WTO delays ruling on Australia’s plain packaging legislation

We posted recently that the WTO was expected to hand down a ruling on the legality of Australia’s plain packaging legislation during November 2014.  According to a communication issued by the WTO, a ruling is now not expected until the first half of 2016.

Under Australian law, it has been compulsory for manufacturers to sell tobacco products in Australia wrapped in plain packing since late 2012 where branding is reduced to a legislated font and point size at the base of each package.  Five tobacco-manufacturing countries – Cuba, Ukraine, the Dominican Republic, Honduras and Indonesia – have each taken action at the WTO asserting that the plain packaging legislation breaches Australia’s international obligations in respect of trade mark protection.

Specifically, it has been argued that:

  • Australia’s plain packaging legislation contravenes a number of international agreements, including the WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights, by imposing restrictions on the use of trade marks, and
  • the requirement for plain packing with reduced visible branding is more restrictive than is necessary to reduce the attractiveness and appeal of tobacco products to consumers.

While the US is not a direct party to the legal action, it has reserved the right to participate as a third party.  This is perhaps not surprising given that the US is home to one the world’s largest tobacco manufacturers the Altria Group, Inc. which is the parent to Philip Morris.  In conjunction with joint litigants British American Tobacco, Britain’s Imperial Tobacco and Japan Tobacco, Philip Morris previously failed in a High Court bid to obtain compensation consequent to the introduction of plain Australia’s packaging laws.

We will keep you informed of further developments.