04 October, 2014

Cigarette Smoke and Olive Green - Australian Plain Packaging Law Challenged

Cigarettes and smoking have always been a controversial topic, especially in the last few decades. From misconceptions as to cigarettes' health benefits in the early-to-mid 1900s, to a more modern understanding, the topic often polarizes both sides of the discussion regardless if you smoke or not. Whether it is purely a deterrent ideology or a perspective from which you want to enforce and strengthen individual responsibility, smoking really has no answer for either side. A gallant effort at the reduction of smoking, especially in younger individuals, with nearly a third of 16 year olds having had at least tried smoking, is the plain packaging initiative, which has been either debated or even started in some countries in the last few years. One of these countries, Australia, instated their plain packaging laws, the Tobacco Plain Packaging Act 2011, some few years ago, showcasing a 15% drop in smoking rates between the Act's introduction and the year 2013.

The Act's life, albeit right now in its infancy still, has not been an easy one, and the Act has since been challenged at the WTO by several countries. The dispute, dubbed "Certain Measures Concerning Trademarks and Other Plain Packaging Requirements Applicable to Tobacco Products and Packaging" essentially deals with potential damage to the tobacco industry in Australia as a result of the Act, or as put forth in the complaint by the Ukraine: "...erode[s] the protection of intellectual property rights [and] impose severe restrictions on the use of validly registered trademarks". Arguably the Act does just that, but under proper justification; the denial of trademark usage can be balanced with a public interest health wise. This was countered by the Ukraine: "...[it] 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". What the Act does is not nullify the rights guaranteed by the Australian Trade Marks Act 1995, but skirts the law by preventing those marks' use. The marks themselves are still quite valid, just not usable in all instances.

When does 'plain' become 'too plain'?
Australia has protected its plain packaging law by stating that "...[it] is a sound, well-considered measure designed to achieve a legitimate objective — the protection of public health... nor is [it] more restrictive than necessary to fulfill its legitimate objective". Arguably, as said above, this is very true, yet the Ukraine does have a point in its argument, at least in relation to tobacco products. Trademarks, especially those relating to tobacco packaging (for example Marlboro and Camel), are quite valuable as they are predominantly how the products are distinguished among a myriad of similar of even identical flavors (as a non-smoker, this writer has no knowledge whether this holds true or not, so please correct me if I am wrong here). As such, rendering them useless in the sphere where they are used strips them of their usability and does impede on their use; however one has to still emphasize the public health concerns which underpin the legislation. Trademarks are a badge of origin relating to quality, authenticity and expertise, yet most tobacco products cause the same health issues regardless of origin or manufacturer, rendering the badge of origin quite useless in the face of health concerns or causation.

The legality, and the purpose behind the Act, was further defended by the High Court of Australia in JT International SA v Commonwealth of Australia, where the Court stated that "There are and always have been purposive elements reflecting public policy considerations which inform the statutory creation of intellectual property rights... [and] Australian trade marks law has 'manifested from time to time a varying accommodation of commercial and the consuming public's interests'". This varying accommodation is just that; the promotion of legitimate rights, but still keeping them in balance with public interests. Health considerations are one of the bigger interests in the public sphere, and are worth defending, even at the detriment to some commercial interests.

Do trademarks then confer a non-restrictable ability to use them? Arguably no, and this was supported by Justice Grummow in the JT International case: "...the TMA, like other trade mark legislation, does not confer on registered owners or authorised users a liberty to use registered trade marks free from restraints found in other statutes". This can be stated to be correct, but a balance still needs to be struck in the event of new legislation that might or might not impede intellectual property rights.

What the decision does, however, is establish a precedent which can be used for or against future plain packaging laws, such as in Ireland or France. The outcome of the WTO panel decision has yet to emerge, but the possible resolution of the dispute seems to lean towards Australia and the TPPA. As explained by Tania Voon and Andrew Mitchell: "...the law applies equally to all tobacco products from all countries, including Australia and New Zealand. The law is also based on years of research showing that standardised packaging will reduce the appeal of tobacco products and enhance the effectiveness of health warnings. Finally, the law implements Australia’s obligations under the WHO FCTC (Framework Convention on Tobacco Control). All these factors enhance Australia’s position in the WTO dispute". Should Australia lose the dispute, the fate of the TPPA would be suspect, and potentially would have to be repealed entirely, setting a precedent to other countries which are a part of the WTO.

This writer for one is intrigued by the prospects of this challenge, but believes that the TPPA will triumph and plain packaging will become more prevalent in the coming years. Its impact on trademarks will be negligible, bar the tobacco industry, which will have to revamp its approach to marketing. Maybe one day we will all reminisce the fancy cigarette packages of yore, or just recoil at the thought of smoking altogether.

Source: The Guardian

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