Consideration
114 In the present case the relevant class of consumers will be those who purchase or who are likely to purchase household insecticide products. I do not think that the class should be defined more narrowly. This class will include, but will not be limited to, those who will be purchasing an AIIC system for the first time, and those who have already purchased a NaturGard AIIC system and who are seeking to purchase a refill for that system. I will refer to the ordinary or reasonable member of that class as "the representative consumer".
115 In opening its case the applicant placed reliance on the observations of Burchett J in Duracell Australia Pty Ltd v Union Carbide Australia Ltd (1988) 14 IPR 293 at 299 that a purchaser of "cheap commodities" cannot sensibly be expected to devote much time and thought to the weighing of statements made about them by their producers, and that an inaccurate or ambiguously qualified statement about such products may often be found to be misleading.
116 Whilst I accept the cautionary nature of those observations, they cannot be applied - and I do not believe that his Honour intended them to be applied - indiscriminately or inflexibly to all cases involving the purchase of relatively inexpensive items. Much will depend on the nature of the item itself and the significance to the consumer, as purchaser, of the alleged representation concerning that item. The present case is a good example. It can be taken that a consumer with an interest in the characteristics of the household insecticide product he or she seeks to purchase will spend some time inspecting the product to garner information from it and, if reasonably and readily available, from other sources (such as other products displayed with it) to ensure that the product meets that person's immediate requirements. This will certainly be so when varieties of a product within a range are presented for choice and the element of choice is important for the consumer. This is unlikely to be so when the consumer is uncaring as to the choice presented - such that any product or variant having the general characteristics of the desired household insecticide (for example, that it is an FIK), regardless of its specific characteristics, will satisfy the consumer's immediate need. There will be consumers who will fall within the range of the two extremes that I have described. Importantly, however, the level of attention to be paid to the packaging of the product will be a function of the consumer's engagement with the product and that person's need for information to satisfy his or her questions about it.
117 Thus I do not accept that consumers who are purchasers of relatively inexpensive items necessarily approach the purchase of those items in a mechanistic or uncritical way. It is to be remembered in this regard that, when Burchett J made these observations, he was addressing a submission based on Parkdale Custom Built Furniture Proprietary Limited v Puxu Proprietary Limited (1982) 149 CLR 191, which was a case dealing with alleged misleading or deceptive conduct in the context of the purchase of relatively expensive items of furniture. His Honour, quite properly, sought to distinguish that case from the case before him which was concerned with the purchase of household batteries.
118 The applicant's case proceeded upon an analysis of the packaging of the New NaturGard Product and the New NaturGard Refill considered, first, in the context of other products in the NaturGard range and the previous promotion of those products (specifically by television advertising) and, secondly, by considering the packaging of the products alone.
119 In my view the respondent's previous television advertising for the NaturGard range of products does not have the significance which the applicant has sought to place upon it. I doubt whether the details to which I was taken in submissions - which I have noted above - would remain steadfastly in the recollection of viewers in any significant numbers. Indeed, my own description of the television commercials in these reasons does not seek to summarise all the thematic elements of them. I have certainly not sought to summarise every significant feature of the commercials. Rather, I have sought to record those features on which the applicant seeks to place reliance. My own description, therefore, places an emphasis on features which they do not necessarily bear when each commercial is viewed as a whole, without attention being directed to them. Considered as a whole, the dominating element of the television commercials dealing with the NaturGard Launch Product and the Second NaturGard Product is that automatic and continuous control of insects is sought to be provided by, and can be achieved by, the system.
120 Having said that, I accept that, by reason of some of those commercials, a not insubstantial number of viewers at that time - who are typical of the representative consumer - would have been led to the belief, correctly, that the particular products advertised also provided a natural means of insect control using a plant-based active ingredient. I also accept that visual elements employed in some of the television commercials would have contributed to the formation of that belief or reinforced it in respect of the particular products in the NaturGard range that were promoted by reference to that attribute. The evidence shows that this attribute has contributed significantly to NaturGard's brand equity and, certainly in previous years, has been provided by the respondent as part of the consumer's "reason to believe" that NaturGard products provide a more natural way to effectively control and eliminate insects. The evidence makes clear, however, that, with the launch of the new products in June and July 2012, the respondent has commenced to move from that marketing platform to one that emphasises the use of other natural ingredients in the NaturGard products. I accept that the motivating reason for this has been the respondent's desire to move away from the use of pyrethrins as an insecticide because of the problems it has encountered with the reliable supply of that ingredient.
