Bloomberg reports:
Ukraine complained at the World Trade Organization over Australia’s decision to prohibit trademarks and logos on tobacco products, saying the ban violates global rules on intellectual property.
Australia is the first country to require plain, identical cigarette packaging. As of Dec. 1, 2012, cigarettes there will have to be sold in dark brown packets, with no company logos or images and the same font for all brands. Imperial Tobacco Group Plc (IMP), British American Tobacco Plc (BATS) and Japan Tobacco Inc. (2914) are among companies that have challenged the law, which Australia is extending to include cigars and loose-leaf tobacco products.
Ukraine says the scientific evidence on which the law is based was insufficient and that the plain-packaging rules will unnecessarily curb trade because Australia’s public-health goal can be met by other means.
“The government has consistently engaged with World Trade Organization members with regard to the plain-packaging measure, and will participate in consultations in a constructive manner,” Australian Trade Minister Craig Emerson said in an emailed statement today. “Australia is prepared to defend any challenge that might result from the consultations.”
I know this issue has been talked about at meetings related to TRIPS and TBT, but I was still a bit surprised to see a complaint. I wonder if other others will bring complaints as well.
An old blog post on these issues is here: http://worldtradelaw.typepad.com/ielpblog/2010/04/plain-packaging-of-tobacco-products-under-trips.html
Here's a discussion of the issue at last June's TRIPS Council meeting:
K. AUSTRALIA: TOBACCO PLAIN PACKAGING BILL 2011 AND ITS COMPATIBILITY WITH THE TRIPS AGREEMENT
166. The Chairman recalled that this item had been put on the agenda at the written request by the delegation of the Dominican Republic.
167. The representative of the Dominican Republic said that, on 8 April 2011, Australia had notified to the Committee on Technical Barriers to Trade the "Tobacco Plain Packaging Bill 2011" ("the Bill") (G/TBT/N/AUS/67). That notification also referred to a "Plain Packaging of Tobacco Products Consultation Paper" ("the Consultation Paper") which described further provisions and other measures that Australia was considering for adoption for the purpose of implementing the Bill or regulating the packaging of tobacco products. She said that the Dominican Republic was seriously concerned about the impact of the measures proposed and their compatibility with the TRIPS Agreement and the TBT Agreement. Concentrating for the moment only on the issues that concern the TRIPS Agreement, her delegation was particularly worried about the impact the proposed measures could have on small economies that are largely dependent on the production and export of tobacco and tobacco products.
168. She said that the Bill would authorize the adoption of a series of regulations requiring "plain packaging for tobacco products", amounting to a ban on the use of registered trademarks, logos and other distinguishing features on tobacco packaging apart from the brand name, which would be subject to specified lettering and placement. The Consultation Paper laid down the steps proposed for implementation of the Bill as it concerned cigarette packaging. For other tobacco products, the Paper stated that the proposed design features for the plain packaging were still under development and that consultations would be held on them in the second half of 2011. According to the Consultation Paper, Australia would also require that all tobacco packets be coloured a shade of dark olive brown with matt finish and that cigarette packets display graphic health warnings that cover 75 per cent of the front of the packet in addition to the one already covering 90 per cent of the back, together with a further warning to cover one of the side panels. The other side panel was to display the manufacturer's details and a bar code. No details were given of changes in warning requirements for other tobacco products such as cigars. The Consultation Paper further stated that all cigarette packs had to be rectangular in shape with a flip-top opening, and that no branding, colours or design features other than those specified would be permitted. She said that these requirements would be in addition to Australia's existing laws and other provisions which prohibit the use of tobacco brand names on non-tobacco products and ban advertising campaigns that target consumers. Retail displays of tobacco products were also either banned already or to be banned throughout the country.
169. She said that these proposed measures would require all producers and importers of tobacco products to adopt highly standardized packaging which would in turn prevent sellers from asserting their intellectual property rights on packaging for cigarettes and other tobacco products, thereby depriving consumers of important information on the products they buy. The Dominican Republic was concerned as to the consistency of these measures with Australia's obligations as a WTO Member.
