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Is alcohol plain packaging next?

Your wine may soon be served in a plain bottle. That was the warning from Carla Michelotti, in-house counsel with brand consultancy Leo Burnett in Chicago, at yesterday’s AIPPI panel on Australia’s tobacco plain packaging law. “The slippery slope is real”, she cautioned

In August, Australia’s new law survived a challenge before the country’s High Court. Now brand owners say they are concerned that plain packaging rules may spread across sectors.

Speaking at the AIPPI’s Congress in Seoul, Michellotti said that foods, especially unhealthy foods, are also in danger of facing restrictions on their trade marks. She cited the example of the United States, where there have been a number of large class action lawsuits brought by smokers against tobacco companies. Michellotti says that many of the same law firms are filing similar actions against fast food companies.

Michellotti also doubted the efficacy of plain packaging at reducing smoking and said that the law may have unintended consequences counter to its goals. She argued that the packaging is only important to those who are already in the market for cigarettes, so it will not prevent new smokers. Furthermore, plain packaging will also make it much easier for counterfeiters, which will affect price-sensitive younger smokers and be harmful to their health.

In light of this, Michellotti said she believed that plain packaging laws represent an unacceptable attack on the right of brand owners to use their marks. She also disagreed strongly with the notion that the rights owners are still in possession of their trade marks and trade dress, even if they can’t use them. If you can’t use a trade mark, it is completely counter to the reason for having one, she argued.

Young Joo Song of Kim & Chang in Seoul also warned that restrictions on tobacco often move to other markets. She noted that although South Korea does not have, and is not yet considering, tobacco plain packaging rules, the government is exploring restrictions on advertising on alcohol, similar to those already in place for cigarettes.

In addition, Song said that Australia’s plain packaging laws may fall foul of section 20 of TRIPs, which requires that laws “shall not be unjustifiably encumbered by special requirements … detrimental to its capability to distinguish the goods or services of one undertaking from those of other undertakings.”

Professor Tania Voon of Melbourne Law School, however, said she believes that Australia’s plain packaging law stands a good chance of surviving the international challenges levelled against it. Philip Morris Asia (PMA) has filed for arbitration under the Australia-Hong Kong Bilateral Investment Treaty, while Ukraine has filed a complaint with the WTO.

Voon said that one potential weakness in PMA’s investment treaty case lies in the fact that it acquired Philip Morris Australia nearly a year after the government revealed its plain packaging plan. This is important because claims under the Treaty depend on the investors’ reasonable expectations, and PMA may have acquired the company knowing that plain packaging was likely to come into effect.

Voon also said that that Australia has a number of arguments it may use before the WTO, although she cautioned that it is still unclear what the specific claims are. For example, she noted that the opposing countries may point to section 15(4), which prohibits countries from denying registration to certain types of goods. She thinks that Australia may argue that the plain packaging law does not prevent tobacco companies from registering marks, but merely restricts their use.

Download the AIPPI Congress News, published by Managing IP from Seoul, Korea, from our conference newspapers page.

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