Australia was the first (and remains the only?) country to mandate plain packaging. Its law was challenged before the High Court of Australia for a breach of the constitutional protection of property (see my summary When plain packaging becomes a matter for the judges). It is now challenged before the World Trade Organisation by five countries (including Ukraine and Honduras).

In the meantime, the plans to introduce rules requiring cigarette packs to use standardised labels without any branding seem to stall or be delayed, at least in the UK, New Zealand, Norway and South Africa (see a July 12, 2013 article in The European Voice, here).

In Europe, the debate on plain packaging took place at the occasion of the Revision of the Tobacco Products Directive 2001/37/EC. The draft directive was published by the European Commission in December 2012  (see here the legislative documents and studies). The preparatory materials include “a review of the science base to support the development of health warnings for tobacco packages” (study by Sambrook Research International for the European Commission). For those who like horrors stories, the appendix 6 (p. 141 and ff) of this study lists 42 pictorial warning used to convey negative messages about smoking under the topics: smokers die younger, smoking clogs the arteries and causes heart attacks, smoking causes fatal lung cancer, smoking is highly addictive, smoking can cause a slow and painful death, smoking can damage the sperm and decrease fertility, smoking when pregnant harms your baby, etc. It is instructive to read the detailed recommendations regarding the key design parameters of health warnings and their optimum specification. The key parameters of importance are as follows:

• “Size – optimally 100% and at least 50% (excluding borders) of the total facial area.
• Colour pictures used in all warnings together with short easily understood text messages that are clearly linked to the graphical image.
• Location – pictorial + text warnings should preferably be used on both sides, and as a minimum requirement on the front of packs.
• The warning should be hung from the top of the pack to maximise visibility. For packs that have a front opening mechanism, front warning should be hung from the ‘cut line’ (to avoid the warning being severed when the package is opened).
• Toll free quit line number on every pack – ideally this should be separate from the warning to avoid reducing the size (and impact) of the pictorial within the warning.
• Plain packaging – using an unattractive standardised colour with the removal of logos / brand images and associated colours, with brand names in a standardised colour (black) and font size.” (see executive summary, p. 1)

On October 8, 2013, the European Parliament, in plenary session, rejected an amendment that would require plain packaging. It also voted to adopt rules requiring the health warnings to cover no less than 65% of the front and the back of the packs. It thus appears that the rules adopted so far only fit in part with the “scientific” recommendations on labelling and packaging.

Here are my questions:

- Where do we stand in the legislative process and what can we expect in the next months?

- Do you think the requirements of plain packaging and the rule relating to the size of the warnings are a true “invasion on intellectual property rigths” that is not compatible with existing rules on IP? What is the best argument for those opposed to plain packaging?

- What is your view on the argument that such rules would constitute an illicit “encroachment on the fundamental right of property”? Is there another fundamental right involved in this debate and how can it be affected by the rules now under consideration at European level?

Thanks for summarizing the situation after the vote at the European Parliament and for sharing your thoughts!

You can go also beyond the IP-related  arguments. For instance, there is an interesting view about the type of approach followed by the European Commission in drafting the proposed Tobacco Products Directive. According to A. Alemanno, Prof. of EU law at HEC Paris (see here), the Commission follows a “nudge” approach which fits with “soft or libertarian paternalism“: according to such approach, “the goal of public policy should be to steer citizens towards making positive decisions as individuals and for society while preserving individual choice“. Quite interesting to reflect on the public policy that best fits with the objective of fighting the smoking effects: should tobacco products be prohibited, at least in certain areas (smoking bans)? should the sole measure be advertising bans? what about the use of tax measures (high excised duties)? The focus now is on reducing the attractiveness of the brand at the point of sale (on the packaging). It is not about increasing the cost for smokers, but about the image of smoking generated when the decisive act of buying is made.  Who said that money is not all in the course of trade?

Plain packaging is not a new issue of public interest in the field of intellectual property, and I already posted some comments on this topic here and here again. There are, however, some new developments over the last months: national courts and international dispute settlement bodies are now asked to rule on the compatibility of such rules with constitutional principles either at national level (the protection of property guaranteed by a Constitution) or at international level (the WTO rules, including TRIPs, which are the backbone of the international economic order).

