FEDERAL COURT OF AUSTRALIA

Unilever Australia Ltd v Revlon Australia Pty Ltd [2014] FCA 573

THE COURT ORDERS THAT:

1.    The Applicant’s claim for interlocutory relief pursuant to the Originating Application filed 23 May 2014 is dismissed.

2.    The Applicant pay the Respondent’s costs of the application, limited to the claim of misleading advertising.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

Introduction and Background

1    The Applicant (Unilever) and the Respondent (Revlon) manufacture and sell in Australia competing brands of a “clinical” anti-perspirant deodorant product. Unilever’s products are sold under the names “Rexona” and “Dove”. Revlon’s products are sold under the name “Mitchum”.

2    Clinical anti-perspirant deodorants provide protection against heavy sweating. Unilever’s clinical products are sold under the names “Rexona Clinical Protection” and “Dove Clinical Protection”. Revlon’s product is sold under the name “Mitchum Clinical”.

3    The Rexona and Dove clinical protection products have been marketed and sold in Australia since 2009. They were the only such product sold in the Australian market until January 2014 when Mitchum Clinical was released.

4    In early May 2014 Revlon launched an advertising campaign in support of the Mitchum Clinical brand. Revlon’s Marketing Director, Ms Tracey Raso, describes it as a “robust media campaign”.

5    Ms Raso states that the advertising campaign started on 3 May 2014 and is scheduled to continue until approximately the end of June 2014. Her evidence is that the advertising campaign will be “critical” to the success of the Mitchum Clinical product in the Australian market.

6    The Australian anti-perspirant deodorant product market accounts for over $380 million of annual retail sales. Clinical anti-perspirant deodorants comprise only about 1.8% of sales in number, but apparently constitute about $20 million in value.

7    Unilever is the market leader in the anti-perspirant deodorant market in Australia with a total market share of approximately 65% to 66%.

8    Following the release of Mitchum Clinical in January of this year, Unilever’s share of the clinical products sub-market has fallen slightly from its previous 100% share and now stands at approximately 93%. Revlon holds the balance, namely about 7%.

9    On about 5 May 2014, Unilever’s Vice President of Marketing in Australia, Ms Andrea Martens, became aware of an advertisement published the previous day in the Herald Sun’s “Sunday Style” magazine. The advertisement included the following statement:

You thought nothing was STRONGER?

Switch to Mitchum – the ULTIMATE sweat + odour control.

10    During May 2014 Revlon published other advertisements or advertorials for its Mitchum Clinical product in various forms of media. One of the advertisements was published in the New Idea magazine on 19 May 2014. A copy of the advertisement was annexure D to Ms Martens’ affidavit.

11    The advertisement in New Idea is headed “NEW Mitchum Clinical”. It contains a photograph of a young couple engaged in what is apparently the challenging physical pursuit of rock climbing.

12    Under the photograph, in bold green letters, the words “The ULTIMATE sweat + odour control” are set out. They appear next to a logo or device which is shown in the middle of the page. The device is in the form of a green coloured shield with a silver border. The words “THE ULTIMATE” and “CONTROL” appear in white letters inside the shield and those words are separated by a red band containing, in white letters, the words “SWEAT + ODOUR”.

13    The advertisement goes on to say, underneath the photograph, and below the words and the shield device, that “Great moments in life make you sweat”. It then says “Enjoy them with confidence with Mitchum Clinical™” and continues:

Its revolutionary oxygen odour control technology targets and destroys odour, neutralising it all.

14    Later in May, Revlon published an advertorial in the Women’s Day magazine which included, as part of the advertorial, an advertisement in precisely the same form as that which had appeared in New Idea. The advertorial was annexure E to Ms Martens’ affidavit.

15    During May, Revlon also published an advertisement for Mitchum Clinical on YouTube. The same advertisement was broadcast on television on or about 18 May 2014.

16    The YouTube/television advertisement is very short. It runs for about 15 seconds. It may be described as an audio-visual depiction of the “rock climbing” advertisement that appeared in New Idea. It contains a voice over of a female voice which states:

Mitchum presents “Great moments in life make you sweat”.

Enjoy them with confidence with Mitchum Clinical.

Its oxygen odour control technology targets and destroys odour.

Switch to Mitchum Clinical, the ultimate sweat plus odour control.

17    This advertisement also includes a depiction of a round device with the words “OXYGEN” and, in slightly smaller letters, “ODOUR CONTROL”, inside the device.

18    In addition, the following words are shown on the advertisement:

OXYGEN

NEUTRALISES ALL ODOURS

NO ODOUR (in smaller print)

19    The shield device which appeared in the New Idea advertisement also appeared in identical form in the YouTube/television advertisement.

20    There was a reference to the availability of the product in Woolworths and Coles at the end of the advertisement.

21    Between 16 May 2014 and 22 May 2014 there was correspondence between the parties’ legal representatives about the advertisements. Unilever’s lawyers contended that Revlon’s advertisements contravened s 18 of the Australian Consumer Law, Schedule 2 of the Competition and Consumer Act 2010 (Cth) (the ACL) in a number of different respects.

