After decades of doctrinal confusion, Australia’s High Court in Self Care IP Holdings v Allergan Australia [2023] HCA 8 has unanimously clarified that reputation is not a relevant consideration under s120(1) of the Trade Marks Act 1995 (Cth) (TMA), the direct infringement provision (use of a substantially identical or deceptively similar later mark for goods the subject of the earlier registration). The High Court has emphatically pronounced that:
“The so-called reputation principle in the context of an infringement proceeding under s 120(1), in all its forms, is rejected.”
The position taken by the High Court in dismissing reputation as a relevant factor can be contrasted with the approach taken by Australia’s major trading partners in the US, UK and EU, each of which expressly take into account the strength or acquired distinctiveness of the allegedly infringed mark as enhancing the scope of protection of the rights owner.
The decision is likely to provoke debate around the contours of the overall infringement test under section 120(1). It brings about a positive change in doing away with the “too famous to be confused” doctrine (where the fame of an earlier mark was considered to lessen the risk of confusion). On the other hand, aspects of the reasoning in respect of the finding that the use of PROTOX did not infringe BOTOX are at odds with longstanding authority that the assessment is to be made by reference to a comparison of the marks at issue, without reference to matter added to or beyond the latter mark, under section 120(1) (such matters being potentially relevant under the separate s120(2) indirect infringement provision).
The decision also provides some welcome guidance around the kinds of descriptive or nominative use that can be made of third party marks in advertisements and on packaging.
Earlier decisions reliant on the reputation principle must now be treated with caution, but this will come down to the specifics.
Finally, even if the facts of the case are idiosyncratic, the decision reinforces that it is incumbent on brand owners to proactively enforce their registered trade mark rights, in the market and on the register. Direct means of bringing in reputation, such as oppositions under section 60 and proactively pursuing defensive trade mark registrations will remain relevant and important, as will be indirect means such as examples of actual confusion and intent on the part of the alleged infringer.
Background
The questions that arose were in the context of the use of the mark PROTOX and the phrase “instant Botox® alternative” on packaging and in advertisements by Self Care. Allergan sued for trade mark infringement and violations of the Australian Consumer Law (ACL).
The High Court was asked to decide on whether PROTOX, used on anti-wrinkle creams, infringes a trade mark registration for BOTOX for the very same goods (being goods Allergan does not use the mark on and registered by way of a defensive trade mark), and whether Allergan’s reputation in BOTOX (for other goods, being injectables) was relevant to that issue. The issue of Allergan’s reputation was also considered in the context of whether use of the phrase “instant Botox® alternative” would be seen as a “trade mark use” (this being a pre-requisite for an infringement finding).
At first instance, it was held that PROTOX would not be confused with BOTOX (including by reference to the fame of the BOTOX mark which was said to reduce the risk of confusion as was unlikely to be imperfectly recollected) and that “instant Botox® alternative” was not used as a trade mark. The Full Federal Court overturned those findings, holding that it might be the case that consumers would be caused to wonder whether PROTOX (whilst it would not be directly confused with BOTOX) came from the same source as BOTOX goods, and that “instant Botox® alternative” was used as a trade mark.
The High Court has held that:
- Self Care’s use of PROTOX as a brand for anti-wrinkle cream did not infringe Allergan’s defensive trade mark registration for BOTOX in class 3 for identical goods, because the “actual use” made (which the court appears to have assessed in the context of the packaging as a whole rather than on a “mark for sign” basis) did not raise a real risk of confusion. The fact that the Full Court had referred to the possibility that consumers might wonder whether the makers of BOTOX had been expanded into cosmetics was in error, as that impermissibly brought in Allergan’s actual use and reputation (in respect of class 5 goods, the subject of a separate registration) rather than notional use in respect of the class 3 goods, the subject of the registration.
- Self Care did not use “instant Botox® alternative” as a trade mark (so it was not necessary to consider if this phrase was deceptively similar to BOTOX). Here it was held that the Full Court impermissibly conflated the issue of Allergan’s reputation in respect of deceptive similarity with the issue of trade mark use.
Summaries in respect of key issues are set out below.
Reputation
The court first outlined established principles in respect of the test for deceptive similarity, referring to it as “an objective question based on a construct”:
“The focus is upon the effect or impression produced on the mind of potential customers. The buyer posited by the test is notional (or hypothetical), although having characteristics of an actual group of people. The notional buyer is understood by reference to the nature and kind of customer who would be likely to buy the goods covered by the registration …”
“The issue is not abstract similarity, but deceptive similarity. The marks are not to be looked at side by side. Instead, the notional buyer's imperfect recollection of the registered mark lies at the centre of the test for deceptive similarity. The test assumes that the notional buyer has an imperfect recollection of the mark as registered. The notional buyer is assumed to have seen the registered mark used in relation to the full range of goods to which the registration extends.”
It then discussed the threshold of deception or confusion, noting that confusion “may merely involve “perplexing or mixing up the minds” of potential consumers” and that intention to deceive or cause confusion is not relevant (albeit it accepted that instances of actual confusion and the intent of the alleged infringer can be relevant).
The High Court next moved on to the “contentious” issue of whether reputation in the registered mark is relevant under s120(1). Part of the background to the matter should be noted here, which is that each of the parties argued at the initial substantive hearing (after special leave was granted to consider the reputation issue) that reputation is not relevant under s120(1). During that hearing, in deference to the Full Federal Court authorities that it was asked to overrule, the court requested that the parties appoint a contradictor to provide submissions in favour of the relevance of reputation. The contradictor provided written submissions and appeared in a further hearing before the High Court in December 2022.
