Case note on Martin & Pleasance Pty Ltd v A Nelson & Co Ltd [2021] FCAFC 80
In the recent decision of Martin & Pleasance Pty Ltd v A Nelson & Co Ltd [2021] FCAFC 80, the Full Court of the Federal Court of Australia upheld the Federal Court’s decision to grant an interlocutory injunction restraining Martin & Pleasance Pty Ltd (and related companies) (collectively, Martin) from marketing, promoting and/or supplying their “RestQ” branded range of complementary medicines.
Background
The respondents are a group of UK based companies, being A Nelson & Co Ltd and related companies (collectively, Nelson), which manufacture a range of complementary medicines under the “Rescue” brand (the Rescue Products), initially devised by Dr Edward Bach in the 1920s and 1930s. The range of Rescue Products included Rescue Remedy and Rescue Pastilles (for stress relief), Rescue Sleep and Rescue Sleep Spray (for sleeplessness) and Rescue Plus (for clarity and composure). Bach Flower Remedies Limited, the Second Respondent, is the owner of Australian registered trade marks for RESCUE and RESCUE SLEEP for goods including medicinal preparations and substances in Class 5.
Martin distributed Nelson’s Rescue Products for over 30 years in the Australian retail market through various retail channels including pharmacies and supermarkets. In October 2020, Nelson sought to terminate the distribution agreement. In February 2021, Martin launched its own range of complementary medicine products for sleeplessness under the RestQ brand including RestQ Sleep Formula, RestQ Calm Formula and RestQ Focus Formula (collectively, RestQ Products). These products were made using methods associated with Dr Edward Bach.
A side by side comparison of the Rescue Products and the RestQ Products is set out below.
 Nelson’s Rescue Products |  Martin’s RestQ Products |
Primary judgement
In March 2021, Nelson commenced proceedings against Martin on the basis of trade mark infringement, passing off and contravention of the Australian Consumer Law (for misleading or deceptive conduct), seeking interlocutory relief restraining Martin from certain conduct, including from offering, marketing, promoting and/or supplying the RestQ Products.
The primary judge granted interlocutory relief after a finding that Nelson had made out a prima facie case of passing off and misleading or deceptive conduct. In particular, His Honour found that Nelson had established substantial goodwill in the Rescue Products and that the “get up” of Martin’s RestQ Products is so sufficiently similar so as to cause in the mind of the consumer real confusion or the likelihood of real confusion as to whether they are the goods of Nelson.
The primary judge declined to base his decision for interlocutory relief on the claims of trade mark infringement, in view of the defence of “good faith” raised by Martin, which would require further inquiry. As interlocutory relief was ordered on other grounds, it was not also necessary for the Court to consider the issue of trade mark infringement at the interlocutory stage.
The primary judge further found that the balance of convenience was in favour of granting interlocutory relief when weighing up the factors involving the relative harm to the parties, the public interest and impact upon third parties, and that an award of damages would not be an adequate remedy.
Appeal
The appeal focused on two key issues, being whether the primary judge erred in the exercise of his discretion in respect of whether (a) a prima facie case had been made out; and (b) the balance of convenience favoured the grant of interlocutory relief.
Prima facie case
In determining whether a prima facie case of passing off and misleading or deceptive conduct had been made out, Martin contended that His Honour erred in comparing the appearance and packaging of the Rescue Products and RestQ Products (that is, the analysis of the similarities and differences in the competing product lines). Martin argued that the primary judge’s analysis involved “a mistaking of the facts and a failure to take into account a material consideration”1. However, the Full Court observed that Martin’s submissions sought to advance a different analysis whereby the dissimilarities in the comparison were given greater weight than the similarities in order to support a different conclusion than that of the primary judge.
In finding that a prima facie case has been established, the primary judge was informed by the similarities of the packaging, including:
- the aural similarity between the names “Rescue” and “RestQ”;
- the similar use of the tag lines “Traditionally used to relieve sleeplessness” on some of Nelson’s packaging and “Traditionally used to calm the mind & relieve sleeplessness” on Martin’s packaging; and
- both the competing product lines referring to Dr Bach.
The Full Court held that the primary judge did not err in weighing the similarities and dissimilarities in the competing packaging in reaching the conclusion that a prima facie case had been made out. Importantly, the Full Court emphasised that in cases which involve questions of evaluation and impression, the Full Court should exercise caution in reversing the primary judge’s findings.
Balance of convenience
As to balance of convenience, Martin’s principal contention was that the primary judge did not properly weigh the harm to Martin and to third parties, and the public interest, from granting the interlocutory injunction against the harm to Nelson if no interlocutory injunction were granted. The Full Court disagreed and noted that whilst the primary judge’s reasons were brief (given the urgency of the matter), his reasons indicated that he performed the necessary weighing and balancing of competing factors.
Martin also contended that the primary judge did not properly assess the strength of the prima facie case, and did not recognise that the strength of the prima facie case and the balance of convenience are related concepts. Both these contentions were rejected by the Full Court. In particular, the Full Court found that the primary judge implicitly concluded that Nelson’s prima facie case was “sufficiently strong” or “relatively strong” in all of the circumstances in accordance with the principles in Samsung Electronics Co. Limited v Apple Inc. [2011] FCAFC 156, resulting in finding that the balance of convenience favoured the grant of the interlocutory injunction.
The Full Court also rejected Martin’s contention that the primary judge did not take into account a range of other relevant matters in assessing the balance of convenience, including that Nelson could not supply products in Australia, the status quo of the market, redundancy of Martin’s employees, wasted expenditure by Martin on marketing and Martin losing shelf space for their products..
Conclusion
Ultimately, the Full Court dismissed the appeal and ordered that Martin pay Nelson’s costs. The matter will now be referred back to the primary judge to determine the substantive causes of action, and award any final relief.
The interlocutory decision acts again as a caution to those traders who seek to “borrow” aspects of the get up of competitors’ products and that doing so may bring such conduct within the realm of the misleading and deceptive conduct provisions under the Australian Consumer Law.
This decision also illustrates the inherent challenges of appealing a decision which involves an exercise of the Court’s discretion.
This article was written by Taryn Francis, Lawyer, and Jacqueline Chelebian, Special Counsel.
1 House v The King (1936) 55 CLR 499 at 504-505