FEDERAL COURT OF AUSTRALIA Johnson & Johnson Pacific Pty Limited v Unilever Australia Limited [2006] FCA 486 Trade Practices Act 1974 (Cth) s 52 Gillette Australia Pty Ltd v Energizer Australia Pty Ltd [2002] 193 ALR 629 Campomar Sociedad Limitada v Nike International Limited (2000) 202 CLR 45 JOHNSON & JOHNSON PACIFIC PTY LIMITED (ACN 001 121 446) v UNILEVER AUSTRALIA LIMITED (ACN 004 050 828) NSD 751 OF 2006 TAMBERLIN J SYDNEY 2 MAY 2006 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 751 OF 2006 BETWEEN: JOHNSON & JOHNSON PACIFIC PTY LIMITED APPLICANT AND: UNILEVER AUSTRALIA LIMITED RESPONDENT JUDGE: TAMBERLIN J DATE OF ORDER: 2 MAY 2006 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. After 8 May 2006, the Respondent be restrained, pending the determination of the proceedings or further order, from broadcasting or communicating or causing or authorizing the broadcast or communication of the 30 second television commercial for Dove Summer Glow ("the Commercial") a copy of which is Exhibit "AH3" to the affidavit of Amethyst Marthe Hall affirmed 20 April 2006. 2. The costs of the Application for interlocutory re for interlocutory relief be costs in the cause. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 751 OF 2006 BETWEEN: JOHNSON & JOHNSON PACIFIC PTY LIMITED APPLICANT AND: UNILEVER AUSTRALIA LIMITED RESPONDENT JUDGE: TAMBERLIN J DATE OF ORDER: 2 MAY 2006 WHERE MADE: SYDNEY REASONS FOR JUDGMENT 1 On Friday 28 April 2006, I indicated that I would grant interlocutory relief to the applicant restraining the respondent from advertising its product Dove Summer Glow. I have expedited the matter for hearing and will set an appropriate timetable. I now give my reasons for the decision to grant relief. The questions to be answered on an application for interlocutory relief are whether there is a serious question to be tried and, if so, where the balance of convenience lies as between the parties. Serious Question 2 Johnson & Johnson Pacific Pty Ltd ("Johnson") contends that Unilever Australia Ltd ("Unilever") in advertising its product Dove Summer Glow Body Lotion has engaged in misleading or deceptive conduct under s 52 of the Trade Practices Act 1974 (Cth) in relation to its qualities when compared to Johnson's product Holiday Skin Body Lotion. The claims relate to alleged preferences concerning the tanning effects of the two products. The advertising and promotion of Dove Summer Glow is clearly comparative in nature, and the Court has emphasised the need for assertions to be correct and not untrue or in the nature of misleading half-truths: see Gillette Australia Pty Ltd v Energizer Australia Pty Ltd [2002] 193 ALR 629 at [22], [44]. In this judgment, Lindgren J points out at [44] that comparative, as distinct from the unilateral, promotion of a product necessarily indicates that the advertisement is not merely puffing but involves representations of fact which may in some circumstances be shown to be either true or false. The representations in this case are said to be made in a television commercial and in print advertising. THE TELEVISION COMMERCIAL 3 The commercial is of brief duration and has been widely broadcast on television to large audiences. The wording on the screen and the voice-over are as follows: VISUAL VOICE OVER Introducing the best tanning body lotion under the sun. Introducing the best tanning body lotion under the sun. If you thought Johnson's Holiday Skin gave you the best summer tan … then think again. Seven out of 10 Johnson's Holiday Skin users preferred new Dove Summer Glow. Seven out of ten Johnson's Holiday Skin users preferred new Dove Summer Glow. In use test of 105 women conducted in Australia by leading research company in March 2006. [as a footnote] The unique combination of moisturisers with a hint of self tanning agent in new Dove Summer Glow leaves your skin silky smooth while gradually building the best light summer tan. New Dove Summer Glow body lotion. The best tanning body lotion under the sun. New Dove Summer Glow body lotion. campaignforrealbeauty.com.au (Dove logo) [Emphasis added by Johnson's counsel] 4 The broadcast video is in evidence and there are intonations of voice, images, light-effects and sounds directed to enforce the textual messages. For example, the reference in the voice-over to "a hint of self-tanning" is backed up by an image of droplets of brown viscous liquid falling into a large pool of white cream. These visual images form part of the context in which the commercial should be viewed. The light effects consist of white moving light across the text and also a large bright glowing light on the models used in the first principal image in the broadcast, which one may infer indicates the effect of sunlight. 5 The print advertisement and website are also designed to reinforce the message of the television broadcast commercial. I refer to this material at [14] below. 6 Johnson submits that the advertising material makes the following false representations: (a) that 7 out of 10 users of Johnson's Holiday Skin preferred Dove Summer Glow to Johnson's Holiday Skin, as a tanning lotion, (b) that 7 out of 10 users of Johnson's Holiday Skin preferred Dove Summer Glow to Johnson's Holiday Skin, with respect to each of the four respective products (including 'Normal to Fair' and 'Normal to Darker' categories in both product lines) (c) that 7 out of 10 users of Johnson's Holiday Skin preferred Dove Summer Glow to Johnson's Holiday Skin, and (d) that Dove Summer Glow is the best tanning lotion available. 7 These representations are said to be untrue because: (a) the research taken on its face did not show that 7 out of 10 users preferred Dove as a tanning body lotion, (b) the research only tested the respective Normal to Fair products, (c) the deficiencies in the research methodology mean that no preference claim ("7 out of 10") is justifiable, and (d) neither product is a tanning lotion. 8 In relation to the preference as a body lotion, Johnson says that the "7 out of 10" preference claim is misleading because the claim is based on a general preference that may relate to other qualities such as fragrance and moisturisation effect, rather than a preference based on its performance as a tanning lotion. Johnson claims, therefore, that this research does not provide any basis for an assertion as to Dove Summer Glow's superiority as a tanning lotion. Secondly, Johnson maintains that only one of the two skin types marketed by both companies was tested. Johnson's Holiday Skin Lotion developed for 'normal to darker' skin types was not tested because it had not been launched at the time of the study. Nevertheless, the claims made in the relevant advertisements are capable of being related to this product. Third, Johnson claims that the testing methodology does not support the preference claim. Johnson cites eight reasons why the research methodology is deficient, including that the survey was comprised of a branded test and also that it forced participants to make a preference between the two products. Finally, it is said that consumers who are unaware of the new field of products consisting of moisturisers with a gradual tanning effect, introduced by Johnson's Holiday Skin, would be likely to regard both products as being tanning lotions. 