Countering Industry Arguments Against Plain Packaging: It Breaches Intellectual Property Rights

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British American Tobacco (BAT), Philip Morris International (PMI), Imperial Tobacco and Japan Tobacco International (JTI) have all argued that requiring tobacco products to be sold in plain packaging is tantamount to the government appropriating their trademarks. This is an example of a tobacco industry tactic designed to influence public opinion against regulation and stall the passage of legislation, even when the industry knows that the argument is unlikely to stand up in court.

Background

The intellectual property (IP) argument was developed in the early 1990s following the creation of The Plain Pack Group in 1993.[1] This group was created to develop a coordinated worldwide strategy against plain packaging. To develop this strategy, The Plain Pack Group agreed to seek the support of IP associations and, amongst other messages, to communicate to a wide audience that plain packaging was in breach of IP. The argument gained traction within months.

In 1993, in response to calls for plain packaging to be introduced in New Zealand, the New Zealand Tobacco Institute, an industry body, argued that the drive for plain packaging “should be treated as expropriation of Intellectual Property and contested politically on that basis. If this strategy is followed the industry has a greater chance of both setting its own agenda and avoiding the need to critique anti‐smoking proposals from a back foot position. The industry should set the agenda in an effort to confine the argumentation to political, economic, international trade, and intellectual property issues".[2]

In March 1994, John McDonald of Rothmans Benson & Hedges Inc. wrote a memo which was forwarded to The Plain Pack Group members outlining the plan to oppose plain packaging using legal challenges against the violation of trademarks. "Experts will be asked to look at the violation of domestic trademarks as well as the violation of international trademarks (NAFTA [North American Free Trade Agreement], GATT [General Agreement on Tariffs and Trade], TRIPS [Agreement on Trade-Related Aspects of International Property Rights], WIPO [World Intellectual Property Organisation], etc)."[3] This is despite being advised that the IP contest was unlikely to be won in court.

Legal Opinion

BAT was briefed that the IP argument would not have any merit under the GATT agreement (the predecessor of the World Trade Organisation (WTO)) or TRIPS.[4] The GATT framework has a number of general exceptions, one of which is when measures are “necessary to protect human…life or health.”[5]

Tobacco companies commissioned several legal opinions on the protection that trade law might offer them. A 2009 Physicians for Smoke Free Canada report summarised the advice they received:[6]

  • In August 1992 the Australian companies had sought and received advice from their own lawyers that they had no basis for legal challenge under the Paris Convention.[7]
  • In April 1994 John Clutterbuck of Rothmans, in a background paper prepared for his colleagues in other tobacco companies, observed that “there appears to be no direct redress available to companies under NAFTA as regards product labelling". In the same paper, he candidly concluded: “The international trade argument by itself will not however be sufficient to ward off the threat of plain packs".[8]

On behalf of the Plain Packs Group, BAT solicitor David Latham wrote to Ludwig Baeumer at WIPO, a specialised body of the United Nations “dedicated to developing a balanced and accessible international intellectual property system”[9], asking for advice about the possible use of the Paris Convention on trademark law. “The Paris Convention does not contain any obligation to the effect that the use of a registered trademark must be permitted,” Baeumer replied. “If a national law does not exclude trademarks for certain kinds of products from registration, but only limits the use of such trademarks, this would not constitute a violation of the Paris Convention.”[10] Latham noted: “Certainly his letter does not take us further.”

