Australia: Trademark Claims

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12 June 2020,
at
5:31 pm.

As part of the fight against the new tobacco control measure of plain packaging in Australia, tobacco
companies have argued that the plain packaging policy violates intellectual property (IP) rights and trademark
claims. IP and trademark claims have been made by tobacco companies opposing public health regulation for
more than 20 years, despite internal industry documents showing that the industry has been aware of the low
success rate of such claims since 1992.

• See Developing the Intellectual Property Argument.

Summary of IP Claims
• In its April 2010 submission to the Australian Senate Community Affairs Legislation Committee inquiry
into plain packaging, Imperial Tobacco said – under the heading “breach of law and international
treaties” – that the new laws risked “breaching Australian law and international legal and treaty
obligations. The introduction of plain packaging would seriously damage Australia’s international
reputation as a supporter of legitimate business and a defender of commercial rights and freedoms,
particular in relation to intellectual property.”1

• Imperial Tobacco also advised the Senate Committee that it would “robustly defend any expropriation of
our valuable corporate assets” and added that plain packaging “raises significant legal questions”.

• That same year, Philip Morris launched a “Plain Packaging of Tobacco Products” website “to describe its
likely effects on retailers, manufacturers, governments and consumers.” It claimed that plain packaging
“would effectively eliminate the use of trademarks in relation to tobacco products, constituting a
violation of trademark rights protected by national and international law.”2

• On 31 May 2011, British American Tobacco Australia (BATA) announced that it was taking the Australian
Government to court over its refusal to make public its legal advice on plain packaging.3 The company
said: “BATA is hopeful that the Full Federal Court orders the Government to release the key document
which it has continually declined to do through the Freedom of Information (FOI) process. BATA suspects
that Minister Roxon hasn’t released the legal advice because it’s likely to demonstrate her plain packaging
laws are flawed.” In addition, BATA successsfully argued for the date of the hearing to be brought forward
from November to August 2011.4

• On 8 June 2011, several US-based business associations issued a statement opposing Australian plain
packaging, because it “risks establishing a precedent of IP destruction for an entire industry”.5

• The groups were:

• US Chamber of Commerce

• National Association of Manufacturers

• United States Council for International Business

• National Foreign Trade Council

• Emergency Committee for American Trade

• US-ASEAN Business Council

• TransAtlantic Business Dialogue

• Later that month, Philip Morris served the Australian Government with a “notice of claim”, leaving both
sides with three months to negotiate before court action, in relation to the violation of intellectual
property rights under Australia’s bilateral investment treaty with Hong Kong. “If no mutually agreeable
solution is found, then it proceeds to us seeking compensation. We estimate the damage will potentially
amount to billions of Australian dollars,” a spokeswoman for Philip Morris Asia told Dow Jones
Newswires.6
For more information on legal cases in Australia, see Challenging Legislation.

Responses to the Legal Claims

False claims

Australia’s Trade Minister at the time, Craig Emerson, dismissed the industry’s trademark and IP rights
arguments. Speaking to the newspaper The Age, he said:7

“Claims that the Australian government is attacking trademarks are false. We are protecting public
health and won’t be threatened or intimidated by big tobacco companies … The government will not
subjugate Australia’s national sovereignty in any trade agreement. Nor will we contract out
government policy to private corporations.”

Misappropriation

The claims were also criticised by patent and trademark attorney Glen Gordon.8 Among other points, he
argued:

“The primary right obtained from trademark registration is a negative right; it is actually the right to
prevent other people from (mis)using the trademark. The proprietors may use the mark themselves
subject to other laws, but they actually gain from registration the right to take legal action that will
stop third parties from using the mark on the same or similar goods … the change to plain packaging
will not adversely affect this right.”

Intimidation

Julia Gillard, Australia’s Prime Minister at the time, was not impressed by the industry’s legal threats. She told
The Guardian:9

“We’re not going to be intimidated by Big Tobacco’s tactics, whether they’re political tactics, whether
they’re public affairs kind of tactics out in the community, or whether they’re legal tactics. We’re not
taking a backward step. We’ve made the right decision and we’ll see it through.”

Delay

The legal threat might not be more than a strategy to delay the introduction of plain packaging.

