GlaxoSmithKline Australia Pty Ltd v Reckitt Benckiser (Australia) Pty Ltd
[2016] FCA 1196
•7 October 2016
FEDERAL COURT OF AUSTRALIA
GlaxoSmithKline Australia Pty Ltd v Reckitt Benckiser (Australia) Pty Ltd [2016] FCA 1196
File number: NSD 1090 of 2015 Judge: FOSTER J Date of judgment: 7 October 2016 Catchwords: PRACTICE AND PROCEDURE – whether the applicants are entitled to interlocutory injunctive relief to restrain the resumption of an advertising and marketing campaign which has been the subject of an undertaking to cease the campaign and not to resume it up to and including the commencement of the hearing of certain separate questions Legislation: Australian Consumer Law, s 18, s 29
Federal Court Rules 2011, r 30.01
Cases cited: Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148
Samsung Electronics Co Ltd v Apple Inc (2011) 217 FCR 238
Warner-Lambert Co LLC v Apotex Pty Ltd (2014) 106 IPR 218
Date of hearing: 2 August 2016 Registry: New South Wales Division: General Division National Practice Area: Commercial and Corporations Sub-area: Regulator and Consumer Protection Category: Catchwords Number of paragraphs: 105 Counsel for the Applicants: Mr R Cobden SC and Mr HPT Bevan Solicitor for the Applicants: Minter Ellison Counsel for the Respondent: Mr AP Coleman SC and Mr ARR Vincent Solicitor for the Respondent: HWL Ebsworth Lawyers ORDERS
NSD 1090 of 2015 BETWEEN: GLAXOSMITHKLINE AUSTRALIA PTY LTD
First Applicant
GLAXOSMITHKLINE CONSUMER HEALTHCARE AUSTRALIA PTY LTD
Second Applicant
AND: RECKITT BENCKISER (AUSTRALIA) PTY LTD
Respondent
JUDGE:
FOSTER J
DATE OF ORDER:
7 OCTOBER 2016
THE COURT NOTES:
1.The undertaking given to the Court by the applicants, by their Counsel:
(a)To submit to such order (if any) as the Court may consider to be just for the payment of compensation, to be assessed by the Court or as it may direct, to any person, whether or not a party, adversely affected by the operation of the interlocutory order made below or any continuation thereof (with or without variation); and
(b)To pay the compensation referred to in (a) to the person there referred to.
THE COURT ORDERS THAT:
2.From the expiration of the undertaking given on 15 December 2015 by the respondent to the Court up to the final determination of the separate questions ordered on 15 October 2015 to be determined in this proceeding (including all appeals in respect of such questions) or until further or other order, the respondent be restrained, whether by itself, its servants, agents or otherwise howsoever, in trade or commerce, from publishing, distributing, exhibiting, displaying, broadcasting or communicating to the public, or causing to be published, distributed, exhibited, displayed, broadcasted or communicated to the public:
(a)The material in Annexure A to these Orders;
(b)The material in Annexure B to these Orders;
(c)The material in Annexure C to these Orders;
(d)The material in Annexure D to these Orders;
(e)The material in Annexure E to these Orders;
(f)The television commercial appearing on the USB that forms part of Annexure F to the Fast Track Originating Application filed herein on 11 September 2015; and
(g)Any matter which is substantially identical to, or substantially the same as, any of the above.
3.The respondent pay the applicants’ costs of the Interlocutory Application filed by the second applicant on 5 July 2016.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
ANNEXURE A
ANNEXURE B
ANNEXURE C
ANNEXURE D
ANNEXURE E
REASONS FOR JUDGMENT
FOSTER J:
The applicants, GlaxoSmithKline Australia Pty Ltd and GlaxoSmithKline Consumer Healthcare Australia Pty Ltd (together, Glaxo), have for some considerable time marketed and sold, and continue to market and sell, a suite of over-the-counter pain relief medications under the product name “Panadol”. The active ingredient in all Panadol products is paracetamol (also known as acetaminophen).
Until 7 September 2015, the first applicant was the entity which marketed and sold Panadol-branded products in Australia. Since 7 September 2015, those activities have been conducted by the second applicant.
Both applicants claim the relief specified in their Fast Track Originating Application filed herein on 11 September 2015 (Application).
The respondent, Reckitt Benckiser (Australia) Pty Limited (Reckitt), also markets and sells a brand of over-the-counter pain relief medication under the product name “Nurofen”. Reckitt markets a number of different products under the Nurofen product name. The active ingredient common to all Nurofen products is ibuprofen.
In August 2015, Reckitt commenced a comparative advertising campaign (campaign) in which it compared Nurofen with Panadol and with paracetamol generally. Glaxo alleges, amongst other things, that, in that campaign, Reckitt represented that:
(a)Nurofen is better than paracetamol for common headaches.
(b)Nurofen gives faster pain relief more effectively for common headaches than does paracetamol.
(c)Nurofen is better than Panadol for common headaches.
(d)Nurofen gives faster pain relief more effectively for common headaches than does Panadol.
(e)Nurofen and ibuprofen perform in a superior manner to Panadol or paracetamol in delivering pain relief for headaches including tension-type headaches.
Glaxo contends that there is no current adequate foundation in scientific knowledge for the representations which Reckitt is alleged to have made in its campaign. As a consequence, Glaxo claims that Reckitt has engaged in misleading and deceptive conduct in contravention of s 18 of the Australian Consumer Law (ACL) and has made false representations in contravention of s 29(1)(a) and s 29(1)(g) of the ACL.
Glaxo seeks declarations as to those alleged contraventions, injunctions to restrain Reckitt from making representations to the effect of those made in the campaign, an order for corrective advertising, damages or compensation, interest and costs.
The proceeding has quite a history in this Court. I shall refer to that history in detail later in these Reasons.
On 15 October 2015, I ordered, pursuant to r 30.01 of the Federal Court Rules 2011, that all questions of whether there has been any contravention of the ACL and the nature and form of any declaratory and injunctive relief to be granted to the applicants including relief by way of corrective advertising (the separate questions) be determined separately from and prior to all other issues.
The proceeding was removed from the Fast Track on 3 February 2016 as a result of delays caused by difficulties with an expert witness which Reckitt had hoped to call at the hearing of the separate questions.
The hearing of the separate questions is currently fixed to commence on 25 October 2016 with an estimate of four days.
