WLF Counsel's Advisory

Comments Sought On Australian Plain Packaging Bill

By Tracy-Gene G. Durkin and Jeremy M. Klass

January 29, 2010 (Vol. 18 No. 2)

On November 26, 2009, the Senate of the Australian parliament referred the Plain Tobacco Packaging (Removing Branding from Cigarette Packs) Bill 2009 to the Community Affairs Legislation Committee for inquiry and report by March 17, 2010.  This bill proposes to amend Australia's Trade Practices Act 1974 and Trade Practices (Consumer Product Information Standards) (Tobacco) Regulations 2004 product information standards to remove brands, trademarks, and logos from tobacco packaging. In short, Australia would outlaw tobacco branding, leaving no meaningful way to distinguish one product from another.

If Australia adopts and implements the provisions of this bill, the nation will be in violation of its obligations under the Paris Convention and the World Trade Organization's Agreement on Trade-Related Aspects of Intellectual Property Rights (known more commonly as TRIPS), as well as the US-Australia Free Trade Agreement.  In particular, Article 15(4) of TRIPS states that "[t]he nature of the goods or services to which a trademark is applied shall in no case form an obstacle to registration of the trademark."  TRIPS Article 20 provides that "the use of a trademark . . . shall not be unjustifiably encumbered by special requirements, such as . . . [mandating] use in [a] manner detrimental to its capability to distinguish goods and services [from one another]."  Such legislation would also violate Article 7 of the Paris Convention, to which TRIPS applies.  Article 7 shares the same language of TRIPS Article 15(4), supra, and the U.S.-Australia FTA requires both countries to comply with their obligations under TRIPS and the Paris Convention.  Since tobacco companies around the world hold Australian IP rights, it is safe to say that some countries might view this bill as an improper trade barrier and that would set off trade disputes in unrelated industries. 

While Australia's goal of reducing smoking-related illnesses and deaths is beyond reproach, surely there is a more effective and less restrictive means of doing so than by decimating the value of tobacco trademarks.  Tobacco is a relatively easy target, given the attendant health issues and increasing social stigma associated with its use.  But if this legislation passes, similar laws regarding products such as alcohol and fast food may quickly follow.

The text of the bill and related information can be viewed at http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22legislation%2Fbillhome%2Fs724%22#billText.  Public comments are invited until February 26, 2010, and should be submitted to community.affairs.sen@aph.gov.au.

Tracy-Gene G. Durkin is a director, and Jeremy M. Klass is an associate with the law firm Sterne, Kessler, Goldstein & Fox P.L.L.C.  Ms. Durkin leads the firm's trademark practice. 

This publication reflects the present thoughts of the authors, and should not be attributed to Washington Legal Foundation or Sterne, Kessler, Goldstein & Fox P.L.L.C. or any of the law firm's former, current, or future clients.  The content is for purposes of discussion and should not be considered legal advice.  This publication should not be construed as an attempt to aid or hinder the passage of legislation.