Marketing a product as an “alternative” is no answer to trade mark infringement

The Full Court of the Australian Federal Court has found that marketing a product as an “alternative” to a trade-marked brand is no answer to a claim of infringing use as a trade mark. In Allergan Australia Pty Ltd v Self Care IP Holdings Pty Ltd [2021] FCAFC 163, Justices Jagot, Lee and Thawley took a broad view of trade mark “use”, and the likelihood of confusion on the part of consumers, to find that both “PROTOX” and “instant Botox® alternative” are deceptively similar to the appellant’s “BOTOX” mark, and that the protection of the Respondent’s defensive registration was ineffective.

KEY TAKEAWAYS

• The use of the phrase “instant Botox® alternative” was held to constitute use “as a trade mark”, such that it infringed the registered trade mark for BOTOX.
• Although it will depend on context, the mere use of the word “alternative” to describe a product (for example, “instant Botox® alternative”) may not be sufficient to avoid trade mark infringement. Indeed, in some circumstances it may imply some association in the trade source.
• Although an exception exists under the Trade Marks Act for comparative advertising, it is easy to fall outside the protection of that provision. In particular, simply referring to a competitor product is not enough to fall within its scope.
• Advertisers should be cautious to avoid references to competitor products that seek to leverage off the competitor’s reputation, rather than advertise comparatively with that product in good faith.

BACKGROUND

The well-known injectable powder Botox is used in therapeutic and cosmetic treatments. It is manufactured, sponsored and sold in Australia by Allergan, under its various “BOTOX” trade marks. Those trade marks are registered for a variety of goods, including “anti-ageing” and “anti-wrinkle” cosmetics.

In 2014 Self Care launched a range of anti-wrinkle skin care products under the brand name “Freezeframe”. The Freezeframe line included “PROTOX”, a skincare product styled as an injection-free solution to “prolong the look of Botox®”, and a product “Inhibox” that was said to be an “instant Botox® alternative”. Self Care sold these products, and others, under its trade mark, “FREEZEFRAME”. Later, it obtained registration of the trade mark “FREEZEFRAME PROTOX” over the opposition by Allergan.

Allergan commenced proceedings alleging, amongst other things, that Self Care had infringed Allergan’s BOTOX trade mark both by its use of “PROTOX” and by its use of “instant Botox® alternative” in relation to Inhibox.

The primary judge found in Self Care’s favour, holding that “PROTOX” was not deceptively similar to “BOTOX”, and that the phrase “instant Botox® alternative” did not constitute infringing use of BOTOX “as a trade mark”. These findings were overturned by the Full Court on appeal.

THE FULL COURT’S DECISION

PROTOX is deceptively similar to BOTOX

The primary judge had held that PROTOX was not deceptively similar to BOTOX because his Honour found that, although consumers would be reminded of BOTOX upon seeing PROTOX branding for anti-wrinkle cream, they would not have confused PROTOX products for BOTOX products.

The Full Court agreed with the primary judge’s factual findings, but disagreed that this meant that PROTOX was not deceptively similar to BOTOX. This is because the Full Court clarified that the relevant “deception” is not whether consumers would confuse one product for the other, but whether consumers would be caused to wonder whether the underlying products were from the same source. The similarity between the words was such that a consumer might wonder whether the products were associated: for example, a consumer may wonder whether those behind BOTOX had decided to expand their product range to include topical cosmetic products such as “PROTOX”.The mark was therefore deceptively similar to Allergan’s mark for the purposes of section 120 of the Trade Marks Act 1995 (Cth) (Trade Marks Act).

Defensive registration ineffective

Self Care argued that it had an express defence to infringement, because it had obtained a trade mark registration for “FREEZEFRAME PROTOX”. However, in fact the livery of the Protox product did not use the words together in a composite manner. The words appeared on different facets of the packaging, and used a different colour palette, font and font case. The Full Court therefore agreed with the primary judge that the word “PROTOX” was used as a distinct trade mark, such that Self Care’s registration for FREEZEFRAME PROTOX did not provide it with a defence to infringement.

“Instant Botox® alternative” is used “as a trade mark”

Under Australia’s Trade Marks Act, simply using another registered trade mark does not amount to infringement of that trade mark, unless it is used “as a trade mark”. That is generally understood to mean that the mark must be used as a “badge of origin” in relation to the goods or services.

