The High Court's decision in Self Care IP Holdings Pty Ltd v Allergan Australia Pty Ltd  HCA 8 involved balancing the rights of traders to properly describe their goods, with the monopoly rights of trade mark owners. This was done in the context of interpreting the provisions of the Trade Marks Act 1995 and assessing matters of impression.
It raises important questions concerning:
- The purpose of the Trade Marks Act; and
- Whether changes are needed
In light of the potential impacts of the decision, it is arguable that a review of current provisions, and some amendment of the Act, is warranted.
What was Decided?
Allergan failed in its attempt to prevent use of the phrase the phrase "instant Botox® alternative" on Self Care's packaging and its website (examples below)
The High Court decided that Self Care was not using Botox 'as a trade mark' in its advertising, with the primary reasons being:
- The use of "instant Botox® alternative" was inconsistent in size, font and presentation on packaging and elsewhere;
- "Of particular significance" was the fact that the expression appeared alongside two clear badges of origin used by Self Care, namely FREEZEFRAME and INHIBOX;
- The representations of FREEZEFRAME and INHIBOX were distinctive and stylised and apt be perceived as brands
Since 'use as a trade mark' is a prerequisite to any finding of infringement under the Trade Marks Act, this finding left Allergan without any remedy.
The High Court cited, and followed, the 1934 House of Lords decision in Yeast-Vite Case (1934 51 RPC) 110, where use of "Yeast Tablets a substitute for Yeast-Vite" was not use of Yeast-Vite as a trade mark.
Interestingly, the Court did not discuss the decision in Mark Foy's Ltd v Davies Coop & Co Ltd ("Tub Happy case")  HCA 41, where use of Tub Happy in contexts such as "Exacto Cotton Garments – Tub Happy Cotton Fresh Budget Wise" was use of Tub Happy as a trade mark.
Presumably use of the qualifier, 'alternative', is significant because it assists in indicating that the trade mark is not being used to identify goods of the user but is being used to refer to the goods of another business. Nevertheless, the Tub Happy decision remains undisturbed.
Indicating a Connection or Distinguishing?
Under the 1995 a trade mark was defined as
a mark used or proposed to be used in relation to goods for the purpose of indicating, or so as to indicate, a connexion in the course of trade between the goods and a person who has the right, either as proprietor or as registered user, to use the mark, whether with or without an indication of the identity of that person
The 1995 Act defines a trade mark as:
a sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person.
When the 1995 Act was introduced, there was nothing to indicate that the legislators intended to affect the tests for infringement under the 1955 Act. Indeed, the words "indicating a connection" appear in s120(3) and the fundamentals of infringement remain unchanged. Subsequent court decisions also mostly reflect a consistent approach pre-and post the 1995 Act.
At the time 1995 Act was enacted, there was much discussion about 'new' trade marks, such as shapes, colours and sounds. Against that background, it is argued that when drafting the definition of trade mark the legislators were more concerned about defining what could be a registered as a trade mark than what impact that might have on the issue of infringement.
Notwithstanding that, if the threshold question in an infringement action is determined with reference to the definition of a trade mark, then differences in the definition are significant.
Prior to the High Court's decision, the case in which this difference might have most clearly presented itself is Pinnacle Runway Pty Ltd v Triangl Limited  FCA 1662. In that case, Murphy J postulated the concept of a "style name", being something different from a trade mark because it is, according to the judgement, a name used to distinguish one product from another within a range, rather than distinguishing the products of the owner from those of other traders.
While the High Court's decision does not depart as far from established precedent, it can be seen that if the focus is upon 'distinguishing the goods of the user', as opposed to considering whether it "indicates a connection in the course of trade", this might lead to a different conclusion.
Echoing the wording of the definition, in considering 'use as a trade mark' the High Court stated (at paragraph 23):
A trade mark is a sign used, or intended to be used, to distinguish goods dealt with by one trader from goods dealt with by other traders; that is, as a badge of origin to indicate a connection between the goods and the user of the mark
The reference to 'distinguishing' and specifying a connection to "the user of the trade mark" might call to mind more strongly the concept of distinguishing in terms of inherent registrability, rather than infringement. Section 120(3), which retains the words 'indicating a connection', refers to "indicating a connection between the unrelated goods or services and the registered owner of the trade mark", rather than the user.