Donald Rothwell, Professor of International Law at the Australian National University, said in an email to Dow
Jones Newswires that it could be some time before a resolution is reached as it must first be proven that the
dispute exists, given the new laws haven’t yet been passed.6

Martin Dockrell, Director of Research and Policy at London-based public health charity ASH, told The
Guardian he expected the Australian suit to be the first of many as governments around the world tighten up
the rules on cigarette packaging:

“Legal action is a standard delaying device for them. They are going to throw huge amounts of money
into this.”9

Last resort

In an editorial entitled “Why Australia has to win its trial of strength against the tobacco giants” in the
European Journal of Cancer Care,10 S.J. O’Connor wrote that he agreed with the then Australian Health
Minister Nicola Roxon that the proposals will “remove the last vestige of glamour from tobacco products” and
“the fact that the tobacco industry have resorted to the use of a relatively obscure bilateral treaty between
Australia and Hong Kong to intimidate the Australian government into retracting the proposals clearly implies
that they think the same thing.”

Countering Industry Arguments Against Plain

Packaging
For more information on the legal advice given to tobacco companies regarding intellectual property claims
see It Breaches Intellectual Property Rights

Outcome of Trademark Appropriation Litigation

On the 15 August 2012, the High Court in Australia ruled that plain packaging law, due to be implemented on
the 1 December 2012, was constitutionally valid.11 The key issue before the court was whether, under the
constitution, plain packaging represented an “acquisition of property” by the government, from which they
could benefit.12

According to The Sydney Morning Herald, president of the Australian Council on Smoking and Health Mike
Daube said that the ruling was “a massive win for public health” and that “It is also the global tobacco
industry’s worst defeat” to date.11

International legal challenges

World Trade Organization
Australia has also been challenged by the international community over its plain packaging law. Under the
World Trade Organization (WTO) countries are able to challenge the practices of other countries by calling
for a disputes panel to be convened. Private businesses and organisations are not permitted to do this.

On 28th September 2012, in response to a request by the Ukraine, the World Trade Organization Dispute
Settlement Body agreed to set up a panel to assess whether the plain packaging law passed in Australia
breaches intellectual property (IP) rules under the Trade Related Aspects of Intellectual Property Rights
(TRIPS) agreement and violates the Agreement on Technical Barriers to Trade (TBT). On the WTO website it
stated that the Ukraine disputes panel with Australia is “established, but not yet composed”. However, in 2015
Ukraine has decided to withdraw from this dispute.13 .

Ukraine is not the only country to file a grievance against Australia’s plain packaging law. On 5 May 2014,
panellists were appointed to examine the complaints of the Ukraine, Honduras, Dominican Republic, Cube and
Indonesia.14 These countries argue that plain packaging law breaches the WTO’sGeneral Agreement on Tariffs
and Trade (GATT), Agreement on Technical Barriers to Trade (TBT Agreement) and Agreement on Trade-
related Aspects of Intellectual Property Rights (TRIPS Agreement) because plain packaging is discriminatory,
more trade restrictive than necessary, and unjustifiably infringes upon trademark rights.

It is claimed that Philip Morris is covering some legal costs for the Dominican Republic and British American
Tobacco are doing the same for both Ukraine and Honduras.15

All claims were dismissed

In 2018 and 2020, the WTO dismissed complaints filed against Australia’s plain packaging by Honduras,
Indonesia, the Dominican Republic and Cuba.16 17

Bilateral Investment Treaty

Philip Morris Asia challenged Australian plain packaging legislation, saying that the Australian Government
breached the “fair and equitable treatment” obligation under The Australia – Hong Kong Bilateral Investment
Treaty.

In response to this claim, Andrew Mitchell (international law expert) highlighted that the timing of Philip
Morris Asia’s acquisition of shares in Philip Morris Australia on 23 February 2011, a whole 14 months after the
Government announced its intention to introduce plain packs, is a concern. It suggests the acquisition was a
strategic move in order to make this argument.18 “It will be very difficult to argue that at the time of making
that investment they had a legitimate expectation that plain packaging wasn’t going to be introduced when the
Government had already announced it was going to do exactly that,” he said.18

On 18 December 2015, the Permanent Court of Arbitration issued a unanimous decision that it had no
jurisdiction to hear Philip Morris’s claim.19 20 21

Call for Action from the Medical World

Australia should not fight this battle alone, according to S.J. O’Connor when he called for other governments to
get off the fence and listen to the advice of healthcare professionals. His plea is for a concerted international
action to step-up the pace of anti-smoking measures:

