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AUSTRALIA’S MOVE TO THE PLAIN PACKAGING OF CIGARETTES AND ITS WTO COMPATIBILITY[*]
This article has been published in the Asian Journal of WTO and International Health Law and Policy, Volume 5, Number 2, 2010
Andrew D. Mitchell[**]
ABSTRACT
Tobacco companies have expressed concern that Australia’s plain cigarette packaging initiative breaches international trade obligations. This article begins by providing a background to cigarette packaging. It then examines developments worldwide and in Australia that have led to this initiative, and finally examines the claim of cigarette companies that the move is incompatible with the TRIPS Agreement. It concludes that the general move towards plain packaging in Australia and elsewhere falls within the scope of permissible regulation under Article 20 of the TRIPS Agreement and that concerns about plain packaging violating the TRIPS Agreement should not prevent WTO Members from placing plain packaging firmly on the public health agenda.
KEYWORDS: World Trade Organization (WTO); Agreement on Trade-Related Aspects of Intellectual Property (TRIPS); encumbrance; the Paris Convention; Trademarks; Public Health; Tobacco Control; Plain Packaging
I. INTRODUCTION
The Australian Commonwealth Government announced on 29 April 2010 that it would require all cigarettes to be sold in plain packaging by 1 July 2012.[1] If implemented, it is likely to be the world’s first cigarette plain packaging scheme,[2] and given the restrictions on other forms of marketing, will shut down one of the last remaining avenues for the advertising of tobacco in Australia. Predictability, cigarette companies have taken issue with the initiative.[3] Their objections include[4] a claim that it violates Australia’s WTO obligations, in particular the minimum obligations for the protection of intellectual property rights under the WTO Agreement on Trade Related Aspects of International Property Rights [TRIPS Agreement]. The Australian Government’s National Preventative Health Taskforce, in a cursory statement, declared that plain packaging is “not inconsistent with international trade agreements.”[5] This article begins by providing a background to cigarette packaging, then examines developments in Australia and internationally that have lead to this initiative, and finally examines the claim of cigarette companies that the move is incompatible with the WTO. It is important to examine the issue of WTO compatibility because concerns about breaching trade obligations, fueled by the tobacco industry, may have a chilling effect on a move to plain packaging.
II. CIGARETTE PACKAGING
A. Packaging as Advertising and Subversion
Cigarette companies heavily invest in the design of cigarette packaging and in the brand names on those packets.[6] In part this is because approximately half of smokers cannot distinguish between similar cigarettes,[7] and therefore packaging is necessary for product differentiation. However, packaging’s role extends beyond this. Marketing theory emphasises that the “product package is the communication life-blood of the firm” and that packaging “act[s] as a promotional tool in its own right.”[8] Packaging aims to promote a particular cigarette brand to existing customers, to those who smoke competitors’ products and to those who might start smoking.[9] Packaging designers have stated:
[W]e will increasingly see the pack being viewed as a total opportunity for
communications − from printed outer film and tear
tape through to the
inner frame and inner bundle. Each pack component will provide an integrated
function as part of a carefully
planned brand or information communications
campaign.[10]
Packaging is
particularly important in “dark” markets, such as Australia, where
tobacco advertising is banned.[11]
Tobacco industry trade journals acknowledge this repeatedly, noting for example,
that “if your brand can no longer shout from
the billboards, let alone
from the cinema screen or the pages of a glossy magazine . . . it can at least
court smokers from the retailer’s
shelf.”[12]
Morgan Stanley
in 2007 stated that after taxation: “[T]he other two regulatory
environment changes that concern the industry
the most are homogenous packaging
and below-the-counter sales. Both would significantly restrict the
industry’s ability to
promote their
products.”[13]
Studies have
also shown that brand imagery distracted from and reduced the impact of health
warnings.[14] Packaging can even be
used to subvert bans on deceptive descriptors such as “light” and
“mild”. For example,
cigarette manufacturers have used
“different colour gradations and intensities . . . to perpetuate
smokers’ understanding
that a brand is allegedly lower- or
higher-yielding.”[15] It can
also be used as a means of subverting advertising restrictions. A packaging firm
has suggested:
Where cigarette advertising is banned by law . . . the retailer can “quite coincidentally” stack up a kind of billboard using the products at the point of sale if, for example, the cigarette cartons of a particular brand bear different parts of an overall design, which complete a puzzle or a caption when stacked up.[16]
B. Plain Packaging
Requiring the plain
packaging of cigarettes is a response to cigarette companies’ use of
cigarette packets as a marketing tool
and as a means to reduce the impact of
health warnings. Broadly, plain packaging requires “the removal of
colours, brand imagery,
corporate logos and trademarks, permitting manufacturers
to print only the brand name in a mandated size, font and place, in addition
to
required health warnings and other legally mandated product information such as
toxic constituents, tax-paid seals or package
contents.”[17] It can also
mandate the appearance of the cigarettes inside the package, and standardize the
texture of the packaging, wrappers,
and the interiors of the package, and
prohibit perfuming, audio chips and
inserts.[18]
There have been a
number of experimental studies regarding plain
packaging.[19]
A study by Wakefield, Germain and Durkin has shown that as brand design
information was progressively removed from cigarettes, they
were seen as less
appealing and the cigarettes in the packs were considered to be less satisfying
and of lower quality.[20] A major
Canadian study concluded:
Plain and generic packaging of tobacco products (all other things being
equal), through its impact on image formation and retention,
recall and
recognition, knowledge, and consumer attitudes and perceived utilities, would
likely depress the incidence of smoking
uptake by non-smoking teens, and
increase the incidence of smoking cessation by teens and adult
smokers.[21]
Plain packaging,
“denormalises”
cigarettes,[22] reminding consumers
of their difference from ordinary grocery items.