22    The complaints made on behalf of Unilever included a claim that the advertisement in the Herald Sun was a “superiority representation” which Revlon was not entitled to make because Unilever considered that Mitchum Clinical and the Rexona and Dove Clinical products each have parity of performance as an anti-perspirant deodorant.

23    The initial letter of demand complained that the Herald Sun advertisement was an “attempted riposte” to a tagline used by Rexona Clinical Protection, namely “nothing is stronger”. The Rexona advertisement using that tagline was screened during the present interlocutory application.

24    A further complaint made on behalf of Unilever by its lawyers relates to the claimed benefits of Mitchum’s “Oxygen odour control technology” including the question of whether the product contains oxygen either at all, or at sufficient levels to provide any anti-odour benefit to consumers.

25    On 23 May 2014, Unilever filed an Originating Application, Statement of Claim and supporting affidavits. The application seeks declarations that the advertisements referred to above, as well as certain statements and symbols appearing on the Mitchum Clinical packaging and products contravened s 18 of the ACL.

26    The application also seeks a wide range of injunctive relief on a final basis and interlocutory relief in the same terms (pending the final hearing).

The Interlocutory Application

27    The interlocutory application came on for hearing before me on 29 May 2014. At the start of the hearing I offered the parties an early final hearing before the Docket Judge on a large range of dates throughout July. The parties accepted the offer of an early final hearing but Unilever, nevertheless, sought interlocutory injunctive relief, although in narrower terms than those which are set out in the Originating Application.

28    Ultimately, Unilever sought interlocutory relief restraining Revlon from publishing advertisements in the form of those which appeared in New Idea and Women’s Day as well as from broadcasting the YouTube/television advertisement.

29    Unilever also sought to restrain Revlon on an interlocutory basis from making the representations set out in paragraph 6 of the Originating Application. Those representations are said to be as follows:

(a)    Mitchum Clinical controls sweat and odour more effectively than any other antiperspirant deodorant on the Australian market while [Rexona and Dove] Clinical Protection and Mitchum Clinical are sold in Australia;

(b)    use of Mitchum Clinical neutralises all body odour.

30    The issue which arises is whether Unilever has demonstrated a prima facie case that the advertisements are misleading and whether the balance of convenience favours the grant of interlocutory relief within the test stated by the High Court in Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57 at [65]. The test has been reiterated and discussed in a number of decisions of Full Courts of this Court including Samsung Electronics Company Ltd v Apple Inc (2011) 217 FCR 238 at [52]-[74] and GlaxoSmithKline Australia Pty Ltd v Reckitt Benckiser Healthcare (UK) Ltd (2013) 305 ALR 363 (GSK) at [81].

31    Whether there is a serious question, or a prima facie case, is not to be considered in isolation from the discretionary considerations which inform the balance of convenience. What is involved here is an assessment of whether Unilever has demonstrated a sufficient probability of success to justify the grant of interlocutory relief in light of the discretionary considerations raised in the interlocutory hearing.

32    Of particular importance is an assessment and comparison of the prejudice and hardship likely to be suffered by Unilever and Revlon, as well as the impact upon the relevant class of consumers, if an injunction is granted or refused: GSK at [81(i)].

33    The question of whether Unilever has established a prima facie case, turns upon whether Revlon may be said to have made the representations to which Unilever points and whether those representations may be said to be misleading or deceptive within the principles stated in a series of High Court authorities: Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304 at [25] and [102]. The emphasis placed in the authorities upon the need to consider the conduct in its full context is of course of equal importance in the case of advertisements: Tobacco Institute of Australia Limited v Australian Federation of Consumer Organisations Inc (1992) 38 FCR 1 at 4.

Consideration

34    Unilever contends that the advertisements set out above contain two representations which are said to be misleading and deceptive.

35    The first representation is said to be that Mitchum Clinical controls sweat and odour more effectively than any other clinical anti-perspirant deodorant in the Australian market.

36    Since the only clinical products presently available in the Australian market are Rexona, Dove and Mitchum, the effect of the representation is said to be that Mitchum Clinical is more effective than Rexona and Dove.

37    The representation is said to be made in the phrase “The ULTIMATE sweat + odour control” which appears in each of Revlon’s advertisements, as well as in the shield device.

38    Unilever relies on the evidence of its Personal Care, Research and Development Technical Manager, Mr Daniel Mullette, to demonstrate the falsity of the representation. Mr Mullette’s evidence is that each of the competing products is equally effective in controlling sweat and odour.

39    Revlon’s expert, Dr Michael Traudt, did not directly attack this aspect of Mr Mullette’s evidence. Rather, Revlon’s attack on the first representation was that the phrase “The ULTIMATE sweat + odour control” is merely a puff of the type commonly used in advertising: General Newspapers Pty Ltd v Telstra Corporation (1993) 45 FCR 164 at 178.

40    In my opinion there is a serious question to be tried as to whether the phrase, considered in its full context, constitutes a representation or whether it is, as Revlon contends, merely a puff.

41    However, the nature of the serious question is such that discretionary considerations lean strongly against the grant of interlocutory relief to restrain the making of the alleged representation.

