Allergan Australia Pty Ltd v Self Care IP Holdings Pty Ltd – Part 2: Allergan’s liability case

[2020] FCA 1530

In this part of proceeding NSD15/2017, Allergan claimed that Self Care:

(1)       infringed the BOTOX registered trade marks by use of the word BOTOX in various forms (including, for example, “instant Botox alternative”, “overnight Botox alternative” and “long term Botox alternative”) on the Freezeframe products and packaging, as well as in promotion and advertising contrary to the Trade Marks Act 1995 (Cth). It also claimed that use of the trade mark PROTOX was deceptively similar to and infringed the BOTOX mark;

(2)       contravened the ACL by making representations of affiliation with the applicants or their Botox product (‘the affiliation representations’) and representations concerning the efficacy of the respondents’ products (‘the efficacy representations’);

(3)       engaged in passing off; and

(4)       infringed various sections of the Therapeutic Goods Act 1989 (Cth) (‘TG Act’).

Allergan contended that Ms Amoroso authorised the infringements of the BOTOX marks, procured or entered into a common design as a joint tortfeasor with Self Care to infringe the BOTOX marks and to engage in passing off, and aided, abetted, counselled, or procured Self Care’s conduct in contravention of the ACL. Allergan relied on Ms Amoroso’s close involvement in the creation, promotion, sale and offer for sale of Self Care’s products.

In summary, Self Care said there was no infringement of the BOTOX mark because Self Care’s use was not use ‘as a trade mark’ within the meaning of section 120 of the Trade Marks Act. It said that PROTOX was not used ‘as a trade mark’ and was not deceptively similar to BOTOX because it was used only in combination with the word FREEZEFRAME.

In relation to the ACL and passing off claims, Self Care said that there was no doubt that consumers associated the word BOTOX with an injectable product used to reduce the appearance of wrinkles. It said that Self Care’s creams/serums are presented as products that reduce the appearance of wrinkles, but explicitly as a ‘Botox alternative’. Self Care said that the distinction was reinforced by other aspects of the context, including Self Care’s own branding on its creams and in its advertising, in which FREEZEFRAME is always prominent, the character of the goods as creams rather than a formulation to be injected, the method of administration (by the consumer themselves rather than by a medical practitioner) and a substantial difference in price.

Self Care also denied that it made misleading representations about the efficacy of Self Care’s creams. It also claimed that Allergan had no standing to prosecute criminal offence or civil penalty proceedings under the TG Act and said, in any event, it was not advertising therapeutic goods.

Ms Amoroso defended her role as being squarely within her position and role as director and officer of Self Care.

Trade mark infringement – PROTOX

Stewart J carefully analysed the authorities on infringement. His Honour noted that important issues arise as to whether the following could be taken into account in assessing whether the PROTOX mark is deceptively similar to the BOTOX mark: (1) the nature and reputation of the BOTOX mark, and (2) the manner of use of the PROTOX mark.

Stewart J noted that he was to follow the Full Court in Melbourne Chinese Press Pty Ltd v Australian Chinese Newspapers Pty Ltd [2004] FCAFC 201; 63 IPR 38, an infringement case, which confirmed that the following must be considered: the look and the sound of the words, the goods to which they are to be applied, the nature and kind of customer who would be likely to buy those goods, and “all the surrounding circumstances” (at [16] per Wilcox, Kiefel and Bennett JJ, citing Re Application by Pianotist Co Ltd (1906) 23 RPC 774 at 777 per Parker J).

Self Care argued that PROTOX was not used as a trade mark and that it was used with the umbrella brand FREEZEFRAME. This was not accepted. Stewart J said at [198] that it was:

quite clear that PROTOX is used as a trade mark. It badges the goods to which it applies; it gives those goods a name; it is indicative of trade origin by linking the goods to Self Care which applied the mark. 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.