The tobacco industry has
made a number of policy (non-legal) arguments against plain packaging proposals.
One argument is that packaging
has no impact on consumption, and is designed to
encourage existing smokers to switch brands and build brand loyalty, rather than
encourage the uptake of smoking.[23]
In other words it is about increasing market share rather than the size of the
market. A contradictory argument is that packaging
limits consumption, since
plain packaging forces competition on prices, which would lower prices, and
therefore increase consumption.[24]
Obviously a tax increase could offset any drop in price. They have also argued
that plain packaging would increase youth smoking
because it would be seen as
“more risky and
anti-authoritarian.”[25] The
tobacco industry also dismisses conclusions from plain packaging studies that
are based on measuring consumers’ assumptions
about their behavior (what
they think they would do) rather than their actual behavior (what they actually
do).[26]
III. FCTC
On 21 May 2003, the World Health Assembly adopted the Framework Convention on Tobacco Control [hereinafter the FCTC]. As one of the first and most widely embraced treaties negotiated under the auspices of the WHO, the FCTC is an evidence-based treaty that promotes public health and was developed in response to global concerns about the tobacco epidemic. Guidelines for the implementation of Article 11 of the FCTC,[27] concerning the Packaging and labelling of tobacco products, adopted by the WHO’s Conference of Parties to the FCTC states:
Plain Packaging
46. Parties should consider adopting measures to restrict or prohibit the use
of logos, colours, brand images or promotional information
on packaging other
than brand names and product names displayed in a standard colour and font style
(plain packaging). This may increase
the noticeability and effectiveness of
health warnings and messages, prevent the package from detracting attention from
them, and
address industry package design techniques that may suggest that some
products are less harmful than others.
Article 13 of the FCTC requires each
Party in accordance with constitutional limits, to “undertake a
comprehensive ban of all
tobacco advertising, promotion and sponsorship.”
Article 1(c) of the FCTC defines “tobacco advertising and promotion”
as meaning “any form of commercial communication, recommendation or action
with the aim, effect or likely effect of promoting
a tobacco product or tobacco
use either directly or indirectly.” Similarly, paragraphs 15 to 17 of the
guidelines for the implementation
of Article 13 of the FCTC, concerning
“Tobacco advertising, promotion and sponsorship,” refer to the
potential for plain
packaging to eliminate the effect of advertising and
promotion on packaging. Paragraph 16 defines plain packaging as packaging with
“black and white or two other contrasting colours, as prescribed by
national authorities; nothing other than a brand name,
a product name and/or
manufacturer’s name, contact details and the quantity of product in the
packaging, without any logos
or other features apart from health warnings, tax
stamps and other government-mandated information or markings; prescribed font
style
and size; and standardized shape, size and materials.”
IV. INTERNATIONAL MOVEMENTS TO PLAIN PACKAGING
In 1989, the New Zealand Department of Health’s Toxic Substance Board “recommended that cigarettes be sold in white packs with simple black and white text and no colours or logos.”[28] The Canadian House of Commons Standing Committee on Health “endorsed plain packaging and recommended that enabling legislation be implemented pending the outcome of research on the probable effectiveness of plain packs.”[29] However, in both countries plain packaging later dropped off the policy agenda.
