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.

Tuesday, 8 October 2013

BREAKING NEWS: European Parliament says ‘No’ to plain packaging for tobacco products

Via veteran IP enthusiast and Katfriend Christopher Morcom QC (Hogarth Chambers) comes the following news from Strasbourg:

"Today the European Parliament, in plenary session, has voted on the proposed revision of the Tobacco Products Directive, which was first published in December 2012.

Studying today's vote
with 'wrapped' attention ...
An important matter, on which the Parliament voted, was an amendment to introduce a requirement for ‘plain packaging’ for tobacco products. To date, only Australia has introduced such a requirement; their law is now subject to challenge before the World Trade Organization, by five countries (Ukraine, Honduras, Cuba, Dominican Republic, and Indonesia). The amendment was today rejected. This rejection is greatly to be welcomed. ‘Plain packaging’ requirements would be a very serious invasion of intellectual property rights, in this instance trade marks. Tobacco products remain legal products, and such requirements would have the effect of prohibiting companies from using valuable trade marks, for which protection has been legally obtained, and on which customers rely when making purchases. Registered trade marks, and the goodwill established by their use over many years, are undoubtedly property rights, and thus entitled to protection under the EU Charter of Fundamental Rights (Art 17) and the European Convention on Human Rights (First Protocol, Art 1). The rejection of this amendment by the European Parliament should be heeded by governments, such as the Irish and UK Governments, and the Scottish Parliament, which are or have been considering the introduction of plain packaging requirements for tobacco products.
Plain packaging at its best ...?
Another aspect of the vote of the European Parliament concerned the size of health warnings. The Parliament voted to adopt proposals requiring such warnings to cover no less than 65% of the front and the back of the packs, from the top downwards. These requirements, like the plain packaging requirements, are a major invasion of intellectual property rights; they have essentially the same effect, and are unjustifiable restrictions on the exercise of such rights. It might perhaps be possible to justify a requirement for 50% health warnings, on the lower half of the pack faces, but one cannot help wondering if even that is necessary. Health warnings, under existing laws, are so very prominent that only the blind can fail to notice them. It must be questionable whether the excessive requirements now sought to be imposed would have any beneficial effect, or are really necessary.

It is understood that the Rapporteur of the Health Committee has received the mandate from the Parliament to commence negotiations with the Commission and the Council. We must now wait to see the final Directive, which is expected to be adopted in early 2014".
On the same subject see the MARQUES Class 46 weblog here.
Christopher Morcom's earlier pieces here, here, here and here
A contrary view from Professor Mark Davison here
The Australian position here, here and here

12 comments:

Anonymous said...

BOOOOOOOOOOOOOOOOO!!!!!!!
The biggest cause of preventable death on the planet and the EU chickens out of helping make it less attractive. There are times when IP rights must come second, and this is one of them. So, no, definitely NOT to be welcomed. Yes, yes, I know that such measures may have marginal effects at best, but if only one person is discouraged from the filthy weed, it would be worthwhile. So, let's hear it for the bonzer blokes Downunder - good on yer, mites!

Derek said...

Mr. Morcom's overwrought comments in this and prior columns notwithstanding, I have yet to see a clear legal argument that the ownership of a trademark registration conveys a license to the owner to use that mark as it sees fit: the state's police power is always superior. Here in the US, as an example, the Food & Drug Administration regulates trademarks for drugs - and indeed the whole labeling, and the Bureau of Alcohol Tobacco Firearms and Explosives regulates labeling of alcoholic beverages. I expect that similar regulation applies elsewhere. Whether plain packaging or mandated health warnings are effective in reducing smoking is something I know not - but to suggest that there is some right inherent in a trademark registration that implicates the European Convention on Human Rights strikes me as going more than a little far.

Anonymous said...

I can only agree with the previous comments. This is a disappointing development - there are clear justifications why trade mark rights should be overriden in the interests of promoting a reduction in smoking in the community.

Joeri Beetz said...

This rejection is greatly to be welcomed. ‘Plain packaging’ requirements would be a very serious invasion of intellectual property rights, in this instance trade marks.

I can't disagree more. Intellectual property rights are there for protecting against commercial exploitation of the creative minds of other people or companies. IP is a regulated exception to free trade and prevents copycat behavior. And this is not about copying.

