Legal Claims

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Industry Uses Legal Claims Across the World

A report from Physicians for Smoke Free Canada shows how since the early 1990s tobacco companies have used international trade and intellectual property agreement claims to forestall or block tobacco control measures. 1

  • 1992 – 1998: Thailand’s proposals to require ingredient disclosure

Tobacco companies launched repeated efforts to characterise requirements for ingredient disclosure as a breach of GATT/WTO obligations, and successfully engaged the US government in supporting their case. The disclosure requirements finally came into force in April 1998.

  • 1993: Changes to Canadian health warning messages

The tobacco industry successfully prompted the EU GATT Inquiry Point to express official concern to the Canadian government about the new requirement for warnings to occupy 25% of the principal display surfaces of packages. The tobacco industry had hoped to have the measure quashed, but succeeded only in having it delayed. The warnings appeared on packages in 1994.

  • 1993: Finland’s proposals to strengthen its 1977 tobacco law banning advertising

The Finnish Tobacco Manufacturers Association told parliament that “the prohibition against the use of symbols combined with a prohibition to register the trademark of a tobacco product as a trademark for a product other than tobacco product would be incompatible with the fundamental principles of the trademark rights, defined in the Paris Convention binding on Finland.” The amendments were passed and came into force in 1994.

  • 1994: South Africa’s proposed 25% health warning messages

In a letter to the health ministry, Philip Morris claimed that proposed larger health warnings would infringe their property rights. “Protection of International Property Rights has provided assurances to international consumer products companies that their trademark rights will be respected and protected against infringement or expropriation. Yet the proposed regulations… would seriously infringe these trademark rights… and expose the South African government to legal challenge.” The regulation came into force later that year.

  • 1996: Hong Kong Smoking Public Health Amendment Bill 1996

The bill restricted advertising and required health warning messages. The Tobacco Institute of Hong Kong protested that “the Bill’s proposals also would effectively diminish the commercial value of trademarks lawfully registered and used in Hong Kong, without any compensation to the trademark owner. They may also violate the Paris Convention for the Protection of Intellectual Property and that part of the General Agreement on Tariffs and Trade (GATT) dealing with Trade Related Aspects of Intellectual Property Rights (TRIPS).” The law was passed in 1997.

  • 1997: New Zealand proposals to increase the size of its warnings

In a submission to the government, the Tobacco Institute of New Zealand charged that the proposals were “an unwarranted and unjustifiable interference with the intellectual property rights of tobacco companies” and “contrary to New Zealand’s international obligations undertaken in the WTO/TRIPS Agreement which New Zealand has ratified and by which it is legally bound.” The regulations were adopted in 1999.

  • 1999: Sri Lanka’s proposed National Authority on Tobacco and Alcohol

BAT’s subsidiary, the Ceylon Tobacco Company, challenged the proposed law as raising “serious issues … under a number of international agreements to which Sri Lanka is a signatory, including the Paris Convention for the Protection of Industrial Property, the Agreement on Trade Related Intellectual Property Rights and Agreement on Technical Barriers to Trade”. Sri Lanka passed legislation to establish this authority in 2006.

  • 1999: Changes to Canadian health warnings messages

The industry again attempted to engage the EU in another trade challenge against Canada’s new health warnings but were summarily rebuffed. The EU Director General for Trade, Mr. Carl, asserted the proposed Canadian measures were “probably compatible with WTO rules.” The warnings have been on packages since 2000.

  • 2001: European Union ban on ‘light’ descriptors

Japan Tobacco International filed a complaint in mid-September 2001 with the European Court of First instance claiming that the ban on ‘light’ and ‘mild’ was a violation of intellectual property laws. The law came into force, as predicted, on September 30, 2003.

  • 2008: UK discussion paper on plain packaging On World No Tobacco Day, 2008

The UK government issued a discussion paper on tobacco control measures, including the potential for plain packaging. Tobacco companies including Philip Morris, JTI, Imperial Tobacco and BAT responded that such measures were an infringement of the Paris Convention or other international treaties.

Legal Claims Still Being Made 20 Years Later

Two decades after the industry received legal opinion that it has no protection under intellectual property right treaties and law, tobacco companies and their representatives are still using this argument against the introduction of plain packaging.
In 2009, members of the UK’s House of Lords tabled amendments to a health bill which, if passed, would outlaw branded cigarette packets. According to a newspaper report, Imperial Tobacco wrote to the Department of Health and members of the Lords, warning that it would take legal action over the “unnecessary, unreasonable and unjustified” proposals. The letter said: “Imperial Tobacco is also concerned about the continued erosion and potential expropriation of our valuable intellectual property rights … Regulation that requires plain packaging will expropriate valuable corporate assets in which the company and its shareholders have invested for more than a century and risks placing the UK government in breach of a range of legal and treaty obligations that relate to intellectual property rights, international trade and EU law.” 2
On 24 September 2010, the European Commission launched a public consultation on the possible revision of the EU Tobacco Products Directive. The consultation included a proposal to introduce plain packaging in the EU: “Plain or generic packaging would standardise the appearance of tobacco packaging. Manufacturers would only be allowed to print brand and product names, the quantity of the product, health warnings and other mandatory information such as security markings. The package itself would be plain coloured (such as white, grey or plain cardboard). The size and shape of the package could also be regulated.” 3
In its response, the Tobacco Manufacturers’ Association suggests that such a move would breach cigarette companies’ intellectual property rights: “The Commission must recognize that changes to packaging and pack labelling regulation impact fundamental legal, economic and commercial rights of tobacco manufacturers and consumers. These include… their property right in their brands (including trademarks, goodwill and brand equity)…” 4
A similar legal strategy can be seen at work in the landmark court case Philip Morris vs the Government of Uruguay, action by four companies against the Australian Government (see TPD: Challenging Legislation) and in British American Tobacco vs the Government of Namibia.

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  1. Physicians for Smoke Free Canada, Packaging Phoney Intellectual Property Claims, June 2009, p23 accessed 1 June 2011
  2. Jamie Doward, “Pledge to stop law on plain cigarette packets”, The Observer, 1 March 2009, accessed 3 June 2011
  3. European Union website, Public consultation on the possible revision of the Tobacco Products Directive 2001/37/EC, undated, accessed 3 June 2011
  4. TMA Website, Tobacco Manufacturers’ Association’s complete response to the public consultation on the possible revision of the Tobacco Products Directive 2001/37/EC, 17 December 2010, accessed 3 June 2011