Sweating it out – the Federal Court provides guidance on the use of "clinical" to describe product ranges

"Clinical" is a powerful term that's often used in advertising, but does it have any firm meaning? A recent decision thoroughly examines its use in the marketing of antiperspirants, and provides a useful insight into how that term is likely to be assessed by courts in future Australian Consumer Law (ACL) matters (Unilever Australia Ltd v Beiersdorf Australia Ltd [2018] FCA 2076).

The "clinical" products and the ACL claims

Unilever Australia Ltd claimed that Beiersdorf Australia Ltd had engaged in misleading and deceptive conduct and had made false representations in the marketing and distribution of its “Nivea Stress Protect Clinical Strength” range of antiperspirant deodorants.

Unilever itself sells a "Clinical Protection" range of Rexona and Dove antiperspirant deodorants, while Revlon Australia Pty Ltd sells the "Mitchum Clinical" range in the same market segment.

Unilever claimed that Beiersdorf had made 11 false and misleading representations with respect to the Nivea product range's antiperspirant effects and protection against stress sweat in both present and future matters. These were categorised as:

• the "similarity" representations: the Nivea product range had similar efficacy and protection characteristics as the other products in the "clinical" subcategory;
• the "superiority" representations: Nivea product range had greater efficacy and a higher level of protection than all other antiperspirant deodorants, including the "clinical" subcategory products; and
• the "stress sweat" representations: the Nivea product range provided particularly strong efficacy and a higher level of protection for consumers who suffer from stress sweat.

Were false and misleading representations made in this case?

Justice Wigney recognised that there "was, or was at least perceived by consumers to be, a "clinical" subcategory or segment of the Australian market for antiperspirant deodorants." The critical question was what membership of this subcategory was likely to convey to consumers.

Considered as a whole, the evidence:

"ultimately established that the ordinary reasonable consumer of antiperspirant deodorants in Australia was, in all the circumstances, likely to believe or understand no more than that an antiperspirant deodorant in the clinical segment was one which was, or was said to be, a high-strength product, or a product which was highly efficacious and particularly suitable for people who were, or perceived themselves to be, heavy sweaters."

In these circumstances, Justice Wigney found that Beiersdorf’s conduct in marketing its antiperspirants as "clinical strength" amounted to no more than a representation that its product was either a high-strength product or highly efficacious product for heavy sweaters. It did not, as Unilever contended, amount to "an implied representation that the product met some specific benchmark of strength or efficacy, by reference to perspiration reduction, which had been established by the existing products in the clinical range".

Justice Wigney found:

• the ordinary meaning of the term "clinical" did not assist in establishing a meaning;
• the evidence demonstrated that “clinical” meant "high strength" in the market segment;
• the ordinary consumer for the market segment would perceive "clinical" as denoting "high strength" and efficacy, and not representative of a quantitative benchmark;
• the marketing materials for the Nivea product range focused on strength and efficacy rather than a standard or quantitative benchmark;
• Beiersdorf's internal documents indicated that it understood the "clinical" subcategory to denote "high strength" to consumers;
• the Nivea product range's similarity to other products in the segment favoured an interpretation of "clinical" as "high strength"; and
• the Nivea product range's membership of the clinical subcategory would not, of itself, represent to the ordinary consumer that the product was better at reducing perspiration than other antiperspirant deodorants.

If the representations had been made, were they false or misleading?

Justice Wigney also went on to analyse the tests and considerations that both parties brought forward to argue for and against the making of the "similarity", "superiority" and "stress sweat" representations. In particular, the court considered:

• laboratory testing – including "head-to-head" tests that compare relevant products, and "absolute" tests that measure the overall efficacy of a product without a comparative assessment;
• blind home user testing – which involved testing unmarked versions of relevant products with a large number of test participants;
• evidence of complaints against the Nivea product range;
• the market performance of the Nivea product range; and
• the marketing of the Nivea product range in other jurisdictions eg. the United Kingdom.

Justice Wigney considered the evidence relating to each of the purported representations, although he deemed that much of the evidence was difficult to rely upon and many of the considerations were unpersuasive. For example, he found deficiencies in each of the laboratory test methodologies, in particular the lack of baseline measurements or ability for the results to demonstrate a perceivable difference in the products to the ordinary consumer. Similarly, the evidence of complaints submitted by Unilever did not prove that consumers were misled by the actual marketing of the Nivea product range.

He did however find that many of the purported representations, if made, would have been misleading. However, given the core finding that the representations had not been made in the first place, the truth or falsity of the representations was irrelevant to his decision.

On 25 February 2019, Unilever appealed Justice Wigney's decision.

Key takeaways

As with most ACL cases, the findings in this case were heavily dependent on the nature of the evidence before the court. To conclude that this case has determined how the term "clinical" would be viewed in every context would be overreaching. The results may vary on a case-by-case basis.

But the case is a cautionary tale for those seeking to use the term "clinical" to market their product ranges. It also demonstrates the need for companies, who wish to use similar terms to sub-categorise their products in existing market segments, to closely scrutinise those segments before deciding to use those terms.

In particular, companies should consider:

• Whether any regulatory standards apply to the use of the chosen term in the market segment: in this case, it was common ground that there was no regulatory or other relevant standard that applied to the use of "clinical" in the antiperspirant deodorant market. The existence of such standards in another market would likely create a different result;
• How the term is currently being used in the market segment: it was clear that other products in this market also did not utilise a quantitative benchmark for "clinical". Beiersdorf therefore had a clearer case for why an ordinary consumer would perceive "clinical" to mean "high strength". However, other market segments may follow different trends such that "clinical" has a more literal significance; and
• Whether the product get-up makes general or specific representations: Beiersdorf's case was assisted by the fact that "clinical" was used in a general sense and as part of a composite term that denoted that the Nivea product had high efficacy. However, the balance of Justice Wigney's reasons demonstrate that a get-up or marketing strategy that denotes something more specific (eg. similar or superior efficacy to other products in the range) would require a strong basis for making such representations, which may include precise quantitative testing for factors or benchmarks that are perceivable to the ordinary consumer.

Further guidance from the courts will no doubt appear in the eventual appeal judgment.