For the half-year to 31 December 2014, the IPKat's regular team is supplemented by contributions from guest bloggers Rebecca Gulbul, Lucas Michels and Marie-Andrée Weiss.

Regular round-ups of the previous week's blogposts are kindly compiled by Alberto Bellan.

Friday, 6 June 2008

Cigarette brands and human rights

This is a guest blog from Christopher Morcom QC (Hogarth Chambers, contributor to The Modern Law of Trade Marks (LexisNexis Butterworths), the 3rd edition of which has recently been published). Christopher writes:

"Recently announced Government proposals regarding the advertising and sale of cigarettes include the suggestion that the use of “colourful branding and fancy logos” would make tobacco products less appealing, particularly to young people. One possibility suggested is that cigarettes will only be permitted to be sold in plain white packs, bearing health warnings, and the brand name in small letters.

Right: how strange the old cigarette packets look, without the now-traditional health warnings

These proposals seem to raise serious issues from the point of view of brand owners. Brand names for cigarettes are registered as trade marks an a variety of forms: the brand names, sometimes in distinctive type faces; logos or designs incorporating the brand names; and representations of the packs themselves, or their front panels. Companies spend money registering and protecting these trade marks. The significant costs include application fees, registration fees and renewal fees, paid to the state or (in the case of Community trade marks) OHIM.

A question that immediately arises is whether the state can take away something, for which it has taken money from brand owners in the form of these fees, by saying (in effect) “we have taken your money for registration of your trade marks, but you may not now use them”. But there are further questions. The Trade Marks Act 1994, s.2 , enshrines the principle (if it was ever otherwise) that a registered trade mark is a right of property. Section 22 confirms that a registered trade mark is personal property (in Scotland, incorporeal moveable property) and s. 27 confirms that an application for registration is an object of property. The CTM Regulation (Part 4) likewise treats a CTM as an object of property. The European Court of Human Rights in Anheuser-Busch v Portugal [2007] ETMR 24 has held that Art 1 of Protocol 1 to the European Convention on Human Rights applies to intellectual property, including trade marks, and that an application for registration of a trade mark is a substantive interest protected by Art 1, as giving rise to rights of a proprietary nature. In that case the claimant had complained of an infringement of its right to the “peaceful enjoyment of its possessions”, as expressly protected by Art 1.

No doubt the Government (if it proceeds with its proposal, rather than changing its mind) would seek to argue that the proposal is in the “public interest”. But even public interest is subject, under Art 1, to “the conditions provided for by law and by the general principles of international law”. So whether the Government could justify the proposal as being in the “public interest”, without regard in particular to international treaties such as the Paris Convention and TRIPs, is a very serious issue which should be addressed. After all, it should not be forgotten that cigarettes and other tobacco goods are lawful products and that no government could afford to make them otherwise".

The IPKat -- a confirmed non-smoker -- has little sympathy for the habit. But he is concerned that the provisions of the law should be respected. Merpel wonders whether, within the context of a single European market, this is an issue that it is wise to leave to individual EU member states anyway. What do you think? Do let the Kats know.

7 comments:

Michael said...

What if the Government just pays back the trade mark application fees - this wouldn't break the bank would it?

Anonymous said...

There's the counter argument that the government are saving the trademark holders costs - if nobody can use logos/fancy branding then nobody has to worry about their trademarks being infringed. No more pesky lawsuits!

Also, doesn't the argument that people are having their property taken away miss the point that the rights granted by a trademark are exclusionary? There's no "right to use" as far as I'm aware.

Jean Leon Pire said...

White packaging with the brand name written in small characters ... What a bright idea! This will mae it even easier for the counterfeiters of cigarettes, whose businesses will presumably become even more profitable.

Jeremy said...

Under the cloak of anonymity, a distinguished member of the IP community has emailed me as follows: "- this scenario has long been debated as a potential TRIPS dispute scenario - for instance, as an example of a non-violation dispute under TRIPS - the argument would be that the government measure would nullify or impair expected benefits arising from protection of the trademark (see WTO document IP/C/W/127, regarding non-violation nullification or impairment submitted to the TRIPS Council by Canada -
http://docsonline.wto.org/DDFDocuments/t/IP/C/W127.DOC)

- but this would surely be justified under TRIPS art 8 as a measure 'necessary to protect public health' which is 'consistent with the provisions' of TRIPS.

- it could be argued that this measure falls foul of TRIPS art 20 ( 'The use of a trademark in the course of trade shall not be unjustifiably encumbered by special requirements') but the burden of proving justifiability in this case could be met by the public health argument - now bolstered in public international law by the recently concluded WHO Framework Convention on Tobacco Control which provides inter alia that 'comprehensive non-price measures are an effective and important means of reducing tobacco consumption. Each Party shall adopt and implement effective legislative, executive, administrative or other measures necessary to implement its obligations'

then again, a good cigar is a smoke. and sometimes a cigar is just a cigar, not a trademark".

Rob Carolina said...

