INTA Brief to WTO Revives Plain Packaging Debate

By Eileen McDermott
January 17, 2019

INTA contends that the WTO panel failed to consider the correlation between plain packaging and counterfeiting, arguing that Australia’s law “will facilitate the spread of counterfeit tobacco products by making them easier to produce and more difficult to detect.”

INTA Brief to WTO Revives Plain Packaging DebateAustralia’s Tobacco Plain Packaging Act (TPPA) was enacted in 2011 and prohibits all use of trademarks (other than word marks) on tobacco product packaging. The law seemingly created a domino effect around the world, with countries including Hungary, Ireland, New Zealand, Norway, and the UK having enacted similar laws since, and many other countries presently considering various approaches to restricting tobacco and other products, including alcohol, snack foods and soda. Most recently, Canada enacted the Tobacco and Vaping Products Act, which places certain restrictions on tobacco products, and is still considering broader plain packaging regulations.

Complaints about the law have been pending with the World Trade Organization (WTO) for some time, and, on January 14, the International Trademark Association (INTA) submitted a brief opining in the latest stage of that case.

WTO: Special, but Justifiable

In June of 2018, the WTO ruled on consolidated complaints brought by tobacco-producing countries Cuba, the Dominican Republic, Honduras, and Indonesia against the Australian law. The complaints asked the WTO to decide whether Australia’s law violated provisions of the Agreement on Technical Barriers to Trade and the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS). One key assertion was that the law is inconsistent with TRIPS, Article 20, which says:

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. [emphasis added]

The WTO ultimately ruled against the complainants, maintaining that, while Australia’s law clearly constituted special use requirements that were detrimental to trademarks, it was justifiable under TRIPS Article 8.1, which says:

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.

The key here is that the WTO considers the special restrictions “justifiable” and therefore TRIPS-compliant.

Honduras appealed the WTO ruling to the Appellate Body of the Dispute Settlement Panel of the WTO in July 2018 and the Dominican Republic appealed in August. The WTO Appellate Body decided to consolidate the appeals in September. The panel generally has three months to circulate its report in an appeal, but the Appellate Body in this case said that it could not meet that timeframe due to the “exceptional size and complexity of the consolidated proceedings, including, the considerable volume of the panel record and the size of the panel report, the number of issues appealed, and the many complex aspects of these appellate proceedings”—not to mention a backlog of appeals.

The INTA Brief

Now, INTA has filed an amicus brief in the consolidated appeal by Honduras and the Dominican Republic. INTA’s brief calls on the WTO Appellate Body to consider the “highly negative effects that the TPPA could have not just within the tobacco industry, but potentially across all sectors of consumer goods.”

INTA further contends that the WTO panel failed to consider the correlation between plain packaging and counterfeiting. Australia’s law “will facilitate the spread of counterfeit tobacco products by making them easier to produce and more difficult to detect,” says the brief. It continues:

By eliminating the source function served by trademarks, the TPPA measures open up the market for counterfeiters (often backed by organized crime or terrorist organizations). Those counterfeit products will likely not meet the necessary health and safety requirements for tobacco products, increasing the risk of harm to consumers.

The brief also says that the WTO panel erred in its finding that the TPPA requirements are justifiable under TRIPS.  “The special requirements contained in the TPPA are unjustifiable, in the sense envisaged by TRIPS, because the effect of the requirements is detrimental to the ability to distinguish those goods in the course of trade.” Such generic packaging “reduces and/or removes the benefits of distinctiveness and information afforded to consumers by distinctive marks…. [and creates] a presumption of equivalence between the products, which is highly damaging for trademark rights, innovation, quality, and safety reasons.”

Is Plain Packaging Even Working?

The Australian government released the findings of a series of peer reviewed studies on the efficacy of the plain packaging law in 2016. The government said that the studies “show that the tobacco plain packaging measure is having an impact by reducing the appeal of tobacco products, increasing the effectiveness of health warnings, and reducing the ability of the pack to mislead. The studies also provide early evidence of positive changes to actual smoking and quitting behaviours.”

But experts have raised doubts about the government’s interpretation of the data presented in those studies. Economists Sinclair Davidson and Ashton de Silva authored a paper in 2016 characterizing the government’s evaluation as falling short of its own criteria for justifying evidence-based policy. Davidson and de Silva said the government’s studies “suffer from inconsistencies and methodological differences” and that “the evidence is not consistent with the stated aims of the plain packaging policy.”

INTA argues that the TPPA should not have been introduced before a thorough “impact assessment and the proper legal considerations, in particular regarding the implications on intellectual property legislation and international agreements to which Australia is signatory,” were conducted.

 

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The Author

Eileen McDermott

Eileen McDermott is the Editor-in-Chief of IPWatchdog.com. Eileen is a veteran IP and legal journalist, and no stranger to the intellectual property world, having held editorial and managerial positions at several publications and industry organizations. She has acted as editorial consultant for the International Trademark Association (INTA), chiefly overseeing the editorial process for the Association’s twice-monthly newsletter, the INTA Bulletin. Eileen has also served as a freelance editor for the World Intellectual Property Organization (WIPO); as senior consulting editor for the Intellectual Property Owners Association (IPO) from 2015 to 2017; as Managing Editor and Editor-in-Chief at INTA from 2013 to 2016; and was Americas Editor for Managing Intellectual Property magazine from 2007 to 2013.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 6 Comments comments.

