Cases about misleading conduct can be enough to give anyone a headache. In the case of GlaxoSmithKline Australia Pty Ltd v Reckitt Benckiser (Australia) Pty Limited (No 2)  FCA 1, we can at lease be confident that the parties came prepared for this.
GlaxoSmithKline is the company that makes and sells Panadol. Reckitt Benckiser is one of their competitors. They make and sell Nurofen. This case involved a claim by GlaxoSmithKline that Reckitt Benckiser had engaged in misleading and deceptive conduct by running ads which suggested that Nurofen was more effective than Panadol for common headaches. The ads included graphics like this:
The Court also found that the ads impliedly represented that there was a current adequate foundation in scientific knowledge to support the claims made in the ads.
The Court provided a useful summary of the relevant principles:
- Conduct is misleading or deceptive if:
- it has a tendency to lead a person into error, or to believe what is in fact false.
- there is a real or not remote chance or possibility that it will have that effect
- The conduct must be:
- assessed as a whole, viewed in the context of all relevant surrounding facts and circumstances.
- considered or tested against the ordinary or reasonable members of the class to whom the representation was made or the conduct directed. The question is whether a substantial, or at least a reasonably significant, number of that class is likely to be misled or deceived
- It is not necessary to prove that the person who made the representations intended to mislead or deceive
- Where the conduct or representation is in the form of an advertisement, the Court must look at:
- the “dominant message” or “general thrust” of the advertisement
- the whole advertisement, because context is or may be important.
- the external context in which a consumer is likely to view an advertisement.
- There are no special principles that apply to comparative advertising. However, a comparative promotion of a product necessarily indicates that the advertisement is not “mere advertising puff”, but involves representations of fact which are either true or false
- Television commercials “will be seen by the casual but not overly attentive viewer viewing a free-to-air program with only a marginal interest in the advertisements shown between the segments of the program. In that context it will be the first impressions conveyed to that viewer, rather than an analysis of the cleverly crafted constituent parts of the commercial, which will be determinative.”
- It can be misleading to make a statement which implies that there is an adequate scientific foundation in scientific knowledge to justify it if, when taken in its context the scientific statement quoted does not provide a proper foundation.
- It can be misleading for a corporation which disseminates information not to put forward sufficient information to avoid the possibility that the recipient may be misled
In this case, Reckitt relied on a clinical trial from 1996 that supported its claims. However, there had been other studies done since 1996. Two of those studies, which were also clinical trials, returned inconclusive results. They did not support the 1996 study, but they also did not prove that the 1996 study was wrong.
There were also two “meta-analyses”, where the researchers did not conduct clinical trials, but gathered as much available data as possible to see if there was a clear difference between the two products. Those “meta-analyses” did not directly contradict the 1996 study, but concluded that the based on the present state of scientific knowledge it was not possible to justify a claim that Nurofen was better than Panadol.
Reckitt argued that the 1996 study was valid and none of the later studies had shown that the conclusions of the 1996 study were invalid or unsupportable. Reckitt claimed that it was not misleading to run ads based on that study.
The Court did not accept that argument, but found that it was misleading to claim that Nurofen was better than Panadol when there was only one study that supported that claim and the balance of the studies did not support it.
This case is a reminder that a business cannot make claims in its advertising unless those claims can be supported. Even if a business can find a study to support its claims, it can still be misleading to refer to just that one study and not other studies that may have reached a different conclusion. Businesses need to be especially careful when claiming that their product is better than a rival product. If an ad includes any unsupported claim or “half-truth”, there is a serious risk that the owner of the rival product will pursue a claim.
I still do not know whether Nurofen is better than Panadol, but I do know that neither one of these products will cure the headaches that you risk causing for yourself if you run a comparative advertising campaign without running it past your lawyer first.