Australia Triumphs Definitively In Long-Running Battle With Big Tobacco Over Plain Packs For Cigarettes
from the no-sacred-right-to-use-trademarks dept
Techdirt has written a lot about corporate sovereignty — also known as “investor-state dispute settlement” (ISDS) — which allows companies to haul countries before special tribunals for alleged loss of profits caused by new laws or regulations. One industry’s use of ISDS that Techdirt has been following particularly closely is tobacco. As a typically brilliant John Oliver segment explained back in 2015, Big Tobacco companies have used corporate sovereignty clauses in international trade and investment deals to sue countries for daring to try to regulate cigarettes, advertising or packaging. Thankfully, that didn’t turn out so well. Philip Morris tried to use ISDS to roll back plain-pack laws, but cases against Australia and Uruguay were both thrown out. The tide against the use of corporate sovereignty by tobacco companies to undo health protection laws has turned so much that special carve-outs have been added to trade deals to prevent this kind of corporate bullying.
But the tobacco industry had one last trick up its sleeve. John Oliver noted five years ago that Big Tobacco persuaded three countries — Honduras, Dominican Republic and Ukraine — to file complaints with the World Trade Organization (WTO) against Australia, claiming the plain-packaging law violates trade agreements. As an article in the Financial Review explains, they were later joined by Indonesia and Cuba. A dispute panel backed Australia in June 2018, but Honduras and the Dominican Republic appealed against that decision. Now the WTO’s Appellate Body has made its final ruling:
The Appellate Body confirmed the previous WTO ruling, which said that when Australia prevented tobacco producers from differentiating themselves from their rivals via brand marketing, this wasn’t necessarily a restriction on trade.
It also rejected the argument that raising the purchasing age or increasing tobacco taxes were less trade-restrictive options that Canberra could have pursued instead of the plain packaging rules.
And it said that the international intellectual property regime didn’t give tobacco companies a right to use a trademark; it merely stopped competitors from using it. So there was no obligation on Australia to allow a company to use its trademark, and the plain packaging regime hadn’t “unjustifiably” encumbered companies’ trademark usage.
That last point is particularly interesting. As far back as 2011 the tobacco companies tried to argue that “plain packaging has a smothering effect on companies’ logos and trademarks.” The WTO has just stamped on the idea that companies have some kind of sacred right to use their trademarks, which could have wider implications.
As for the main attempt to get rid of plain packs in Australia, that has now failed definitively — there is no way to appeal against the WTO Appellate Body’s ruling. That means that many more countries around the world are likely to bring in plain-pack laws — a real victory for Australia’s tenacious pursuit of this important health measure.