There is no such thing as a right to promote unhealthy products. It is up to governments to decide whether they allow a clearly unhealthy product to be sold. And if so, it is up to the same governments to make laws about what type of promotion for these products they consider to be acceptable. That has nothing to do with IP.

Of course, plain packaging would seriously reduce the 'value' of the trademark portfolio of tobacco companies. But things like that happen with all kinds of regulations. Changing regulations may make prior investments more or less valuable than you expected before. That's a risk you take when starting a business.

I am concerned that also this website and other IP related magazines and websites seem to be infected by the influence of the tobacco lobby and copy their arguments without actually thinking them through. It is a bad thing for the IP community to become associated with the lobbying activities of the tobacco companies. We already have enough problems with public opinion ourselves. I see no need to add new problems.

Jeremy said...

Joeri -- you write "I am concerned that also this website and other IP related magazines and websites seem to be infected by the influence of the tobacco lobby and copy their arguments without actually thinking them through".

This is unfair. In the first place, this weblog is a forum for discussion, not a pro- or anti-tobacco lobby. We carry readers' opinions whether we agree with them or not. Only one reader, Mark Davison, has ever offered us a piece in support of the contrary view -- and we published it.

Secondly, it is wrong to suggest that Christopher Morcom's arguments, and those of the tobacco industry, have not been thought through. Whether you agree with them or not, and whether they are found to have any substance or not, they have been very carefully thought through. If you do not agree with them and believe them wrong, the best thing to do with them is to identify any errors they contain and show their points of weakness.

Thirdly, the issues raised here are not unique to the tobacco industry, which is why the arguments are so important. At present there are labelling requirements for the alcohol sector. Similar requirements may be imposed with respect to confectionery that is high in sugar content and foods with a high fat content. The issue will also fall to be considered if the EU should address the issue -- frequently raised and not by the tobacco industry -- of labelling and branding of cannabis products.

For my part, I should put on record the fact that I am militant anti-smoker, both of whose parents died of smoking-related conditions. I would happily ban smoking completely. However, I see this messing around with branding and labelling as a feeble and ineffective way of addressing issues such as health education and nicotine addiction.

Joeri Beetz said...

I agree that my comments about the tobacco lobby are mainly 'ad hominem' and do not contribute to a good discussion (which is proven by the fact that my better arguments are not addressed in your answer). The reference to the tobacco lobby was, however, triggered by the fact that I've seen exactly the same arguments in other articles in more general media. But while I can tolerate that normal journalists don't know exactly what intellectual property actually is, I had expected better from this website.

Which brings me to your second point. The mere (and repeated) statement that IP rights are 'majorly invaded', without actually explaining how and why to me proves that the argument was not actually thought through (but I will click the links to check whether the arguments were brought up before). From an IP specialist I would at least like to hear what principle of (IP) law, treaty or article would have been violated by the rejected policy proposals.

As to your third point. Here you also make clear that this is an issue of labeling and advertisement, not of IP. However, this (breaking) news item brings the news as an important victory of IP law. But this is just a victory for tobacco companies.

Anonymous said...

Joeri, we must be reading different articles, because the first main paragraph above shows clearly the thinking through of the IP position. I would also add that mere copying is not the only thing in play.

That being said, the position in that first paragraph is clearly erroneous, as there is no international necessity (outside of agreed upon treaties) that mandate one country must treat property rights in any particular way than how that country wants to.

Individual national sovereignty still exists.

Jeremy said...

Joeri -- thanks for your comments. If you don't find what you're looking for in Christopher Morcom's links, why not contact him at Hogarth Chambers and ask for something more substantial? He will happily fill you in.

Perhaps for the sake of clarity I should add that yesterday's post was of necessity a short one since it was flagged as a breaking news item. It was not intended as a fully fledged argument, or as a substitute for one. The blog remains open for longer and more reasoned arguments both for and against the proposed amendments to the Tobacco Products Directive.

One small final point: you comment that it is made clear that this is an issue of labelling and advertisement, not of IP". This is true, though in reality it is hard to split the two entirely: this why the Court of Justice has felt it necessary to address the advertising function of the trade mark as one of its non-essential functions.

Derek said...