On 15 December 2015, in circumstances which I shall explain, Reckitt gave the following undertaking to the Court (Reckitt’s undertaking), namely:
… that, on a without admissions basis, it will:
(a)From 21 December 2015 to the commencement of the hearing, suspend the advertising campaign referred to in paragraphs 3 and 14 of the Amended Fast Track Statement, including, without limitation, all:
(i) Television commercial advertising;
(ii) Printed material including magazine and newspaper articles;
(iii) Point of sale advertising at Woolworths, IGA and Metcash stores;
(iv) Point of sale advertising at approximately 5,200 pharmacies; and
(v) Outdoor advertising;
(b) Use its best endeavours to withdraw:
(i)Point of sale advertising at Coles stores scheduled to commence on 16 December 2015;
(ii)Point of sale advertising at Chemist Warehouse stores scheduled to commence on 4 January 2016.
On 9 June 2016, the solicitors for Reckitt, HWL Ebsworths (Ebsworths), gave notice to the solicitors for Glaxo, Minter Ellison (Minters), that Reckitt intended to resume the campaign immediately after the commencement of the hearing of the separate questions.
After a short while, this notification provoked the second applicant into filing an Interlocutory Application on 5 July 2016 (Glaxo’s Interlocutory Application) by which the second applicant seeks to restrain Reckitt from resuming the campaign until after the Court has determined the separate questions. I do not think that I should treat these claims for interlocutory relief as being made only by the second applicant. The better course is to treat them as being made by both applicants.
By these Reasons for Judgment, I determine Glaxo’s claims for interlocutory injunctive relief made in its Interlocutory Application filed on 5 July 2016.
For the purposes of Glaxo’s Interlocutory Application, Reckitt conceded that there was a serious question to be tried or prima facie case in respect of Glaxo’s claims for final injunctive relief made in its Application. As a consequence of that concession, I do not need to consider whether Glaxo has established such a serious question or prima facie case nor do I need to assess the strength of that serious question or prima facie case (Warner-Lambert Co LLC v Apotex Pty Ltd (2014) 106 IPR 218 at 239 [97]). For these reasons, although Glaxo tendered evidence before me which proved the subject matter of the campaign, it did not tender any evidence directed to establishing that the claims made by Reckitt in the campaign had no scientific foundation.
THE PARTIES’ CONDUCT OF THE PROCEEDING
This proceeding was commenced on 11 September 2015. It was first returned before the Court on 15 October 2015.
Prior to 11 September 2015 and soon after it became aware of the campaign, Glaxo instructed its then solicitors to write to Reckitt demanding that Reckitt cease the campaign because it believed that representations being made during the campaign were false. Before that, a letter of demand had been sent by Glaxo to Reckitt on 11 August 2015. Reckitt had commenced the campaign on 5 August 2015.
Reckitt responded immediately. It denied any breach of the ACL.
Further correspondence passed between the solicitors for the parties in the period from 3 September 2015 to 11 September 2015. That correspondence comprised detailed but argumentative expositions of each party’s position with reasons to support the rectitude of that position.
Ultimately, no accommodation was reached between Glaxo and Reckitt so Glaxo commenced this proceeding.
When the proceeding came before the Court on 15 October 2015, I ordered that:
(a)Glaxo have leave to file an Amended Fast Track Statement;
(b)The separate questions be determined separately from and prior to all other issues; and
(c)The separate questions be fixed for hearing at 10.15 am on 21 December 2015 with an estimate of two and a half days.
I also made orders designed to ensure that the parties were ready to proceed with the hearing of the separate questions on 21 December 2015. In addition, I granted liberty to apply on short notice. The Court treated Glaxo’s Application as requiring urgent attention.
On 4 December 2015, Reckitt filed and served an affidavit affirmed on 3 December 2015 by Robert Andrew Moore who was, at the time when he affirmed that affidavit, an Honorary Senior Research Fellow in the Nuffield Division of Anaesthetics at the University of Oxford, UK. Dr Moore had been retained by Ebsworths to give evidence of an expert nature in response to the affidavit of Professor Andrew Alexander Somogyi, who is to give expert evidence on behalf of Glaxo, at the hearing of the separate questions. An unverified version of Dr Moore’s affidavit had been filed on 2 December 2015 and provided to Minters on the same day.
On 2 December 2015, Reckitt filed and served an affidavit affirmed by Emma Ensor on the same day.
As at early December 2015, it was Reckitt’s intention to read and rely upon Dr Moore’s affidavit and Ms Ensor’s affidavit at the hearing of the separate questions.
Shortly before 4 December 2015, Ebsworths contacted my Associate pursuant to the liberty to apply which I had granted on 15 October 2015 and requested an urgent listing before me in order to address certain issues which had, by then, arisen between the parties. Apparently, Ebsworths had approached Minters with a request that Glaxo consent to Dr Moore’s evidence being given by video link from London. Glaxo had declined to consent to that request.
As a result, I listed the matter before me on 4 December 2015 for case management. On that occasion, I was told that Dr Moore was ill and could not come to Australia for the purpose of attending the hearing fixed to commence on 21 December 2015. I was also told that he would be available to come to Australia in order to give evidence in person in February or March 2016.
As at 4 December 2015, the campaign was still running.
On 4 December 2015, I made orders readying for hearing on 15 December 2015 Reckitt’s application to have Dr Moore’s evidence given by video link and Reckitt’s application to set aside one particular paragraph in a Notice to Produce dated 3 December 2015 served upon it by Glaxo. I also made further directions in the nature of pre-trial directions upon the assumption that the hearing of the separate questions would proceed on 21 December 2015 as had previously been ordered.
On 15 December 2015, I heard Reckitt’s application to have Dr Moore’s evidence taken by way of video link. After I had indicated to Counsel that I was not disposed to accede to that application, Senior Counsel for Reckitt informed me that Reckitt would be prepared to suspend the campaign until the hearing of the separate questions. In light of that offer and given that Dr Moore was not prepared to come to Australia for the 21 December 2015 hearing, I most reluctantly concluded that the hearing of the separate questions fixed to commence on 21 December 2015 should be vacated. Accordingly, on that day, I vacated that hearing and made other case management orders designed to ensure that the hearing of the separate questions could proceed expeditiously on the next occasion. I fixed that hearing for 15 February 2016 with an estimate of three days.
In addition, upon Glaxo giving to the Court the usual undertaking as to damages, I noted and accepted Reckitt’s undertaking, the terms of which I have set out at [12] above.
When Reckitt’s undertaking was proffered and accepted by the Court, I observed that it would be most unfortunate if, on the first day of the hearing, I were to be confronted with an application by Glaxo for interlocutory injunctive relief because Reckitt had recommenced or was about to recommence the campaign. I indicated that I might well be disposed to grant such relief were such an application made in those circumstances.
