Tobacco companies focus on plain packaging fight after ECJ backs EU tobacco directive 05 May 16
The European Court of Justice (ECJ) has ruled that the new EU directive on tobacco products is valid, meaning that the extensive standardisation of packaging, the future EU-wide prohibition on menthol cigarettes and upcoming special rules for electronic cigarettes are lawful. However, tobacco industry commentators have hit back, arguing that the ruling does not necessarily give the green light to plain packaging.
In April 2014 the presidents of the European Parliament and Council signed the second EU Tobacco Product Directive (2014/40/EC), which seeks the uniform application of the laws in relation to the sale and manufacture of tobacco products within the 28 EU member states to meet obligations under the Framework Convention on Tobacco Controls. The directive was the subject of a number of challenges. Specifically, the prohibition of menthol cigarettes was challenged by Poland (with support from Romania), while, in two other cases the High Court of Justice of England and Wales, Queen’s Bench Division (Administrative Court) asked the Court of Justice whether a number of provisions of the directive on tobacco products are valid. This week the European Court of Justice ruled that new EU directive on tobacco products is indeed valid, meaning that the extensive standardisation of packaging, the future EU-wide prohibition on menthol cigarettes and upcoming special rules for electronic cigarettes are lawful. From a trademark perspective, the treatment of health warnings and labelling is the element to note.
INTA has previously stated its opposition to the restriction or prohibition of trademarks “through such actions as overly burdensome labelling provisions and plain packaging requirements”, and with respect to the directive has argued that its provisions on enlarged health warnings “could affect the legitimate use of trademarks and their function of allowing consumers to distinguish among products”. It also argued in 2013 that, while the proposed directive did not introduce plain packaging per se, it “offers the possibility for EU Member States to implement full standardisation of packaging (so-called plain packaging) through measures such as restricting the use of certain types of trademarks and prohibiting the use of others”. It therefore urged EU Member States to carefully assess the impact on trademarks that the introduction of plain packaging would have.
All eyes, however, have been on the ECJ, which this week ruled on the challenges, declaring that the prohibition on the inclusion on labelling of elements and features (even if truthful or accurate) that promote a tobacco product or encourage its consumption – in bid to “protect consumers against the risks associated with tobacco use” – does not go beyond what is necessary in order to achieve the objective pursued. It also found that, in providing that packaging must carry health warnings taking the form of a message and a colour photograph, which cover 65% of the external front and back surface of each unit packet, the EU legislature did not go beyond the limits of what is appropriate and necessary.
Reacting to the decision, a spokesperson for British American Tobacco spokesperson maintained that “many elements of the directive are disproportionate, distort competition and fail to respect the autonomy of the Member States.” However, the spokesperson was keen to stress that the court had not given an automatic green light to plain packaging: “It’s important to remember that this decision does not endorse claims by some that the directive authorises Member States to adopt plain packaging. In particular, what is clear from the directive and the judgment is that measures that go beyond the requirements of the directive, such as plain packaging, must still comply with the wider principles of EU and international law. Whether plain packaging meets these requirements is currently the subject of ongoing litigation before the English Courts and the World Trade Organisation. We urge the governments in all Member States to carefully consider how they will now interpret the directive in to their own national law, and take into account all of the implementation costs.”
Philip Morris International released a statement noting that the directive does not necessarily preclude a Member State from adopting plain packaging, providing it can show that the measure respects private property, a competitive marketplace, and consumer access to information, and that it complies with domestic, European, and international law. However, Marc Firestone, senior vice president and general counsel of the company, added: “The court has not considered whether plain packaging is legal or is capable of reducing smoking rates.”
Therefore, while the changes to the directive now have a clear field ahead, the battle over plain packaging will continue at Member State level.
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