170. She said that, because the proposed measures had serious consequences, it was important to ensure that the policy objectives they underpinned were legitimate. According to Australia's notification to the TBT Committee, the measures were designed to "reduce the appeal of tobacco products to consumers; increase the effectiveness of health warnings on the packaging of tobacco products; and reduce the ability of the packaging of tobacco products to mislead consumers about the harmful effects of smoking". Apparently, each of these objectives formed part of a broader plan that sought to reduce the number of smokers in Australia. However, she said that it was unclear to her delegation as to how the proposed measures would contribute to meeting that goal.
171. She said that her delegation was also concerned that plain packaging might have unwanted effects that undermined the proposed health objectives. For example, if tobacco products were to be sold in standard packs thus making product differentiation difficult, sellers might feel compelled to compete solely on the basis of price, causing a drop in retail prices which might in turn produce an increase in the demand and consumption of tobacco products, including cigarettes and cigars. Furthermore, to sell tobacco products in plain packaging might make the production and sale of fake and counterfeit tobacco products easier, which would increase the sale and consumption of non-regulated products. In other words, the plain packaging measures proposed could actually run counter to the objectives sought.
172. She said that the Dominican Republic was also concerned over the compatibility of the proposed measures with the TRIPS Agreement and the Paris Convention for the Protection of Industrial Property ("Paris Convention"). Article 20 of the TRIPS Agreement prohibited the imposition of unjustified barriers that affect trademarks. She said that a ban on the use of trademarks and a requirement for brand names to be displayed using a standard format and lettering would obviously "encumber" their use. Article 20 gave two instances of such encumbrance: (a) a requirement to "use [a trademark] in a special form"; and (b) a requirement for use in a manner detrimental to its capability to distinguish the goods or services of one undertaking from those of other undertakings.
173. She said that the proposed measures would require use of trademarks in a special form. Manufacturers of tobacco products would have to meet the following requirements for displaying the brand name: use a standard font style and size; use a dark olive brown background colour with a matt finish; use only the top and bottom of the packet and the bottom quarter of the front surface. Because of their design these restrictions would be "detrimental" to the capability of trademarks to distinguish the goods or services of one undertaking from those of other undertakings. With the packaging stripped of virtually all of the products' distinctive features and with a standardized brand name display, packets would look very much alike to consumers and retailers.
174. She said that it would be most helpful to her delegation if Australia could explain how these measures could be justified and specify the evidence it used as a basis for showing that the plain packaging requirement would meet the objectives set out in the notification and, more generally, how tobacco consumption would be reduced. It would also be useful to know whether Australia had explored the kind of effects that the plain packaging requirement would have on low budget generic type tobacco products and on unregulated trade in tobacco products, such as illegally imported counterfeit or fake products.
175. With respect to the obligation of Members to comply with Article 10bis of the Paris Convention, which prohibited "all acts of such a nature as to create confusion by any means whatever with the establishment, the goods, or the industrial or commercial activities, of a competitor", she said that, in the view of the Dominican Republic, there was a serious risk that the proposed generic packaging requirements might lead sellers to use packets that create confusion. Indeed, one of the plain packaging requirements seemed to have been designed to prevent consumers from distinguishing between different tobacco products. Pursuant to the plain packaging requirement, all distinctive features that currently appeared on a cigarette packet would have to be removed. As observed earlier, although the brand name would appear, this information would have to be conveyed in a standard font style and font size and displayed on a dark olive brown background with a matt finish, and could only be placed on the top and bottom of the packet and on the bottom quarter of the front surface. This meant that the appearance of competitors' tobacco products would be almost identical and there was a genuine risk that consumers in a retail market context would be unable to adequately distinguish between them.
176. In view of the above, the Dominican Republic requested that Australia take account of these concerns and review the Bill accordingly.
177. The representative of Australia said that her delegation welcomed the opportunity to discuss this extremely important public health issue in the TRIPS Council and to explain the health policy underpinnings of the Australian Government's proposal. In order to provide some context for Members, she said it was worth noting that some 3 million Australians continued to smoke daily, that smoking killed over 15,000 Australians per year and that the cost to Australia's society and economy was over $31.5 billion per annum. This was the policy context in which the Australian Government approached this issue.