On 18 December 2015, Reckitt again exercised the liberty to apply which I had granted to the parties in order to have the matter relisted before me. The reason that the matter had to be relisted on this occasion was that Dr Moore had informed Ebsworths that he was unable to attend the hearing fixed to commence on 15 February 2016. Reckitt led evidence as to its solicitors’ dealings with Dr Moore in order to explain the difficulties which those solicitors had already experienced and were continuing to experience with Dr Moore. As the case management hearing on 22 December 2015 progressed, it became obvious to me that Dr Moore was never going to come to Australia to give evidence viva voce and that it would be necessary for Reckitt to seek to retain a different expert.
In light of the matters conveyed to the Court on 22 December 2015, on that day I vacated the hearing of the separate questions fixed to commence on 15 February 2016 and listed the proceeding for further case management at 9.30 am on 3 February 2016.
On 3 February 2016, the matter was again listed before me for case management. On this occasion, I was informed that Reckitt intended to retain a different expert in order to assist it in the proceeding and that it required some time within which to do so and within which to file such expert evidence as it might be able to muster. On this occasion, Glaxo sought additional relief in respect of what it alleged to be breaches of the undertaking previously given to the Court by Reckitt. I declined to grant that additional relief.
On 3 February 2016, I ordered that the proceeding be removed from the Fast Track List. I also ordered that, by 16 March 2016, Reckitt file and serve all expert affidavits upon which it intended to rely in answer to the affidavit of Professor Somogyi affirmed and filed on 6 November 2015. I listed the proceeding for further case management at 9.30 am on 12 February 2016 and again at 9.30 am on 23 March 2016 in order to closely monitor the progress of Reckitt’s preparations.
The parties subsequently agreed on the terms of appropriate orders in relation to the costs wasted by Dr Moore’s unwillingness to attend to give evidence. In light of that agreement, the listing of the proceeding on 12 February 2016 became unnecessary and was vacated. On 12 February 2016, I made an administrative order in Chambers ordering Reckitt to pay Glaxo’s costs thrown away by the filing of the affidavit material of Dr Moore on an indemnity basis and assessed those costs as a lump sum at $135,000.
Subsequently, on 21 March 2016, I vacated the listing on 23 March 2016 and extended the time within which Reckitt was to file its expert evidence to 15 April 2016. That order was made by consent but at the request of Reckitt. The matter was then listed for further case management at 9.30 am on 20 April 2016.
On 12 April 2016, Reckitt filed and served the affidavit of Professor Robert H Dworkin sworn on 5 April 2016. At the same time, Ebsworths notified Minters that they intended to rely upon the evidence of Professor Dworkin at the hearing of the separate questions.
At the further case management hearing held on 20 April 2016, I made an order requiring Professor Somogyi’s response to Professor Dworkin’s evidence to be filed and served by 18 May 2016. On the same day, I also listed the separate questions for hearing at 10.15 am on 24 October 2016 before me with an estimate of three days. For reasons unconnected with the parties, the commencement date of that hearing was subsequently postponed by one day to 25 October 2016 and the estimate has been enlarged to four days.
By letter dated 6 May 2016, Ebsworths wrote to Minters requesting Minters to obtain their clients’ instructions as to whether they would be prepared to consent to an order releasing Reckitt from its undertaking given to the Court on 15 December 2015. In that letter, Ebsworths threatened to make an application to the Court to be released from that undertaking if Glaxo refused to consent to its being released from its undertaking.
Minters responded by letter sent on 9 May 2016. Minters informed Ebsworths that Glaxo was not willing to consent to Reckitt’s being released from its undertaking.
Each of the letters referred to at [42]–[43] above contains a good deal of argumentative material to which it is not necessary to refer in any detail in these Reasons.
On 9 June 2016, Ebsworths again wrote to Minters. In that letter, they said (omitting formal parts):
Reckitt Benckiser (Australia) Pty Limited ats GlaxoSmithKline Australia Pty Limited & Anor.
Federal Court of Australia Proceedings No. NSD 1090/2015
We refer to paragraph 2 of the Orders made by Justice Foster on 15 December 2015 (Orders), which refers to the undertaking (the Undertaking) provided by our client that from 21 December 2015 until the commencement of the hearing, it would suspend the advertising campaign (the Advertising Campaign) referred to in paragraphs 3 and 14 of the Amended Fast Track Statement.
As the hearing commences on 25 October 2016, the Undertaking will expire at 10:15am on that day.
We note that the wording of the Undertaking, including its duration, was the subject of express agreement by your client. We have previously sought your client’s consent that our client be immediately released from the Undertaking, but such consent was refused.
We put you on notice that our client intends on recommencing the Advertising Campaign upon the expiration of the Undertaking.
As your clients would be aware, our client will incur significant time and expense in taking the steps necessary to prepare for and recommence the Advertising Campaign. If your clients object to the Advertising Campaign commencing at the expiration of the Undertaking we ask that you inform us of your clients’ objection and the basis for it, by no later than 4pm Tuesday 14 June 2016.
In the event that we do not receive a response by this time our client will assume that your clients·do not object to the recommencement of the Advertising Campaign. Accordingly, and in reliance on that assumption, our client will take the necessary steps to arrange for the Advertising Campaign to recommence. This will involve, among other things, it entering into commercial commitments that, if not fulfilled by our client, will lead to significant financial loss and potentially irreparable reputational harm to its business.
If your clients indicate that they object to the Advertising Campaign recommencing, we expect that your clients will make such objection known to the Court at the earliest opportunity and make whatever application they think necessary. Your clients should not delay and certainly not wait until the first date [sic] of the hearing to raise any objections. Such a course would result in significant prejudice to our client and may jeopardise the proper conduct of the hearing and use the limited hearing time available. In this regard, we reserve our client’s rights to re-list the matter before his Honour to ensure the matter is ventilated so as not to prejudice the hearing date or the progression of the hearing – noting that our clients’ respective experts will be travelling extensive distances to attend the hearing.
We await your response.
Yours faithfully
(Emphasis in original.)
Minters responded to the 9 June 2016 letter by their letter dated 17 June 2016. That letter was in the following terms (omitting formal parts):
GlaxoSmithKline Australia Pty Ltd & Anor v Reckitt Benckiser (Australia) Pty Limited
Federal Court Proceeding NSD 1090 of 2015 (Proceedings)
We refer to your letter dated 9 June 2016.
We do not see the need to rehearse in detail the circumstances that surrounded the giving of undertakings by our clients and yours on 15 December 2015. To the extent that your client appears to continue to place emphasis on any “express agreement”, it is sufficient for present purposes to say that our clients rely on all surrounding circumstances, including what transpired at the directions hearing before his Honour on that day.
