Johnson & Johnson Pacific Pty Ltd v Cottons Australia Pty Ltd

[1995] FCA 243

IN THE FEDERAL COURT OF AUSTRALIA )
NEW SOUTH WALES DISTRICT REGISTRY )   No. NG 677 of 1994
GENERAL DIVISION               )

Between:JOHNSON & JOHNSON PACIFIC PTY LIMITED

Applicant

And:COTTONS AUSTRALIA PTY LIMITED

Respondent

REASONS FOR JUDGMENT

EINFELD J                 SYDNEY          17 FEBRUARY 1995

The applicant moves on an amended notice of motion for orders to prevent or restrain the respondent's advertising of its product in the form which the respondent has adopted and proposes to continue to adopt, and its packaging of one of its products.

The matter in dispute concerns cotton tampons, a product which some seven months ago was first launched by the respondent on the Australian market.  Until that time and subsequently the applicant has substantially dominated the market in tampons in Australia, producing products under two principal names, Meds and Carefree, which significantly consist of rayon or a rayon extract.

The case primarily turns, especially for urgency, on the respondent's television advertisement.  The evidence establishes that the respondent proposes to launch another round of its television advertising on 5 March, the advertisement having first been shown on television on 15 January this year.  The respondent has apparently purchased a total air time over a three week period commencing on 5 March which will cost it some $121,000 to add to the $120,000 it has already expended on the advertisements and commercials up to the present time.

Because this matter comes on for hearing so close to the proposed resumption of the advertising and because if any changes have to be made to the advertising there would need to be a lead time of at least two weeks, it is urgent that the judgment on the application for interlocutory relief in relation to the advertising be given.  Having formed a clear view about the matter I propose to give judgment now without expressing totally or in perhaps the most felicitous way that would otherwise have been attempted, the brief reasons for judgment.  If necessary I shall expand on these reasons in a prepared judgment at a later time.

Because of the urgency this is not the time or place for a lengthy quotation of legal authority but it is clear law that comparison advertising which this commercial is must comprise close adherence to truth to pass what I described in another case: Benckiser Australia Pty Ltd v L&K Rexona Pty Ltd unreported 19 February 1993 at page 9, as the "spicy curry" of the Trade Practices Act.  On the other hand, it is the Act's intention that consumers be protected from being misled or deceived concerning matters of substance, not that they be, as I called it in the same case, "cuckolded from the day to day features, some would say ugliness, of a robust, sophisticated, competitive, pluralist market economy".

The commercial which I have seen several times on video in the course of the proceedings is quite short -- I did not time it myself but I am told it takes thirty seconds.  The words used are not the only things attacked by the applicant but the words are really at the heart of what is sought to be restrained.  Indeed, the applicant expressly put to the Court that it has no objection to the visual presentations at all but only to the voice-overs which give meaning to and seek to draw the message from the pictures shown.

The words are, and I quote:

Of these three leading brands of tampons -

-- the three leading brands include the two manufactured by the applicant and one other --

two are covered with a synthetic material, two use dyes to colour the cords and all three are made using some synthetic fibres.  Still they are all very effective.  Here's another very effective tampon.  It's called Cottons because unlike the others it's made from a hundred per cent natural cotton.  No dyes, no synthetics.  Now you really do have a choice.

To obtain urgent relief in support of its application and statement of claim, the applicant has of course to make out an arguable case that this advertisement, and the packaging to which I shall come later, are misleading and deceptive in contravention of section 52 of the Trade Practices Act.  Its argument is that the advertisement contains in substance two major sections.  One is that the tampons which are manufactured by the applicant are made with synthetic material which the applicant says is false because they are made out of rayon which is said not to be a synthetic.  The second section is the statement that the respondent's product has no dyes or synthetics, which the applicant says is false because in fact it contains a very small proportion of a product known as ethylhexylpalmitate (EHP).  Therefore the respondent is misleading and deceptive about both its own product and its competitor's product.

So far as concerns the packaging, the attack is that the respondent's product is described as "Australia's first all natural 100 per cent cotton tampon".  These words appear on a plastic cover surrounding the packages in which the tampons are finally purchased and on a leaflet contained inside the package.  The attack here is that because of the presence of the EHP, it is not "all natural" at all.

There has been presented in evidence today, albeit on an interlocutory basis and therefore not cross-examined, a very considerable amount of technical and scientific material, not all of which of course I have read in full.  I am therefore relying upon counsel to have drawn my attention to the parts which would most obviously assist their respective cases on an interlocutory basis.

So considered, the technical and scientific material establishes that there is a considerable degree of conflict in the expert community about what rayon is, and even about what a synthetic fibre or substance means.  The context in which this television commercial and packaging must be viewed is not only their precise words and their analysis by scientists and lawyers but, in relation to the television commercial, its presence amongst a large volume of product commercials of all kinds appearing day in, day out, week in, week out; and in the case of packaging, its presence amongst literally hundreds of thousands of products found on the shelves of supermarkets and commercial outlets all over the western world, a very large number of which contain messages to convey information to potential and actual purchasers about the contents and merits of the product concerned.  In fact the public is inundated with appeals and invitations for its custom for a wide range of household goods by an almost inexhaustible variety of tantalising mechanisms.

