A recent court decision by the Australian High Court means that the country will become the first to require that cigarettes be sold in uniform packages, eliminating the painstakingly designed logos and marketing messages created by tobacco companies.
The High Court of Australia yesterday dismissed claims by Japan Tobacco Inc., British American Tobacco Plc., Philip Morris International Inc. and Imperial Tobacco Group Plc that the decision by the government served as an illegal seizure of their intellectual property by preventing the display of trademarks on their cigarette packs.
The law, set to take effect on December 1, 2012, will require that cigarettes be sold with no company logos and with the same font for all brands on a dark brown background. Graphic health warnings, showing the harm the disease can cause, will cover 90% of the back of the packaging and 70% of the front.
The tobacco industry is worried about the precedent such a decision sets. Once one country acts to implement a tobaccos-control measure, it becomes that much easier for other countries to follow suit. For example, once Canadian officials decided to post pictorial warnings on their cigarette packages in 2001, 50 other nations followed suit. New Zealand has announced that it has an interest in pursuing similar measures.
British lawmakers have been considering similar legislation, but discussions broke up after the International Chamber of Commerce Raised concerns. The ICC’s director of policy explained at a government hearing how the rule would likely breach several of the U.K.’s international intellectual property agreements, including various WTO obligations.
Talk of such a move in the U.S. has been minimal, as tobacco companies hear have relied on the First Amendment to protect their ability to use their trademarks. They claim that any move to limit their ability to use their logos would amount to government interference with their right to freedom of expression.
Philip Morris isn’t taking the matter lying down and has said the Australian law breaches an agreement with Hong Kong and will result in possibly billions of dollars in damages for the company. The tobacco giant also announced that it plans to pursue claims against the Australian government for the loss in international arbitration.
Source: “Tobacco Packaging,” by Victoria Slind-Flor, published at Businessweek.com.