Despite clear advice that IP law offered the industry no protection against plain packaging legislation, the industry continues to use these arguments. The Physicians for Smoke Free Canada report noted: “BAT continued to instruct its public relations officials to counter proposals for plain packaging with arguments that it would violate intellectual property laws, and when it launched an industry public relations publication, The Tobacco File, in Canada in 1995, it continued to position plain packaging as contrary to intellectual property laws. In July of 1995, Rothmans, Benson and Hedges president Joe Heffernan told shareholders that plain packaging was against Canada’s “International Treaty obligations to protect intellectual property including trademarks".[6]

Plain Packaging Legislation in Australia

In response to the plain packaging debate in Australia, Mark Davison, a senior law expert from the IP Research Institute of Australia at Monash University, commented in a seminar that the IP argument, and the related industry argument that plain packaging legislation amounts to government appropriation of company trademarks, was “so weak, it’s non-existent. There is no right to use a trademark given by the World Trade Organisation agreement. There is a right to prevent others using your trademark but that does not translate into a right to use your own trademark.”[11][12][13] In any case governments do not want to use company trademarks; tobacco companies would still own the rights, legislation would simply impede companies’ ability to use them as marketing tools.[14]

In line with these legal opinions, on the 15th of August 2012, the High Court in Australia ruled that plain packaging law, due to be implemented on the 1 December 2012, did not represent an "acquisition of property" by the government, from which they could benefit.[15]

Tobacco Tactics

"It Will Cost Taxpayer’s Money"

Despite all of the legal opinions from experts and the ruling in Australia, in New Zealand BATNZ launched a multi-media campaign against plain packaging centred on IP. The campaign was launched to coincide with a public consultation in New Zealand on plain packaging that ran from August to October 2012.[16]

Legal battles raise the costs of tobacco control and, therefore, act as a deterrent to new laws aimed at promoting public health. In Australia, to gather public support against plain packaging, British American Tobacco Australia (BATA) launched a campaign in 2012 called “Don’t let the taxpayer foot the bill for a bad bill”. The campaign argued that the Australian government will have to spend millions defending the legislation with the further risk of having to spend billions compensating the industry for acquiring their trademarks, all out of the taxpayer’s pocket.[17]

Countering Industry Arguments Against Plain Packaging

TobaccoTactics Resources

TCRG Research

Notes

  1. Jacqueline Smithson, Terminology and Terms of Reference, Rothmans International Tobacco Limited, 8 October 1993, accessed 1 June 2011
  2. Tobacco Institute of New Zealand Limited, Protection of Intellectual Property: Initial Report and Backgrounder,10 May 1993, accessed 1 June 2011
  3. John McDonald, Rothmans, Benson & Hedges Inc, Canada - update on plain pack initiatives by government, 10 March 1994, accessed 14 June 2012
  4. Souza Cruz, International Conference on Sales and Distribution TSG Meeting, 11 May 1994, accessed 1 June 2011
  5. Case study: Ban in cigarette advertisement and promotion within the scope of GATT/WTO, 1994, accessed August 2012
  6. 6.0 6.1 Physicians for Smoke Free Canada, Packaging Phoney Intellectual Property Claims, June 2009, p14, accessed 1 June 2011
  7. Anthony C Johnston, Tobacco Sponsorship and Labelling in Australia, 6 August 1994, accessed 1 June 2011
  8. Jacqueline Smithson, Plain Packs Meeting - Papers, 12 April 1994, accessed 1 June 2011
  9. What is WIPO? undated page, accessed 3 June 2011
  10. David Latham, Letter to Jacqueline Smithson, enclosing the WIPO advice, 6 July 1994, accessed 1 June 2011
  11. M. Davison, Banning tobacco logos: A look at the issues, Research Institute of Australia, 2010, accessed August 2012
  12. Cancer Council Victoria, Plain packaging of tobacco products: A review of the evidence, 2011, accessed July 2012
  13. N. Berkovic Legal experts back Canberra, The Australian, 30 April 2012, accessed August 2012
  14. M. Davison, Plain packaging of cigarettes: Would it be lawful?, Australian Intellectual Property Law Bulletin, 23(5), 105-8
  15. Philip Morris Limited, Philip Morris Limited comments on Australian High Court decision on plain packaging for tobacco products, 15 August 2012, accessed August 2012
  16. BATNZ, AgreeDisagree.co.nz, accessed August 2012
  17. BATA, Don't let the taxpayer foot the bill for a bad bill,2012