There has been no marketing evidence presented here to demonstrate the success of this type of advertising in attracting custom away from one product to a competitor's, whether in tampons or any other area of commerce, so I am left to draw inexpert personal or intuitive conclusions.  As it seems to me, some commercial importuning on television is so unattractive and repulsive as to be likely to cause positive repugnance.  Other attempts seem startlingly seductive but glaringly exaggerated.  Others still might have some people running to their local 24 hour outlets in their night attire with a passion otherwise reserved for non-commercial pursuits.

It is not overstating the position to describe the public exposure to television and point of sale advertising as a tolerance-testing overdose.   To treat the respondent's particular thirty seconds of enticement as of such quality and invasive genius that people will be glued to every word is absurd.  Uninstructed by any expert testimony on the subject, in my opinion that is not what happens at all.  It is unlikely that when confronted by this commercial on television the public will immediately rush off to the Macquarie Dictionary or the Australian edition of the Oxford Dictionary, both of which have been exhibited before me.  Still less, if I may say so, will they search their book shelves for what I have been told is the Textile Institute's Textile Terms and Definitions, 8th edition, 1986, to try to plumb the mysteries of what are "synthetics" or "synthetic fibres" or "rayon" or any of the other subject matters raised in this dispute.

As I said in argument, I believe that the normal public reaction to the use of the word "rayon" would not be to treat it as a naturally grown substance like cotton which is harvested in the fields and converted into a product for use on the market in various ways.  I think that "rayon" would be likely to convey the concept of something manufactured with the assistance of many additives, including chemical compounds and elements, so as to create what would be described, by comparison with a vegetable like cotton, a synthetic substance or fibre.

As it seems to me, that view is significantly supported by the evidence.  Not only is there quite a weight of evidence suggesting that rayon is synthetic but some of the evidence comes from the applicant itself.  Very understandably these pieces of evidence were dismissed by senior counsel for the applicant as being what he described as a "gotcha" point.  It was a colourful and expressive way, as is his attractive wont, to deal with what in fact must be treated as a fairly decisive inroad into the argument he was putting on behalf of his client, no doubt under instructions.  For on not one but two occasions, once in October 1990 at the time of an application for a patent in relation to one of their makes of tampon, the other in a letter in February 1994 at the outset of this dispute between the parties, his own client described rayon and rayon fibres in writing as synthetic materials.  In my view, their use of that expression, in terms of public understanding if not scientific correctness, was much more correct than the argument which they sought to raise in these proceedings.

I am not at all persuaded that the applicant has any sort of arguable case that the respondent has misled or deceived the public by using the words in their television commercial "All three are made using some synthetic fibres" when referring to the applicant's goods made out of rayon.  It would on that ground alone be in inappropriate for equity to intervene to grant relief to prevent that statement.

However, the applicant not only based its case on the use of those words.  At the point in the commercial when the words "All three are made using some synthetic fibres" are spoken, there appears, from what I am informed from the bar table, to be an unravelling of the three so-called leading brands of tampons including the applicant's two.   Having watched the commercial four or five times, I must say that it did not occur to me that what was actually being shown was the unravelling of a tampon so as to highlight the fact that the substance of the tampon was synthetic.

Typically, the majority of the public would see this commercial only once or twice perhaps, certainly not as I did with intensive concentration one time after another in the fairly cloistered and artificial atmosphere of a court room unaffected by the interventions of screaming children and sports or meal-hungry husbands uninterested in the constitutional make-up of tampons.  It is not at all clear to me that potential customers of either the applicant's or the respondent's product would come to a conclusion that what they were being told was that the internal content of the applicant's products were synthetic.  On the other hand, when informed that that is what is being done, I could accept it as the fact because there is certainly nothing to see that is inconsistent with that fact.  But I could not imagine that a member of the public watching that commercial would really have very much idea at all of what an unravelled tampon would look like or that it particularly was being criticised at all.

I think the general view would be that the tampons are being distinguished between those that are made of what the public itself would generally regard as a synthetic fibre on the one hand, and those which are made out of cotton.  In the circumstances I can see nothing other than the most minimal misleading of the public in this regard, if any at all, certainly not the type of misleading to which the Trade Practices Act was directed.  It must be remembered that the Trade Practices Act as a total piece of legislation was actually directed towards providing for bigger, better and more protected competition in the marketplace as well as the narrowing of the nature of the type of presentation and promotion of products in the protection of the consumer.  Consumers certainly need to be protected from lies and untruths told to them in advertising but it must not be done in such a technical and semantic way as to deprive them of a real opportunity of enjoying competitive products.

