- Australia triumphs in trade dispute over its tobacco plain packaging law
- WTO panel rejects arguments that Australia infringed trademark rights
- Many parties respond, INTA voices it is “extremely disappointed”
In a landmark ruling, the World Trade Organisation (WTO) has upheld Australia’s tobacco plain packaging regime as being consistent with the WTO’s trade obligations. The response has been mixed. While the Canadian Cancer Society has told World Trademark Review it gives a “big boost” to plain packaging momentum, INTA has voiced its disappointment and is regrouping on the issue.
Originally introduced in 2012, Australia’s plain packaging law bans logos and distinctive packaging on all tobacco products sold in the country. Instead, such products are sold in drab olive packaging with large health warnings, with the brand names printed in a small standardised font. The law has been controversial and led to a number of lawsuits, including a six-year legal battle between the Australian government and tobacco giant Philip Morris (which, it was revealed today, cost the Australian government nearly £40 million to defend). But arguably the most significant of those legal battles kicked off in 2012, when Hondurus brought a case against the regime to the WTO and was subsequently followed by Cuba, Indonesia, and the Dominican Republic.
After six years of bitter legal proceedings, on June 28 the WTO panel rejected the key argument that Australia’s plain packaging law unjustifiably infringes the trademark rights of tobacco companies. The outcome was leaked over a year ago but the 800-page decision has now been released. In it, the panel also rejected claims that alternative measures would be equally effective and arguments it would improve public health. The decision is now expected to serve as the green light for other countries to roll out similar laws (nations like the UK, Ireland, New Zealand Norway have already implemented such legislation). It is also expected that the ruling will be appealed, with a Honduran spokesperson saying: "It appears that this dispute will require the review of the Panel’s findings by the WTO Appellate Body before any final conclusions can be drawn.”
Reaction to the ruling has been decidedly mixed. The World Health Organisation (WHO) were quick to praise the decision, saying it cleared “another legal hurdle thrown up in the tobacco industry's efforts to block tobacco control and is likely to accelerate implementation of plain packaging around the globe”. Similarly positive are the Canadian Cancer Society, which has been outspoken in its support of plain packaging for a number of years. Talking to World Trademark Review, a spokesperson for the society says that the decision “gives a big boost to international momentum in favour of plain packaging”, adding that “plain packaging in far more countries is inevitable”.
On the flipside, INTA issued a statement saying it is “extremely disappointed” by the ruling, adding “given the importance to brand owners, trademark professionals, and society, the association is studying the WTO report in-depth to determine next steps”. There is no indication yet on what those next steps could be but the association appears to be prepared to fight on, having been a consistent and very vocal opponent of such legislation.
Meanwhile, Geir Ulle, international trade director of Japan Tobacco International, claimed the ruling is a significant step backwards for IP rights: “It sets a dangerous precedent that could encourage governments to ban branding on other products without providing any reliable evidence of benefits to public health. This ruling doesn’t make the policy right or effective, nor does it make it worth copying.”
Indeed, some of the response suggests that it won’t just lead to more tobacco product plain packaging, but that it could lead to plain packaging on other goods sectors. For example, Mike Ridgway of the Consumer Packaging Manufacturers told Packaging News that plain packaging laws should be seen as a real concern for all brand owners. “For the packaging industry this precedent for increased regulation moving into other market sectors is of concern,” he says. “[For example], the introduction of minimum pricing for alcohol in Scotland is the start of market intervention and the ‘slippery slope’ into packaging health warnings followed by graphical warnings leading to restrictions on logos, branding in a similar way to that of tobacco. These restrictions would be a further attack on brands and a threat to the Intellectual Property rights of the brand owners.”
We’ve written extensively about the so-called ‘domino effect’ that could emerge from Australia’s plain packaging regime, with some rights holders (especially in the alcohol, pharmaceutical and fast food sectors) concerned that the prospect of significant packaging restrictions in their industries could be next. The WTO’s decision will certainly do nothing to ease those concerns. Trademark owners and counsel in other industries where there are significant public health concerns will no doubt be watching closely to determine the impact the WTO decision could have on them.