The High Court ultimately held that the reputation which Allergan held in its BOTOX trade mark should not be taken into account in considering whether PROTOX was deceptively similar to BOTOX under s120(1). This outcome was “compelled by the structure and purpose of, and the fundamental principles underpinning” the TMA. The High Court considered that the “level of protection afforded … would vary and be inherently uncertain” if reputation was considered (other than in respect of provisions in which this was expressly provided for). It referred also to the fact that reputation in the mark or of its owner is not a particular entered on the trade marks register. The scheme of the TMA and the existence of the register is to provide “a bright line” delineating the rights of the registered owner for the benefit of the owner and the public. Finally, the High Court referred to particular examples of the TMA that bring in reputation (the opposition ground under s60, the ability to register defensive marks under s185, the “well known” marks infringement provision in ss120(3) and (4), and s24 which provides a means to cancel a registration of the mark (eg. where it becomes generally accepted within the relevant trade as the sign that describes or is the name of an article, substance or service.) This reflected that the TMA “strikes a balance between various interests, manifesting “from time to time a varying accommodation of commercial and the consuming public’s interests””. In the case of s120(1), which does not refer to reputation, “the registration of a trade mark alone determines the rights of the owner of a registered trade mark”.
The decisions from the Full Federal Court in Woolworths, Henschke and Australian Meat Group demonstrated “the difficulty of reconciling the use of reputation within the text and operation of s120(1)”. Those decisions were overruled by the High Court.
Tantalizingly, the High Court concluded this aspect of its judgment by flagging the following point:
“None of this detracts from what Dixon and McTiernan JJ said more than 85 years ago in Australian Woollen Mills, that if a mark is in fact or from its nature likely to be the source of some name or verbal description by which buyers will express their desire to have the goods, then similarities both of sound and of meaning may play an important part. That inquiry does not concern reputation in the mark or in the owner of the mark. The inquiry is concerned with the effect and meaning of the spoken description of the mark.”
Deceptive similarity between the marks at issue
Putting to one side Allergan’s reputation in BOTOX, the High Court held that PROTOX was not deceptively similar to BOTOX and therefore did not infringe Allergan’s registration. Sections 10 and 120(1) read together require an assessment of whether PROTOX “so nearly resembles BOTOX for anti-wrinkle creams in class 3 that it is likely to deceive or cause confusion as to the source of those products”. The High Court conducted its comparison “visually and aurally and in the context of the relevant surrounding circumstances”. It referred to consideration of “both the packaging and the website for Protox” in terms of the “actual use” of PROTOX. It accepted Allergan’s submission that there were visual and aural similarities between the marks. The assessment would be made based on the notional buyer having a recollection of the BOTOX mark in use for anti-wrinkle creams, and the goods would be sold through similar trade outlets. Reputation is not to be considered, but the High Court allowed consideration of advertisements and packaging for PROTOX that refer to the effect that it can “prolong the look of Botox®”. The High Court also referred to statements on Self Care’s website that “PROTOX has no association with any anti-wrinkle injection brand” (even acknowledging that the assumption on the part of the relevant consumer is that Botox is an anti-wrinkle cream). The High Court concluded:
“Applying the applicable principles, there is no real risk of confusion or deception such that the notional buyer will be caused to wonder whether it might be that the products come from the same source. What is required is a "real, tangible danger" of confusion or deception occurring. As explained, the marks are sufficiently distinctive such that there is no real danger that the notional buyer would confuse the marks or products. The similarities between the marks, considered in the circumstances, are not such that the notional buyer nevertheless is likely to wonder whether the products come from the same trade source. That conclusion is reinforced by the fact that the PROTOX mark was "almost always used in proximity to the FREEZEFRAME mark" and that there was "no evidence of actual confusion".”
It is this mosaicking of matter beyond the PROTOX mark itself from a variety of sources that is likely to provoke the greatest debate in terms of the assessment of deceptive similarity under s120(1). These arguably reflect the broader considerations relevant to the indirect infringement provision (s120(2) of the TMA) and passing off, rather than section 120(1).
Finally, there were no instances of actual confusion and Allergan did not press reliance on an intention on the part of Self Care to deceive or cause confusion.
Trade mark use?
The High Court considered the test for “trade mark use”, noting that the test is objective, and drawing the distinction (“not always easy to apply”) between “use of a sign in relation to goods and the use of a sign as a trade mark”. It was also noted that “[t]he existence of a descriptive element or purpose does not necessarily preclude the sign being used as a trade mark”. If one purpose is a trade mark use, then that will be sufficient. Other relevant matters included the existence of a “clear dominant “brand””, but this does not mean that other aspects of a label cannot also act as trade marks.
With this in mind, the High Court found that “instant Botox® alternative” was not used as a trade mark. Rather, it 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”.
It was relevant that:
- the manner of use by Self Care was inconsistent in size, font and presentation;
- in the context of the packaging the phrase was used alongside the umbrella brand “FREEZEFRAME” and the product brand “INHIBOX”; and
- the script and style of FREEZEFRAME and INHIBOX were also significant, as they were used as “distinctive and stylised signs that were apt to be perceived as brands”.
Because there was no trade mark use, the High Court did not need to consider the defence of use in good faith in s122(1)(b) or the comparative advertising defence in s122(1)(d).
ACL
The above has focused on the trade mark issues. For completeness, the court also held that the “long term efficacy representation” by Self Care (alleged to represent that the wrinkle reducing effects of Self Care’s Inhibox product would last for a period equivalent to that of a Botox injection) was not made, and as such did not contravene the ACL.
The full decision (including examples of the packaging) is available here.