The applicant of course says that its attitude in these proceedings has not been to interfere with competition in the slightest.  In a metaphorical way it was almost falling over the bar table to say that it welcomed the competition in the marketplace.  In fact, of course, the realities of the commercial world are somewhat different to that form of interesting advocacy.  As Chief Justice Gibbs enjoined us in Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] 149 CLR 191, one must take the totality of advertising in its context and not choose words or analyse lines or look to dictionaries or be too pedantic about it. It is on the totality of the impression that consideration must be given as to whether there has been any misleading or deception at all. In relation to the comparison between synthetics and cotton, this commercial has in my opinion not infringed the Act in an arguable way.

The second part of the commercial attacked relates to the supposed misrepresentation that the respondent's product has no synthetics in it, despite a minimal quantity of the substance called EHP.  In my opinion this is a trivial and entirely unmeritorious attack on the commercial and must be disregarded and dismissed.  So far as concerns the packaging, once again the use of the words "all natural", when the fact is that there is a less than half a per cent of EHP in the substance, in my opinion does not deceive or mislead or have any tendency to deceive or mislead the public in any relevant way to which the Act might have been and is directed.

The applicant's case amounts to a contention that the commercial and, I suppose for that matter, the packaging are so engaging and eye-catching to that part of the population in the market for tampons that it could only conclude that the respondent's product is unaffected by anything synthetic whereas the applicant's product is so affected.  If that is so, then it can only be because the applicant's products are made of a substance which
the public would regard as being a synthetic fibre as the applicant itself has so described it in important documentation.

This explains rather than results in the respondent's particular criticism of the long delay which has attended the applicant's bringing this matter before the court.  I said earlier that the matter was first drawn to the respondent's attention in February 1994.  There followed an exchange of correspondence which resulted on 31 March 1994 in the respondent declining to accede to the applicant's requests in relation to the presentation of its product and their description, comparative and otherwise.  Another three months passed before the respondent's tampons were first sold to the public but still no action was taken to stop their marketing.  It was not until 6 October 1994 that an injunction was first sought but the matter has, for one reason or another, not reached a hearing until today, due largely or significantly to the apparent reluctance of the applicant to press the claim.  Moreover, at least two orders of the Court requiring that the applicant file its statement of claim, so that the nature of the case could clearly be seen before the question of an injunction was considered, were ignored and it was not until some time after the second extension of time for the filing of a statement of claim that it was in fact filed.  Even in the correspondence that preceded the statement of claim there was little if any reference to the matters which are now being agitated in support of the injunction.

All of those facts lead me to believe that the applicant was never confident of its position and did not believe that the comparisons being made by the respondent of the two products were in fact an infringement of the Act.  At any rate, they were so doubtful about it that they delayed inexorably, it appears, in commencing their proceedings.

The respondent argues that the applicant was motivated by television reports in January 1995 and immediately thereafter on the condition called toxic shock syndrome from which it is alleged a thirteen year old Australian girl died as a result of the use of a tampon.  The evidence shows that that television program actually appeared some two weeks after the respondent's television advertising started, suggesting that it was the report on the death of the young girl which sent up the danger signals for the applicant that if it did not act quickly, it could lose its significant share of the market to the relatively new player with its advertising of a 100% natural cotton product.

As it seems to me, these are all matters which I should take into account not merely on discretionary questions, but on the merits of the case as a whole.  They reinforce the view which I have independently formed that the case has little if any arguability at all.  I should record that the applicant argued that if balance of convenience and discretionary issues arose, it would be relatively simple to amend the television advertising because all that would be necessary would be to change a small part of the voice-over.  This action, the applicant said would not be extremely costly or need to delay the campaign to commence in March.

In relation to the packaging the applicant conceded that they had known of it for some time, that the respondent would need further approval from government authorities to change the packaging, that there would be problems because the respondent imported its packaging and product from overseas, and that unless it could use up at least the stocks which it already had, there would be significant wastage and loss of funds.  The respondent said that this would represent a commercial disaster for it which might send it "to the wall".

There was little if any evidence of any of these arguments and I put them to one side except to say that if the matter had come down to discretionary issues, I should have thought that the clear balance of convenience was in favour of allowing the respondent to continue with its television advertising and its packaging, and that the applicant's arguments should all await the great day when it is ready to present its substantial case to the court.

However, as I say, discretionary issues are not necessary because I do not believe that the applicant can overcome the first of the hurdles, viz. to establish that it has a real case that has a reasonable and fair chance of being successful.  All I have really is the contention of lawyers and some unsworn speculated marketing assumptions in relation to public reaction and I must treat those with some degree of reserve and allow for the possibility of vivid imagination and colourful advocacy.

In the circumstances the motion for an interlocutory injunction must fail.

(After discussion)

In my opinion this motion was misconceived and had virtually no merit at all.  I cannot see any reason at all why the respondent should wait for its costs to abide the outcome of the principal proceedings.  In fact, I should be very surprised if there were any principal proceedings.  I dismiss the notice of motion with costs.