Australia hit by WTO action over plain packaging

Yesterday Ukraine’s representative in Geneva requested consultations with Australia. This is the first step in a legal dispute at the trade body.

The Ukrainian government argues that Australia's Tobacco Plain Packaging Act 2011 and its Trade Marks Amendment (Tobacco Plain Packaging) Act 2011 violate the TRIPs Agreement and GATT, the umbrella agreement covering trade in goods.

Questions about the compatibility of TRIPs with Australia’s new plain packaging law were discussed at the last meeting of the TRIPs Council in February. The issue of tobacco packaging was placed on the agenda by the Dominican Republic.

At previous meetings, a number of WTO member states, including the Ukraine, Mexico, Nigeria, Cuba, Honduras and Zimbabwe, have argued that the law will violate Australia’s obligations under the TRIPs Agreement by preventing cigarette and cigar companies from using their trade marks.

Representatives from a number of other countries have argued that they should be able to use the flexibilities in TRIPs for public health purposes.

Australia’s parliament passed the government’s plain packaging legislation in November. The legislation was split into two bills – Tobacco Plain Packaging Bill 2011 and Trade Marks Amendment (Tobacco Plain Packaging) Bill 2011.

Tobacco companies have consistently argued that the legislation breaches Australia’s commitments under the TRIPs Agreement, violates the country’s constitution and will make it easier for cigarette packets to be counterfeited.

Managing IP will have more analysis of the dispute later this week.