V. AUSTRALIAN DEVELOPMENTS
A. National Preventative Health Taskforce
In Australia, recommendations for plain packaging were made in the early 1990s. The Center for Behavioral Research in Cancer recommended in 1992 that “regulations be extended to cover the colours, design and wording of the entire exterior of the pack.”[30] However, the current Australian initiative arose from the National Preventative Health Taskforce [hereinafter the Taskforce], which was announced on 9 April 2008.[31] Comprised of Australian health experts, it was asked to provide evidence-based advice to government and health providers regarding the health challenges caused by obesity, tobacco and alcohol, and provide a National Preventative Health Strategy [hereinafter the Strategy] by June 2009.[32] In October 2008, the Taskforce released a Discussion Paper, Australia: the Healthiest Country by 2020, together with a various Technical Reports, including one presenting international and Australian evidence about tobacco. On the basis of these documents, the Taskforce then called for public submissions and conducted consultations. Following this process, the Taskforce released its final report in September 2009. It contained 136 recommendations and in the case of tobacco, recommended significantly increasing tobacco excise and stronger regulatory control on the manufacture, packaging, marketing and use of tobacco. Specifically, the Strategy recommended to eliminate the promotion of tobacco products through design of packaging:
The
strategy also recommended “mandating standard plain packaging of all
tobacco products to ensure that design features of
the pack in no way reduce the
prominence or impact of prescribed government
warnings.”[34]
It noted
that packaging “has become a cornerstone of marketing strategy. Brand
names and package design enable the communication
of personal characteristics,
social identity and aspirations, and are a crucial aspect of marketing tobacco
products. Market-testing
studies show that package design – through the
use of varying colour and other design elements – induces smokers to
expect,
and then actually experience, their cigarettes to be lower strength,
lower in tar and lower in health risk than exactly the same
cigarettes presented
without this packaging. These misperceptions are part of the constellation of
modifiable tobacco marketing factors
that make smoking easier to take up and
harder to quit.”[35]
On 11
May 2010 the Minister for Health and Ageing, the Hon Nicola Roxon MP, released
Taking Preventative Action, the Government’s response to the report
of the National Preventative Health
Taskforce.[36] The Commonwealth
accepted the Strategy’s recommendations on packaging. It committed itself
to developing legislation to introduce
mandatory plain packaging of tobacco
products from 1 January 2012 with a compliance date of 1 July
2012.[37] The government stated that
plain packaging would “increase the noticeability, recall and impact of
health warning messages;
reduce the ability of packaging to mislead consumers to
believe that some products may be less harmful than others; reduce the
attractiveness
of the tobacco product, for both adults and children; and reduce
the appeal and desirability of smoking
generally.”[38] The Government
noted the 2008 Taskforce would begin that month to “develop and test plain
packaging design for tobacco
products.”[39] It was noted
that this research was needed to “determine the optimal design to achieve
the public health objectives of the
measure” and “[t]he concerns of
retailers in handling plain packaged products, and anti-counterfeit
measures.”[40]
B. The Fielding Bill
On 20 August 2009, Senator Steve Fielding introduced the Plain Tobacco Packaging (Removing Branding from Cigarette Packs) Bill 2009 into the Australian Senate.[41] This Bill requires all tobacco product packaging to be matt brown and prohibits the use of any brand imagery, colours or graphics on tobacco packages, other than the brand name itself in 12-point Helvetica font. It requires that all tobacco product packages be the same size and contain the same number of cigarettes. On 26 November 2009, the Australian Senate, on the recommendation of the Selection of Bills Committee, referred this Bill to the Senate Community Affairs Legislation Committee for inquiry. The Committee is scheduled to deliver its report by 26 August 2010.
VI. TRIPS
One of the key legal objections tobacco companies have to plain packaging[42] is that it violates minimum obligations for the protection of intellectual property rights under the TRIPS Agreement — specifically the protection for trademarks under Section 2. Trademarks are signs or combinations of signs capable of distinguishing goods or services from other goods or services. Signs include “words, person names, letters, numerals, figurative elements and combinations of colors.”[43] The TRIPS Agreement and the Paris Convention (which is incorporated into the TRIPS Agreement by TRIPS article 2.1) requires WTO Member States to maintain a register of trademarks and establish minimum standards governing the registration of such marks. It has been argued by tobacco companies that plain packaging should not be implemented as it would be contrary to WTO obligations. In particular, it would constitute breaches of TRIPS Articles 15(4), 17 and 20 and Paris Convention Article 6 quinquies (B). The alleged violations of each of these provisions will be analyzed separately.
A. TRIPS Article 15.4 and Paris Convention Article 6 Quinquies (B)
Article 15.4 of the TRIPS
Agreement, which reproduces Article 7 of the Paris Convention, provides that
“[t]he nature of the
goods or services to which a trademark is to be
applied shall in no case form an obstacle to registration of the
trademark.”
Opponents of plain packaging have argued that because it
specifically targets tobacco products, that is, the nature of the good itself,
this would form an obstacle to the use and therefore registration of any tobacco
trademark.[44]
Plain packaging would create a discriminatory “two-tier” trademark
system where the trademark rights of tobacco products
are severely restricted
and the trademark rights of all other products are afforded the minimum
standards of
protection.[45]
Further, it has
been argued that plain packaging violates a Member State’s obligations
under Article 6 quinquies (B) of the Paris Convention, which
provides:
Article 6 quinquies (B):
Trademarks covered by this Article may be neither denied registration nor invalidated except in the following cases:
As none of
the three aforementioned situations are applicable in the context of tobacco
trademarks, tobacco companies argue that plain
packaging would violate this
provision.[47] Again, this finding
is based on plain packaging creating a barrier to the use and therefore
registration of a tobacco trademark.
Despite the force with which the tobacco
companies have put these arguments, their reasoning confuses registration with
use. These
concepts are separate and distinct. TRIPS Article 15.4 and Paris
Convention Art 6 quinquies grants the right to “register” a
trademark. However, there is no provision in either agreement that obliges WTO
Members
to grant the owner of a registered trademark, an affirmative right to
actually “use” that mark. Rather, TRIPS accords
with the traditional
conception of a trademark right, which is a right to prevent or exclude others
from using the mark in question.