Your client has now declared its intention “on recommencing the Advertising Campaign upon the expiration of the Undertaking”. The effect of that statement is that your client plans to resurrect the Advertising Campaign at 10.16am on 25 October 2016.
Such a scenario was raised at the hearing before his Honour on 15 December 2015. The issue was ventilated. In this regard we refer you to the transcript of that hearing, particularly at pages 19-21. We consider that his Honour could not have been more plain.
Nevertheless, our clients notify you that they object to the recommencement of the Advertising Campaign upon the expiration of your client’s undertaking because the Advertising Campaign:
(a)is misleading or deceptive, or likely to mislead, in contravention of s 18 of the Australian Consumer Law; and
(b)makes false representations in contravention of s 29(1)(a) and s 29(1)(g) of the Australian Consumer Law.
We refer you to the affidavits of Professor Andrew Somogyi that have been filed and served in this proceeding as the basis for this position.
Having regard to the history of this matter, your client is on notice of the potential for the imposition of an interlocutory injunction in lieu of its undertaking for the duration of the hearing. Our clients also reserve their position to make such application as they may be advised to make at the conclusion of the hearing in the light of the evidence at hearing.
In these circumstances, if your client now chooses voluntarily to incur (as yet unspecified) expenditure or “commercial commitments” relating to the possible recommencement of the advertising campaign from 10.16am on 26 October 2016, that is a matter entirely for it and upon which it will bear the risk. We do not consider that any such commitments could be relevant to the question of the balance of convenience. The balance of convenience will depend upon the particular facts that pertain at the time of determination.
Finally, we do not understand upon what proper basis you or your client could have any expectation of the kind mentioned in the final paragraph of your letter. In any event, we take this opportunity to remind you that his Honour has granted the parties liberty to apply on 3 days’ notice or on such shorter notice as a Judge might allow.
Yours faithfully
(Emphasis in original.)
Reckitt then relisted the matter pursuant to the liberty to apply previously granted.
The matter was again before me on 22 June 2016. On this occasion, Senior Counsel for Reckitt informed me that Reckitt proposed to resume the campaign at 10.16 am on the first day of the hearing, or as soon thereafter as possible, and to continue with that campaign unless restrained by the Court. A discussion then ensued on 22 June 2016 as to the implications of this announcement.
No orders were made on 22 June 2016 as none were necessary.
As I have already mentioned, on 5 July 2016, the second applicant filed its Interlocutory Application. That Application was supported by an affidavit affirmed by James Robert Ellery Meins on 4 July 2016 which was also filed on 5 July 2016 (Mr Mein’s first affidavit).
Glaxo’s Interlocutory Application was returned before the Court on 8 July 2016 at which time I made programming orders designed to ready that Interlocutory Application for hearing. On that occasion, I fixed the hearing of that Interlocutory Application for 2.15 pm on 2 August 2016. In addition, I formally noted that, for the purposes of the hearing of that Interlocutory Application, Reckitt conceded that there is a serious question to be tried in respect of the claims for injunctive relief made by Glaxo in its Application. That concession has remained in place.
On 12 July 2016, by consent, I extended the time for compliance with the orders which I had made on 8 July 2016.
As can be seen from the above chronological account of the progress of the proceeding in this Court, Reckitt’s undertaking has remained in place at all times since 15 December 2015. It remains in place. However, it will expire according to its terms immediately after the commencement of the hearing of the separate questions. That is, as matters currently stand, it will expire immediately after 10.15 am on 25 October 2016. It was not until Ebsworths wrote to Minters on 9 June 2016 that Glaxo was informed that Reckitt intended to resume the campaign as soon as the undertaking expired. The Court became aware of this on 20 June 2016.
It is also apparent from the above account that, when it commenced the present proceeding, Glaxo had hoped to secure an early final hearing (which, in fact, it did secure) and, for that reason, had eschewed seeking any interlocutory relief. Reckitt contests this latter proposition and wishes to argue that Glaxo delayed bringing this proceeding in the first place to such an extent that it should be denied the interlocutory relief which it now seeks. I do not think that Glaxo has been guilty of disentitling delay.
OTHER EVIDENCE
Reckitt placed reliance upon the circumstances in which its undertaking was given in support of a proposition that Glaxo and Reckitt struck a “bargain” after arms-length negotiations, which led to the proffering of Reckitt’s undertaking to the Court. The terms of this alleged bargain are obscure. As I understood the submission, Reckitt contended that, in return for Reckitt proffering its undertaking, Glaxo had agreed that it would not make any application in the future for interlocutory injunctive relief along the lines now sought.
In support of these submissions, Reckitt relied upon certain correspondence passing between Ebsworths and Minters immediately prior to the listing before the Court on 15 December 2015.
On 14 December 2015, Ebsworths had proposed to Minters that the hearing of the separate questions fixed to commence on 21 December 2015 should be vacated. Minters replied to Ebsworths in respect of that matter by letter dated the same day. In their response, Minters did not commit to agreeing to vacate the hearing date. In addition, in the second half of their letter, Minters said:
In order for us to take further instructions from our clients in relation to the proposal, we would be grateful if you would please provide us with confirmation that:
1. the Advertising Campaign will be suspended from 21 December 2015 until the date on which judgment is handed down in the Proceeding. As you will appreciate, 31 January 2016 is a date that bears no relevance to this Proceeding;
2. the material would also be removed from Coles and Chemist Warehouse stores. There are approximately 764 Coles and 350 Chemist Warehouse stores and therefore the prospect that the advertising would continue in those stores is of very significant concern. Your proposal includes withdrawing material from Woolworths so a difficulty with Coles is not immediately apparent. Should your client maintain its position that it is “unable to withdraw” the campaign from those stores, please provide to us a copy of the commercial terms which bring about that inability, so that we can obtain instructions. We note that we will restrict access to that material to legal representatives for the clients (including in-house counsel instructing us);
3. all outdoor advertising will be suspended (in the same manner as the other advertising);
4. the reference to “Advertising Campaign” includes all advertising containing any one or more of the Representations (as pleaded); and
5. your client would give a without admissions undertaking to the Court in respect of the suspension of the campaign.
We look forward to your urgent response so that we can consider this matter further with our clients ahead of tomorrow mornings’ [sic] hearing.
Yours faithfully
Ebsworths responded to that letter by letter dated 15 December 2015. In their response, Ebsworths declined to suspend the campaign for as long as Minters suggested but did agree to do so until the commencement of the hearing.
It is this correspondence and the conduct of the parties immediately thereafter on 15 December 2015 in respect of the listing on that day that is said to demonstrate the bargain relied upon by Reckitt.