Let me take this on a little, though I am neither a trademark attorney nor a specialist in international law.
I have read the previous columns of Mr. Morcom. Each consists of bald assertions that rights are being infringed, even greatly infringed, with no indication of a legal basis for the claim; which perhaps allows me to quote the late Christopher Hitchens in a different context: "What can be asserted without evidence can be dismissed without evidence."
Mr. Morcom does provide in his first column a link to the WTO case against Australia on plain packaging. I have read the request for consultation and the request for a panel by Ukraine.
I have neither the time nor, probably, the skill to undertake a full analysis, but ... the first item of Ukraine's request states:
"Australia's measures, especially viewed in the context of Australia's comprehensive tobacco regulatory regime, appear to be inconsistent with a number of Australia's obligations under the
TRIPS Agreement, the TBT Agreement, and GATT 1994:
* Article 15.1 of the TRIPS Agreement because the measures fail to give legal effect to the obligation that any distinctive sign be capable of constituting a trademark, and thus that it can be affixed on a lawfully available product to which it is to be applied;"
Now, if one looks at Article 15.1 of TRIPS, it says:
"Article 15
Protectable Subject Matter
1. Any sign, or any combination of signs, capable of distinguishing the goods or services of one undertaking from those of other undertakings, shall be capable of constituting a trademark. Such signs, in particular words including personal names, letters, numerals, figurative elements and combinations of colours as well as any combination of such signs, shall be eligible for registration as trademarks. Where signs are not inherently capable of distinguishing the relevant goods or services, Members may make registrability depend on distinctiveness acquired through use. Members may require, as a condition of registration, that signs be visually perceptible."
Australia thus appears to be offending Ukraine because plain packaging "fail(s) to give legal effect to the obligation that any distinctive sign be capable of constituting a trademark" (I don't believe that they do so - the act and regulations specify what can and cannot be put on a cigarette packet, not what can or cannot be a trademark), "and thus that it can be affixed on a lawfully available product to which it is to be applied;" (which is whole-cloth invention - Article 15.1 of TRIPS simply says what constitutes a trademark: I see nothing there that requires member states to allow affixation of trademarks to products).
This is hardly an impressive argument for the right of trademark owners to object to plain packaging.
Perhaps there is better elsewhere in the request, and perhaps Mr. Morcom has better; but it is up to him to produce them rather than up to those who think his columns are a whinge to imagine what they are or request them of him.
In addition to the regulation of trademarks on other goods that I noted above, I refer to prohibitions in effect in many countries (including Australia) of tobacco advertising in various media and display or sale of tobacco products in various stores, all of which have the effect of denying tobacco product trademark owners the right to put their marks in front of the public, and none of which are challenged.

Anonymous said...

When third parties make noise about the patenting of ethically-grey inventions or the registration of offensive designs, IP practitioners typically respond that the IP right is a negative right: a license to prevent use, and not a license to use. Use is said to be governed and subject to national law.

Why then the contrary position taken for trademarks, which as far as I can see are also a negative right?

Clive Bruton said...

At the risk of preaching to the converted… It seems clear enough that all property rights exist subject to the public interest (IP has term limitations/renewal fees, even real property can be confiscated for the public good), so Christopher Morcom is over-egging it a little with such outrage over this issue - where there is a clear public interest in the health-related issues surrounding smoking, and where successive legislation has sought to restrict the ways in which tobacco can be promoted.

Clearly, packaging is just another form of advertising/promotion - the tobacco companies are disingenuous in suggesting otherwise.

Anonymous said...

At least in the US, Trademark law comes from a different constitutional section than the other IP law of Patents and Copyrights.

Trademark law is not a negative right.

Trademark law starts with the notion of protecting the consumer (from freeriders who wish to improperly associate themselves as the source of a product).

While a product may still be deemed legal - it also can be segregated from other products because it may be considered dangerous, and I see no reason why a state should be limited in its ability to proscribe how the dangerous product can be portrayed to the consuming public.

In fact, if a government is NOT taking steps to distinguish dangerous products, I would say that the government is failing the public.

If 95% of a product is plain wrapped and even only 5% is allowed to carry the Trademark, then the Trademark still serves its purpose of source identification so that the consumer can know the source of the dangerous item. Anything else (all else) is merely a marketing concern and not an IP concern.

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