121 I am not persuaded that, typically, the representative consumer who is a present-day purchaser of, specifically, the New NaturGard Product or the New NaturGard Refill would approach his or her purchasing decision with any specific recollection of the historical television advertising of the NaturGard products. This advertising was not continuous but seasonal in nature. Such a purchaser may have a general recollection that previously advertised products contained a plant-based active ingredient, when that claim was made. As the respondent has emphasised, that claim was last made in television commercials some 15 months before the launch of the New NaturGard Product and the New NaturGard Refill. I am unable to accept that any recollection of the previous television commercials promoting that claim would now be held so strongly that the representative consumer would apply his or her understanding of previously promoted products indiscriminately to what is now being promoted as a new product in the NaturGard range with its own specific and discrete product claims.
122 A not insubstantial number of consumers, typical of the representative consumer, will approach their purchasing decision informed by the current season's television commercial for the New NaturGard Product. The commercial does not make a claim that the product uses plant-based ingredients. The commercial does emphasise that the product contains 98% natural ingredients and is "odourless". Those watching the commercial attentively will see the visual messages that the product contains 1.4% synthetic actives and no plant-based actives. Those visual messages are far less prominent, and are correspondingly of far less significance, than the aural message that the product contains a large percentage of natural ingredients. Some viewers will take those visual messages into account and retain them; others will not be cognisant of them. Once again I note that the applicant makes no complaint about the current television commercial. Its only complaint is with respect to the packaging of the New NaturGard Product and the New NaturGard Refill.
123 Even given the existence of the current season's television commercial and the fact that television advertising is the main form of promotion of products in this category, I accept the respondent's submission that the display of household insecticide products on the shelves of supermarkets will constitute the dominating context in which the representative consumer will consider the packaging of the New NaturGard Product and the New NaturGard Refill. In that context the New NaturGard Product and the New NaturGard Refill are presented not only as Mortein brand products but as products within the NaturGard range. More specifically, the products are presented as variants within the sub-category of AIIC systems. The evidence shows that, typically, at least two variants are displayed. Thus the New NaturGard Product is shown alongside or near the Second NaturGard Product. No doubt there will be occasions when the New NaturGard Product will be displayed alongside or near the Adjustable NaturGard Product. It may well be the case that all three AIIC systems will be displayed alongside or near each other. The point of present relevance is that the circumstance of choice thus presented by such a display will introduce the element of comparison into the consumer's decision-making process.
124 Similarly the evidence shows that, as a component of the NaturGard AIIC systems, the New NaturGard Refill will be displayed alongside or near, at least, the Second NaturGard Refill. Indeed, the evidence gives an example of all three current refill variants (that is, including the eucalyptus variant) displayed together. Once again, the circumstance of choice presented by such a display introduces the element of comparison into the consumer's decision-making process. In that connection it is also necessary to bear in mind that all variants of the refills can be used in the NaturGard AIIC systems, whether that system be the Second NaturGard Product, the New NaturGard Product, the Adjustable NaturGard Product or, indeed, the NaturGard Launch Product.
125 It is convenient to put the circumstance of choice to one side for the moment and to consider how the representative consumer would examine the packaging of the New NaturGard Product and the New NaturGard Refill without the opportunity for in-store comparison with other variants within the sub-category. The applicant's submissions, in that regard, proceeded on a somewhat sequential treatment of the packaging elements of each product to ground a submission that, by the time the consumer comes to see the words "1.4% synthetic actives" in the tombstone on the packaging, he or she would be already labouring under a serious misunderstanding which that particular statement in the tombstone does not correct. According to the applicant, that misunderstanding, in respect of each of the products, is constituted by each of, or one or more of, the representations which it has pleaded: see [91]-[92] above.
126 In my view the packaging of each product cannot be dissected in that way. Of necessity any description of the packaging elements must be given in a step-wise fashion. But when the representative consumer views the packaging, he or she will be met with a combination of elements that, as a whole, will be meaningful and impart information about the product to that consumer. In the present case that information will include, of course, that the product is part of the NaturGard range. The consumer's consideration of the product will be preceded by knowledge that it is an insecticide product. That is, after all, the essential characteristic of the product that initiates the consumer's consideration of it in the first place. But if the attributes and characteristics of the New NaturGard Product and the New NaturGard Refill are important for the representative consumer - and specifically as avowedly new products - he or she is unlikely to ignore the combined effect of conspicuous elements of the packaging that impart information about the particular product in question.
127 In the case of the New NaturGard Product those elements include the description of the product as "new" and "odourless". The applicant submitted that, for the representative consumer, these are the only features of the packaging that would differentiate the New NaturGard Product from other products in the NaturGard range. It submitted that the representative consumer would be predisposed by the general elements of packaging that the New NaturGard Product shares with other products in the NaturGard range to believe that it contains a plant-based or otherwise natural active ingredient. It submitted that, if the product did not contain a plant-based or otherwise natural active ingredient, the representative consumer would need to be specifically disabused of his or her erroneous belief.