178. She said that, on 7 April 2011, the Australian Minister for Health and Ageing had released for public comment the Consultation Paper and draft legislation to mandate the plain packaging of tobacco products. The consultation period had closed on 6 June 2011. The comments lodged were currently being considered by the Australian Government. She said that Australia had been a global leader in tobacco control over the past 30 years and had implemented a comprehensive range of measures to reduce smoking rates. These included extensive and continuing public education campaigns on the dangers of smoking; age restrictions on tobacco purchase; comprehensive bans on tobacco advertising, promotion and sponsorship; bans on smoking in workplaces and enclosed public places; bans on smoking in cars with children and increasingly in open air public places where children may be exposed to second hand smoke; bans and restrictions on the retail display of tobacco products; pricing measures through excise and customs duties; and mandatory graphic health warnings on tobacco product packaging.
179. She said that tobacco packaging was one of the last remaining forms of tobacco advertising in Australia and the plain packaging legislation was the next logical step in Australia's tobacco control efforts. Guidelines agreed by the Conference of the Parties to the WHO Framework Convention on Tobacco Control (FCTC) in 2008 for the implementation of Articles 11 and 13 of the FCTC recommended that Parties consider the introduction of plain packaging. The legislation proposed by Australia was expected to commence on 1 January 2012, and would require all tobacco products offered for retail sale on or after 1 July 2012 to be compliant. The proposed legislation was part of a comprehensive package of new reforms to combat smoking announced by the Australian Government in April 2010. Other elements of the package were a 25 per cent increase in tobacco excise - Australia's tobacco excise and excise-equivalent duty was already high by international standards and now amounted to A$8.40 on a packet of 25 cigarettes, and A$10.09 on a packet of 30; increased investment in anti-smoking social marketing campaigns; and legislation to bring restrictions on tobacco advertising on the Internet into line with restrictions in other media and at retail points of sale.
180. She said that these measures had been recommended by Australia's leading public health experts on the National Preventative Health Taskforce, and accepted by the Australian Government. The Taskforce had considered that plain packaging would improve public health by reducing the attractiveness and appeal of tobacco products to consumers; reducing the ability of tobacco packaging to mislead consumers about the harmful effects of smoking; increasing the noticeability and effectiveness of mandated health warnings.
181. She said that her delegation had noted the comments from the Dominican Republic referring to an alleged lack of scientific evidence to indicate that a plain packaging requirement would work. She observed, however, that there was a body of peer-reviewed literature on the public record indicating that a plain packaging requirement would contribute to Australia's objectives. All of that literature was available on the preventative health website, the details of which she would be happy to furnish to Members. Australia did not consider that the plain packaging proposal would have a significant impact on the illicit trade in tobacco products since already branded products were quickly and readily counterfeited. Nevertheless, she said that anti-counterfeiting markings would be allowed to be used on the packaging provided those markings were not linked to tobacco marketing or promotions and did not interfere with graphic health warnings. She said that the Australian Government considered that the smoking of any tobacco products, whether licit or illicit, was fundamentally harmful to human health.
182. She said that Australia was, and would continue to be, fully committed to its international obligations to protect intellectual property rights, including the rights of trademark owners. She assured all Members that, in framing its policy on plain packaging, Australia had paid full regard to the TRIPS Agreement and would ensure that the new policy was implemented in a manner that was consistent with that Agreement.
183. The representative of Honduras said that her delegation endorsed the concerns expressed by the Dominican Republic regarding the Australian Bill, the purpose of which was to attempt to protect human health. Australia's measure caused systemic concerns because, according to her delegation's view, its implementation would be detrimental to trademark owners. The obligation to apply or fit in with specific forms for display on tobacco packaging would require certain adjustments to their trademarks in order to satisfy Australia's "health warning" requirements. This special requirement to create novel "plain packaging" for this product would make it difficult for a trademark to distinguish a product from that of a competitor. This was contrary to Article 20 of the TRIPS Agreement and failed to take account of the legitimate interests of trademark owners, as stipulated in Article 17 of the Agreement.
