[Ip-health] Wall Street Journal: Australia Rejects Tobacco Challenge

Thirukumaran Balasubramaniam thiru at keionline.org
Tue Aug 14 23:43:24 PDT 2012


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"The message to the rest of the world is big tobacco can be taken on and beaten," said Nicola Roxon, Australia's attorney general who has championed the legislation.

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Tobacco companies claimed the laws were unconstitutional because they breached their intellectual property rights without providing compensation, a charge the government has vigorously denied. The companies also claimed the move would trigger an explosion in counterfeit supplies because the new packets would be easier to copy and smuggle.

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The government still faces some challenges. Three countries—Ukraine, Honduras and the Dominican Republic—are seeking to challenge the laws through the World Trade Organization.

And Philip Morris is seeking arbitration from a United Nations tribunal to counter the Australian government's plans, claiming the laws breach a trade agreement struck in 1993 between Australia and Hong Kong to protect their respective offshore investments.

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http://online.wsj.com/article/SB10000872396390444772404577589932010454866.html

	• MEDIA & MARKETING
	• Updated August 14, 2012, 10:21 p.m. ET

Australia Rejects Tobacco Challenge


By ENDA CURRAN

SYDNEY—Australia's highest court Wednesday rejected a challenge from big tobacco companies to tough new plain-packaging laws due to take effect later this year, in a legal battle closely watched around the world.

The ruling is a major blow for global tobacco giants that had been seeking to stop Australia from implementing the new laws, fearing the move would set a precedent for other countries to follow. Britain, New Zealand, Norway, India, France and Canada are also considering curbs including plain-packaging laws.

"Big tobacco will be thunderstruck by the ruling," said Matthew Rimmer, an intellectual property and trademark law expert at Australia National University. "There has been a lot of bluster and scaremongering by the tobacco industry. That bluster has been undone by the ruling in this particular case."

Australia will now become the first country to ban logos, branding, colors and promotional text on tobacco packaging. Under the new rules, brand names will appear in a standardized font on olive-brown-colored packets, while health warnings with graphic images of the harmful effects of smoking will cover 75% of the front of any packaging, and 90% of the back.

"At least a majority of the court is of the opinion that the [tobacco packaging] act is not contrary" to the country's constitution, the High Court of Australia in Canberra said. A full judgment on the case will be delivered at a later date.

The legal challenge had been brought by British American Tobacco BATS.LN +0.01% PLC, Philip Morris International Inc. PM +0.77% —the maker and seller of U.S. brands including Marlboro—Imperial Tobacco Group IMT.LN +0.12% PLC and Japan Tobacco Inc. 2914.TO -4.84%

Combined, the four companies account for around 45% of the global market, equivalent to around 5.5 trillion cigarettes a year.

"The message to the rest of the world is big tobacco can be taken on and beaten," said Nicola Roxon, Australia's attorney general who has championed the legislation.

Tobacco companies claimed the laws were unconstitutional because they breached their intellectual property rights without providing compensation, a charge the government has vigorously denied. The companies also claimed the move would trigger an explosion in counterfeit supplies because the new packets would be easier to copy and smuggle.

Describing the ruling as "extremely disappointing," Scott McIntyre, a spokesman for BAT Australia, said the British company will abide by the new laws.

"Even though we believe the government has taken our property from us, we'll ensure our products comply with the plain-packaging requirements and implementation dates," Mr McIntyre said.

The government still faces some challenges. Three countries—Ukraine, Honduras and the Dominican Republic—are seeking to challenge the laws through the World Trade Organization.

And Philip Morris is seeking arbitration from a United Nations tribunal to counter the Australian government's plans, claiming the laws breach a trade agreement struck in 1993 between Australia and Hong Kong to protect their respective offshore investments.

"There is still a long way to go before all the legal questions about plain packaging are fully explored and answered," said a spokesperson for Philip Morris, Chris Argent.

International steps like these mean the Australian government's plain-packaging laws may yet be derailed, said Sonia Stewart, a spokesperson for Imperial Tobacco.

The government estimates that 15,000 people a year die in Australia from tobacco-related illnesses.

The World Health Organization, which backs the plain-packaging measures, estimates that 5 million people worldwide die annually from diseases linked to tobacco, a figure expected to climb to 9 million by 2030.


-- 

Thiru Balasubramaniam
Geneva Representative
Knowledge Ecology International (KEI)

thiru at keionline.org



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