Nevertheless, whether it was used as a trade mark was not the real issue. The real issue was whether PROTOX is deceptively similar to BOTOX and, if it is, whether PROTOX as used (that is, including the way in which it is used with FREEZEFRAME) is not likely to deceive or cause confusion.

The Court carefully compared the PROTOX and BOTOX marks noting that although the words are similar in look and sound, they are less so in idea or meaning. His Honour did not accept Ms Amoroso’s evidence that she chose to use ‘TOX’ as a reference to botulinum toxin rather than BOTOX, but given his Honour had accepted that the general understanding of the word BOTOX in the public domain is an anti-wrinkle injection, he did not think this use demonstrated an intention to appropriate the trade or reputation of the brand BOTOX, but rather as a play and to differentiate from it. The intention was to say this is not BOTOX.

Stewart J stated that an important factor, in his assessment, is the ubiquitous reputation of BOTOX. His Honour found that the word is very widely known, and to such a degree that it has become in ordinary usage a common noun, not only a proper noun. Thus, and within the authority of CA Henschke & Co v Rosemount Estates Pty Ltd [2000] FCA 1539; 52 IPR 42 and Australian Meat Group Pty Ltd v JBS Australia Pty Ltd [2018] FCAFC 207; 268 FCR 624, and as in Mars Australia Pty Ltd v Sweet Rewards Pty Ltd [2009] FCA 606; 81 IPR 354 at [97] per Perram J, the fame of the mark is such as to impact on a consumer’s imperfect recollection of the mark. 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.

That conclusion was reinforced by consideration of relevant surrounding circumstances. These include that 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.

Stewart J concluded that the PROTOX mark does not so nearly resemble the BOTOX mark that it was likely to deceive or cause confusion. Also of influence was the fact that there was no evidence of actual confusion, which offered some support to that conclusion.

Stewart J also considered the ‘chaussette’ to s 120(2) of the Trade Marks Act, namely the wording:

 

[h]owever, the person is not taken to have infringed the trade mark if the person establishes that using the sign as the person did is not likely to deceive or cause confusion.

 

His Honour concluded that the PROTOX mark is used in relation to quite different goods, 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. In those circumstances, the use of PROTOX by Self Care in the manner in which it does is not likely to deceive or cause confusion within the meaning of s 120(2).

 

The Court next considered whether Self Care was using its PROTOX mark in relation to the same goods or goods of the same description. Allergan’s primary contention was that each of Self Care’s products, including Protox, is a good in class 3 in respect of which Allergan’s class 3 marks are registered, that is, the 655 mark and the 426 defensive mark. Although the s 120(1) infringement claim failed at the requirement of deceptive similarity, the requirement of “the same goods” was met in relation to class 3. The requirement in s 120(2)(a) of “goods of the same description” was also met in respect of the BOTOX 426 defensive mark class 3 goods.

 

Allergan also submitted that Protox is a good of the same description as some of the goods in class 5 in relation to which the BOTOX marks are registered. The relevant goods in class 5 are “Pharmaceutical preparations for the treatment of […] wrinkles.” Botox is clearly such a good.

 

Stewart J concluded at [221] that Protox is not a good of the same description as the BOTOX class 5 registered goods within the meaning of s 120(2)(a).

 

Trade mark infringement – BOTOX in composite phrases

Justice Stewart considered the use of BOTOX in composite phrases and whether those phrases were used as trade marks. His Honour concluded that the use of BOTOX in composite phrases was not use as a trade mark despite use of capital letters for the first letter of several words in some of the phrases, or even in the spatial arrangement of the words such as one above the other. His Honour’s analysis and conclusion included consideration of use of ‘Instant Botox® Alternative’ at a week-long in-store promotion in 2014. His Honour found that most of the phrases are narrative or descriptive phrases that include within them badges of origin such as PROTOX, FREEZEFRAME and BOTOX concluding at [231]:

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.