I do not think that any bargain of the kind alleged was made on 14 December 2015 or on 15 December 2015.
Rather, all that happened was that, as the price for securing an adjournment of the hearing fixed to commence on 21 December 2015, Reckitt proffered its undertaking to the Court. Both Glaxo and the Court accepted that undertaking pro tem. However, it was quite clear to me on 15 December 2015 and, I think, to Counsel for the parties that the acceptance by the Court and by Glaxo of Reckitt’s undertaking in the terms in which it was proffered on 15 December 2015 did not preclude Glaxo from making any application which it was advised to make in the future for interlocutory injunctive relief in relation to claims made by Reckitt of the kind impugned in the Application and in the Amended Fast Track Statement. In particular, the proffering of that undertaking did not preclude Glaxo from applying for interlocutory injunctive relief in respect of the period after the undertaking was expressed to expire.
I shall return to the circumstances in which Reckitt’s undertaking was proffered to the Court and accepted by the Court on 15 December 2015 later in these Reasons when I come to discuss the balance of convenience.
Both sides of the record led evidence intended to address the balance of convenience.
Glaxo read two affidavits of Mr Meins: his first affidavit and a second affidavit affirmed on 22 July 2016.
In his first affidavit, Mr Meins gave detailed evidence as to why it was that the campaign was likely to influence consumer behaviour.
After referring to the fact that over-the-counter pain relief products are typically purchased by either:
(a)The household shopper who purchases either to stock up the medicine cabinet or in response to current pain being suffered by a household member; or
(b)The pain sufferer,
Mr Meins explained by reference to the four “P’s” of marketing that the campaign was likely to have a significant impact on the sales of Nurofen-branded products and Panadol-branded products because the campaign addressed each of the four components of the four “P’s” principles. He said that brand loyalty is not absolute. He said that there is a category of consumers who are repertoire shoppers. Such shoppers have more than one brand which they purchase from time to time and regularly switch between them, often based on their perception of how the brand meets their immediate pain need. Mr Meins went on to explain that there are also new consumers constantly entering the over-the-counter pain relief category.
At par 42 of his first affidavit, Mr Meins described the components of the campaign in the following terms:
I am aware that in or around August 2015, Reckitt Benckiser commenced an advertising campaign consisting of a range of materials including the following:
(a)a television commercial (TVC) which was broadcast on television, a copy of which is on the DVD at Tab 10 of Exhibit JM-1;
(b)print advertisements that were published in magazines including New Idea, Better Homes and Gardens, New Idea, Who, That’s Life and Womens Health (examples of the advertisements are in Tab 11 of Exhibit JM-1);
(c)advertisements that were published in supermarket catalogues. An example that was published in the Woolworths catalogue is at Tab 12 of Exhibit JM‑1;
(d)advertisements that were published in the Australian Journal of Pharmacy and the Retail Pharmacy (publications directed at pharmacists and pharmacy staff) an example of which is at Tab 13 of Exhibit JM-1;
(e)an outdoor campaign, comprising a bus shelter advertisement, an example of which is at Tab 14 of Exhibit JM-1; and
(f)in-store point of sale material, examples of which are at Tab 15 of Exhibit JM-1.
I refer to these materials as the ‘Advertising Campaign’.
(Emphasis in original.)
At pars 47–53 of his first affidavit, Mr Meins addressed the implications of the campaign if it were to recommence on 25 October 2016 or shortly thereafter as foreshadowed by Reckitt. At those paragraphs, he said:
Potential implications of the Advertising Campaign recommencing in October
47I am concerned that if the Advertising Campaign recommences on or around 25 October it will result in some consumers purchasing Nurofen instead of Panadol. This is because the Advertising Campaign specifically compares Nurofen and Panadol using two of the three key category drivers of purchase namely effective relief and fast relief and rates Nurofen as superior to Panadol in these key areas.
48Further, the Advertising Campaign contextualises this comparison using graphs comparing Nurofen and Panadol and statements such as “Nurofen is superior to paracetamol”, “Nurofen is better than paracetamol”; “Faster Pain Relief” and “More Effective” and words such as “in a clinical study Nurofen was found to be superior to paracetamol for common headaches providing faster and more effective relief”. This is in a context where many of those items of promotional material contain a mock up of a green and white Panadol pack which is non-specific to the particular Panadol sub-brand.
49I note that some items of the advertising materials do not contain the mock up of a Panadol pack but rather have a more generic reference to paracetamol. However, based on:
(a)awareness of the Panadol brand;
(b)consumer awareness that the active ingredient in Panadol is paracetamol; and
(c)the fact that Panadol is the leading competitor of Nurofen,
in my opinion it is likely that both consumers and healthcare professionals would consider the references to paracetamol at a minimum to include Panadol, if not being a direct reference to Panadol. In this regard I am also of the opinion that the advertisement would ‘halo’ across (ie spread across to cover) the entire Panadol range that is packaged in the traditional green and white and [sic] packaging given the non-specific references to Panadol, paracetamol and the pack mock-up.
50In my opinion, based on my experience, the context of the marketplace I have described in this affidavit, and for the reasons outlined specifically in paragraph 36, I believe that recommencement of and continuing to run the Advertising Campaign will undermine Panadol’s brand equity over time translating into loyal consumers being more likely to switch from Panadol to Nurofen. The level of erosion of brand equity may not be seen immediately, but rather over the medium to long term. In my experience, erosion of this nature is difficult to quantify in monetary terms.
51Further the Advertising Campaign will, in my view, speak directly to repertoire shoppers and new entrants into the category shifting them to Nurofen rather than Panadol for the reasons I outlined in paragraph 41 above. It will not be possible to identify with precision the value of sales that would be lost as a result.
52I am also of the view that recommencing the Advertising Campaign will capitalise on and consolidate the effect of the Advertising Campaign having been in the marketplace from August to December 2015. That is, it will capitalise on the residual latent equity acquired through the previous activation of the Advertising Campaign. In my experience, typically re-run campaigns periodically to remind consumers of the key messages and to build on the ground that was made with the previous viewing of the material. By way of example, when I was working on the Codral brand at Johnson & Johnson, we used the same campaign each winter for a period of 2 years for this reason. I have been involved in numerous other campaigns which have also taken this approach. In this way, re-running a campaign can have a compounding and consolidating effect on the mind of a consumer compared to the effect of an entirely new campaign being utilised.
