12 November, 2016
INTRODUCTION
Fair use in comparative advertising is a defence to trade mark infringement under the Trade Marks Act (“TMA”). The applicable principles in the defence of comparative advertising under s 28(4)(a) of the TMA were recently considered by the Singapore High Court (“HC”) in a trademark infringement suit (“the Suit”) brought by Allergan, Inc. (“the First Plaintiff”) and Allergan Singapore Pte Ltd (“the Second Plaintiff”) against Ferlandz Nutra Pte Ltd (“the Defendant”).
This is the first time that the defence of comparative advertising under s 28(4)
(a) of the TMA has been extensively considered by the Singapore courts in a trademark infringement case. This article examines principally the HC’s interpretation and application of the term “fair use” in s 28(4)(a) of the TMA.
BRIEF FACTS
The First Plaintiff was an American company that manufactured an eyelash growth product (“the Latisse Product”), which treated eyelash hypotrichosis, a medical condition where a patient has inadequate or insufficient eyelashes. The Latisse Product was the only product approved by the US Food & Drug Administration for treatment of hypotrichosis and could only be sold to patients under prescription by a doctor.
The Second Plaintiff, the wholly-owned Singapore subsidiary of the First Plaintiff, had sold the Latisse Product directly to medical clinics and hospitals in Singapore since January 2011. The Latisse Product was marketed through a combination of the Latisse word mark (“the LATISSE mark”) with a stylised eyelash on top of the word (“the Latisse Device Sign”) (collectively, “the Latisse Signs”). The First Plaintiff did not register the Latisse Device Sign in Singapore but only registered the LATISSE mark in respect of “Pharmaceutical preparations used to treat eyelashes”.
The Defendant was a Singapore company that imported and distributed cosmeticeutical and neutraceutical products. In July 2012, the Defendant brought into Singapore an eyelash growth-enhancement product (“the Lassez Product”
) that was made in America. The Defendant also sold the Lassez Product directly to medical clinics, but unlike the Latisse Product, the Lassez Product did not require a doctor’s prescription
before the sale.
The Lassez Product was marketed under 3 signs:
(a) the Lassez word mark (“the Plain Lassez Sign”)
(b) a combination of the Lassez word with a stylised eyelash at the bottom right corner of the word (“the Lassez Device Sign”); and
(c) a combination of the Lassez Device Sign and the words “with myristoyl pantapeptide-17” and “Le Cariderm” appearing on two separate lines below it (“the Lassez Ingredient Sign” (collectively,“the Allegedly Infringing Signs”).
The Suit centered around two categories of alleged trade mark infringement by the Defendant. The first category concerned the Defendant’s use of the Allegedly Infringing Signs, while the second category concerned the Defendant’s use of the LATISSE mark in comparative advertising. Other issues raised in the Suit included malicious falsehood and passing off, but will not be examined in this article.
SUMMARY OF DECISION
The HC held that the Defendant was liable for trade mark infringement in both categories.
1. INFRINGEMENT OF THE LATISSE MARK
The HC held that all three elements of s 27(2)(b) of the TMA were satisfied:
- the Allegedly Infringing Signs and the LATISSE mark were similar;
- the Latisse Product and the Lassez Product were identical or similar; and
- there existed a likelihood of confusion on the part of the relevant public in view of the preceding two factors.
On the similarity of both products, the HC accepted that the Lassez Product was a cosmetic product that did not require a prescription, as compared to the Latisse Product which was a pharmaceutical product available only on prescription. However, these differences did not prevent the HC from concluding, based on guidelines established in case law, that the Lassez Product was similar to the range of products (namely, “pharmaceutical preparations used to treat eyelashes”) that the LATISSE mark was registered for.
On the likelihood of confusion, the HC found that the “average consumer” was not limited to only doctors and/or clinic staff, but included the end-users because the evidence suggested that they were significantly involved in the selection process of the Latisse and Lassez Products. In particular, the C noted that both products were displayed side-by-side in one of the medical clinics and the Lassez Product was a viable alternative to the Latisse Product. The HC accepted the Plaintiffs’ definition of end-users as “females who have an interest in improving the appearance of their eyes or eyelashes, and who are the target customers of the products in question”.2
The HC was also satisfied that a substantial portion of the end-users would likely be confused in this case, notwithstanding that they would have “a relatively high level of attentiveness”3 as the products related to personal well-being and were costly. Besides the technical distinctiveness of the LATISSE mark, the HC took into account the results of a survey conducted by the Plaintiffs which showed that 45% of 400 randomly selected females aged 20 to 55 years old who used or bought eyelash related products thought that they were likely to be confused in that they might mistake one brand for the other. Only 11.5% of the respondents said that they were unlikely to be confused.
The HC rejected the Defendant’s contention that the survey results did not take into account the fact that the Latisse Product was sold under a doctor’s prescription and the Lassez Product would only be recommended by the doctor as “an alternative way to enhance eyelash growth”.4
The HC observed that there was no evidence that such differentiation of both products to the end-user would be performed in practice. Moreover, “a mistaken assumption of some economic link of or connection between the Latisse Product and the Lassez Product alone will constitute confusion”.
2. INFRINGEMENT BY USE OF THE LATISSE MARK ON PROMOTIONAL BROCHURES
The Defendant’s evidence was that its promotional brochures were intended to be a “detailing aid for the purpose of marketing the Lassez Product to medical professionals in Singapore”.6
The brochure, comprising four pages, set out in its main body two charts, one of which used the LATISSE mark to compare the effectiveness of both the Latisse Product and the Lassez Product (“the Chart”).
