Wrinkles smoothed: High Court clarifies reputation is irrelevant to trade mark infringement

The question of whether reputation is relevant to actions for trade mark infringement under section 120(1) of the Trade Marks Act 1995 (Cth) (Act) has been contentious for a number of years. The High Court’s decision in Self Care IP Holdings Pty Ltd v Allergan Australia Pty Ltd [2023] HCA 8 unanimously clarified that reputation is not relevant in such an assessment.


Background

Botox is a well-known cosmetic and therapeutic injectable. It is manufactured and sold in Australia under various “BOTOX” trade marks owned by Allergan Australia Pty Ltd (Allergan).

Self Care IP Holdings Pty Ltd (Self Care) sells skin care products under the brand name “FREEZEFRAME”, including anti-wrinkle products sold under the product names “PROTOX” and “INHIBOX”. The “INHIBOX” product was marketed as an “instant Botox® alternative”.

Allergan commenced proceedings against Self Care alleging that the use of “PROTOX” and “instant Botox® alternative” constituted trade mark infringement as they were deceptively similar to its “BOTOX” trade marks, and that the phrase “instant Botox® alternative” was likely to mislead and deceive consumers as to the efficacy of the product and was false and misleading.

At first instance, the Federal Court decided in favour of Self Care, finding that Self Care did not infringe Allergan’s “BOTOX” trade marks and its use of “instant Botox® alternative” was not misleading or deceptive. This decision was overturned by the Full Court of the Federal Court. The Full Court decision was then appealed to the High Court.


High Court Decision

The High Court was asked to determine four key issues, being whether:

1. reputation should be relevant when assessing deceptive similarity in the context of trade mark infringement;
   
   
2. “PROTOX” was deceptively similar to “BOTOX”;
   
   
3. Self Care’s use of “instant Botox® alternative” constituted use as a trade mark;
   
   
4. Self Care’s use of “instant Botox® alternative” was misleading or deceptive as to the long-term efficacy of its products in contravention of the Australian Consumer Law (ACL).

Reputation

The High Court held that reputation is not a relevant consideration and set out the four limited circumstances prescribed by the Act in which reputation is a relevant consideration, being:

1. oppositions to the registration of a trade mark [1];
   
   
2. registration of a defensive trade mark [2];
   
   
3. infringement of a well-known trade mark [3]; and
   
   
4. loss of exclusive rights in a trade mark resulting from that trade mark becoming a generic description of a product or service [4].

This observation was compelled by the structure and policy of the Act and the property rights it grants. In all other circumstances, the registration of a trade mark alone determines the rights of the owner.


“PROTOX” is not deceptively similar

The reputation Allergan had in its “BOTOX” trade marks was not taken into account in assessing whether Self Care’s use of “PROTOX” infringed them. The correct question was whether “PROTOX” so nearly resembled “BOTOX” that a real and tangible danger of confusion or deception existed. The High Court noted that the lower courts incorrectly relied on the reputation of the “BOTOX” brand in making this assessment, such that both considered whether Allergan’s reputation resulted in a risk of confusion.

The High Court found “PROTOX” and “BOTOX” to be aurally and visually distinct and were almost always in close proximity with the umbrella brand “FREEZEFRAME”. There was also no evidence of actual confusion in the market. As a result of the combination of these factors, “PROTOX” and “BOTOX” were sufficiently distinct such that consumers, even taking into account imperfect recollection, would not confuse the marks or the products they represented. The High Court also noted that it is common for consumers to be faced with the goods of one trader that are complementary to the goods of another trader without there being any suggestion of affiliation between those traders.


“instant Botox® alternative” was not used as trade mark

The High Court held that Self Care’s use of the phrase “instant Botox® alternative” did not amount to use as a trade mark because:

• Self Care’s use of the phrase on various mediums was inconsistent in size, presentation and arrangement;
  
  
• the phrase was used alongside clear badges of origin, being “FREEZEFRAME” (Self-Care’s umbrella brand) and “INHIBOX” (a product sub-brand). The use of “instant Botox® alternative” was not as dominant as the use of “FREEZEFRAME” and “INHIBOX”; and
  
  
• the script style and presentation of the phrase indicated the phrase served a descriptive purpose, consistent with the ordinary meaning of the words. In contract, “FREEZEFRAME” and “INHIBOX” were presented in distinctive, stylised manners which were apt to be perceived as brands.

In coming to this decision, the High Court emphasised that questions of deceptive similarity are irrelevant to assessing use as a trade mark.


“instant Botox® alternative” was not misleading and deceptive

The Full Court of the Federal Court found that the phrase “instant Botox® alternative” implied that Self Care’s product would achieve similar results as Botox and would last as long as Botox. The High Court overturned this decision on the basis that a reasonable consumer would understand that self-applied skincare products would not produce the same effects as a professionally injected product, and any effects would not have a similar effective period. Self Care’s use of “instant Botox® alternative” did not contravene the ACL.


Implications

The reputation of a trade mark is irrelevant when considering whether it has been infringed. The monopoly conferred on trade marks is therefore limited to the goods and/or services for which it is registered. Owners cannot rely on reputation they have accrued when making a case under the Act as to the deceptive similarity of an allegedly infringing trade mark. A clearer distinction has been drawn between actions for passing off or misleading or deceptive conduct under the ACL, which require evidence of the owners goodwill and reputation.


[1] Trade Marks Act 1995 (Cth) section 60.

[2] Trade Marks Act 1995 (Cth) section 185.

[3] Trade Marks Act 1995 (Cth) section 120(3)

[4] Trade Marks Act 1995 (Cth) section 24.


This article provides general commentary only. It is not legal advice. Before acting on the basis of any material contained in this article, seek professional advice.


Co-author: Jacinta Zheng

Practice: Transactions

Position: Lawyer