This is confirmed by TRIPS Article 16 which
states, “The owner of a registered trademark shall have the exclusive
right to
prevent all third parties . . . from using in the course of trade,
identical or similar signs.” In this regard, the Panel in
EC –
GIs explained that the TRIPS Agreement generally provides negative rather
than positive rights. The Panel stated:
[T]he TRIPS Agreement does not generally provide for the grant of positive
rights to exploit or use certain subject matter, but rather
provides for the
grant of negative rights to prevent certain acts. This fundamental feature of
intellectual property protection inherently
grants Members freedom to pursue
legitimate public policy objectives since many measures to attain those public
policy objectives
lie outside the scope of intellectual property rights and do
not require an exception under the TRIPS
Agreement.[48]
While
the shift towards plain packaging would affect the “use” of tobacco
trademarks, the “registration” of
such trademarks would remain
unaffected. The plain packaging initiative seeks to prevent use of the tobacco
trademark, not to limit
the right to register. The fact that a trademark has
been registered for a particular good does not give the owner the right to use
that mark or be exempted from any regulatory limitation on the use of the mark.
Indeed, TRIPS envisages in articles 17 and 20 (to
be discussed below) that
limitations on the use of trademark rights may exist in certain circumstances.
In any event, plain packaging
does not affect “registration” and
there is therefore no violation of TRIPS Article 15(4) and Paris Convention
Article
6 quinquies (B).
However, even if it were accepted that plain
packaging did affect registration of tobacco trademarks, it may fall within the
morality
and public order exception in Paris Convention Article 6 quinquies
(B)(3). Given the public significance that the tobacco epidemic has assumed,
tobacco trademarks may be contrary to the public order.
In particular, the
tobacco trademark may be of “such a nature as to deceive the
public.” This is because plain packaging
aims to overcome public
misconception that certain cigarette packets are “healthier.” By
standardizing the marketing
of trademarks, this makes health-warning signs more
visible and consumers are less likely to believe that a particular type of
cigarette
is “healthy.”
B. TRIPS Article 17
TRIPS Article 17 reads
that “Members may provide limited exceptions to the rights conferred by a
trademark, such as fair use
of descriptive terms, provided that such exceptions
take account of the legitimate interests of the owner of the trademark and of
third parties.” Opponents of plain packaging have argued that plain
packaging does not meet the requirements of this
exception.[49] This is because plain
packaging does not take into account the legitimate interests of owners of
tobacco trademarks in using their
trademark and tobacco consumers in being able
to distinguish between competing brands of tobacco. It is therefore not a
“limited
exception.”
However, the Article 17 exception is not
even engaged when read in the context of Article 16. Article 17, titled
“Exceptions”,
refers to “exceptions to the rights conferred by
a trademark”. Article 16 governs the rights to be conferred by a
trademark.
As stated above, these rights do not grant a positive right to use a
trademark, only a negative right to stop others from using it.
Accordingly,
plain packaging of tobacco products cannot fall within the scope of Article 17
as an exception to a right to use a trademark
since no such right is conferred
with a trademark. There is no interference with the rights conferred by Article
16. As such, Article
17 cannot be invoked. The focus for this analysis must then
turn to the Article 20 provision.
C. TRIPS Article 20
The strongest argument raised by tobacco companies is that plain packaging violates TRIPS Article 20, which is set out below with emphasis added to the key clauses relevant to plain packaging:
Article 20: Other Requirements
The use of a trademark in the course of trade shall not be
unjustifiably encumbered by special requirements, such as use with
another trademark, use in a special form or use in a manner detrimental to
its capability to distinguish the goods or services of one undertaking from
those of other undertakings. This will not preclude a requirement
prescribing the use of the trademark identifying the undertaking producing the
goods or services
along with, but without linking it to, the trademark
distinguishing the specific goods or services in question of that
undertaking.
Plain packaging is likely to fall within the scope of Article
20,[50] because it constitutes a
special requirement encumbrance. Article 20 does not define the term
“encumber.” However, according
to its ordinary meaning, the term
refers to special requirements that would have the effect of
“hampering” or “limiting”
the use of a trademark. Some
have argued that because plain packaging effectively prohibits the use of a
tobacco trademark, this
is not a mere “encumbrance” and Article 20
does not apply.[51] Instead, the
encumbrance is so high that it amounts to an impermissible interference with the
trademark owners’ rights. However,
it seems that the degree of encumbrance
is irrelevant to the question of whether a measure is prima facie captured by
Article 20.
As de Carvalho states, “Article 20 applies to . . .
requirements imposed by governments . . . [which] may reach the level of
prohibiting the use of trademarks — prohibition of use is, indeed, the
ultimate
encumbrance.”[52]
The analysis, therefore, turns on whether the “ultimate encumbrance”
is justifiable. It may be that the higher the degree
of encumbrance, the higher
the level of justification. In any case, it appears that plain packaging is
clearly an encumbrance within
the meaning of Article 20.
Plain packaging
measures also appear to be a “special requirement.” Limited guidance
as to the meaning of this term has
been provided by the Panel in Indonesia
– Autos, the only WTO case to interpret Article 20. The Panel did not
consider the operation of the Indonesian subsidy program to constitute
“requirements” under Article 20. This is because companies that
participated in the subsidy program did so voluntarily
and in the knowledge of
any consequent implications for their ability to use their pre-existing
trademark.[53] In contrast, plain
packaging measures will be mandatory in nature and apply to all tobacco
companies and their trademarks.
