Trevor Little

Philip Morris has stepped up its battle against the UK’s decision to give the green light to plain packaging for tobacco products, filing suit in the English High Court and stating that the regime would violate EU trademark law. The move comes as, according to World Trademark Review sources, the World Trade Organisation (WTO) prepares to hear oral arguments in the challenges against Australia’s plain packaging regime.

On Friday Philip Morris International (PMI) filed suit to contest the UK government’s recently introduced standardised packaging regulations for tobacco products. The company is seeking a decision that the regulations violate English and European Union law, with Marc Firestone, PMI senior vice president and general counsel, stating: “We respect the government’s authority to regulate in the public interest, but wiping out trademarks simply goes too far,” he said. “Countries around the world have shown that effective tobacco control can co-exist with respect for consumer freedoms and private property.”

The filing asserts that the regulations unlawfully deprive PMI of its trademarks (its press statement arguing: “A core doctrine of English and EU law is that there must be fair compensation for deprivations of property, a remedy that the regulations do not provide”); that they violate the EU law that says Community trademarks (CTMs) can be used by identical means throughout the EU; and that they obstruct the free movement of goods through means that are neither necessary nor proportionate to achieving the UK government’s public health objectives.

The company has supplied World Trademark Review with an opinion from Lord Hoffman, former Law Lord, honorary professor of intellectual property law at the University of London and chair of the Institute of Intellectual Property Research Council, who concludes that the UK’s recently enacted plain packaging regulations for tobacco products are unlawful and violate EU law.

In the eight-page document, Hoffman argues that the general prohibition of a marks use “is a simple destruction of the value previously enjoyed by the trademark owner” and states that the UK’s regulations unlawfully deprive tobacco companies of their intellectual property in violation of the European Charter of Fundamental Rights and the European Convention on Human Rights. He concludes that “the existence of public interest grounds to justify plain packaging would not entitle the Secretary of State to deprive the owners of those rights without payment of compensation”.

Turning to whether the UK’s plain packaging regulations violate the Community Trademark Regulation (207/2009), which provides that CTMs shall have a unitary character and equal effect throughout the entirety of the EU, he again answers in the affirmative.

Noting that the regulation gives trademark owners the right to use CTMs by “identical means throughout the entire Community, regardless of frontiers”, he argues that the UK regulations would be contrary to that principle “if goods bearing a trademark that was lawful in one member state could not be exported to another because the use of the trademark would infringe its domestic law”.

Elsewhere, earlier this month the INTA board approved a resolution setting forth the association’s position regarding restrictions on trademark use through plain and standardised product packaging, calling for plain and highly standardised packaging measures being considered or imposed by governments to be rejected or repealed since they violate various international treaties and national laws on trademark protection including provisions of the Paris Convention, the Technical Barriers to Trade Agreement, and the Agreement on Trade-related Aspects of Intellectual Property Rights. It also suggested that governments should instead use less drastic alternatives to address health and safety goals, such as public educational campaigns which do not violate international and national law and expropriate valuable trademark rights.

As we have reported previously, the introduction of plain packaging elsewhere has also been the subject of legal challenges. Also keenly awaited is the WTO decision over challenges to Australia's plain packaging regime. The WTO was expected to rule on the challenges last year, but this was subsequently delayed, potentially until 2016World Trademark Review understands that the WTO is to hold oral hearings on the challenges in Geneva next week (subsequent to the posting of this blog, the WTO confirmed to us that a meeting between the parties in this dispute and WTO panellists will take place on June 1, 3, 4 and 5, but the meetings will not be open to the public), but the decision is still some way off. In the meantime, the pressure is building as both pro and anti-plain packaging interests look towards developments in Geneva. 

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