It is argued that the changed definition of a trade mark in the 1995 Act was enacted for the purposes of clarifying what is registrable, and was not intended to affect assessments of infringement. However, that has arguably been a consequence.
When assessing infringement, it is permissible to take into account certain surrounding circumstances, although what that includes has been uncertain. Typically, those have been focussed on the trade channels and the ways in which the subject goods or services are traded.
In the context of determining deceptive similarity, the High Court seems to have expanded the scope of what 'surrounding circumstances' might be taken into account, and how they might be considered, when assessing whether a trade mark registration has been infringed. The High Court cited (at paragraph 70) a reference to the owner of the trade mark and a website disclaimer:
In this case, the back of the packaging stated in small font that "Botox is a registered trade mark of Allergan Inc" and, although the assumption is that Botox is an anti-wrinkle cream, the website stated that "PROTOX has no association with any anti-wrinkle injection brand".
and (while possibly obiter) stated at paragraph 71:
That conclusion [that there was no likelihood of confusion] is reinforced by the fact that PROTOX was "almost always used in proximity to the FREEZEFRAME mark" and that there was "no evidence of actual confusion".
While the Full Federal Court also took a relatively expansive view, its interpretation differed and it stated (at paragraph 67):
it is true that a close examination of the packaging would have revealed that BOTOX was a registered trade mark of Allergan Inc. In context, however, the use of the ® symbol, and the reference to BOTOX being the registered trade mark of Allergan Inc, does not lead to the conclusion either that there was no implied association with Allergan Inc or that the phrase "instant Botox® alternative" was not being used to denote product origin. Even the meticulous consumer who searched the packaging to find out that BOTOX was a registered trade mark of Allergan Inc might reasonably consider there was an association. Such a consumer, noting that Inhibox was Self Care's product and aware that Self Care was not Allergan Inc, might reasonably think that Self Care must have some form of authorisation or licence to use Allergan Inc's trade mark or that there was some other association between Self Care and Allergan Inc. Indeed, the typical consumer might reasonably wonder whether, or think that, Self Care and Allergan Inc were related corporations in light of the packaging, in particular the reference to Allergan Inc and Botox®.
On the question of what surrounding circumstances are relevant to consider, it is worth noting that the leading judgment of the High Court in the Tub Happy case cited with approval the judgment of Lord Greene M.R. in Saville Perfumery Ltd. v. June Perfect Ltd. (1939) 58 RPC 147, at p 161:
In an infringement action, once it is found that the defendant's mark is used as a trade mark, the fact that he makes it clear that the commercial origin of the goods indicated by the trade mark is some business other than that of the plaintiff avails him nothing, since infringement consists in using the mark as a trade mark, that is, as indicating origin (1945) AC, at p 94 . (at p205)
One justification for finding that reputation should not be considered when assessing deceptive similarity was that it unnecessarily complicated the issue. The apparent expansion of what surrounding circumstances might be considered seems to add a complicating factor, although arguably not as complex as reputation assessments.
It is also worth noting that the factors considered by the High Court in the context of 'surrounding circumstances' seem to blur the distinction between sections 120(1) and 120(2). Section 120(2) provides that there is no infringement if 'using the sign as the person did is not likely to deceive or cause confusion'. This exemption is not included in section 120(1).
The Purpose of the Trade Marks Act
In considering whether change is warranted, it is helpful to briefly consider the purpose and background of the Trade Marks Act.
There has long been debate as to whether the primary purpose of the Trade Mark Act is to protect the interests of trade mark owners or to protect consumers, or both.
While the Act clearly aims to do both, there are some instances, such as the BOTOX decision, which highlight why an understanding of its primary purpose is important.
In the BOTOX decision, the High Court's comments suggest more of a consumer protection focus than an owner protection focus. It is stated, in paragraph 49, that the infringement inquiry under the Trade Marks Act
"is directed to avoiding deception and confusion between trade marks, and protecting the registered owner's trade mark rights in relation to the particular goods covered by the registration. It is not concerned with and does not seek to protect "the commercial value or 'selling power' of a mark".
Whether this correctly indicates what should (or should not) be a primary purpose of the Act, is contentious.
Australia's first Trade Marks Act was the 1905 Act came into force on 2 July 1906. At that time, the law recognised actions for passing off, but Australia did not have the same consumer protection laws that it has today.