His Honour also concluded that Self Care’s use of the word BOTOX within the phrases that are complained of was also not use as a trade mark. First, Stewart J found that Self Care uses BOTOX in a manner which distinguishes Botox from Self Care’s own products. Secondly, the use of the ® (registered trade mark) sign adjacent to BOTOX, acknowledges that BOTOX is a badge of origin for the well-known product of that name. In many instances, Self Care expressly recorded on the relevant packaging or in the relevant marketing material that BOTOX is a registered trade mark of Allergan Inc. Thirdly, as a general proposition, each product within the range was also branded with the umbrella brand, FREEZEFRAME. Finally, Self Care’s use of the BOTOX mark (as an alternative product) did not indicate a connection in the course of trade between Self Care and BOTOX.

The phrases were also not deceptively similar to the BOTOX marks. While the use by Self Care of the BOTOX mark alone was use of an identical mark, it was not use ‘as a trade mark’.

Australian consumer law and passing off

Allergan’s case in reliance on the ACL and the tort of passing off was divided between the case on the affiliation representations (ACL and passing off) and the case on the efficacy representations (ACL only).

Affiliation representations

Allergan pleaded that the statements that it complained of in relation to all of the products made the following false representations about the product:

(1)       the product is, or is related to, the Botox product or a product sold under the BOTOX trade marks;

(2)       the product is a topical cream or serum containing the Botox products;

(3)       the product has the licence, sponsorship or approval of Allergan;

(4)       the product is affiliated with the business of Allergan; and

(5)       Self Care has an approval from or connection or association with Allergan.

In respect of the Protox product, Allergan also said that the statements that are complained of made the following false representations:

(1)       the Protox product has a therapeutic use Allergan has verified as correct;

(2)       Allergan has verified as correct that the physiological processes of the Botox products can be influenced, modified or extended by the use of the Protox product; and

(3)       Self Care is legally permitted to advertise the Protox product and/or the Botox products, including under the TG Act.

 

Stewart J was not satisfied that the ACL and passing off cases based on the affiliation representations had been established. The principal reason was because Self Care, for the most part, made it clear that its products were not Allergan’s products; they were advertised and presented as an ‘alternative’ to Botox. Moreover, that other product was also known to be very different, that is, it is an injectable administered only by healthcare professionals and was significantly more expensive: [461]-[463].

 

Efficacy representations

In relation to the efficacy representations, the identified representations, said to be representations as to future matters, essentially tracked the wording of s 29(1)(a) of the ACL, that is, a false or misleading representation that goods are of a particular standard, quality, value, grade, composition, style or model or have had a particular history or particular previous use. In relation to each of the statements, Allergan pleaded that they make the following representations, in trade and commerce, to Australian consumers:

(1)       use of the product (as a cream) will give results to the same standard or quality as the Botox products (as an injection); and

(2)       use of the product will achieve the same performance characteristics, uses and/or benefits as the Botox product.

 

In addition, in relation to the Protox product statements, Allergan pleaded that they also made the representation that use of the Protox product will work complementarily or synergistically with, or can be used as part of a treatment with, the Botox products to enhance and/or prolong the benefits of the Botox products (said to be caught by s 29(1)(g) of the ACL).

 

The first category of statements were those that were said to give rise to comparative efficacy representations that included the word ‘alternative’.

 

The Court considered the class of consumers for Self Care’s products and hence the people who are likely to read the impugned statements. The Court found that the ordinary and reasonable consumer on reading the impugned statements in their context is likely to know that Botox is an injectable anti-wrinkle treatment that is available to be administered only by healthcare professionals, that in contrast Self Care’s products are topically self-applied creams, serums and lotions, and Botox is likely to be more expensive than Self Care’s products because it is required to be professionally administered. Also, although probably not being conscious of the fact, such consumers will not have seen or experienced Botox and Self Care’s products being available in the same place. His Honour stated at [500]:

 

In that context, in my assessment the impugned statements that describe the relevant product as an “alternative” to Botox are likely to be understood by ordinary and reasonable members of the relevant class of consumer as representing that the Self Care product will reduce the appearance of wrinkles to a similar extent as Botox does. The statements convey, in context, that the product will be effective in reducing the appearance of wrinkles. The statements do not say anything expressly about the extent of that effectiveness, particularly with regard to how long any such reduction in the appearance of wrinkles will last. The statements also say nothing about the mechanism of the effect on the reduction in the appearance of wrinkles.

