark consistently. Giving this consideration too much weight in isolation, however, risks creating some sort of pirate’s charter.

Ultimately, it might be thought the result is not too surprising. Afterall, phrases like this have not been considered to be trade mark use since the House of Lords’ decision in 1934 that “Yeast tablets a substitute for Yeast-Vite” did not infringe the registered trade mark YEAST-VITE.

In explaining why the Full Court wrongly found use as a trade mark, however, the High Court advanced a very different explanation why “instant Botox® alternative” was not use as a trade mark. The Full Court had impermissibly conflated the tests of use as a trade mark and deceptive similarity. At [60], the High Court then said:

Conflation of those elements is not uncommon. As Shanahan’s Australian Law of Trade Marks & Passing Off observes, “[t]here is a common misconception that an infringer uses a sign as a trade mark if the use indicates or is likely to indicate a connection between the infringer’s goods and the owner of the registered mark”[129]. However, “factors relevant to whether there is a misrepresentation or likelihood of deception have no role to play in deciding the question of what constitutes ‘use as a trade mark’”[130]. As was stated in Coca-Cola Company v All-Fect Distributors Ltd, the inquiry is not “whether the sign indicates a connection between the alleged infringer’s goods and those of the registered owner”[131]. The correct approach is to ask whether the sign used indicates origin of goods in the user of the sign[132]. (emphasis supplied) (citations omitted)

This may be contrasted with the reason why the House of Lords held that there had been no use as a trade mark. Lord Tomlin explained:[2]

This is clearly a use of the word “Yeast-Vite” on the respondent’s preparation to indicate the appellant’s preparation and to distinguish the respondent’s preparation from it. It is not a use of the word as a trade mark, that is, to indicate the origin of the goods in the respondent by virtue of manufacture, selection, certification, dealing with or offering for sale.

The High Court’s endorsement of Coca-Cola v Allfect on this point cannot be the result of some change in the meaning or concept of “use as a trade mark”. In the Yeast-Vite case, Lord Tomlin said:[3]

The phrase “the exclusive right to the use of such trade mark” carries in my opinion the implication of use of the mark for the purpose of indicating in relation to the goods upon or in connection with which the use takes place, the origin of such goods in the user of the mark by virtue of the matters indicated in the definition of “trade mark” contained in s 3.

That is the same explanation of the concept as adopted by the High Court in Gallo at [42] and in Self Care at [23] and [53].

It also cannot really be explained by the introduction into the Trade Marks Act of s 122A and s 123. Lord Tomlin roundly rejected a similar argument by the trade mark owner in Yeast-Vite:

nor do I think it is legitimate to treat special defences available under other sections of the latter Act as constituting a measure of the right conferred by s 39.

It appears therefore that the High Court has resolved the point left open in the Gallo case at [53] – whether a retailer uses the trade mark as a trade mark when using it in relation to the genuine goods of the trade mark owner.[4]

Whether that means our law now needs amendment to provide a defence for parody and satire, or other types of nominative fair use, remains to be seen.

The ACL case

The Full Court had found that the phrase “instant Botox® alternative” conveyed the representations that use of INHIBOX would result in a similar reduction in the appearance of wrinkles to using Botox and, secondly, that the effects would last for a period equivalent to that resulting from use of Botox.

The Full Court found that Self Care had reasonable grounds for the former representation, but not the latter – the long term efficacy representation. Therefore, Self Care’s use of the phrase was misleading or deceptive in contravention of the ACL.

On appeal, Self Care did not contend INHIBOX had a similar long term efficacy to Botox. Rather, it denied that the phrase “instant Botox® alternative” conveyed the long term efficacy representation at all.

Recap of the ACL principles

At [81], the High Court confirmed that determining whether there had been a breach of s 18 required a four step analysis:

1. Identifying the conduct said to contravene with precision;
2. Confirming that the conduct was “in trade or commerce”;
3. Considering what meaning the conduct conveyed; and
4. Determining whether the conduct in light of that meaning was misleading or deceptive or likely to mislead or deceive.

At [82], the High Court also confirmed that the third and fourth steps required characterisation as an objective matter. This required viewing the conduct as a whole and its notional effects, judged by the conduct in context, on the state of mind of the relevant person or class of persons.

The context includes the immediate context – all the words in the communication and the way they are conveyed, not just the word or phrase in isolation. The context also includes the broader context – all the relevant surrounding facts and circumstances.

Next, in cases of this kind the High Court re-affirmed at [83] that it is necessary to identify an ordinary and reasonable representative member of the relevant class “to objectively attribute characteristics and knowledge to that hypothetical person (or persons), and to consider the effect or likely effect of the conduct on their state of mind.” This required allowing for a range of reasonable reactions to the conduct by excluding from consideration reactions of the ignorant or very knowledgeable, those resulting from habitual caution or exceptional carelessness and the extreme or fanciful.

The misrepresentation was not made

The High Court analysed each of the three types use – Packaging A, Packaging B and the website – separately. But the reasons why “instant Botox® alternative” was not misleading or deceptive are essentially the same.