184. She said that, as a Member of the WTO whose objective was to oversee trade law, Honduras was committed to fulfilling the undertakings made under the trade agreements. This did not preclude Members from adopting certain sanitary measures for the protection of human health, as was the case here, which may also have trade implications. Honduras was of the view that Australia's proposed measure could only be valid if it were revised to achieve the pursued public health objectives in a manner consistent with the commitments and obligations under the WTO framework, in particular the provisions of the TRIPS Agreement. Australia could rectify the measure by reducing the space designed for displaying the health warning on both sides of the packet, front and back, to use up only 50 per cent or less of the surface for messages and pictograms of its choice. This would allow the trademark owner more freedom to use the remaining space to differentiate its own product, in recognition of its legitimate right to do so.
185. She said that Honduras had had a similar experience in this regard when its Special Law on Tobacco Control was enacted through Decree No. 92-2010. While the original requirement had been that health warnings should take up 80 per cent of the package surface, this requirement was subsequently amended, and the space for health warnings reduced to 50 per cent on the front and back of the package, precisely because of the aforementioned considerations.
186. The representative of Nicaragua said that her delegation shared the concerns regarding the Australian plain packaging bill 2011 presented by Australia. If the plain packaging of tobacco products were to be implemented as outlined in the Consultation Paper, this would go against the TRIPS Agreement and would also be in contravention of other international trade agreements. With respect to the TRIPS Agreement, she said that Article 20 very clearly laid down that the use of a trademark in the course of trade should not be unjustifiably encumbered by special requirements, by use of a special form or use in a manner detrimental to its capability to distinguish the goods or services of one undertaking from that of the competition. The Australian bill on plain packaging did violate that provision because it would lay down a particular requirement for the trademark and would therefore hinder trade.
187. She said that Article 15 of the TRIPS Agreement and Articles 6 and 7 of the Paris Convention provided that countries had to accept trademarks registered in other countries and that they may not discriminate against those trademarks. These agreements implicitly required that parties to these agreements provide a positive right to the trademark holders in question to use the trademark for the goods that they are selling. The right to use a trademark must be put into practice, because having a theoretical right without having the practical use of trademark would not be fair. The TRIPS Agreement stipulated that any measure to deal with public health issues should be in keeping with the TRIPS principles and this would not be the case with respect to the Australian measure.
188. With respect to the WHO Framework Convention on Tobacco Control, she said that this only contained recommendations on plain packaging and that there was no obligation on parties to the framework convention to use plain packaging. As a tobacco producer, Nicaragua considered that the adoption of the law in question by Australia would undermine the rights of tobacco producers in Nicaragua and would therefore have a direct effect on their ability to generate revenue. Her delegation would therefore like to request Australia to consider amending the Bill, so that its right as a sovereign state to protect public health would not actually go against the rights that others enjoy under the TRIPS Agreement.
189. She said that her delegation further believed that the adoption of this measure in Australia would not be in keeping with Article 2.2 of the TBT Agreement and that it might raise the TBT-related issues in another forum. Her delegation believed that plain packaging would not affect consumer behaviour, and that the measure would therefore not actually fulfil the goals laid down by Australia, rather it would simply mean economic difficulties for those having to comply with the legislation. The Bill also violated Article 12.3 of the TBT Agreement as well as the Paris Convention on the Protection of Intellectual Property. She invited Australia to take these concerns on board and refrain from adopting the measures as outlined.
190. The representative of Cuba thanked the Dominican Republic for having included this matter on the Council agenda. He believed that the Bill could well have an effect on trademark use and it was therefore appropriate to have the TRIPS Council consider the proposed legislation. This was a complex issue with two facets: on one hand, there was the objective of protecting human health which motivated the measure, and on the other hand there were the potential implications for trade in tobacco products from the point of view of intellectual property rights. The Bill's stated objectives were to improve public health by discouraging people from taking up smoking, discouraging people who have given up smoking from relapsing, and reducing people's exposure to smoke from tobacco products. He said that Cuba considered these to be legitimate objectives that were essential to high-level public health care, a human right that should be defended and given priority by all States.
