Case: Gillette Australia Pty Ltd v Energizer Australia Pty Ltd [2002] FCAFC 223 ; (2002) 193 ALR 629
Outcome: considered
Gillette Australia Pty Ltd v Energizer Australia Pty Ltd [2002] FCAFC 223 ; (2002) 193 ALR 629 the Full Court made some helpful observations about comparative advertising. Gillette and Energizer manufactured and distributed batteries. Gillette used the brand name "Duracell", and supplied alkaline batteries. Energizer used the brands "Energizer" and "Eveready". It supplied both alkaline and carbon zinc batteries. Alkaline batteries last longer but are more expensive than carbon batteries of the same size. Energizer sought to restrain Gillette's television advertisement which claimed that the Eveready Super Heavy Duty Battery (a carbon zinc battery) "just can't keep up", and that "with up to three times more power Duracell will always win", on grounds that included that the advertisement did not reveal that there was a substantial price differential between the two batteries, and thus consumers could be misled in comparing the value of the two. On that basis the trial judge granted an injunction. The Full Court allowed Gillette's appeal. Heerey J said at [20]: The characterisation of advertising as comparative does not of itself have legal significance, or create any kind of presumption in favour of a party alleging a breach of Pt V of the TPA. There is no basis in the TPA for regarding comparative advertising as an inherently disreputable form of commercial conduct, to be viewed with suspicion by the courts. On the contrary, to the extent that comparative advertising provides consumers with accurate hard facts about competing products, it assists in the making of better informed consumer choices and thereby results in more effective competition. Of course, the more actual comparisons that are used, the more potential there is for error (and half-truth). So advertisers have to be careful ... Assertions of factual inaccuracy have to be carefully considered by courts in comparative advertising cases, no differently from any other cases. Heerey J then rejected Energizer's contention that to compare the products without mentioning the price was not to make a full comparison and was thus unfair. His Honour said at [22]: [The] textual basis [for the contention] is the heading of Div 1 of Pt V , "Unfair practices". But to use general notions of unfairness, which bring to mind the concept of unconscionable conduct appearing elsewhere in the TPA, is to put an unwarranted gloss on the plain words of provisions of Pt V such as ss 52(1) and 53 (a). Provided the factual assertions are not untrue, or misleading half-truths, an advertiser can lawfully compare a particular aspect of its product or service favourably with the same aspect of a competitor's product or service. His Honour then considered an example that had been discussed in argument where airline X advertised that its economy class seats provide 20 cm more leg room than those of airline Y. If that claim is true, s 52 does not oblige airline X to provide in its advertisement detailed information as to the other factors which might influence consumers choosing between airlines. And if airline Y wanted to advertise that its fares were cheaper, its aircraft more modern, and its flights more frequent, that would be legitimate so long as "no untruths or misleading half-truths are stated": at [23]. Returning to the facts before him, Heerey J concluded at [24]: A consumer, informed by the advertisement (correctly, it must be assumed for present purposes) that the Duracell battery lasts three times longer than the Eveready Super Heavy Duty battery, can make his or her decision at the point of sale whether the extra power of the Duracell is worth the higher price. I do not see how it could be said that such a consumer has been misled or deceived. Indeed, it would be inconsistent with the policy and objectives of the TPA to restrict a trader from publicising, truthfully, a feature of its product which is superior to the same feature of a competitor's product. His Honour went on to explain why that was so. The other members of the Full Court were of the same opinion: Lindgren J at [53] (pages 646-647 point (7)) and Merkel J at [85], [91] and [93]. THE WITNESSES Polaris Trevor Guest established Polaris in 1981. It first manufactured SoundShield in 2001. Mr Guest has over 25 years experience in the sale of telecommunications equipment in Australia. He has no formal technical or scientific qualifications. However his experience in the manufacture, importation and sale of this equipment has exposed him to a wide variety of technical matters associated with sound regulation. He said he is familiar with the various technical standards that apply to telecommunication devices in Australia. He has personally installed SoundShields and other telecommunications equipment in a range of customer premises, has programmed SoundShield on numerous occasions and is familiar with the device and the settings contained within it. Mr Guest swore four affidavits and wascross-examined at length. He came across as an honest witness. On one occasion, when he was describing a test he had done of SoundShield, he seemed to gild the lily by describing it as a comparative test of SoundShield and M15D. However, I think this was attributable to confusion on his part and was not an attempt to mislead the Court. He conceded that he was wrong to characterise his test as a comparative one. Mr Guest accepted that his lack of formal technical qualifications meant he could not express authoritative opinions about scientific, electronic and audiological matters. However, his long involvement in the acoustic protection device industry, his participation in the formulation of industry standards, and his hands on experience, provided sufficient basis for the evidence he gave as to the industry, the general effect of the standards and the mechanisms of SoundShield. I have emphasised the word "general" because Mr Guest was not seised of the detail of the standards or of the technical attributes of the various devices. The best example of this was his confusion about the headset profiles, when he was at odds with his own experts. In addition, Professor Blamey took exception to many of Mr Guest's measurements, in particular his unexplained transition between the different types of decibels dB, dBA, dB SPL at DRP as though they were all the same. Thus, on matters of a technical nature, I do not regard him as having the expertise to express opinions that can compete with those of acknowledged experts. Ben Minski joined Polaris in 2004 as an account manager. More recently he has been the project/implementation manager of the major roll outs of SoundShields into call centres nationally. His experience includes installing over 20,000 SoundShields in approximately 80 call centres Australia wide, and he was consequently familiar with the device, the different technical settings contained within it, which settings best suit particular technical environments and users, and what happens if a device is not correctly customised to its particular environment and user. His evidence was largely uncontroversial. He was cross-examined. I thought him an honest witness, a conclusion that was confirmed by the fact that on one topic his evidence did not assist Polaris' case. Rodney Thompson was in charge of the technical side of Polaris' business. He has tertiary electronic engineering qualifications, and experience as an engineer with Telstra and since 2006 with Polaris. He is familiar with the measurement of sound signals and signal levels generally, the various telecommunications standards in use in Australia, and what those standards mean in technical terms for the Australian telephone network and devices that operate in conjunction with it. He was cross-examined, and the concessions he made in the course of his evidence made it clear that he was giving a truthful account of matters on which he spoke.