9 Unilever contends that it has not represented that both products are tanning lotions but rather that its advertisement refers to a moisturiser with a gradual tanning agent. In this respect, Dove Summer Glow is similar to Johnson's Holiday Skin. This submission emphasises the reference to "tanning body lotion" with the emphasis on "body lotion" rather than "tanning." Unilever says that the focus on moisturisers with a hint of tanning is emphasised by the visual reference that shows the brown droplets in a large pool of moisturiser. The submission by Unilever unduly plays down the references to tanning and underlines the moisturising assertions. 10 In my view, a reasonable, casual and attentive, but not over-analytical, viewer or reader of the advertising material could be arguably perceive the "7 out of 10" preference claim as placing a strong emphasis on the tanning qualities of Dove Summer Glow and asserting the superiority of the Dove product in this respect: as to the type of viewer or reader to be considered, see Campomar Sociedad Limitada v Nike International Limited (2000) 202 CLR 45 at [103]. Therefore, in my opinion, the matter can arguably be approached on the basis that the broadcast relates to the product and its qualities as a tanning lotion. As to the "7 out of 10" representation, I also consider that there is a serious question in the context of comparative advertising in the light of the emphasis in the initial preceding textual paragraphs and voice-over referring to the product as being a tanning body lotion and the later reference to "summer tan". 11 The imperative "think again" in the second voice-over could arguably be said to provide the context and trigger for the "7 out of 10" preference claim. The implication is that the viewer did not 'get it right' in preferring Johnson's Holiday Skin and that such a view, if held, must be reconsidered. This phrase leads to the subsequent transition to the line of reasoning as to why the ordinary viewer should reconsider any previously held view that Johnson's Holiday Skin gives the best summer tan. On a reasonable interpretation, these claims could be seen by the viewer to assert the performance superiority of Dove Summer Glow as a tanning lotion. 12 Unilever submits that there has been undue delay by Johnson in seeking urgent relief because Johnson was aware of the material in March and did not commence proceedings until 20 April 2006. This is said to indicate that there is no serious infringement or, alternatively, that Johnson did not consider the advertisements to be damaging. This submission is not accepted because, in my view, there has been no undue delay given the obvious necessity to investigate the claim, raise the issue, try to find an alternative solution, seek legal advice and prepare the application. It is evident from this hearing alone that Johnson regards the infringement as serious. 13 Unilever also says that the limitation of the research to the "normal to fair" products in the respective product lines is explicable because the research was done before the new "normal to darker" variant was marketed. While there is some force in this submission, the advertising after that marketing date continued, apparently without any further research. However, there is no evidence that any further survey would be different to the earlier survey and, on the limited material presently before me, I do not consider that a serious issue has been raised on this question. In relation to the Colman Bunton report, in my view the evidence raises a serious factual issue for trial on the question of whether there was a proper factual basis for the assertions made as a consequence of this report. Printed Material 14 The printed material advertising Dove Summer Glow is illustrated by Exhibit 8. This advertisement repeats the "7 out of 10" preference claim and similarly refers to a survey of 105 women conducted by leading research company in March 2006. As discussed above in relation to the television advertisements, these representations are arguably misleading. The printed material also refers to a website at http://www.realbeauty.com.au and, to the extent that this reproduces representations which I have found to be arguably misleading, the reference to the website and the website itself can be said to arguably incorporate misleading material. Balance of Convenience 15 I am not persuaded that Johnson's case is so lacking in force on the material presently available that this should weigh adversely on the question of balance of convenience, although the relative strength of the case is a matter which may be taken into account. Unilever submits that Johnson's delay, the need to complete its advertising campaign, the small number of television commercials remaining before an early final hearing date and the cost of amended advertising, together with the large market share of Johnson are all factors which support its case for the refusal of interlocutory relief. Johnson, on the other hand, contends that the potential damage to it is not capable of remedy in damages and that it is likely to be irremediable if continued. It argues that it may lose market share because it is the express purpose of the Colman-Bunton report to "steal" market share. The advertising is directly targeted at the Johnson product and calls for a greater degree of accuracy, which is arguably lacking in this case. In addition, Johnson contends that damage to the advertising campaign will be minimal because there are only a limited number of television commercials that remain to go to air. Furthermore, Johnson is not opposed to an expedited and early hearing of this matter so that all issues can be ventilated. 16 My conclusion as to balance of convenience is that, provided the hearing of the matter is expedited and an early hearing date obtained, the balance of convenience is in favour of granting interlocutory relief. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Court. Associate: Dated: 2 May 2006 Counsel for the Applicant: D K Catterns QC with S J Goddard Solicitor for the Applicant: Corrs Chambers Westgarth Counsel for the Respondent: T F Bathurst QC with M R Elliott Solicitor for the Respondent: Minter Ellison Date of Hearing: 24 and 28 April 2006 Date of Judgment: 2 May 2006