191. He said that, nevertheless, for many of the small and under-developed economies, tobacco products were an exportable staple on which thousands of families in the rural areas depended. Moreover, as for any other legal products - that is any products whose trade had not been forbidden - trade in tobacco products was governed by the rules of the WTO and as a result, there were a number of legitimate questions and concerns regarding the impact of these regulations on trade.
192. His delegation was concerned about how to protect the rights of owners under Article 16 of the TRIPS Agreement and to prevent counterfeiting or unfair competition. Plain packaging, he said, eliminated the distinctive elements of a brand and the appearance of the packaging became uniform for all marks, making it difficult for consumers to identify and differentiate tobacco products on the basis of brand preference. At the same time, the lack of distinctive elements would make the packaging easier to reproduce and could lead to an increase in illicit trade in counterfeit products which would threaten the rights of owners. In view of these foreseeable implications of the Australian bill, his delegation would be grateful if Australia could share with all Members the scientific evidence at its disposal concerning the direct link between the measure and the health protection objectives it was seeking to achieve, in the light of Article 8 of the TRIPS Agreement. It would also be useful to know whether Australia had considered other measures, less restrictive of intellectual property rights, that would achieve the same health objectives and, if so, whether it could provide Members with the results of the analysis conducted. His delegation would be grateful if Australia could provide information on these issues at the next regular session of the TRIPS Council.
193. The representative of Ukraine said that her delegation would like to echo the concerns expressed by other countries regarding Australia's notification G/TBT/N/AUS/67 on its Tobacco Plain Packaging Bill of 2011. Ukraine considered that the adoption of this legislation and the introduction of the plain packaging requirements and the proposed terms would violate the provisions of the TRIPS Agreement, in particular Articles 8.1, certain provisions of Articles 6 and 7 of the Paris Convention as incorporated into the TRIPS Agreement, Article 17, and Article 20 of the TRIPS Agreement. On 2 June 2011, Ukraine had sent its comments and questions to the Australian government department of Foreign Affairs and Trade, and urged the Australian Government to consider the revision of the proposed draft in order to make it WTO consistent. Her delegation was confident that the Australian Government would carefully consider the concerns of Members about the proposed legislation and ensure its compatibility with the requirements of the TRIPS Agreement.
194. The representative of Brazil said that his delegation had listened to the Dominican Republic's reasons for having brought this issue to the attention of the Council as well as Australia's explanations of the rationale for introducing its plain packaging legislation for cigarettes. He said that this was yet another example of the extremely diversified and complex interplay between public health on one hand, and intellectual property rights on the other. Brazil recognized the importance of the matter under discussion, and accordingly reserved its rights to revert to this issue in the future for more detailed comments.
195. The representative of India said that the matter raised important questions on the interplay between the TRIPS Agreement and the right of a Member to protect public health. There had been a number of experimental studies on plain packaging. A study by Wakefield, Germain and Durkin had shown that as brand design information was progressively removed from cigarettes, they were seen as less appealing and the cigarettes in the packs were considered to be less satisfying and of lower quality. A major Canadian study had concluded that "plain and generic packaging of tobacco products, all other things being equal, through its impact on image formation and retention, recall and recognition, knowledge and consumer attitudes and perceived utility, would likely depress the incidents of smoking uptake by non-smoking teens and increase the incidence of smoking cessation by teens and adult smokers".
196. He said that the WHO Framework Convention on Tobacco Control stated that parties should consider adopting measures to restrict or prohibit the use of logos, colours, brand images, or promotional information on packaging other than brand names and product names displayed in a standard colour, and font type. This could increase the noticeability and effectiveness of health warnings and messages, prevent the package from detracting attention from them, and address industry package design techniques that may suggest that some products are less harmful than others.