A first court decision on plain packaging was released on August 15, 2012 but the reasons are contained in the judgment of Oct. 5, 2012 issued by the High Court of Australia (see: JT International SA v Commonwealth of Australia [2012] HCA 43). The Court confirmed that the law does not infringe section 51 (xxxi) of the Australian Constitution which empowers the Parliament to make laws with respect to “the acquisition of property on just terms”. Considering that registered trademarks, as well as designs and copyright are attracting the protection under section 51(xxxi), the High Court nevertheless found that the Tobacco Plain Packaging Act of 2011 does not result in an acquisition of property, as there was no gain of a proprietary nature on the part of the Commonwealth of Australia (The resulting space caused by the absence of the trademark was not an accrual of property).

But the plain packaging case is also moving at international level. On September 28, 2012, the WTO decided to establish a dispute settlement panel at the request of Ukraine to study the complaint against measures taken by Australia concerning trademarks and other plain packaging requirements (see here). (Two other complaints against Australia respectively made by Honduras and by the Dominican Republic are still under consultations, see here and here).

In its request for the establishment of a panel, Ukraine said that Australia’s measures “erode the protection of intellectual property rights” and “impose severe restrictions on the use of validly registered trademarks”. Ukraine’s statement also said that “Ukraine considers that governments should pursue legitimate health policies through effective measures without unnecessarily restricting international trade and without nullifying intellectual property rights as guaranteed by international trade and investment rules”. Ukraine’s arguments are summarized in a request of August 17, 2012. Basically Ukraine claims that TRIPS gives tobacco companies a positive right to use trademarks.

It would be interesting to review the TRIPs rules that Ukraine puts forward (Articles 1, 1.1, 2.1, 3.1, 15, 16, 20 and 27)  to support the view that Australia’s laws on plain packaging are not in line with the WTO framework, and to assess the validity of Ukraine’s claim. This is what you are (t)asked to do!

You have to take a clear position and to advocate either that Ukraine’s claim is valid or that it is not supported by the TRIPs rules. Of course, you could also bring additional arguments (in favor or against Ukraine) if you think they are relevant (those arguments might be based on IP or non-IP rules).

Enjoy your trip within the international IP rules!

This comes from an article in thespoof.com. As indicated, this pacifier will be available in a variety of pastel colors!

As already reported on ipdigit (see here), Australia aims at adopting a law banning any mention of the trademarks on the packaging of cigarettes. This is referred to as the draft ‘plain’ packaging law. The issue obviously is still annoying for  Philip Morris International which, according to the Financial Times (21 Oct. 2011) still ‘fumes’ at the proposal. The CFO of this company said recently: “We are therefore vigorously pursuing several legal avenues to challenge this unreasonable proposal and protect our valuable brands”.

Please think to those avenues and prepare counter-arguments (materials available through the previous ipdigit post on the issue).

On April 7, 2011, the Federal Government of Australia released the plain packaging design (see the image on the side of this post) that cigarette manufacturers will be forced to adopt when a proposed legislation will come into force, possibly on January 1, 2012. All cigarette packets should then use olive green, a colour supposed to be dull, and reproduce not very attractive photos of smoking-related diseases. Significantly, cigarette manufacturers will be prevented to use their logos, trademarked colors of promotional texts. “The only thing to distinguish one brand from another will be the brand and product name in a standard colour, standard position and standard font size and style” according to the Nicola Roxon, the Australian Health Minister (see Finantial Times, 7 April 2011). Other governments, for example in the UK and Canada, are considering to adopt similar legislation on plain packaging. The tobacco industry is concerned as this new limitation on the way their products can be marketed might significantly reduce their sales.

Some claim that imposed plain packaging amounts to a taking or expropriation of intellectual property.

Do you think such a legislation would encroach on the protection granted by the intellectual property laws or by fundamental rights, such as freedom of expression and property? In particular, are the international rules on IP, such as those included in the Paris Convention and the TRIPs Agreement, violated by such a law?

This is the question I would like you to think about.

There are a lot of sources available on line. The tobacco industry of course has its view on the issue (see for example here). On the contrary, some academics think the tobacco industry’s case is weak (here).