History of Plain Packaging: Developing the Intellectual Property Argument

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How Plain Packaging Proposals Developed

In 1986 the Canadian Medical Association (CMA) adopted a proposal from Dr Gerry Karr to have cigarettes sold “in the equivalent of plain brown wrappers”. The following year, the CMA called on the federal government to introduce laws that would require that “tobacco products be sold in plain, standard-sized packages that state: ‘This product is injurious to your health’.” [1]

In May 1989, New Zealand’s Toxic Substances Board published far-reaching proposals on strengthening tobacco control. As the report was released, a health promotion group called the Coalition Against Tobacco Advertising and Promotion called for a complete ban on advertising “including the biggest advertising of all, the glamorous cigarette pack.” [2]

In October 1991, Action on Smoking and Health submitted a proposal to the UK Government stating that it “should require by law that all cigarette packets should be uniform and plain. The brand name should be printed in a uniform typeface, and the package should otherwise carry only health warnings and product details.” [3] (For information on developments in the UK see Plain packaging in the UK.)

As governments worldwide have responded to these calls, the industry has campaigned hard to derail them. The industry initially attempted to oppose calls for plain packaging with arguments about the nanny state and the importance of educating young people, but as a report for Physicians for Smoke-Free Canada describes, “alarmed over the prospect of losing control of the tobacco package, they worked together to develop new strategic approaches". [4]

How the Industry Responded

Calls for plain packaging restrictions in a number of countries prompted John Owen of Wills New Zealand to send a warning to colleagues in British American Tobacco in January 1993. He said the move "heralds the biggest battle to be fought by the industry” and called for an "international approach to brand protection” using nascent laws protecting intellectual property rights. He suggested that “the Paris Convention, provisions within the General Agreement on Tariffs and Trade (GATT) and the European Community would seem a good starting point for finding out what existing protection there is for our brands under these conventions". He hoped that the major manufacturers would work together to “research and develop strategies” and develop “legal defences that could tie up legislators in litigation over a long period, and, hopefully, attract international legal attention". [5]

Within months, this approach had gained traction in the industry. In May 1993, 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. Industry should set the agenda in an effort to confine the argumentation to political, economic, international trade, and intellectual property issues". [6]

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 generic 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, TRIPS [Agreement on Trade-Related Aspects of International Property Rights], WIPO [World Intellectual Property Organisation], etc)."[7]

When the Canadian Government’s Commons Standing Committee on Health launched hearings into plain packaging, in February 1994, Philip Morris and RJ Reynolds hired two heavyweight diplomats, former U.S. trade representative Carla Hills, and former Deputy Trade Representative Julius Katz to provide expert opinion. They told the Canadian Commons Committee that plain packaging would be an “unlawful expropriation” of the companies’ trademark rights and that “the compensation claims of affected foreign trademark holders would be staggering, amounting to hundreds of millions of dollars". [8]

This time the outcome was not favourable to the companies. The committee “concluded that plain or generic packaging is a reasonable component” of a tobacco control agenda, and recommended that work on a proposed law should proceed. [9]

In February 1995 an Australian subsidiary of BAT, WD & HO Wills, provided a Senate Inquiry into the Tobacco Industry and the Costs of Tobacco Related Illnesses with a submission on generic packaging. It stated that plain packaging would violate “the legal and constitutional rights of the manufacturers who own them. Loss of brand rights would lead to substantial claims for compensation". It named TRIPS and the Paris Conventions. [10]

The companies "argued that the Australian government should compensate them for 'acquisition' of their property 'on just terms' under the Australian Constitution", even though according to a report for Action on Smoking and Health Australia "numerous High Court judgements have confirmed that mere restraint in relation to property does not involve acquisition, so the concept of “just terms” is not applicable". [11]

The Physicians for Smoke Free Canada report notes: "What the companies did not tell the Australian Senate was that two years previously they had sought and received advice that they had “no basis for any legal challenge” and that the British government had told them they “did not have a case.” Nor did they mention that their arguments had been soundly refuted by WIPO only months earlier. [4]

Nonetheless, the tactic yielded results. The Health Ministry announced that Australia would not be pursuing plain packaging because of free trade and constitutional constraints. "Unfortunately, it's just not feasible" the spokesperson said. "We would have to buy the tobacco companies' trademarks and that would cost us hundreds of millions of dollars." [12]

It would take another 15 years until new regulation on Plain Packaging in Australia would be announced.


Read more about Plain Packaging.

External Sources

Physicians for Smoke Free Canada, Packaging Phoney Intellectual Property Claims, June 2009, accessed 1 June 2011

TobaccoTactics Resources

Notes

  1. AD Porter, Plain Pack Group, 17 March 1994, accessed 1 June 2011
  2. Action on Smoking and Health, The Big Fight Begins, June 1989, accessed 1 June 2011
  3. Action on Smoking and Health, Ending an Epidemic: A Manifesto for Tobacco Control, October 1991, accessed 1 June 2011
  4. 4.0 4.1 Physicians for Smoke Free Canada, Packaging Phoney Intellectual Property Claims, June 2009, p11 accessed 1 June 2011
  5. John Owen, Letter to D Bacon regarding copy of the tobacco control regulations, 22 January 1993, accessed 1 June 2011
  6. Tobacco Institute of New Zealand Limited, Protection of Intellectual Property: Initial Report and Backgrounder,10 May 1993, accessed 1 June 2011
  7. John McDonald, Rothmans, Benson & Hedges Inc, Canada - update on plain pack initiatives by government, 10 March 1994, accessed 14 June 2012
  8. RJ Reynolds Tobacco Company, Plain packaging of tobacco products, 4 May 1994, accessed 3 June 2011
  9. Report of the Standing Committee on Health, Generic Packaging of Tobacco Products, June 1994, accessed 3 June 2011
  10. WD and HO Wills (Australia) Limited, Generic packaging – supplementary submission to the Senate Community Affairs References Committee February 1995, accessed 3 June 2011
  11. Anne Jones and Stafford Sanders, Countering Tobacco Tactics, Action on Smoking and Health Australia, 2010, accessed 7 June 2011
  12. Martin Riordan, Generics Rejected by Australian Health, 24 July 1995, accessed 1 June 2011