If it is established that Article 20 applies,
the main issue is whether the special requirement encumbrance can be
justified. It has been argued that the three examples of special
requirements listed in Article 20 “are examples of requirements that
unjustifiably encumber the use of trademarks in the course of
trade.”[54] The three examples
listed are (i) use with another trademark; (ii) use in a special form; and (iii)
use in a manner detrimental to
[a trademarks] capability to distinguish the
goods or services of one undertaking from those of other undertaking. If a
special requirement
corresponds to one of these three examples, it is
“unjustifiable.”
It appears that plain packaging falls within the
third listed example. It is clearly detrimental to the capability of tobacco
trademarks
to distinguish between tobacco products from different producers. The
claim that special requirements expressly listed in Article
20 can never be
justifiable, however, is contrary to the ordinary wording of the provision. The
provision reads that the use of a
trademark “shall not be unjustifiably
encumbered by special requirements, such as” the three listed examples.
These examples
are illustrative of what constitutes a “special
requirement,” not an “unjustifiable special requirement.”
Had
the drafters of TRIPS intended to remove these three special requirements from
the realms of justifiability, they would have
done so using clear language to
that effect. TRIPS Article 20 would read that the use of a trademark
“shall not be encumbered
by unjustifiable special requirements, such
as” the three listed examples. None of the examples address potential
justifications
for the limitations on trademark use. Therefore, the term
“unjustifiable” is a separate, independent qualification that
is not
inherent in all three examples.
Despite plain packaging falling within the
third listed example, justifiability is to be determined on a case-by-case
basis. The concept
of “justifiability” under Article 20 is ambiguous
and has not been considered in any WTO jurisprudence. Nevertheless,
I consider
that plain packaging would be “justifiable” under Article 20, based
on public health grounds. Support for
this is found in TRIPS Article 8(1):
Article 8: Principles
1. Members may, in formulating or amending their laws and regulations, adopt
measures necessary to protect public health and nutrition,
and to promote the
public interest in sectors of vital importance to their socio-economic and
technological development, provided
that such measures are consistent with the
provisions of this Agreement.
Unlike GATT Article XX or GATS Article XIV,
TRIPS Article 8 is not an exception to the other obligations in the TRIPS
Agreement. This
is made clear by the clause: “provided that such measures
are consistent with the provisions of this Agreement.” However,
Article 8
can provide interpretative guidance on what would be reasonable for the purposes
of Article 20. Further interpretive guidance
may also be found in paragraph 4 of
the Doha Declaration on the TRIPS Agreement and Public Health:
We agree that the TRIPS Agreement does not and should not prevent members
from taking measures to protect public health. Accordingly,
while reiterating
our commitment to the TRIPS Agreement, we affirm that the Agreement can and
should be interpreted and implemented
in a manner supportive of WTO
members’ right to protect public health . . . .
By reading Article 20
in light of the objectives and principles of the TRIPS Agreement as outlined in
TRIPS Article 8 and paragraph
4 of the Doha
Declaration,[55] Article 20 should
be read as granting Members significant flexibility in enacting public health
measures.
The precise boundaries of these public health flexibilities under
the TRIPS Agreement are unclear. The context of GATT Article XX(b),
however, may
be instructive. GATT Article XX(b) exempts a Member’s measure from
compliance with the provisions of GATT where
that measure is “necessary to
protect human, animal or plant life or health.” Arguably, the
“necessity” test
under GATT Article XX(b) imports a higher threshold
than the “justifiability” test under TRIPS Article 20. Despite this,
the Appellate Body in EC – Asbestos held that, “it is
undisputed that WTO Members have the right to determine the level of protection
of health that they consider
appropriate in a given
situation.”[56]
In that case, France’s chosen level of protection was the “halt to
the spread of asbestos-related health risks,”
which they were entitled to
achieve through banning asbestos.
Further, the more important a Member
considers a particular health issue, the more likely is the measure necessary. A
treaty interpreter
may take into account the relative importance of values that
the law to be enforced is intended to protect. The more vital or important
those
values are, the easier it would be to accept as “necessary” a
measure designed as an enforcement
instrument.[57] Given that the
protection of public health is “vital and important in the highest
degree” and that “few interests
are more
vital”[58] it appears that
TRIPS Article 20 should be interpreted to allow Members broad discretion in
designing their policy space to respond
to important health
concerns.
Following the approach of the Panel in EC – Biotech
it might be possible to use the guidelines to FCTC Articles 11 and 13 as
factual evidence or ordinary meaning. In other words it may
be used as evidence
in the way a dictionary might be, especially if justifiability is deemed to have
an “evolutionary”
meaning so it is necessary to know its current
status.
