INTA “extremely disappointed” as WTO issues plain-packaging ruling

In a landmark ruling, the World Trade Organisation (WTO) has upheld Australia’s plain-packaging regime for tobacco as being consistent with the WTO’s trade obligations. Responding to the decision, which is under appeal, INTA issued a statement that it is “extremely disappointed” by the ruling.

Originally introduced in 2012, Australia’s plain-packaging law bans logos and distinctive packaging on all tobacco products sold in the country. The law has been the focus of a number of lawsuits, including a six-year legal battle between the Australian government and  tobacco giant Philip Morris (which, it was recently revealed, cost the Australian government nearly £40 million to defend). However, the WTO action – initiated in 2012 when Honduras brought a case against the regime and was subsequently followed by Cuba, Indonesia and the Dominican Republic – has long been regarded as the key challenge to plain-packaging legislation.

On 28 June the WTO panel rejected the key argument that Australia’s plain-packaging legislation unjustifiably infringes the trademark rights of tobacco companies. The panel also rejected claims that alternative measures would be equally effective and arguments that it would improve public health.

The World Health Organisation (WHO) praised the decision, stating that it cleared “another legal hurdle thrown up in the tobacco industry’s efforts to block tobacco control and is likely to accelerate implementation of plain packaging around the globe”. Talking to World Trademark Review, a spokesperson for the Canadian Cancer Society agreed that the decision “gives a big boost to international momentum in favour of plain packaging”, adding that “plain packaging in far more countries is inevitable”.

However, INTA was quick to express its disappointment with the ruling, stating that “given the importance to brand owners, trademark professionals and society, the association is studying the WTO report in-depth to determine next steps”.

Providing an industry perspective, Geir Ulle, international trade director of Japan Tobacco International, claimed that the ruling is a significant step backwards for IP rights. “It sets a dangerous precedent that could encourage governments to ban branding on other products without providing any reliable evidence of benefits to public health. This ruling doesn’t make the policy right or effective, nor does it make it worth copying.”

Honduras filed an appeal against the ruling on 19 July.