Mr Morcom raises an issue which points up what seems to be a serious difference in philosophy between US and English lawyers on the nature of IP rights. From my perspective, his comments (while interesting) all rest upon a false premise posed in his opening question: “whether the state can take away something”. It seems to me that such a regulation would not actually constitute the state “taking” property.

The opening lecture of my first-ever study of IP law at Georgetown University in 1989 began with a single observation by our professor: “Intellectual property is a negative right, not a positive right. It does not vest the owner with the right to have anything or to do anything. Rather, it provides the owner with the right to prevent other people from doing something.” As with most things in IP, this made no sense to me at first. The example provided at that time was one drawn from long experience in US IP law: the conflict between the law of intellectual property and antitrust (competition law). Thus holding copyright in software might vest the owner with the right to prevent others from making copies of that software, but this does not act as some kind of “super-right” that over-rides the obligation not to abuse a dominant market position in violation of antitrust law.

The first time I noticed the very different approach to IP was shortly after my arrival in London and during the (interminable) arguments about the McGill case. Here we had a similar set of arguments, and a result that seemed to shock many English legal professionals. While UK and Irish copyright law protected copyright in the relevant television listings, we discovered that competition law nonetheless would limit the way in which that right was used commercially. I found myself extremely comfortable with that proposition, only to discover that most of my English colleagues were aghast (as Mr Morcom appears to be now) that IP law was not supreme in all ways.

Another way to highlight the difference in approach (and my argument that brand owners are not being deprived of property), is to note that the proposed regulation presumably would not require the de-registration of existing marks. Indeed I assume that the brand owners would continue to pay maintenance fees on such marks, if for no other reason than in hope that the advertising regulation might some day change again. But this particular argument, I think, does not advance the discussion very far.

Consider this, however. Such a regulation, should it be adopted, would certainly prevent mark owners from using their marks in a particular fashion. At the same time, the mark owners would presumably retain the core rights granted by the trademark registration itself: the right to prevent OTHERS from using the mark to describe counterfeit or competing goods. The actual property right (the negative right to prevent third party use) remains intact. Devaluation of economic value of the “brand”, perhaps. Deprivation of “property”, no.

In a US context, Mr Morcom’s argument most closely approaches the area of US law that has been described as the “regulatory taking” argument. This argument proceeds from the 5th Amendment to the US Constitution and as such falls within the US “Bill of Rights” that we would today describe as human rights law. That provision demands that any “taking” of property by the government can only happen if appropriate compensation is paid to the property owner. The argument that developed over the years is that various types of government action that fall short of depriving someone of title to property, but nonetheless significantly devalue that property. For example, property owners in a major city who had arranged for the purchase of property were distressed when local property development law was changed in a way that would forbid them from building a sky-scraper on their property (as that had planned to do). Whilst they still owned the property in question, the investment had become economically unattractive and (worse) the resale value of the property had declined severely. An early court decision held that the revised land use law was not a “taking” of property and thus did not require payment of compensation. A similar set of cases put to the US Supreme Court starting in the 1980s generally did not receive a very favourable hearing.

twr57 said...

In Europe, we distinguish between the existence of a right and its exercise. Maybe this can be carried too far. But patents at least give you the right to stop other people doing what you're not allowed to do yourself.

Or maybe the principle should be that applied in an older authority: "a pound of flesh but not a drop of blood".

cheribombe said...

s an artist, I am offended greatly that it is suggested that doing away with the sometimes lovely and enduring package designs would even be considered as ethical. People created these logos, or designs or whatever they are called, and in so doing they have left a piece of themselves in history, just as with any package design. Who does not recognize the "Lucky Strike" design? These, like cigar boxes, are genuine articles to be preserved as intellectual and artistic property, and are not any different than liquor or beer label designs that are recognizable and would never be considered for plain labeling. It is offensive and furthermore, cigarette smoking is not a crime, although it is being assigned similar properties associated with criminal activity. I choose to smoke, am an adult, am informed of any health risks involved and these are stated on the packages of cigarettes. Before this goes any further it should be halted at this point. It is an affront to my intelligence and my dignity and the government just perhaps consider labeling disposable diapers as dangerous to the environment and imposing a tax on the purchasers of these items, instead of taxing cigarette smokers to pay for the health insurance for children whose parents cannot afford it but who can afford disposable diapers rather than use cloth diapers which are not bad for the environment nor the child. Issues are being clouded with subterfuge in an attempt to use pragmatism for purposes that are frankly based on a market that is being created for a "smoking cessation industry" and it is necessary for people to recognize this as a pharmaceutical, over-the-counter, and innumerable other types of product and service related businesses that are being created and will profit from this semi-criminalization of cigarette smoking that is taking place.
It starts by taking away the art. Anything cultural that is to be destroyed begins by destroying art, and believe it or not, cigarette packages, cigar boxes, liquor and beer labels are all art. The government has no business telling a company that its artistic designs shall be plain labels. It is abhorrent in its nature and it will only get worse if this seemingly small thing is allowed for it is not small, it is huge. It is the destruction of design and extortion through taxation. Extortion! Government is not who decides your label or logo or sign or your letterhead. This is wrong and do not accept it.

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