A P P EL L AT E R E P O RT S , A U S T R A L I A - C E RTA I N ME A S U R E S

CO N C E R N I N G T R A D E MA RK S , G E O G RA P H I C A L
I N D I C AT I O N S A N D
O T H E R P L A I N PA C K A G I N G R E Q U I R E ME N T S A P P L I C A B L E
TO
TO B A C C O P R O D U C T S A N D PA C K A G I N G
 THE CASE

Measure at issue: Tobacco plain packaging (TPP) measures requiring tobacco

products and their retail packaging to appear in a uniform manner.
Product at issue: Tobacco products and their retail packaging i.e. a law requiring
all tobacco products to be sold in plain packaging as of 1 December 2012

Honduras requested consultations with Australia concerning certain Australian

laws and regulations that impose trademark restrictions and other plain packaging
requirements on tobacco products and packaging.

1. act to discourage the use of tobacco products, and for related purposes,
Australia's Tobacco Plain Packaging Act 2011, and its implementing
regulations;
2. the Trade Marks Amendment (Tobacco Plain Packaging) Act 2011
 THE CASE

The complainants had not demonstrated that Australia's tobacco plain packaging
measures (the TPP measures) are inconsistent with
Article 2.2 of the TBT Agreement on the basis that they are more trade-restrictive
than necessary to achieve a legitimate objective
Article 15.4 of the TRIPS Agreement
Article 16.1 of the TRIPS Agreement
Article 16.3 of the TRIPS Agreement
Article 20 of the TRIPS Agreement
Article 22.2(b) of the TRIPS Agreement
Article 24.3 of the TRIPS Agreement
Consequently, the Appellate Body upheld the Panel's conclusion that the
complainants had not demonstrated that the TPP measures are inconsistent with
Article 20 of the TRIPS Agreement.
 CASE – TREATY INTERPRETATION

In 2018, Honduras decided to appeal to the Appellate Body certain issues of law and legal
interpretations in the panel report.
The Appellate Body upheld the Panel's conclusion that the complainants had not demonstrated
that the TPP measures are inconsistent with the provisions of the TBT or the TRIPS Agreement.

TRIPS Article 20: “ The use of a trademark in the course of trade shall not be unjustifiably
encumbered by special requirements.”
Honduras claims that the Panel erred in its interpretation of the term "unjustifiably" in Article 20
 TREATY INTERPRETATION

In the Panel Report the TPP measures encumber the use of trademarks in the course of trade
"unjustifiably

Honduras claims that the Panel erred in its interpretation of the term “unjustifiably” in Article 20.
(i) focusing on the economic value of trademarks and in its assessment of the allegedly mitigating
factors
(ii) finding that the TPP measures contribute to the reduction in the use of tobacco
(iii) rejecting the alternative less trademark-encumbering measures proposed by the complainants
(iv) attributing undue legal weight to the FCTC guidelines.

Australia countered: the interpretation finds no support in the ordinary meaning of this term, properly
interpreted in its context and in light of the object and purpose of the TRIPS Agreement.
 TREATY INTERPRETATION

Article 31(1) of the Vienna Convention: The terms of a treaty must be interpreted in accordance
with the "ordinary meaning" to be given to these terms in their context and in the light of its object
and purpose.
The Panel:
1. Reviewed a number of definitions and concluded that the term "unjustifiably" "connotes a
situation where the use of a trademark is encumbered by special requirements in a manner that
lacks a justification or reason that is sufficient to support the resulting encumbrance“
2. Turned to the context provided by other provisions of the TRIPS Agreement to determine what
reasons may form the basis for "justifiability" of an encumbrance
 TREATY INTERPRETATION

Article 8 offers “useful contextual guidance for the interpretation of the term 'unjustifiably' in
Article 20”
5(a) of the Declaration on the TRIPS Agreement and Public Health (Doha Declaration)

“is formulated in general terms, inviting the interpreter of the TRIPS Agreement to read
'each provision of the TRIPS Agreement' in light of the object and purpose of the
Agreement, as expressed in particular in its objectives and principles”
Panel: This provision "may be considered to constitute a 'subsequent agreement' of WTO
Members within the meaning of Article 31(3)(a) of the Vienna Convention“

Articles 7 and 8 of the TRIPS Agreement provide important context for the interpretation of
Article 20 as context and object and purpose of the treaty being interpreted must be taken into
account.
 TREATY INTERPRETATION

Conclusions of the Panel:

1. The Panel did not consider that the term "unjustifiably" in Article 20 should be viewed as
synonymous with the term "unnecessarily".
2. The term 'unjustifiably' as used in Article 20 does not have exactly the same meaning as the term
'unjustifiable' as used in the chapeau of Article XX of the GATT 1994
3. The term 'unjustifiably' should not be understood to require only the existence of some rational
connection between encumbrances imposed on the use of a trademark and the reason for which
they are imposed
 TREATY INTERPRETATION

The Panel thus concluded that a determination of whether a trademark is being "unjustifiably"
encumbered involves a consideration of the following factors:
a. the nature and extent of the encumbrance resulting from the special requirements, bearing in
mind the legitimate interest of the trademark owner in using its trademark in the course of trade and
thereby allowing the trademark to fulfil its intended function;
b. the reasons for which the special requirements are applied, including any societal interests
they are intended to safeguard
c. whether these reasons provide sufficient support for the resulting encumbrance.
 TREATY INTERPRETATION

As regards the ordinary meaning, the term "unjustifiably" is an adverb that derives from the
adjective "unjustifiable", which has been defined as "not justifiable" or "indefensible".

Other definitions describe the term "unjustifiable" as "not able to be shown to be right or
reasonable“ or "unacceptable and wrong because there is no good or fair reason for it".
The antonym of the term "unjustifiable" is "justifiable", a word that denotes the existence of a "good
reason" for something or refers to something that is "able to be shown to be right or reasonable;
defensible".
The various meanings attributed to the concept of justifiability thus indicate that it connotes
something that is fair and capable of being reasonably explained. By contrast, something is
"unjustifiable" when there is no fair reason for it and when it cannot be reasonably explained.
 CONCLUSIONS OF THE AB

AB made the following observations:

“The term "unjustifiably" in Article 20 of the TRIPS Agreement reflects the degree of regulatory autonomy that
Members enjoy in imposing encumbrances on the use of trademarks through special requirements.”
“The degree of connection between the encumbrance on the use of a trademark imposed and the objective
pursued reflected through the term "unjustifiably" is lower than it would have been had a term conveying the
notion of "necessity" been used in this provision.”
“In our view, the Panel did not err by not including an examination of alternative measures as a requisite
consideration for determining whether the use of a trademark has been "unjustifiably“ encumbered by special
requirements. Indeed, as Australia argues, if a consideration of alternative measures was required under Article
20, this would equate the concept of justifiability reflected in Article 20 of the TRIPS Agreement with the concept
of necessity, within the meaning of Article 2.2 of the TBT Agreement and Article XX of the GATT 1994. In our
view, this would defy the drafters’ intention to provide greater latitude to Members by using the term
unjustifiably”

Conclusion: the complainant has to demonstrate that a policy objective pursued by a Member imposing special
requirements does not sufficiently support the encumbrances that result from such special requirements.