The plain packaging of cigarettes is unlikely to amount to a
violation of TRIPS. Article 20 envisages significant regulatory freedom
for
Members to enact their health measures. For the policy and scientific reasons
stated in Section II above, plain packaging promotes
public health by reducing
the incidence of smoking and is therefore “justifiable.” This is the
same conclusion reached
by de Carvalho who states that special requirements for
tobacco trademarks are justifiable under TRIPS Article 20 “in order
to
reduce the good-will associated to those marks and thus limit their power to
induce
consumption.”[59]
Finally,
tobacco companies could also argue that plain packaging constitutes a
non-violation complaint. Under GATT Article XXIII(1)(b),
a contracting party may
bring a WTO complaint where it considers its rights under the WTO Agreements are
being nullified and impaired
as a result of the application of another
contracting party measure, “whether or not it conflicts with the
provisions of this
Agreement.” This provision is not open for tobacco
companies to use, however, because non-violation complaints do not currently
apply to TRIPS.[60] In any event,
the claim would probably fail.
VII. BEYOND TRIPS
Philip Morris International, in a submission to the United States Trade Representative [USTR] regarding the proposed Trans-Pacific Trade Agreement, expressed particular concern about Australia’s plain packaging initiative. In what might be seen as an implicit concession that TRIPS does not prevent plain packaging, PMI expressed support for a “TRIPS-plus” intellectual property chapter to increase the protection given to trademarks.
VIII. CONCLUSION
It is important that the concerns raised by tobacco companies about breaching international trade obligations be critically examined. In light of the Australian Government’s desire to introduce plain packaging of cigarettes by 1 July 2012, paper has argued that moves to such a scheme are WTO compliant. It does not violate any provisions of the TRIPS Agreement or the Paris Convention. It is implicit within the TRIPS Agreement itself, and especially Article 20, that a high degree of domestic regulatory autonomy shall be afforded to a Member State to enact measures to protect and promote public health. While detail of the Government’s proposal has yet to be released, the general move towards plain packaging is consistent with the FCTC Guidelines and should fall within the scope of permissible regulation under Article 20. No violation of WTO obligations exists. No concern about plain packaging doing so should prevent the Government from implementing what is an important initiative at the top of the global public health agenda.
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THE COMMONWEALTH OF AUSTRALIA (2010), TAKING PREVENTATIVE ACTION – A RESPONSE TO AUSTRALIA: THE HEALTHIEST COUNTRY BY 2020 – THE REPORT OF THE NATIONAL PREVENTATIVE HEALTH TASKFORCE.
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Wakefield, M. A. et al. (2008), How Does Increasingly Plainer Cigarette Packaging Influence Adult Smokers’ Perceptions About Brand Image? An Experimental Study, 17 TOBACCO CONTROL 416.
Cases
Appellate Body Report, European Communities – Measures Affecting Asbestos and Asbestos- Containing Products, WT/DS135/AB/R (March 12, 2001).
Appellate Body Report, Korea – Measures Affecting Imports of Fresh, Chilled and Frozen Beef, WT/DS/161/AB/R, WT/DS169/AB/R (December 11, 2000).
Panel Report, European Communities – Protection of Trademarks and Geographical Indications for Agricultural Products and Foodstuffs, WT/DS290/R (March 15, 2005).
Panel Report, Indonesia – Certain Measures Affecting the Automobile Industry, WT/DS54/R, WT/DS55/R, WT/DS59/R, WT/DS64/R (July 2, 1998).
Treaties
Agreement on Trade-related Aspects of Intellectual Property Rights, January 1, 1996.
Vienna Convention on the Law of Treaties, May 23, 1969.
WTO/Health-Related Documents
Ministerial Conference, Declaration on the TRIPS Agreement and Public Health, WT/MIN(01)/DEC/W/2 (November 14, 2001).
The Conference of the Parties to the WHO FCTC, Guidelines for Implementation of Article 11 of the WHO Framework Convention on Tobacco Control on Packaging and Labelling of Tobacco Products, Decision FCTC/COP3(10) (November 2008).
Official Documents
Media Release, Prime Minister of Australia, Anti-Smoking Action (April 29, 2010).
Media Release, The Hon Nicola Roxon MP, Minister for Health and Ageing, New Health Taskforce on Prevention – Tobacco, Alcohol and Obesity Priorities (April 9, 2008).
Terms of Reference of the National Preventative Health Taskforce, available at http://www.preventativehealth.org.au/internet/preventative health/publishing.nsf/Content/terms-of-reference-1lp.
The Canadian Standing Committee on Health, Towards Zero Consumption: Generic Packaging of Tobacco Products, June 1994.
Internet and other sources
Goldberg, Marvin E. et al., When Packages Can’t Speak: Possible Impacts of Plain and Generic Packaging of Tobacco Products, March 1995 (unpublished expert panel report).
Memorandum from LALIVE, to Philip Morris International Management SA, Why Plain Packaging is in Violation of WTO Members’ International Obligations under TRIPS and the Paris Convention (July 23, 2009), available at http://www.plain-packaging.com/downloads /LALIVE_Analysis_23_July_2009.pdf.
Morgan Stanley Research Europe, Tobacco: Late to the Party (2007).
Senator Steve Fielding, Plain Tobacco Packaging (Removing Branding from Cigarette Packs) Bill (August 20, 2009), available at http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22legislation%2Fbillhome%2Fs724%22.