53Further, the proposed recommencement of the Advertising Campaign in October 2016 (quarter 4 of this year) will coincide with the commencement of the annual range review and planning meetings which will be undertaken with supermarkets and leading pharmacy chains. These are the meetings at which suppliers seek to negotiate shelf space and in-store advertising space for 2017. I participate in these meetings with retailers (including last year at GSK CH and in my previous roles). I believe there is a real risk that supermarket and pharmacy chains will see the Advertising Campaign as speaking to consumers in a way that could result in increased sales of Nurofen and decreased sales of Panadol. In my experience, advertisers generally point to such advertising campaigns during these retailer meetings and attempt to leverage off them. Shifts (or potential shifts) in consumer purchasing behaviour are of great significance in the annual range review and planning meetings and can influence the retailers’ decision in relation to allocation of shelf space and in-store advertising space between brands. In this context, I believe there is a real risk that the re-commencement of the Advertising Campaign on or around 25 October could cause detriment to the Panadol brand in the upcoming retailer negotiations.
I accept Mr Meins’ evidence at pars 47–53 of his first affidavit. It constitutes a rational and compelling analysis of the likely impact of a resumption of the campaign in October 2016.
The relevant substance of that evidence may be summarised as follows:
(a)The recommencement of the campaign in October 2016 is likely to undermine the value of Panadol’s brand equity to a significant degree;
(b)The campaign will be particularly effective in respect of repertoire shoppers with the consequence that they would most likely shift from Panadol to Nurofen as a result;
(c)The timing of the recommencement of the campaign is likely to most effectively capitalise on and consolidate the effect of the original campaign which ran from August to December 2015; and
(d)The recommencement of the campaign will coincide with the commencement of the annual range review with retailers. It is likely that the retailers (supermarkets and leading pharmacy chains) will see the campaign as detrimentally affecting sales of Panadol and increasing sales of Nurofen.
In his second affidavit, Mr Meins took issue with the evidence given by Ms Ensor in her second affidavit which was read at the hearing of Glaxo’s Interlocutory Application (viz the affidavit affirmed by her on 15 July 2016). In substance, Mr Meins said that the timelines about which Ms Ensor gave evidence were far too rigid and too extended. Mr Meins said that much of the lead-up work required to be done prior to the recommencement of the campaign could be done in a shorter timeframe.
Reckitt read and relied upon Ms Ensor’s second affidavit. In that affidavit, at pars 12 and 13, Ms Ensor described the subject matter of the proposed recommenced campaign in the following terms:
12.It is anticipated that the advertising campaign to commence on 25 October 2016 (2016 Advertising Campaign) would consist of:
(a)a television commercial (TVC) to be broadcast on free-to-air and pay television networks;
(b)digital advertisements (including YouTube and online videos during streaming); and
(c)printed advertisements including:
i.in numerous magazines and catalogues;
ii.various outdoor placements; and
iii.at point of sale areas in supermarkets and pharmacies.
13.The ‘copy’ of the various forms of the 2016 Advertising Campaign will mirror that of the advertising campaign commenced by RB in August 2015 (the 2015 Advertising Campaign) in that the TVC, digital and printed advertisements will be exactly the same.
(Emphasis in original.)
She then explained the steps that were required in order to have the campaign ready to recommence on 25 October 2016.
At pars 17–19, Ms Ensor said:
17.Further, in order to organise the 2016 Advertising Campaign to commence from 25 October 2016, RB committed to a four week ‘burst’ of advertising a TVC (as referred to at Confidential Exhibit “EE-2”) on free-to-air and pay television. Given that advertising campaigns are run on a weekly basis, beginning on Sundays, RB intends to commence airing the TVC for the 2016 Advertising Campaign on 30 October 2016, being the first Sunday following the commencement of the Hearing.
18.Further, in order to organise the 2016 Advertising Campaign to commence from 25 October 2016, RB will need to enter into further commitments from early August 2016 with various entities where the advertising is to be placed or broadcast. For instance, retailer display activity which has point of sale attached to it is typically locked in with the retailers around 8 weeks prior to the commencement of the campaign.
19.The commitments which RB will need to make have varying ‘deadlines’, which, if not met, will result in RB being unable to carry out the 2016 Advertising Campaign by 25 October 2016. The commitments that RB intends to entering [sic], the costs for those commitments and the, deadlines for those commitments are contained at tab 1 of Confidential Exhibit “EE-2”.
Ms Ensor did not expand upon or explain the contents of Exhibit EE-2 to her second affidavit. This task was left to Senior Counsel for Reckitt. During the course of his endeavours to explain that document, Senior Counsel endeavoured to tender other documents from the custody of Reckitt in order to explain the contents of Exhibit EE-2. Ultimately, after some considerable argument, I rejected the tender of these additional documents because their provenance was not clearly explained and, in any event, because they did not, without more, assist me to understand Exhibit EE-2.
Exhibit EE-2 is a landscape chart specifying bookings made or intended to be made by Reckitt for media advertisements (both electronic and print) for the 2016 calendar year. The document also contains the quantum of the expenditure for that year by reference to the type of marketing material or advertisement and by reference to the retailers with whom marketing materials are to be placed. The document does not, however, descend into sufficient detail to satisfy me that the commitments which have been made cannot otherwise be utilised by Reckitt in the event that I grant the interlocutory relief sought by Glaxo.
As I understood Ms Ensor’s evidence in respect of Exhibit EE-2, that evidence was intended to demonstrate that Reckitt had already committed to significant expenditure in respect of the proposed recommencement of the campaign and was going to continue to commit to such expenditure from early August 2016 onwards.
While I am prepared to accept that Reckitt has committed to certain levels of expenditure for the rest of this calendar year in respect of marketing and advertising and has also committed significant expenditure to retailers in respect of such material, I am not satisfied that the commitments made cannot satisfactorily and productively be deployed in respect of advertisements which are not of the type which comprise the campaign. That is to say, I am not satisfied that Reckitt has committed to significant ongoing expenditure in respect of the proposed recommencement of the campaign which expenditure cannot be productively utilised for other marketing and advertising materials in the event that injunctive relief is granted.
CONSIDERATION
The Relevant Principles (Interlocutory Injunctions)
In Samsung Electronics Co Ltd v Apple Inc (2011) 217 FCR 238 at 254–262 [44]–[74], the Full Court explained the principles which govern the grant of interlocutory injunctive relief in private litigation. In particular, at 256 [53], their Honours cited the well-known passage from the judgment of Mason ACJ (as his Honour then was) in Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148 at 153 where his Honour said:
In order to secure such an injunction the plaintiff must show (1) that there is a serious question to be tried or that the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief; (2) that he will suffer irreparable injury for which damages will not be an adequate compensation unless an injunction is granted; and (3) that the balance of convenience favours the granting of an injunction.