Two issues arose for consideration here, namely, whether the Defendant’s promotional brochures containing the LATISSE mark constituted:
(a) “use” in the trade mark sense; and
(b) “fair use” under s 28(4)(a) of the TMA
(a) Use in the trade mark sense
The HC held that the Defendant’s use of the LATISSE mark on its promotional brochures was “use in the course of trade for a trade mark purpose”7, which constituted infringement under s 27(1) of the TMA:
- It was clear that the Defendant had “used” the LATISSE mark in its promotional brochures. Section 27(4)(e) of the TMA states that a person uses a sign if he uses it for advertising. Here, the Defendant did not dispute that the promotional brochures were for advertising purposes; and
- Such use was use as a trade mark to denote origin as the Defendant had expressly referred to Latisse in its brochure and compared the Latisse Product to the Lassez Product. Although the Defendant asserted that the reference to the LATISSE mark did not constitute use in the trade mark sense, the HC disagreed as the word “Latisse” appeared three times in the brochure and “clearly refers the reader to the Latisse Product for the purpose of the comparison that was being made with the Lassez Product”.8
(b) “Fair use”
The Defendant relied on the defence of comparative advertising under s 28(4)(a) of the TMA to argue that any use of the LATISSE mark in the trade mark sense constituted “fair use”. Section 28(4)(a) of the TMA
provided as follows:
“Notwithstanding section 27, a person who uses a registered trade mark does not infringe the trade mark if such use constitutes …
fair use in comparative advertising or promotion …” [emphasis
added]
The key issue was how “fair use” should be interpreted. The HC noted that s 28(4)(a) was added to the TMA following the conclusion of the US-Singapore Free Trade Agreement in 2003. This introduced the doctrine of “fair use”, which originated from US trade mark jurisprudence, into Singapore law.9
The HC observed, however, that whilst Parliament referred to the US fair use doctrine in enacting s 28(4)(a), the Singapore courts were not bound by US decisions on fair use. The HC agreed with academic commentary that “it is for [the Singapore] courts to arrive at a judgment call as to what sort of fair use in comparative advertising accords with fair practices in the market which is truly reflective of the needs of Singapore and all her stakeholders.”10
The HC also noted that it was no longer bound by the case law principles developed vis-à- vis the predecessor provision of s 28(4)(a), which was derived from the equivalent UK provision in the UK Trade Marks Act 1994.
Based on the wording of s 28(4)(a), the HC held that the burden of proving fair use was on the Defendant “who must assert fair use and, accordingly, must bear the burden of proving fair use”.11
In considering whether advertisements that contained untrue or misleading statements could constitute “fair use” under s 28(4)(a), the HC provided the following non-exhaustive guidelines:
- The Court must strike a balance “between the rights of the trademark owner and the right of competitors to enter the market and to provide the public with alternative choices”;12
- Section 28(4)(a) safeguards the public interest in fair competition by permitting a fair use of the trade mark for commercial comparative advertising or promotion;
- Whether including a false statement negates fair use depends on the nature of the statement and whether the defendant knew or ought to have known that it was false; and
- Where it is disputed whether the statement is misleading, the test is whether “the average consumer would find the statement misleading in a material manner”.13
On the facts, the Plaintiffs argued that the Chart was misleading as it suggested that “the Lassez Product was proven by a study to be significantly more effective than the Latisse Product in stimulating eyelash growth”.14
In particular, the Chart “merely reflected figures taken from different studies” and used different parameters and scales to measure eyelash growth in each study.15
The Defendant, however, pointed out that the brochure had clarified, in small print, that the Chart was not a head-to-head comparison because the results of the effectiveness of each product were arrived at by conducting different studies. The HC accepted that a careful examination of the fine print in the Chart supported the Defendant’s contention, but found that the overall impression created by the Chart without such careful examination was that the Lassez Product was much better than the Latisse Product.
The HC also noted that although the brochure was prepared with both medical professionals and end-users in mind and whilst medical professionals and pharmacists could be expected to read and understand the fine print in the Chart, this might not be the case for end-users.
Accordingly, the HC held that the brochure was materially misleading to end-users, because it gave the false impression not only that the comparison of both products was conducted on a similar basis, but also that the Lassez Product, like the Latisse Product, was a regulated product.
The comparative advertising defence therefore did not apply in this case.
CONCLUSION
This case is instructive in that for the “fair use” doctrine in the defence of comparative advertising to apply under the
TMA, a brand owner who intends to use a competitor’s registered trade mark in comparative advertising must ensure that the comparison is “like for like” and is objective and transparent, particularly where the end-users are likely to be lay persons.
The brand owner must be careful not to use different sets of data or information in the comparison that would give the relevant public the mistaken impression that its product is superior to its competitor’s. If the brand owner intends to use different sets of data or information in the comparison, it must qualify the comparison and the qualifications must
be, firstly, clearly visible so as to bring the qualifications to the attention of the public and, secondly, easily understood by lay persons so that they can make an informed decision as to whether the brand owner’s product is indeed superior to its competitors.
1 Allergan, Inc. and another vs Ferlanz Nutra Pte Ltd [2016] 4 SLR 919 (“Allergan”).
2 Allergan at [87].
3 Allergan at [100].
4 Allergan at [110].
5 Allergan at [112].
6 Allergan at [122].
7 Allergan at [130].
8 Allergan at [129].
9 Allergan at [138]-[139].
10 Allergen at [147] quoting from Susanna Leong, Intellectual Property Law of Singapore, Academy Publishing 2013, at para 29.125.
11 Allergen at [148].
12 Allergen at [150].
13 Ibid.
14 Allergen at [153].
15 Ibid.