128 There are a number of difficulties with that submission. First, I do not accept that the representative consumer would approach his or her consideration of products in the NaturGard range with a rigid mindset that all products in the range contain a plant-based active ingredient, particularly if they are new products. Secondly, if the presence of a plant-based active ingredient in the product is a significant element in the representative consumer's purchasing decision, I think it is more likely than not that he or she would seek some specific verification of that fact from the packaging itself. Thirdly, and in any event, the tombstone is a conspicuous element of the packaging of the New NaturGard Product. The representative consumer is unlikely to ignore it. Even a cursory examination of the packaging will draw attention to it. The representative consumer would understand the tombstone to contain important information about the attributes and characteristics of the product. The representative consumer must be taken, therefore, to be equally armed with that information as he or she would be with the information imparted by other conspicuous elements of the packaging. So armed, the representative consumer will know that the product provides continuous protection against flies, mosquitoes and crawling insects; that over 90% of its ingredients are natural; and that 1.4% of its ingredients are synthetic actives.
129 In my view the representative consumer would more likely than not regard the last-mentioned statement for what it truly is: a description of the active ingredients of the product. By that description the representative consumer is informed, accurately, that the active ingredients are synthetic and that they constitute 1.4% of the total ingredients of the aerosol. If verification of these facts were required, the "actives" and their respective proportions are clearly and specifically identified just above, and to the left of, the tombstone. They are easily seen on the packaging. These are the only active ingredients. There are only two of them. I would accept that unless the representative consumer has specialised knowledge, he or she might not know the derivation of the listed substances by reason only of their chemical names. But the representative consumer would realise that these must be the "actives" referred to in the tombstone and that, by reason of the information given in the tombstone, they must be synthetic substances. I should add that the applicant did not suggest that the representative consumer would not understand that the word "synthetic" in this particular context means a substance that was not naturally occurring.
130 The applicant's case proceeds on the basis that, rather than accepting the statement as a description of the characteristics of the active ingredients of the product, the representative consumer would embark upon a process of reasoning that involves reading the last-mentioned percentage statement as referring only to the synthetic ingredients as a percentage of the active ingredients of the product, not to the active ingredients as a percentage of the total ingredients of the product. The applicant's thesis was that the representative consumer would then take the further steps of reasoning that there must be other active ingredients in the product and that those other active ingredients must be plant-based ingredients or otherwise natural ingredients.
131 Contrary to the applicant's submission, I do not accept that it would be reasonable for the representative consumer to read this percentage statement as referring only to the synthetic ingredients as a percentage of the active ingredients of the product. Having been informed that 90% of the total ingredients of the product are natural, it would not be rational for the representative consumer to then think that the immediately succeeding 1.4% statement was referring to a different universe; that is, something other than a percentage of the total ingredients of the product. If the consumer did think that a different universe was being referred to then that would be the consumer's own erroneous conclusion based on nothing more than conjecture, the consequences of which could not be attributed to the respondent. The succeeding steps in the reasoning process posited by the applicant represent no more than further examples of conjecture based on the initial erroneous conclusion.
132 The same considerations apply in relation to the second version of the New NaturGard Refill. Here the contrastingly coloured tombstone identifies the product as the "odourless" variant. Although the two "percentage" statements are depicted in smaller figures and lettering within the tombstone, they are nevertheless sufficiently conspicuous and would not be missed by the representative consumer as important information about the characteristics of the product.
133 When one comes to consider how the representative consumer would examine the packaging of the New NaturGard Product or the second version of the New NaturGard Refill when presented with the opportunity for in-store comparison with other variants within the sub-category - which will be the typical context in which the examination takes place - the situation of the consumer presents even more obvious outcomes. When the tombstones for the respective products are compared, they each impart different important information about the characteristics of the products.
134 For example, if the representative consumer were to compare the New NaturGard Product with the Second NaturGard Product, he or she would be told instantly that the Second NaturGard Product controls flying and crawling insects with a plant-based active ingredient. The use of a different packaging statement about the characteristics of the New NaturGard Product provides an inescapable contrast between the two products. They are different. In that example, one important difference is that the Second NaturGard Product has a plant-based active ingredient whereas the New NaturGard Product - the new odourless variant - has synthetic actives.
135 The same contrast is provided when the second version of the New NaturGard Refill is compared with the other refill variants. The tombstone on the Second NaturGard Refill once again characterises the product as having a plant-based active ingredient. The tombstone on the eucalyptus variant characterises the product as having a plant-based active ingredient and natural eucalyptus extract. When the comparison is undertaken, the representative consumer knows immediately that the three refills are different. One point of difference is that the Second NaturGard Refill and the eucalyptus variant each have a plant-based active ingredient whereas the tombstone on the New NaturGard Refill - the new odourless variant - tells the consumer that that variant has synthetic actives.
