Tobacco marks restricted as being contrary to public policy

European Union

A group of tobacco companies has failed to convince Advocate General Geelhoed of the European Court of Justice that restrictions on the labelling and marketing of tobacco products under the Tobacco Products Directive diminish the value of the goodwill they enjoy in their trademarks.

The tobacco companies argued that provisions of the directive are at variance with the right to property as laid down in the European Convention on Human Rights and the Agreement on Trade-Related Aspects of Intellectual Property Rights, among other agreements. The directive imposes packaging and labelling requirements on tobacco products sold in the European Union or manufactured in the European Union for export. In particular, Article 7 states that with effect from September 30 2003 texts, names, trademarks and figurative or other signs suggesting that a particular tobacco product is less harmful than another (eg, 'mild' or 'light') cannot be used on packaging.

In his opinion, the advocate general stated that while the agreements require the European Union to respect fundamental rights, which include the right to property, the measures at issue do not constitute a disproportionate and unreasonable interference with the right to property. In his view, the exercise of trademark rights may be made subject to restrictions on grounds of general interest. Also, the First Trademark Harmonization Directive and the Community Trademark Directive recognize that deceptive trademarks, and marks which are contrary to public policy or accepted principles of morality, may be declared invalid. A trademark coming under the public law ban on designations under Article 7 for the protection of public health is, in the view of the advocate general, invalid as being contrary to public policy.

The advocate general also stated that the measures do not infringe the principles of legal certainty or legitimate expectation. He noted that tobacco companies have until September 2003 to invest in new trademarks, and they have been aware since 1996 that measures similar to those in the directive were under consideration.

Patricia McGovern and Peter Bolger, LK Shields Solicitors, Dublin

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