That Act sought to protect both brand owners and consumers. However, it is appropriate to ask whether the development of consumer protection laws, such as the Australian Consumer Law and the preceding provisions of the Trade Practices Act, have reduced the importance of consumer protection as a primary focus of the Trade Marks Act.
Many would argue that the primary focus of an Act devised to grant trade mark owners rights should have, as its primary focus, the protection of their interests, although naturally within acceptable limits.
While it is not claimed that the Act does not have this as a primary focus, the question is whether it adequately achieves that purpose or whether there is a need for amendment so that it does.
Why did Self Care reference Botox?
Self Care wished to make meaningful representations to consumers about the nature of its goods. In light of the fact that its products perform a somewhat similar function to Botox, and given consumer familiarity with that trade mark, a reference to that brand name is a convenient short-hand way of conveying that information to consumers.
At the same time, Self Care would have known that Botox is a well-known brand and that the uses, effects and reliability of that product are well known to consumers. While many descriptive options were available to Self Care, this was likely an attractive factor.
Describing a product as a "Botox alternative" indicates that the product is at least similar. By saying it can be used as an alternative, it implies that while it may not be the same, it has as similar effect. Given consumer familiarity with, and trust in, Botox product, it is reasonable to expect that the direct alternative reference will transfer to the user a degree of the trust and efficacy that consumers attach to Botox products. Bearing in mind also that there are substantial subconscious motivators in purchasing decisions, the associations created by the alternative product reference leverages the reputation and takes advantage of the Botox trade mark.
As a consequence, the short-hand referencing acquires for the user a benefit without any financial investment in the brand, or recompense to the brand owner.
Traders may view referencing a well-known trade mark as advantageous because:
- It will likely increase their visibility in online searches
- The well-known trade mark will be more readily noticed and recognised by consumers
- Using that trade mark will give the alternative product an instant impression and attraction that it would not otherwise have
- There will be a degree of association between the two products
Consequently, it will be unsurprising if a growing number of traders now seek to avail themselves of the potential benefits of permissible short-hand referencing.
This may be seen as giving the user a benefit that is a consequence of the product development efforts of another business, and it also has the potential to tarnish and damage, through association, the reputational rights of the owners of well-known brands.
Possible Solution – Section 120(3)
Section 120(3) Trade Marks Act 1995 was enacted as a recognition that well-known trade marks are deserving of additional protection. It expands their infringement rights to unrelated goods and services. However, that provision, which has very rarely been litigated, and it has no effect if the allegedly infringing use is not "use as a trade mark".
If it is agreed that well-known trade marks deserve additional protection, closer to the protection they enjoy in other major jurisdictions, against dilution and tarnishment arising from use that is not 'use as a trade mark', then reform is justified.
One suggestion is that section 120(3) could be modified to:
- Remove the requirement for the offending use to be 'use as a trade mark'; and
- Cover use on the same and similar goods and services
The reputational requirement could also be clarified to specify 'well-known in the target market in Australia', and the section could include a prohibition on taking unfair advantage of the trade mark.
As the section would still be confined to actions ' indicating a connection' or 'taking unfair advantage', this would be a relatively moderate expansion of rights, and would move Australian protection a little closer to the protection afforded such marks in major trading partners such as the United States and the European Union.
It is also noted that section 122(1)(d) would still protect comparative advertising. On that point, it seems incongruous that s122(1)(a), (b) and (c) refer to use 'in good faith' while (d) does not, and it seems consistent and reasonable to include those words.
Indicating a connection has previously, and remains, at the heart of trade mark infringement. However, the change in the definition of a trade mark that occurred when the 1995 Act has arguably resulted in a shift in focus from the indication of a connection to identification of the user. The proposed changes would realign the focus and recognise that the owners of well-known trade marks should be able to protect the value of those trade marks.
Possible Solution – Deceptive Similarity
Given the High Court's explanation of surrounding circumstances, the view might be taken that considering such 'circumstances' unnecessarily complicates the assessment of deceptive similarity. If that is the case, then the definition in the Act could be amended to read something like:
a trade mark is taken to be deceptively similar to another trade mark if it so nearly resembles that other trade mark that it is likely to deceive or cause confusion, having regard to similarities between the trade marks, the nature of the goods and/or services, and the ways in which such goods and/or services are traded.
The consequences of the High Court's decision will be watched with interest; however, there seem to be good reasons for reviewing the current provisions of the Trade Marks Act.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.