 

The Court was not persuaded that the statements conveyed that the effect of the product in question would be the same as the effect of Botox. Justice Stewart said that this 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.

The second category of statements were comparative statements that expressly made representations as to the effect of the product in question and Botox being the same or similar such as “… which could produce a Botox-like visual effect when applied topically to the skin” (Protox statement 12).

The third category of statements was of those which make a representation that the product in question works with Botox in some way, such as to ‘prolong’ its effects, to make Botox “look better for longer” or to make the visual effect of Botox “look even more dramatic”.

Stewart J found that the question is whether the claim that the products achieve a similar reduction in the appearance of wrinkles was well-founded. His Honour stated at [577]-[578]:

[T]he representations as to a Self Care product being an alternative to Botox […] are justified as having been made on reasonable grounds. Self Care offered a lot of evidence in support of the proposition that its relevant products produce a noticeable and significant reduction in the appearance of wrinkles. Allergan failed to discharge the onus on it to prove that Self Care did not have reasonable grounds for making the representations. Since, in my evaluation, the achievement of a reduction in the appearance of wrinkles is a similar effect to the use of Botox, the representations were not misleading. That is to say, as concluded above, the ordinary and reasonable consumer would not understand Botox to have a readily quantifiable effect on the appearance of wrinkles, and no evidence has been adduced to actually quantify that effect. Thus, the noticeable and not insignificant effect of Self Care’s products in reducing the appearance of wrinkles is sufficiently similar to the effect of Botox in reducing the appearance of wrinkles that the representation that one is an alternative for the other is not misleading.

In the second category of representations […], the statement that Protox “could produce a Botox-like visual effect” is also not misleading for the same reasons. The evidence establishes reasonable grounds for the representation that Protox can produce a noticeable and significant visual effect in the appearance of the reduction of wrinkles similar to that produced by Botox (although not quantifiably so).

However, also in the second category was the statement that the Night (tube) product “delivers the results of a Botox injection in 4 weeks”. This constituted a representation that the product would deliver the same results as Botox in four weeks. There was no head-to-head study to compare the results of the two products. Self Care had not sought to justify the comparative representation and it was not justified by the evidence. The statement was therefore misleading within the meaning of s 29(1)(g) of the ACL.

The third category of statements were those that represented that the product in question prolongs or improves the look of Botox. The studies provided an adequate foundation, and thus reasonable grounds, for the statements with regard to prolonging and improving the look of Botox.

Therefore, in all, one representation was found to be misleading or deceptive.

Loss and damage

As the misleading statement with regard to the results of Night (tube) after four weeks being the same as Botox was found to be misleading, his Honour was satisfied that this claim could properly proceed to the quantification of damages, if Allergan elected to follow that course: [587].

Liability of Ms Amoroso

Ms Amoroso’s evidence in chief put her firmly at the centre of the companies, in ultimate control of their decision-making and in charge of their creative direction. She did not seek to shy away from any of that. However, none of it put her in a position such as to have gone beyond her role as a director or CEO. Stewart J did not find any basis upon which Ms Amoroso would be personally liable on the non-ACL causes of action against the Self Care companies. His Honour said the applicant would face some difficulty in establishing that Ms Amoroso knew that the impugned statements made representations that were misleading or deceptive, or false. In the circumstances, his Honour also did not find any basis upon which Ms Amoroso would be personally liable on the ACL causes of action against the Self Care companies: [608].

Therapeutic Goods Act claim

This claim failed. Allergan failed to prove that the statements made the representations that were pleaded, and which were in turn said to constitute contraventions of the TG Act. There were also serious question marks over Allergan’s standing to bring this action.

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