“I hope that there will be a strong and resounding repudiation of the tobacco industry’s attempts to
hold back the tide of progress inherent in these measures, and that we will see strong political action
on the part of national governments in this respect. Otherwise it is they and not the tobacco industry
who should be suing for financial compensation for the immense costs involved in palliating the
consequences of this particular ‘consumer good’, and I doubt that even the tobacco companies have
enough resources to meet that particular bill on a global scale.”10

TobaccoTactics Resources
• Campaigning websites

• International lobbying
 • Smuggling and illicit trade threats

• Astroturfing

• Funding Think Tanks and Hiring Independent Experts

• Freedom of Information Requests

• Challenging Legislation

• Economic threats

• Plain Packaging

• Countering Industry Arguments against Plain Packaging

External Links
• Cancer Council Australia’s Plain facts website provides up to date information on the impacts of plain
packaging in Australia and provides critiques of tobacco industry reports claiming that plain packaging in
Australia has not been successful.

• The McCabe Centre for Law and Cancer’s summary of legal challenges to Australian plain packaging
legislation.

• Special edition of Tobacco Control journal with peer-reviewed studies evaluating the impact of plain
packaging legislation in Australia.

References
1. ↑ Imperial Tobacco, Submission to the Senate Community Affairs Legislation Committee for the inquiry
into the Plain Tobacco Packaging (Removing Branding from Cigarette Packs) Bill 2009, April 2010

2. ↑ Philip Morris, www.plain-packaging.com (no longer live), undated

3. ↑ BAT Australia, Federal Court hearing set for secret plain pack advice, 31 May 2011, accessed 7 June 2011

4. ↑ Belinda Merhab, Cigarette packaging appeal expedited, Sydney Morning Herald, 7 June 2011, accessed
9 June 2011

5. ↑ PR Newswire, Leading Business Organizations in the U.S. Issue Joint Statement in Opposition to
Australian Government’s Proposed Tobacco Plain/Standardized Packaging Legislation, 8 June 2011,
accessed 26 June 2011

6. ↑ ab Dow Jones Deutchland, Philip Morris Warns Australia Government Of Legal Battle, 27 June 2011

7. ↑ Christian Kerr, Trade minister blasts tobacco companies over claims government plan in breach, The
Age, 19 May 2011, accessed 8 June 2011

8. ↑ Glen Gordon, Trademark attorney: Tobacco companies have no case on plain packaging,
www.crikey.com.au, 5 May 2010, accessed 9 June 2011

9. ↑ a b Dominic Rushe, Philip Morris to sue if Australia puts all cigarettes in plain green wrappers,
Tobacco firm claims Canberra’s ban on logos and other packaging restrictions will lose it billions, the
Guardian, 27 June 2011

10. ↑ a b S.J. O’Connor, David versus Goliath. Branding, intellectual property rights and the ‘nanny state’: why
Australia has to win its trial of strength against the tobacco giants, European Journal of Cancer Care,
Volume 20, Issue 5, pages 561–562, September 2011

11. ↑ a b Mark Metherell, Big Tobacco loses high court battle over plain packaging, The Sydney Morning
Herald, 15 August 2012, accessed August 2012

12. ↑ Philip Morris Limited, Philip Morris Limited comments on Australian High Court decision on plain
packaging for tobacco products, 15 August 2012, accessed August 2012

13. ↑ Interfax Ukraine news agency, Ukraine ends dispute with Australia over Cigarettes, 2015, accessed in
June 2020

14. ↑ McCabe Centre for Law and Cancer, Dispute in the World Trade Organization: Latest developments,
accessed December 2015
 15. ↑ A. Martin, Philip Morris leads plain packs battle in Global Trade arena, Bloomberg Business News, 22
August 2013, accessed December 2015

16. ↑ World Trade Organization, Appellate Body issues reports regarding tobacco plain packaging
requirements, 9 June 2020, accessed in June 2020

17. ↑ Campaign for Tobacco Free Kids, Australia – tobacco plain packaging, 9 June 2020, accessed in June
2020

18. ↑ a b L, Mezrani, Tobacco challenges unlikely to succeed, Lawyers Weekly, 17 August 2012, accessed
October 2012

19. ↑ J. Mather, Philip Morris loses case against Australia’s plain packaging law, Financial Review, 18
December 2015, accessed December 2015

20. ↑ D. Hurst, Australia wins international legal battle with Philip Morris over plain packaging, The
Guardian, 18 December 2015, accessed December 2015

21. ↑ G. Hutchens, Australian government wins plain packaging case against Philip morris, The Sydney
Morning Herald, 18 December 2015, accessed December 2015

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