197. While refraining from comments on the specific elements of the Australian measure under discussion, he said his delegation wished to make observations on the larger systemic issue of protection of public health and the TRIPS Agreement. The Appellate Body in EC - Asbestos had held that it is "undisputed that WTO Members have the right to determine the level of protection of health that they consider appropriate in a given situation". The panel in EC - Trademarks and Geographical Indications had explained that the TRIPS Agreement generally provided negative rather than positive rights. The panel had stated that "the TRIPS Agreement does not generally provide for the grant of positive rights to exploit or use certain subject matter, but rather provides for the grant of negative rights to prevent certain acts. This fundamental feature of intellectual property protection inherently grants Members freedom to pursue legitimate public policy objectives since many measures do attain those public policy objectives lie outside the scope of intellectual property rights and do not require an exception under the TRIPS Agreement". Any interpretation of the TRIPS Agreement had to be done keeping in view the objectives and the principles of this Agreement.
198. He said that Article 8 of the TRIPS Agreement provided enough flexibility for Members to adopt measures necessary to protect public health and nutrition and to promote public interest in sectors of vital importance to the socio-economic and technological developments. The Doha Declaration on the TRIPS Agreement and Public Health also made it clear that the TRIPS Agreement did not, and should not prevent Members from taking measures to protect public health and that the TRIPS Agreement should be interpreted and implemented in a manner supportive of WTO Members' rights to protect public health. His delegation believed it was implicit in the TRIPS Agreement, and especially in Article 20, that a high degree of domestic regulatory autonomy had to be afforded to a Member to enact measures to protect and promote public health.
199. The representative of New Zealand said that her delegation welcomed the Australian legislation for the plain packaging of tobacco products. The disastrous effects of smoking could not be overstated. Smoking was one of the leading preventable causes of early deaths and caused around 85 per cent of lung cancers and was linked to many other types of cancers. It was also a major cause of heart attacks, strokes, serious respiratory diseases such as emphysema, bronchitis and asthma, and a range of other conditions including blindness and infertility. Numerous scientific studies showed that plain packaging of tobacco products would lead to positive public health outcomes by reducing the attractiveness and desirability of smoking and increasing the prominence of public health warnings.
200. She said that, as a comprehensive suite of tobacco control measures, plain packaging would contribute to efforts to reduce smoking rates. New Zealand applauded Australia's commitment to taking the next step to reduce smoking rates through the introduction of plain packaging of tobacco products. She also noted that the guidelines agreed by the Conference of Parties to the World Health Organization Framework Convention (FCTC) on tobacco control in 2008 for the implementation of Articles 11 and 13 of the FCTC recommended that parties consider the introduction of plain packaging. New Zealand also appreciated to hear that Australia had paid close attention to its WTO obligations in developing its plain packaging proposal. Members should recall that the Doha Declaration on the TRIPS Agreement and Public Health had confirmed that the TRIPS Agreement did not and should not prevent Members from taking measures to protect public health. The TRIPS Agreement could and should be interpreted and implemented in a manner supportive of Members' rights to protect public health, and to use to the full the provisions in the TRIPS Agreement which provided flexibility for this purpose.
201. The representative of Uruguay said that his delegation was concerned about the inclusion of this item in the agenda of the Council for TRIPS. Uruguay considered it a general principle that the protection of public health fell within the sovereign authority of states and that every country was therefore entitled to legislate in the public interest, as had recently been recognized in the Punta del Este Declaration on the implementation of the WHO Framework Convention on Tobacco Control. In that Declaration, the 172 countries parties to the Convention had reaffirmed their commitment to prioritize the implementation of health measures designed to control tobacco consumption, and had reasserted the right of states to define and implement national public health policies to protect their people. In Uruguay's case, the implementation of tobacco control policies had led to notable improvements, including a 24 per cent drop in the prevalence of daily smokers, air pollution in closed public spaces had fallen by over 90 per cent and, more significantly, hospitalization for myocardial infarction has declined by 17 per cent.
202. He said that Article 20 of the TRIPS Agreement provided that the use of a trademark should not be unjustifiably encumbered by special requirements. Recently, states had shown the clear tendency to prioritize the implementation of measures designed to control tobacco consumption in their territories because of its devastating health, social, economic and environmental consequences. Uruguay was therefore of the view that the measure proposed by Australia should raise no objections since it was consistent with the provisions of the WTO Agreements.