Submission from British American Tobacco Australasia, to Senate Community Affairs Committee, Inquiry into Plain Tobacco Packaging (Removing Branding from Cigarette Packs) Bill 2009 (May 6, 2010).
Submission from Philip Morris Limited, to to Senate Community Affairs Committee, Inquiry into Plain Tobacco Packaging (Removing Branding from Cigarette Packs) Bill 2009 (October 9, 2009), available at http://www.aph.gov.au/senate/committee/clac_ctte/plain_tobacco_packaging_09/submissions/sub45a.pdf.
Submission from R. J. Reynolds Tobacco Company, to the Canadian Standing Committee on Health (May 3, 1994).
Wilson, Tim, Director of IP and Free Trade Unit, Institute of Public Affair, Governing in Ignorance: Australian Governments Legislating Without Understanding, Intellectual Property (version 2.1) (May 4, 2010).
[*] This paper was first presented at the Conference “2010 International Conference on FCTC: Review and Prospect.” The author would like to thank Tim Lau for his research assistance, and Tania Voon and Tim Lau for their comments on an earlier draft of this Article. The author would also like to thank Professor Chang-Fa Lo, The Bureau of Health Promotion, Department of Health Taiwan, and the Asian Center for WTO and International Health Law and Policy, College of Law, National Taiwan University, for inviting and supporting his attendance at the Conference, as well as participants at the Conference for their thought-provoking questions and comments.
[**] Ph.D. (University of
Cambridge); LL.M. (Harvard University); Graduate Diploma Int’l Law, LL.B.
(Hons.), B.Com. (Hons.) (Melbourne,
Austl.). Associate Professor, Melbourne Law
School, The University of Melbourne; Fellow, Tim Fischer Centre for Global Trade
&
Finance, Bond University; Barrister & Solicitor, Supreme Court of
Victoria & High Court of Australia. Email:
a.mitchell@unimelb.edu.au.
[1]
Media Release, Prime Minister of Australia, Anti-Smoking Action (Apr. 29,
2010).
[2] THE COMMONWEALTH OF
AUSTRALIA, TAKING PREVENTATIVE ACTION – A RESPONSE TO AUSTRALIA: THE
HEALTHIEST COUNTRY BY 2020 –
THE REPORT OF THE NATIONAL PREVENTATIVE
HEALTH TASKFORCE 10, 62 (2010).
[3]
Phillip Morris made submissions to the Canadian Standing Committee on Health in
1994 when Canada was contemplating plain packaging.
See submission from
R. J. Reynolds Tobacco Co., to the Canadian Standing Comm. on Health, at TAB 3
(May 3, 1994). See also Steve Farnsworth, Tobacco Puffery, 15(6)
MULTINAT’L MONIT. 7
(1994).
[4] Another reported
objection is the initiative requires the Australian Government to pay
compensation since it is acquiring property
it must do so on just terms.
Deprivation of rights does not constitute acquisition under the
Constitution.
[5] NATIONAL
PREVENTIVE HEALTH TASKFORCE, AUSTRALIA: THE HEALTHIEST COUNTRY BY 2020 –
NATIONAL PREVENTATIVE HEALTH STRATEGY –
THE ROADMAP FOR ACTION 181-82
(2009).
[6] John Slade, The Pack
as Advertisement, 6 TOBACCO CONTROL 169 (1997); SIMON CHAPMAN, PUBLIC HEALTH
ADVOCACY AND TOBACCO CONTROL: MAKING SMOKING HISTORY 176
(2007).
[7] “One of every two
smokers is not able to distinguish in blind (masked) tests between similar
cigarettes . . . for most smokers
and for the decisive group of new, younger
smokers, the consumer’s choice is dictated more by psychological, image
factors
than by relatively minor differences in smoking characteristics.”
D. Germain et al., Adolescents’ Perceptions of Cigarette Brand Image:
Does Plain Packaging Make a Difference?, 46(4) J. ADOLESC. HEALTH 385
(2010).
[8] Becky Freeman et al.,
The Case for Plain Packaging of Tobacco Products, 103 ADDICTION 580, 581
(2008).
[9] Id. at
581.
[10] Nigel Mawditt,
Putting Pack Opportunities into the Frame, 36 WORLD TOBACCO 212
(2006).
[11] Supra note 8, at
583.
[12] G. Eindhoven,
Elegant Packs Promote Image, Defend Property Rights, 16 WORLD TOBACCO 170
(1999).
[13] Morgan Stanley
Research Europe, Tobacco: Late to the Party (2007); Supra note 8, at
580.
[14] Supra note 8, at
582-83.
[15] Id. at
584.
[16] Conjuring Pack
Appeal, 200 WORLD TOBACCO 35 (2004).
[17] Supra note 8, at
581.
[18]
Id.
[19] See in
particular Marvin E. Goldberg et al., When Packages Can’t Speak: Possible
Impacts of Plain and Generic Packaging of Tobacco
Products, Mar. 1995
(unpublished expert panel
report).
[20] M. A. Wakefield et
al., How Does Increasingly Plainer Cigarette Packaging Influence Adult
Smokers’ Perceptions About Brand Image? An Experimental Study, 17 TOB.