Here, as I have already noted, Reckitt has conceded for present purposes that Glaxo has established that there is a serious question to be tried or a prima facie case in respect of the claim for injunctive relief made by Glaxo in its Application.
After discussing whether proof of irreparable harm was a necessary ingredient in the Court’s consideration of such an application (at 259–260 [61]), the Full Court said at 260–261 [62]–[69]:
62The assessment of harm to the plaintiff, if there is no injunction, and the assessment of prejudice or harm to the defendant, if an injunction is granted, is at the heart of the basket of discretionary considerations which must be addressed and weighed as part of the Court’s consideration of the balance of convenience and justice. The question of whether damages will be an adequate remedy for the alleged infringement of the plaintiff’s rights will always need to be considered when the Court has an application for interlocutory injunctive relief before it. It may or may not be determinative in any given case. That question involves an assessment by the Court as to whether the plaintiff would, in all material respects, be in as good a position if he were confined to his damages remedy, as he would be in if an injunction were granted (see the discussion of this aspect in Spry, The Principles of Equitable Remedies (8th edn, 2010) at pp 383–389; at pp 397–399; and at pp 457–462).
63The interaction between the Court’s assessment of the likely harm to the plaintiff, if no injunction is granted, and its assessment of the adequacy of damages as a remedy, will always be an important factor in the Court’s determination of where the balance of convenience and justice lies. To elevate these matters into a separate and antecedent inquiry as part of a requirement in every case that the plaintiff establish “irreparable injury” is, in our judgment, to adopt too rigid an approach. These matters are best left to be considered as part of the Court’s assessment of the balance of convenience and justice even though they will inevitably fall to be considered in most cases and will almost always be important considerations to be taken into account.
64Gleeson CJ also observed in Lenah Game Meats (at [18]), that, where there is little or no room for argument about the legal basis of the applicant’s claimed private right, the court will be more easily persuaded at an interlocutory stage that a prima facie case has been established. The court will then move on to consider discretionary considerations, including the balance of convenience and justice. But, as his Honour also observed at [18]:
The extent to which it is necessary, or appropriate, to examine the legal merits of a plaintiff’s claim for final relief, in determining whether to grant an interlocutory injunction, will depend upon the circumstances of the case. There is no inflexible rule.
65The resolution of the question of where the balance of convenience and justice lies requires the Court to exercise a discretion.
66In exercising that discretion, the Court is required to assess and compare the prejudice and hardship likely to be suffered by the defendant, third persons and the public generally if an injunction is granted, with that which is likely to be suffered by the plaintiff if no injunction is granted. In determining this question, the Court must make an assessment of the likelihood that the final relief (if granted) will adequately compensate the plaintiff for the continuing breaches which will have occurred between the date of the interlocutory hearing and the date when final relief might be expected to be granted.
67As Sundberg J observed in Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth (2009) 81 IPR 339 at [15], when considering whether to grant an interlocutory injunction, the issue of whether the plaintiff has made out a prima facie case and whether the balance of convenience and justice favours the grant of an injunction are related inquiries. The question of whether there is a serious question or a prima facie case should not be considered in isolation from the balance of convenience. The apparent strength of the parties’ substantive cases will often be an important consideration to be weighed in the balance: Tidy Tea Ltd v Unilever Australia Ltd (1995) 32 IPR 405 at [416] per Burchett J; Aktiebolaget Hassle v Biochemie Australia Pty Ltd (2003) 57 IPR 1 at [31] per Sackville J; Hexal Australia Pty Ltd v Roche Therapeutics Inc (2005) 66 IPR 325 at [18] per Stone J; and Castlemaine Tooheys at 154 per Mason ACJ.
68It may also be necessary to consider and evaluate the impact that the grant or refusal of an injunction will have or is likely to have on third persons and the public generally.
69In Patrick at [65] and [66], Brennan CJ and McHugh, Gummow, Kirby and Hayne JJ, in a joint judgment, expressly adopted a passage from Spry, The Principles of Equitable Remedies (5th edn, 1997) (at pp 402–403), which may be summarised as follows:
(a)In assessing the balance of convenience in an interlocutory injunction application, the interests of the public and third persons are relevant and have more or less weight according to other material circumstances;
(b)Whether those interests tend to favour the grant or the refusal of an injunction in any given case depends upon the circumstances of that case; and
(c)Hardship visited upon third persons or the public generally by the grant of an interlocutory injunction will rarely be decisive.
I intend to apply these principles in the present case.
The Present Case
Panadol is one of the two leading brands of over-the-counter adult everyday pain relief. Nurofen is the other. Together they hold approximately 71% of the relevant market. That total market share is not split between Panadol and Nurofen 50/50 but in a ratio of approximately 46% to 54%.
Panadol has a significant and long standing reputation in the over-the-counter pain relief market in Australia and is a well-known and clearly identifiable product. It has very significant brand equity.
The relevant class of consumers in respect of over-the-counter pain relief products is likely to be broad. The purchasers will cover a broad range of ages. They will include customers who are loyal to one brand, repertoire shoppers and new customers.
Both groups of products are for sale in supermarkets and other retail stores, as well as in pharmacies. They are relatively inexpensive. The level of consumer engagement in respect of such products will not be high, the purchase being of short duration and involvement. The relevant consumers are likely to be heavily influenced by advertising of the kind which Reckitt intends to deploy in the campaign if it is permitted to recommence that campaign on 25 October 2016.
I am firmly persuaded that, if Reckitt is permitted to resume the campaign on 25 October 2016, as it has threatened to do, then some consumers will purchase Nurofen in preference to Panadol. This is because the campaign has been cleverly constructed and aggressively and specifically compares the two products while constantly reminding the consumer of Nurofen’s superiority. These assertions of superiority are specifically directed to effective pain relief and fast relief, which are two of the three key category drivers of purchase of these types of products, according to Mr Meins. In addition, even where the proposed advertising refers to paracetamol in a generic fashion, it is likely that it will have an impact on sales of Panadol.
The resurrection of the campaign:
(a)Will remind consumers of the messages from the August–December 2015 campaign, compounding and consolidating those messages in the minds of consumers; and
(b)May have a detrimental effect on Glaxo’s negotiations with retailers with respect to shelf space and in-store advertising space, especially where those retailers perceive a shift or potential shift in consumer purchasing behaviour.