42    One of the discretionary considerations is the early final hearing which is due to take place next month. Another is the need for a closer consideration of the context, as well as the need to determine the impact of the advertisement upon the relevant class of consumers: Campomar Sociedad Limitada v Nike International Ltd (2000) 202 CLR 45 (Nike) at [102], [103].

43    It is true that I was taken, to some extent, to the context in which the advertisements appeared but little or no attention was paid to determining the relevant class of persons to whom the advertisements are directed and their impact upon such persons.

44    The internal Revlon emails to which Unilever referred (Exhibit A) are, in my opinion, of little assistance in answering this question. In particular, the content of the emails is concerned with the way in which Revlon wished to “pitch” the advertisement. The emails do not, in themselves, provide an answer to the question posed in Nike.

45    The second representation is that Mitchum Clinical neutralises all body odour. That representation is made in each of Revlon’s advertisements. But a difficulty arises in determining whether Unilever has established a prima facie case that the representation is misleading or deceptive.

46    The difficulty is due, in part, to the fact that Unilever did not pursue its claim for interlocutory relief in respect of paragraphs 6(c) to 6(e) of the Originating Application. Those paragraphs seek orders restraining Revlon from making representations to the effect that Mitchum Clinical contains oxygen.

47    The use of oxygen in Mitchum Clinical is claimed by Revlon to be an essential part of its new “Oxygen Odour Control Technology”. It is also said to provide special benefits to consumers in controlling and neutralising perspiration odour.

48    However, the separation of paragraphs 6(c) to 6(e) of the Originating Application from paragraph 6(b) makes it more difficult to form a view as to Revlon’s claim that the use of Mitchum Clinical neutralises all body odour.

49    In addition, Dr Traudt’s evidence must be taken into account in determining whether Unilever has established a prima facie case in relation to the representation that Mitchum Clinical has the beneficial effect claimed in the advertisements.

50    The task which I must undertake in deciding this issue was described by a Full Court (Allsop CJ, Jagot and Nicholas JJ) in Warner-Lambert Company LLC v Apotex Pty Ltd [2014] FCAFC 59 at [72], citing the observations of Mahoney JA (with whom Glass and Samuels JJA agreed) in Shercliff v Engadine Acceptance Corporation Pty Ltd [1978] 1 NSWLR 729 at 734.

51    In the present case, Dr Traudt’s evidence contains what appears to me to be a helpful explanation of the way in which anti-perspirants work. He explains that members of a certain type of bacteria which commonly exist in the human axillia (or armpit) are the primary, but not exclusive, causative agents of axillary malodour and that a specific thiol is a major contributor.

52    Dr Traudt goes on to say that the formula for Mitchum Clinical includes stabilised hydrogen peroxide which works so as to oxidise any malodourous thiols present in a consumer’s armpit through the release of oxygen when the product is applied.

53    Dr Traudt’s evidence goes some way toward demonstrating that Unilever has not made out a prima facie case in relation to Unilever’s claim that Mitchum Clinical does not neutralise all body odour. However, in my opinion the better view is that the dispute between the experts as to this question cannot be resolved in the present interlocutory hearing.

54    Unilever pointed to certain confidential evidence in a report obtained by Revlon which was part of Exhibit 1. The results of clinical testing set out in Table 2 to the report suggest some instances in which the result was greater than the odour neutral score of 4. This suggests that for a small percentage of the persons who were the subjects of the tests, the application of Mitchum Clinical resulted in some odour. This would lead to the conclusion that the phrase “Mitchum Clinical neutralises all odour” is misleading.

55    However, I do not consider that the results of this clinical testing are sufficiently clear that they establish a prima facie case to the level which in my view would be necessary to warrant the grant of interlocutory relief.

56    It may be true, as Senior Counsel for Unilever submits, that an injunction would have limited effect on Revlon’s marketing arrangements with Woolworths and Coles, which were not explained in any detail. However, it is clear that if I were to grant an injunction it would have some adverse effect on Revlon’s marketing campaign which has been planned on a worldwide basis over a substantial period of time.

57    It is difficult to determine the precise effect on Revlon. It may not be great because I was informed, at the conclusion of argument, that the New Idea and Herald Sun “Sunday Style” advertising has been completed.

58    In any event it is necessary to weigh against the adverse effects on Revlon, the effect on Unilever and consumers.

59    Whilst it is possible that consumers may be misled, I cannot be satisfied of this to the extent which in my opinion would be needed to justify the grant of interlocutory relief to restrain advertising. This is particularly so, as I have said, where a final hearing is to take place next month.

60    So far as Unilever is concerned, it seems to me that I can take into account the fact that it held a monopoly on the sale of clinical products until January and, notwithstanding Revlon’s efforts to enter the market, Unilever still holds a 93% share of this sub-market.

61    Moreover, the sub-market for clinical products is a very small part of the large market for anti-perspirant deodorants in which Unilever is the market leader. Any adverse effects on Unilever can be met by an order for corrective advertising if Unilever succeeds at the trial next month. I note that Unilever seeks such an order in paragraph 7 of the Originating Application.

Orders

62    I will order that Unilever’s claim for interlocutory relief be dismissed with costs.

Associate:

Dated:    3 June 2014