CONTROL 416 (2008).
[21]
Supra note 20.
[22] S. Chapman & B.
Freeman, Markers of the Denormalisation of Smoking and the Tobacco
Industry, 17 TOB CONTROL 25, 28 (2008).
[23] Supra note 8, at
584.
[24]
Id.
[25] Id. at
585.
[26] Id. at
584.
[27] The Conference of the
Parties to the WHO FCTC, Guidelines for Implementation of Article 11 of the
WHO Framework Convention on Tobacco Control on Packaging and Labelling of
Tobacco
Products, Decision FCTC/COP3(10) (Nov.
2008).
[28] Supra note 8, at
581.
[29] Id. at 582; the
Canadian Standing Committee on Health, Towards Zero Consumption: Generic
Packaging of Tobacco Products, June
1994.
[30] CENTRE FOR BEHAVIOURAL
RESEARCH IN CANCER, HEALTH WARNINGS AND CONTENTS LABELLING ON TOBACCO PRODUCTS:
REVIEW, RESEARCH AND RECOMMENDATIONS
(1992).
[31] Media Release, The Hon
Nicola Roxon MP, Minister for Health and Ageing, New Health Taskforce on
Prevention – Tobacco, Alcohol
and Obesity Priorities (Apr. 9,
2008).
[32] Terms of Reference of
the National Preventative Health Taskforce, available at
http://www.preventativehealth.org.au/internet/preventativehealth/publishing.nsf/Content/terms-of-reference-1lp
(last visited Sept.
15, 2010); supra note 5, at
287-88.
[33] Supra note 5,
at 19, 181-82.
[34] Id. at
20.
[35] Id. at
181.
[36] Supra note
2.
[37] Id. at 10,
66.
[38]
Id.
[39] Id. at 10,
111.
[40] Id. at 10,
66.
[41] Sen. Steve Fielding,
Plain Tobacco Packaging (Removing Branding from Cigarette Packs) Bill (Aug. 20,
2009), available at
http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=
Id%3A%22legislation%2Fbillhome%2Fs724%22
(last visited Sept. 15,
2010).
[42] Other legal
objections assert that plain packaging is a violation of the TBT
Agreement.
[43] Agreement on
Trade-Related Aspects of Intellectual Property Rights [hereinafter TRIPS], Jan.
1, 1996, art.15.
[44] Memorandum
from LALIVE, to Philip Morris Int’l Mgmt. SA, Why Plain Packaging is in
Violation of WTO Members’ International
Obligations Under TRIPS and the
Paris Convention, at 6 (July 23, 2009), available at
http://www.plain-packaging.com/downloads/LALIVE_Analysis_
23_July_2009.pdf
(last visited Sept. 15,
2010).
[45]
Id.
[46] Emphasis
added.
[47] Submission from
Philip Morris Ltd., to S. Cmty. Affairs Comm., Inquiry into Plain Tobacco
Packaging (Removing Branding from Cigarette
Packs) Bill 2009 (Oct. 9, 2009),
available at
http://www.aph.gov.au/senate/committee/clac_ctte/plain_tobacco_packaging_09/submissions/sub45a.pdf
(last visited Sept. 15,
2010).
[48] Panel Report,
European Communities – Protection of Trademarks and Geographical
Indications for Agricultural Products and Foodstuffs, 7.246,
WT/DS290/R (Mar. 15, 2005).
[49]
Tim Wilson, Dir. of IP and Free Trade Unit, Inst. Pub. Affair, Governing in
Ignorance: Australian Governments Legislating Without
Understanding,
Intellectual Property (version 2.1) (May 4, 2010), at
16.
[50] Supra note 49, refers to trademark owners legitimate
interests in “using its own trademark in connection with the relevant
goods and services
of its
own.”
[51] Submission from
British American Tobacco Australasia, to S. Cmty. Affairs Comm., Inquiry into
Plain Tobacco Packaging (Removing Branding
from Cigarette Packs) Bill 2009 (May
6, 2010).
[52] NUNO PIRES DE
CARVALHO, THE TRIPS REGIME OF TRADEMARKS AND DESIGNS (2006).
[53] Panel Report, Indonesia
– Certain Measures Affecting the Automobile Industry, 14.277,
WT/DS54/R, WT/DS55/R, WT/DS59/R, WT/DS64/R (July 2,
1998).
[54] Supra note 45, at
11.
[55] Ministerial Conference,
Declaration on the TRIPS Agreement and Public Health, at 5(a),
WT/MIN(01)/DEC/W/2 (Nov. 14, 2001); Vienna Convention on the Law of Treaties,
May 23, 1969, art. 31.
[56]
Appellate Body Report, European Communities – Measures Affecting
Asbestos and Asbestos- Containing Products, 168, WT/DS135/AB/R (Mar.
12, 2001).
[57] Appellate Body
Report, Korea – Measures Affecting Imports of Fresh, Chilled and Frozen
Beef, 162, WT/DS161/AB/R, WT/DS169/AB/R (Dec. 11,
2000).
[58] Supra note 57, at
172.
[59] Supra note 53.
[60] Supra note 44, art. 64.
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