If the Court grants the interlocutory injunctive relief claimed by Glaxo, it will have either no or only negligible impact on Reckitt. The claimed injunction will not prevent Reckitt from advertising Nurofen or Nurofen branded products. It will be directed only to the impugned comparative advertising campaign in respect of which Reckitt has conceded for present purposes that there is a serious question to be tried as to whether the statements made by it at the heart of the campaign are false. As I have already mentioned, I am not at all satisfied that Glaxo is prevented by some contract, agreement or bargain said to have been reached between it and Reckitt on 14 December 2015 or on 15 December 2015 from making the present application. Nor am I satisfied that Reckitt has incurred expenditure upon the assumption that it will be permitted to recommence the campaign on 30 October 2016 which cannot otherwise be productively employed. The evidence did not disclose with any particularity when the first of these expenditure commitments was made. There is no suggestion that commitments were made prior to 17 June 2016 when Minters made perfectly plain to Ebsworths that any attempt to recommence the campaign in October 2016 would be resisted by Glaxo.
In any event, any expenditure undertaken by Reckitt in order to ready itself to recommence the campaign in October 2016 will have been made in the face of a very clear indication from me given on 15 December 2015 that I would not look too kindly on Reckitt’s seeking to recommence its campaign at the beginning of the hearing of the separate questions.
It must be remembered that the responsibility for all of the delays to date rests entirely with Reckitt. While I appreciate that those difficulties seem to have been caused by Dr Moore refusing to come to Australia in order to give evidence, nonetheless Reckitt must take responsibility for them because it was Reckitt which engaged Dr Moore in the first place and Reckitt which wished to continue to defend the current proceeding even though Dr Moore had let them down. This stance adopted by Reckitt meant that the Court was obliged to afford to it a fair opportunity to secure the services of another appropriate expert and then to have that expert prepare and make available his or her evidence. All of these things have delayed the hearing of the separate questions. None of them can conceivably be regarded as the responsibility of Glaxo or the Court.
It is unfortunate for Reckitt that the progress of the case has been so heavily influenced by the default of the expert chosen by them but that is incontrovertibly the fact of the matter.
Reckitt’s undertaking was given, in effect, as the price which it was compelled to pay for securing any adjournment of the hearing fixed to commence on 21 December 2015 and for the later adjustments to the date for the hearing of the separate questions. It must be remembered that, on 15 December 2015, Glaxo’s primary position was that the Court should force Reckitt to conduct this case on 21 December 2015 without the benefit of an expert. To have done so would have been unjust. However, given that the campaign was still running as at 15 December 2015, Reckitt saw the obvious wisdom in proffering an undertaking to the Court in the terms in which it did in order to avoid an immediate application for interlocutory relief on the part of Glaxo. Reckitt must have formed the opinion at that time that the Court was unlikely to allow the campaign to continue indefinitely while Reckitt put its house in order in respect of the expert evidence upon which it intended to rely at the hearing of the separate questions.
Reckitt submitted that, in addition to the prejudice that will be suffered by it by having its expenditure on advertising and promotional activity wasted, it will suffer additional prejudice constituted by further delay in its capacity to recommence the campaign at a time which might produce the most effective results. I do not accord any weight to this submission as it ignores entirely the reasons for the alleged timing difficulty.
In addition, Reckitt made a submission to the effect that the true “status quo ante”, for present purposes, is that Glaxo delayed commencing this proceeding and then did so without making any claim for interlocutory relief. Thus, according to Reckitt, it was permitted to continue to run its campaign throughout August, September, October, November and December 2015 in circumstances where no application to restrain it from doing so on a temporary basis had been made.
I do not accept these submissions.
I have already concluded that there was no inordinate delay on the part of Glaxo in commencing the present proceeding. Furthermore, Reckitt has not demonstrated any prejudice suffered by it as a result of the time taken by the parties to explore their respective positions in the month between early August and early September 2015. Also, I accept Glaxo’s submission that it acted appropriately when it sought an early final hearing in respect of its claims for declaratory and injunctive relief when it appeared before the Court on 15 October 2015. It is commonplace in matters of this sort for the aggrieved party to forego a contested interlocutory hearing in order to procure the earliest possible date for the final hearing. This approach should be commended, not criticised.
In addition, to identify the status quo ante on a basis which does not include the existence of Reckitt’s undertaking is wholly unreal. As matters presently stand, Glaxo has the protection of Reckitt’s undertaking up to and including the commencement of the hearing of the separate questions. That undertaking has been in place for almost ten months. The Court and Glaxo may have been forgiven for thinking that, in the circumstances presently obtaining, Reckitt would not act precipitately to reinvigorate the campaign at a time when the parties and the Court would be (and should be) appropriately occupied with the hearing of the separate questions. Had Reckitt attempted a resumption of the campaign on 25 October 2016, no doubt Glaxo would have made an application of the kind which it has now made. While that application would have been dealt with on its merits, it is likely that some form of temporary restraint would have been imposed.
Glaxo cannot be criticised for not pressing for a more significant restraint in December 2015. Both the Court and Glaxo took a pragmatic approach to that which was offered fully expecting that there would be no need for Glaxo to make an application of a kind which it has now been compelled to make.
Finally, it must be remembered that, notwithstanding that this proceeding is between private litigants who compete in a very lucrative and substantial product market, the persons who will be most affected by false statements being made in Reckitt’s advertising are the consumers of the relevant over-the-counter pain relief products. In circumstances where Reckitt has conceded that there is a serious question to be tried in the present case, the Court would require compelling evidence and arguments going to the balance of convenience and justice of the case before declining to restrain the making of such statements for a further few months or so in circumstances where Reckitt’s undertaking has been in place for ten months already.
CONCLUSIONS
In my view, the balance of convenience and justice overwhelmingly favours the grant of injunctive relief as sought.
There was some argument between the parties as to whether the injunction, if granted, should be expressed to apply only for the four days commencing 25 October 2016 upon the basis that the injunction should not extend beyond the end of the hearing of the separate questions. To restrict the life of the injunction in that way would inevitably mean that a further interlocutory hearing would be required at the end of the hearing of the separate questions. This is most unsatisfactory and the Court will not countenance such an approach.
In all the circumstances and bearing in mind that the present application has been fully contested and argued, I think that the appropriate order is that the injunction inure for the benefit of Glaxo until the final disposition of the separate questions or until further or other order of the Court. In this way, if Reckitt is successful at the upcoming hearing, the injunction can be immediately dissolved. On the other hand, if it is unsuccessful and seeks to appeal, the injunction will stand subject to any consideration of the matter by the Full Court.
The present Application is a discrete application. Reckitt has lost. There is no reason why it should not pay Glaxo’s costs of and incidental to the Application. I therefore propose to make an order for costs in favour of Glaxo against Reckitt.
There will be orders accordingly.
I certify that the preceding one hundred and five (105) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Foster. Associate:
Dated: 7 October 2016
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