In a landmark ruling, the World Trade Organisation has backed Australia’s controversial law imposing plain packaging on tobacco products, finding the law did not violate intellectual property rights.
The WTO shot down arguments by Indonesia, Honduras, Cuba and the Dominican Republic that the law infringed on trade treaties and violated the trademarks of tobacco companies.
The trade body said the complaining countries had not shown that Australia’s Tobacco Plain Packaging Act 2011 (TPP) was restrictive and in breach of the TBT Agreement, an international treaty aimed at ensuring laws are not barriers to fair trade.
The countries also failed to demonstrate that the law — passed as a public health initiative to reduce smoking rates– violated the TRIPS Agreement. That agreement, signed by all WTO member nations, protects and enforces intellectual property rights.
The TPP bans tobacco companies from putting any logos or distinctive colours on the packaging of cigarette and tobacco products. The law requires tobacco products to be sold in nondescript olive green packaging with brand names in small, standardised font.
Honduras sought consultations in April 2012 over the law. Dozens of countries, including the European Union, New Zealand and Canada, asked to join the consultations.
The complainants argued the law breached the treaties because Australia did not accept “as is” every trade mark registered in the country of origin, that it formed an obstacle to the registration of trade marks, and that it prevented registered trade mark holders from protecting their marks from unauthorised use.
Cuba had separately argued that the restrictions imposed by the TPP would devalue the Habanos sign and the Cuban Government Warranty Seal found on authentic Cuban cigars.
The WTO panel found the complainants had failed to establish any of their claims and noted that curbing smoking was a legitimate objective of the TBT Agreement.
The panel found that the TPP makes “a meaningful contribution to Australia’s objective of reducing the use of, and exposure to, tobacco products”.
“We find reasonable Australia’s suggestion that the measures may be expected to have an impact in particular on future generations of young people whose exposure to tobacco advertising or promotion in Australia will have been generally limited, and that impacts on smoking cessation for existing smokers will also take some time to produce their full effects.”
Honduras has flagged a possible appeal of the ruling in the case, which was seen as a test case.
The World Health Organisation said the ruling would likely accelerate plain packaging initiatives around the globe.
Six other countries — Hungary, Ireland, France, New Zealand , Norway and the United Kingdom — have implemented plain packaging laws, the WHO said. Another six have passed laws yet to be implemented and a number of other countries are examining the policy.
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