Trademark

Australia: WTO Appellate Body Rejects Appeal Regarding Plain Packaging of Tobacco

(June 18, 2020) On June 9, 2020, the World Trade Organization’s (WTO’s) Appellate Body issued its reports on cases brought by Honduras and the Dominican Republic against Australia’s tobacco plain packaging requirements. (Australia — Certain Measures Concerning Trademarks, Geographical Indications and Other Plain Packaging Requirements Applicable to Tobacco Products and Packaging (DS435 and DS441).)

The Appellate Body rejected the appeals, upholding the June 2018 decision of a dispute settlement panel that the measures contained in Australia’s Tobacco Plain Packaging Act 2011 (Cth) and associated regulations are not inconsistent with relevant provisions of the Agreement on Technical Barriers to Trade (TBT) and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

Under Australia’s plain packaging laws, all tobacco products must

  • be packaged in a certain colour
  • display brand names in certain ways
  • display the required text and graphic health warnings
  • not display logos, brand images or promotional text

In 2012, the High Court of Australia rejected a challenge to the legislation brought by four tobacco companies which argued that the requirements amounted to the removal of their intellectual property rights in a manner contrary to the Australian Constitution. The legislation was also the subject of a challenge, brought by Philip Morris Asia, under the Australia-Hong Kong bilateral investment treaty. This challenge was dismissed by the arbitral tribunal in 2015.

In the WTO cases, Honduras and the Dominican Republic argued that the plain packaging measures breach the TBT and TRIPS agreements “in that they are more trade restrictive than necessary and unjustifiably infringe upon trademark rights,” while Australia argued that “its laws are a sound, well-considered measure designed to achieve a legitimate objective, the protection of public health.”

In a press release regarding the Appellate Body’s decision, Australia’s minister for health stated that

[t]his is a fantastic win not just for Australia, but for governments around the world who want to reduce the terrible toll of sickness and death caused by smoking[.]

Our Government has consistently maintained that tobacco plain packaging is a legitimate measure designed to protect public health, and fully respects our international trade and investment obligations.

We were the first country in the world to introduce plain packaging, in 2012. This decision affirms Australia as a world leader in fighting the harmful effects of tobacco.

According to the press release, “[s]moking rates in Australia have declined significantly over the past two decades, from 22.3% cent in 2001 to 13.8% in 2017–18. But the latest statistics show tobacco use still contributed to an estimated 21,000 deaths, or more than one in eight, in 2015.” The government aims to reduce the smoking rate to below 10% by 2025 and is currently reviewing the National Tobacco Strategy and tobacco control laws.

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