136 In my view, however, the position in respect of the first version of the New NaturGard Refill is somewhat different. The tombstone tells the representative consumer that the variant is "odourless" and contains "over 90% natural ingredients". The active ingredients are listed immediately to the right of the tombstone. Unless the representative consumer knows that transfluthrin and permethrin are synthetic ingredients, he or she will be none the wiser about their derivation. The back of the can does refer to the product containing "1.4% trusted synthetic actives" along with other product information. The information is not inconspicuous, but the consumer would be required to engage in a detailed investigation of the product to find it. I accept that some consumers would do this if they were very engaged by the product. In my view, however, there would be a not insubstantial number of persons who are typical of the representative consumer who would not examine the product with that level of attention or engagement. Such a consumer would simply rely on what he or she was told in the tombstone. This then throws emphasis back on the statement: "Over 90% natural ingredients". Given that the essential quality of the product is that it is an aerosol insecticide, I am satisfied that a not insubstantial number of those persons would understand that statement as conveying, without further elaboration, that at least some part of the insecticide (that is, some part of the active ingredients) is "natural". The important point of difference between this version of the New NaturGard Refill and the second version is that the tombstone of the second version presents composite information which includes an important and explicit statement about the active ingredients in the product being synthetic.
137 Moreover, the opportunity for comparison with the other variants would not dispel the consumer's impression that at least some part of the active ingredients of this version of the New NaturGard Refill is "natural". This is because the other two variants contain a plant-based active ingredient. The representative consumer examining the first version of the New NaturGard Refill might understand that the other two variants are different in having a plant-based active ingredient, but he or she would still be left with the impression that at least some part of the New NaturGard Refill's active ingredients is "natural", although not apparently plant-based.
138 For these reasons I am not satisfied that, by using the packaging of the New NaturGard Product, the respondent has represented and continues to represent that:
(a) the New NaturGard Product uses or contains a plant-based active ingredient to control insects;
(b) the New NaturGard Product uses or contains a natural active ingredient to provide continuous protection against flies, mosquitoes and crawling insects; or
(c) 1.4% of the active ingredients of the New NaturGard Product are synthetic and the balance of the active ingredients are natural.
139 Similarly, I am not satisfied that, by using the packaging of the first and second versions of the New NaturGard Refill, the respondent has represented that the New NaturGard Refill uses or contains a plant-based active ingredient to control insects.
140 The applicant also claims that, by its packaging for the New NaturGard Product and for the first and second versions of the New NaturGard Refill, the respondent has represented that the New NaturGard Product and the New NaturGard Refill use or contain a natural ingredient to control insects. The pleading of these allegations is ambiguous. If the expression "to control insects" is taken to mean no more than that natural ingredients are used in the aerosol product which, as a product, is used to control insects then the packaging of these products does convey that representation because over 90% of the ingredients are said to be natural. That representation is, however, accurate. The making of it cannot constitute conduct that, in the circumstances, is misleading or deceptive or likely to mislead or deceive.
141 On the other hand, if the applicant intends to allege that the respondent has represented that some part of the natural ingredients of the product have an effect upon the insect itself, I am satisfied that that representation is made by the packaging of the first version of the New NaturGard Refill and is false. In the circumstances, the making of that representation by that form of packaging constitutes conduct in trade or commerce that is misleading or deceptive or likely to mislead or deceive in contravention of s 18 of the Australian Consumer Law. I am not satisfied, however, that that representation is made by the packaging of the New NaturGard Product or the second version of the New NaturGard Refill.
142 There is a final matter I should mention in my consideration of the applicant's case. In the course of his cross-examination, Mr Tedesco was challenged with the respondent's adoption of the visual statement in its current season's television commercial that the New NaturGard Product contains "No plant based actives". A similar statement is also now used by the respondent in its website advertising with respect to the product. Mr Tedesco was also challenged with the respondent's adoption of the statement "Does not contain Natural Active Ingredients" that is to be used in future print advertising for the product. It was put to Mr Tedesco that the respondent consciously deployed these statements to dispel the suggestion, otherwise made in those forms of advertising, that the New NaturGard Product uses a plant-based active ingredient or a natural active ingredient. The thrust of this part of the cross-examination was to suggest that, without such an explicit disclaimer, the mere statement that the product contains 1.4% synthetic actives (such as that used in the impugned packaging for the products) was insufficient to dispel an abiding impression on the part of consumers that the products do contain natural or plant-based active ingredients.
143 Whilst it may be accepted that the respondent could use a range of explicit statements on the packaging of its products to describe with greater detail the attributes or characteristics of the active ingredients used in them, the question presented for adjudication in this proceeding is whether the packaging which the respondent has adopted for the New NaturGard Product and the New NaturGard Refill misrepresents the attributes and characteristics of the products in the ways that the applicant has alleged. For the reasons I have given, I am satisfied that, in one aspect, that claim has been established in respect of the packaging of the first version of the New NaturGard Refill, but not otherwise.