Australian High court injects some clarity on the relevance of reputation on trade mark infringement

Of note, the High Court clarified that the trade mark owner’s reputation is not a relevant factor in the context of trade mark infringement proceedings under s120(1) of the Trade Marks Act 1995 (Cth) (TM Act). This has important ramifications for strategies relating to the use, protection and enforcement of trade marks. We discuss this further below.

Background

Allergan Inc manufactures Botox, an injectable pharmaceutical product containing botulinum toxin. Its products are sold under various BOTOX trade marks which are registered in class 5 for "pharmaceutical preparations for the treatment of… wrinkles".

Allergan Inc also owns a defensive registration for BOTOX in class 3 for goods that include "anti-ageing creams; anti-wrinkle cream… cosmetic articles and preparations… cosmetics".  The basis on which Allergan obtained defensive registration was reliance on its substantial reputation for class 5 pharmaceutical products, i.e. on the basis that consumers would likely believe class 3 goods bearing BOTOX are connected with Allergan as the source of origin.

Self Care Corporation Pty Ltd and Self Care IP Holdings Pty Ltd (together Self Care) supply cosmetic anti-wrinkle skincare products under the umbrella brand FREEZEFRAME. This range of products includes:

1. PROTOX, a skincare product advertised as an injection-free solution to ‘prolong the look of Botox®’; and
2. INHIBOX, a skincare product advertised to be an ‘instant Botox® alternative’.

Allergan Inc and its Australian subsidiary commenced proceedings in the Federal Court of Australia, alleging among other things, that Self Care had infringed its BOTOX trade marks (including the defensive registration) pursuant to section 120(1) of the TM Act.

Allergan was unsuccessful at first instance. However, on appeal to the Full Federal Court the primary judge’s decision was overturned.

The Full Court relied on the reputation of BOTOX, finding that PROTOX was deceptively similar to BOTOX because potential customers would wonder whether Allergan had expanded into topical cosmetic anti-wrinkle products.

Self Care appealed to the High Court.

High Court of Australia appeal

The trade mark issues the subject of the appeal related to infringement under section 120(1) of the TM Act, namely whether:

1. Self Care had used the phrase "instant BOTOX® alternative" as a trade mark and if so, whether it is deceptively similar to the BOTOX mark; and
2. whether PROTOX is deceptively similar to BOTOX.

Was "instant Botox® alternative" used as a trade mark?

The High Court said no.

Under s 120(1) of the TM Act, a person infringes a registered trade mark if they use as a trade mark a sign that is substantially identical with, or deceptively similar to, the registered trade mark in relation to goods or services in respect of which the trade mark is registered.

The High Court held the phrase "instant Botox® alternative" was not trade mark use.  Their Honours stated that the phrase was not "a sign used, or intended to be used, to distinguish" one trader's goods or services from those of another (emphasis added, see paragraph [7] of Judgment) given that:

1. the phrase was used in inconsistent sizes and fonts and in varying arrangements of the words;
2. the phrase appeared alongside FREEZEFRAME and INHIBOX, which were clear badges of origin; and
3. FREEZEFRAME and INHIBOX were both distinctive and stylised signs.

The High Court therefore held that it followed that Self Care had not engaged in trade mark infringement.

Is PROTOX deceptively similar to BOTOX?

The High Court also said no to this question.

In considering the issue of whether PROTOX was deceptively similar to BOTOX, the High Court held there was no real, tangible danger of confusion or deception because the marks were sufficiently different such that the notional buyer with an imperfect recollection would not confuse the marks or the products offered under them.

Importantly, the High Court held that the Full Court had erred by relying on the reputation of BOTOX to conclude that PROTOX might be associated with Allergan because some customers “would wonder whether those behind BOTOX had decided to expand into topical cosmetic anti-wrinkle products”.

The High Court clarified that reputation of the registered trade mark should notbe taken into account when assessing deceptive similarity under s 120(1) of the TM Act, stating that:

1. when comparing two marks for deceptive similarity in the relevant surrounding circumstances or context, the actual use of the allegedly infringing mark by the alleged infringer is relevant;
2. inspection of the Australian Trade Marks Register should be sufficient to enable a person to assess infringement risks;
3. assessing reputation is a complex exercise and to do so would distract from the well understood test for infringement; and
4. reputation is expressly referred to in the TM Act as a relevant consideration in specific other contexts and therefore is not part of the consideration where it is not referenced.

Key Takeaways

The High Court’s judgment is particularly significant as it clarifies that reputation of the registered trade mark cannot be taken into account when assessing trade mark infringement under section 120(1) of the TM Act.

This finding has wide-reaching implications, namely:

1. companies should conduct clearance searches to obtain an assessment on potential infringement risks before using a proposed trade mark as they cannot rely on reputation of existing registered trade marks to mitigate such risks (e.g. a house brand). This also applies to defensive marks - while reputation is the critical factor in obtaining a defensive registration, it will not be of assistance when it comes to enforcing that mark against third parties;
2. trade marks that were accepted for registration on the basis that the decision in Registrar of Trade Marks v Woolworths Ltd [1999] FCA 1020 was applied (where reputation was held to be relevant in assessing deceptive similarity) may be open to challenge; and
3. actions for trade mark infringement are now clearly differentiated from actions for passing off or contraventions of sections 18 and 29 the ACL, which require the claimant to establish reputational rights.