In the case of Packaging A, the High Court noted the use of the trade marks FREEZEFRAME and INHIBOX and “instant Botox® alternative” on the front of the packaging. On the side of the packaging were printed the words “Clinically proven to erase wrinkle appearance in 5 minutes”. And on the back, there was the vertical script “The world’s first Instant and Long Term Botox® Alternative” in larger, blue lettering than the panel of explanatory text. Under the heading “Freeze wrinkles instantly”, the first paragraph of that explanatory text read:

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. (emphasis supplied)

The remainder of the text included three more references to the effects of INHIBOX being “long term”. This included a heading “And long term!” under which the packaging stated “”freezeframe technology is scientifically proven to reduce the appearance of wrinkles by up to 63.23% in just 28 days“ and ”freezeframe’s Dual Effect technology gives you proven instant wrinkle reduction, plus the world’s best long term wrinkle relaxing”.

Under the heading “Two of the world’s most potent wrinkle erasers* in one formula”– the packaging stated “[i]magine… the power of an instant wrinkle freeze, combined with the long term benefits of the most potent, cumulative facial relaxing technology on the planet. All in one simple formula.”

Despite all these references to “long term”, the High Court held at [102] that both the immediate and broader contexts meant the phrase “instant Botox® alternative” would not convey to the reasonable consumer in the target market that either a single treatment or long term use of INHIBIX would last for an equivalent period to a BOTOX injection.

In the immediate context – the packaging, the words “long term” must be understood in the context of “lasts for hours” and that the treatment was “instant” and working “within 5 minutes”. As a result, “long term” was mere puffery. At [99], the High Court explained:

…. The fact that the effect of Inhibox was said to be instant makes 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 too good to be true that the effects of Inhibox are both instant and as long lasting as those of Botox.

The broader context included that INHIBOX was a cream applied by the user while BOTOX is a pharmaceutical injection requiring a visit to a healthcare professional. INHIBOX was much cheaper. The two products were not sold in the same locations. In these circumstances, the High Court concluded at [101]:

Taking into account that broader context, it is difficult to conceive why the reasonable consumer in the target market would think that a topically self-applied cream obtained from the pharmacy at a relatively low cost and worn in the course of the usual activities of life (including bathing and exercise) 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. ….

Moreover, the reasonable consumer would not assume that the use of BOTOX in the phrase indicated a common trade connection between INHIBOX and BOTOX.

Similar reasoning led to the same conclusion in respect of Packaging A and the website even though the latter, in particular, seems to have used “long term” rather more prominently.

The errors made by the Full Court

The High Court’s reasons why the phrase “instant Botox® alternative” was not misleading or deceptive suggest a rather robust approach to assessing the impact of the conduct on the target market. In addition, its reasons provide further guidance about how the conduct should be analysed.

First, at [88] – [89], the High Court agreed the trial judge had made an appealable error by considering only the phrase and the broader context, not taking into account the immediate context as well. So, it is necessary to consider all three aspects.

Secondly, the Full Court had also erred. There are a number of strands to this. One key error was misidentification of the ordinary and reasonable consumer. A second was the false premise that consumers would think the phrase “instant Botox® alternative” conveyed an association between INHIBOX and the trade source of BOTOX.

On the second point at [89], the High Court pointed out that the trial judge had found “instant Botox® alternative” would not convey an association between INHIBOX and BOTOX and there had been no appeal from that finding.

On the first point, the Full Court had found that some members of the relevant class would know that the effects of BOTOX lasted four months. The High Court criticised the factual basis for the conclusions about how long BOTOX lasted and whether consumers knew that.

More generally, however, the High Court said the Full Court had been wrong to assess the effects of the phrase on the target market on the basis that some reasonable consumers would have been misled. At [90], the High Court explained:

…. Further, the Full Court’s statement that the target market “would have included” reasonable consumers who had that knowledge demonstrated a misunderstanding of the relevant test. The ordinary and reasonable consumer is a hypothetical construct to whom the court attributes characteristics and knowledge in order to characterise the impugned conduct. The class in fact will always have reasonable consumers with varying levels of knowledge; the question was whether the knowledge should be attributed to the hypothetical reasonable consumer in this case.

Then, as already discussed above, the High Court proceeded to analyse how the phrase “instant Botox® alternative” would be perceived and understood by the ordinary reasonable consumer in all the circumstances.

Self Care IP Holdings Pty Ltd v Allergan Australia Pty Ltd [2023] HCA 8

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1. Picking up the definition of What is a trade mark in s 17 as explained in Campomar and E & J Gallo at [42]: “the requirement that a trade mark ”distinguish“ goods encompasses the orthodox understanding that one function of a trade mark is to indicate the origin of ”goods to which the mark is applied“[16]. Distinguishing goods of a registered owner from the goods of others and indicating a connection in the course of trade between the goods and the registered owner are essential characteristics of a trade mark[17]. There is nothing in the relevant Explanatory Memorandum[18] to suggest that s 17 was to effect any change in the orthodox understanding of the function or essential characteristics of a trade mark.” (citations omitted)  ?
2. Irving’s Yeast-Vite Ltd v F A Horsenail (trading as The Herbal Dispensary) (1934) 51 RPC 110 at 115.36; 1B IPR 427 at 431.37.  ?
3. 51 RPC 115.36; 1B IPR 432.  ?
4. See also Scandinavian Tobacco Group Eersel BV v Trojan Trading Company Pty Ltd [2016] FCAFC 91 at [49]ff and Warwick A Rothnie, ‘Unparalleled importing and trademarks in Australia,’ (2020) 21(3) Business Law International 229.  ?