  1. Anonymous January 18, 2019 5:53 am

    Everyone should read the paper by Professor Mark Davidson of Melbourne’s Monash University on the subject:

    https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2137455

    The simple fact is that there some products that are so harmful to public health that they should be in no way permitted to be promoted or allow themselves to be “glamorized”, and tobacco is one of these. To elevate trade mark rights above public health concerns is obscene. As the Australian High Court decision put it, tobacco is the only product that will kill you when used according to the manufacturer’s instructions:

    http://www.hcourt.gov.au/cases/case-s389/2011

  2. Gene Quinn January 18, 2019 12:13 pm

    Anonymous @1…

    Did you even read the article? I have to believe the answer is no. If you did read the article you obviously don’t understand the issue.

    It is funny that you call it “obscene” to elevate “trade mark” rights above public health. What is really obscene is ignorance. The study relied upon to justify banning trademarks is hopelessly flawed. It is impossible to believe any thoughtful, educated individual would base anything, let alone government policy, on a clearly biased and flawed study. But as is so often the case with do-gooders like you, the end justify any means. That’s fine if you want to be intellectually dishonest, but just don’t be a condescending prick when you are being so overtly intellectually dishonest.

    Now, with respect to your concerns over public health, only a fool would believe that taking a trademark off a package would increase public health. To think smokers will suddenly stop smoking because a trademark is not on a package fundamentally misunderstands addiction and how hard it is for many to quit smoking. Taking trademarks off the package is a feel-good-do-nothing approach to governing. It is a visible symbol that allows people like you to claim victory without doing anything to fix the problem you allegedly care so much about. You must be a government bureaucrat.

    All plain packaging laws do is make counterfeiting easy. Counterfeiting funds organized crime and terror groups. Counterfeit goods are inferior, and often come with extraordinary health and safety risks. This is all well documented and explained on the pages of IPWatchdog, and many other publications. So I invite you to join the 21st century and open your eyes. The “solution” you advocate causes far more problems of a far greater magnitude while doing absolutely nothing to address public health.

  3. Anon January 21, 2019 7:24 am

    Gene,

    I have to disagree with the vehemence of your position.

    Not necessarily with the lesson that “Ends do not justify the Means” — as that remains an extremely important consideration, especially for matters at law.

    That being said, I would hesitate to accept the notion that the flaws of the study must mandate that the results of the study must be wrong.

    Also, I think it a bit of misdirection to claim that control of the advertising (and that is what is being controlled, as Word Marks were not eliminated) would remove the dangers of tobacco.

    That was never the issue.

    Instead, as the decision now under appeal clearly stated, the mechanism allows for the control of trademarks if a Sovereign decides — for itself — that health is at issue. This does NOT mean that “trademarks CAUSE the health issue.”

    I would gladly settle for an alternative of rescinding the control of advertising on these KNOWN dangerous products if we were to turn around and out-right ban tobacco from human consumption, as tobacco has zero human benefits to offer, and is ONLY a source of addictive chemicals.

  4. Anon January 21, 2019 7:39 am

    And yes, I will grant that an ease of counterfeiting should be included in considerations of how to control advertising of dangerous products.

    But if counterfeiters will counterfit non-Word Marks (with relative ease) — as they do anyway, is the degree of relative ease enough to overcome the (very real) health concerns that underlie a Sovereign’s choice to control advertising of dangerous products?

    The accord under consideration clearly envisioned the power of an individual Sovereign to abbrogate the full reach of trademark protection. The counter arguments presented that basically assert that NO product is dangerous enough to employ a “word-Mark only” scenario goes too far in light of what the Accord plainly states.

    I just do not buy the conclusory assertions of “which is highly damaging for trademark rights, innovation, quality, and safety reasons.”

    As trademarks of a non-Word Mark nature have ZERO to do with innovation, only marginal effects (over any legislated baseline for dangerous products), and safety itself STILL must be satisfied, regardless of the extent of advertising involved.

    To touch again then on the vehemence of your reply, the poster provides a link to a study that counters the study by the two economists that are questioning the series of peer-reviewed items (not just one government study).

    I am reminded of a joke my Econ professor would tell wat back when I obtained my MBA:
    Q: how do you generate ten different economic theories?
    A: invite ten economists to a meeting.

  5. Tina Anderson April 13, 2019 5:36 pm

    Let’s talk about the Australian Government’s addiction to tobacco. At present, smokers are almost single-handedly propping up our nation’s fiscal situation.

    As of September 2019, a 50g pouch of tobacco will cost approx $100. When the government started collecting this ever-increasing revenue it promised to put (currently) $17.5b per year back into the health system. Instead it has CUT much health funding and has made treatments for smoking related health issues unaffordable to the average Australian. Many aids that may assist smokers in giving up have been also been banned – unless, of course, it is provided by Big Pharma.

    This tells us three things:
    1) that our government has not the slightest concern for the health burden
    2) it also has a vested interest in keeping 2.5m smokers thoroughly addicted
    3) the poorest Australians are making the largest financial contributions to the economy

    Meanwhile, the government is telling tax-payers that these poor people are lazy no-hopers who are stealing from the government in order to justify the robo-debt attack dog which clawed back another billion by removing food from their tables and, in some cases, rendering them homeless.

    Now there’s a novel way to make sure people give up smoking! Make them so destitute they have to eat out of rubbish bins, sleep in the street and can’t afford to treat whatever health ailments they may have from smoking Australia into surplus! Not to mention having paid half a million in health care that they’re now denied.

    I don’t even have to read the bogus report to know it’s not based on fact, but addiction – the government’s own addiction to tobacco sales. I’m not surprised other countries LOVE the idea!

  6. Tina Anderson April 13, 2019 5:46 pm

    Apologies in advance if the real impact on the ground doesn’t fit with professional ideals, but they rarely do… right?