The primary judge had considered that Self Care’s use of the phrase “instant Botox® alternative” was descriptive. His Honour also considered that the word “alternative” effectively distinguished the Inhibox product from the Botox product, and therefore the phrase was not used by Self Care as a badge of origin for the Inhibox product.

The Full Court disagreed, and found the phrase “instant Botox® alternative” as a whole was used as a trade mark because:

• Although the word “alternative” implied the two products were different, it did not entail that the products came from a different source.
• Although “instant” and “alternative” are descriptive, the whole phrase “instant Botox® alternative” was not purely descriptive. Instead, it denoted some trade source connection with the Botox products (to the effect that Inhibox product was not the Botox product).
• The Inhibox product packaging and website displayed the words “Inhibox”, “Freezeframe” and “instant Botox® alternative” with such prominence that each appeared as a trade mark.
• Even though the product packaging identified Allergan as the owner of the “BOTOX” mark, this was not sufficient to dispel doubt as to the trade source of Inhibox. Even a diligent consumer might reasonably think that Self Care enjoyed some form of licence or authorisation from Allergan in order to use the mark on its product.

Comparative advertising & use “in good faith”

Self Care also sought to invoke certain exceptions to infringement under the Trade Marks Act in relation to its use of “instant Botox® alternative”, including that its use of the phrase was “for the purposes of comparative advertising” within the meaning of section 122(1)(d). The Full Court rejected this argument, because:

• On a technical level, their Honours said that the exception was not applicable to Self Care as the provision refers to “use of the trade mark” (that is, “BOTOX”), whereas the infringing use was of the phrase “instant Botox® alternative”.
• Even if the exception could apply, the Court held that Self Care’s conduct could not be characterised as “comparative advertising”, since the phase “instant Botox® alternative” was “used to leverage off the reputation of BOTOX, not to advertise Inhibox comparatively with Botox”. The finding that consumers would be caused to wonder if the products came from the same source was relevant to this conclusion.

Self Care also sought to rely on other exceptions, which provide that a person does not infringe a registered trade mark if they use the sign “in good faith” to indicate some characteristic or the intended purpose of goods or services. The Court also rejected these arguments for similar reasons.

Misleading representations: time matters

As well as its claim for trade mark infringement, Allergan had alleged that the phrase “instant Botox® alternative” conveyed that Inhibox would give results of the same quality or standard as Botox, which Allergan alleged was misleading or deceptive in contravention of the Australian Consumer Law (ACL).²

The Court agreed that the phrase “instant Botox® alternative” would have been understood by relevant consumers to convey that Inhibox both caused a similar reduction in the appearance of wrinkles, and that this effect lasted as long, as Botox. In this regard, the Court also noted that the target market included consumers who understood that Botox continued to “have effect for a period of 4 months after treatment”. By contrast, at their highest, studies relied on by Self Care established that their active ingredient would reduce wrinkles “over a 28-day period of application”, but said nothing about the duration of the effect after the application had ceased. As such, the Court also agreed that this phrase contravened the ACL.

IMPLICATIONS

The Full Court’s findings serve as an important reminder for persons seeking to distinguish their goods or services from those of competitors. Although each case will turn on its facts, the mere styling of a product as an “alternative” may not sufficiently distinguish the trade source of a competitor product to avoid liability in trade mark infringement.

Similarly, although Australia’s Trade Marks Act provides an express exception to infringement for comparative advertising, the Court’s reasoning demonstrates that the scope of this exception can be narrow, and it is easy to fall outside its ambit. In both cases, it may be relevant to enquire whether the impugned conduct was done in good faith for the relevant descriptive purpose, or whether it was done so as to “leverage off the reputation of” the registered trade mark.

The decision also serves as an important reminder that defensive marks will not always be effective to protect against claims of trade mark infringement. Where a registered mark is comprised of two or more words (or other elements), the mark must be used in its entirety in order to be availed of the protection under the registration.

As explained above, the Court’s ruling that the phrase “instant Botox® alternative” was used as a trade mark is not without controversy. While it is possible that this could be appealed to the High Court, Self Care would need to seek special leave to appeal. Special leave is discretionary, and is reserved for cases which meet certain public interest thresholds.³ As such, it is unclear that special leave would be granted.

Businesses will need to tread carefully when marketing their products by reference to other goods. Descriptive or comparative phrases are not necessarily exempt from trade mark infringement—as always, context is key.