203. The representative of the Philippines said that his delegation shared the concerns expressed by other delegations on how the Bill violated Article 20 of the TRIPS Agreement. The Philippines were still in the process of evaluating the proposal and therefore reserved the right to revert to this issue at later meetings of the Council.
204. The representative of Chile said that this was a complex issue on which his delegation did not yet have all the elements needed to form a final opinion. On a preliminary basis, he nevertheless wished to raise two systemic aspects. The first concerned use of flexibilities afforded by the TRIPS Agreement on public health grounds. Numerous discussions had taken place in the Council on the importance of the flexibilities contained in the TRIPS Agreement for public health reasons, as well as the flexibilities on grounds of public interest, and of those applied to prevent abuse of intellectual property rights under Article 8 of the TRIPS Agreement. He said that the case before the Council further strengthened the legitimacy and importance of flexibilities, particularly in the public health sphere. This case highlighted that the flexibilities in question had been established not only for the benefit of developing countries, as people usually tended to think, but also because their use might be necessary in developed countries such as Australia.
205. The second issue concerned the proper balance between use of a flexibility afforded by the TRIPS Agreement - since this was a legitimate tool provided for by the system - and the provisions governing the protection of intellectual property rights, in this instance trademarks. It was without question that the flexibilities needed to be applied in a manner that was fully consistent with the protection provided for in the TRIPS Agreement, and that their use could not unjustifiably undermine intellectual property rights recognized in the Agreement, including the relevant provisions of the Paris Convention. He emphasized that Chile entirely shared Australia's concern regarding public health protection. Nonetheless, the present case raised questions which called for careful and in-depth analysis. Chile would closely follow implementation of the legislation in Australia because of the potential repercussions of the issue in systemic terms.
206. The representative of Zambia said noted Australia's statement that it was committed to fulfil its international obligations, including those under TRIPS Agreement. In light of this, her delegation would like to know how plain packaging conformed to Australia's obligation under Article 20 of the TRIPS Agreement. Her delegation would also be grateful to receive information on any impact assessments undertaken by Australia to arrive at the conclusion that plain packaging would reduce the appeal of tobacco products to consumers, particularly the young people.
207. Marking and labelling provided consumers an important basis for making informed choices on the products in question. As other delegations that had spoken before her, she would be interested to hear how Australia would ensure that consumers were not subject to more harmful, high-toxin tobacco products through plain packaging. It was her delegation's view that the Bill - if implemented - would not only be counter to obligations under Article 20 of the TRIPS Agreement but would also have lasting negative effects for small and medium size enterprises, without any guarantee that the measure would lead to reduced appeal of tobacco products to consumers.
208. The representative of Switzerland said that his delegation was supportive of public health measures in the area of anti-smoking. At the same time, it was clear that such measures had to comply with TRIPS obligations and had to be implemented in a TRIPS-consistent manner. In particular, such measures had to be appropriate to achieve the goal and the public interest for which they were being implemented, and they had to be supported by relevant evidence that they could actually achieve the stipulated goal. Furthermore, such measures could not be more restrictive than necessary to achieve the public health objective, as compared to other measures which could equally achieve that same objective through less restrictive measures.
209. Therefore, he said, while fully sharing Australia's concerns with regard to the damaging effects of smoking for individual and public health, the right balance had to be struck between such public health measures and the safeguards of property rights, including intellectual property rights, and in the case at hand, the rights of trademark owners. His delegation appreciated the assurances given by the delegation of Australia and trusted that, in the further elaboration of its draft legislation and its later implementation, the Australian legislator would take into account the legitimate interests of trademark owners in a manner compatible with its international obligations, and in particular with Articles 17 and 20 of the TRIPS Agreement.
210. The representative of Ecuador said that his delegation had listened with sympathy to the concerns raised by the Dominican Republic and others that the Bill could affect these countries' exports and how it complied with the provisions of the TRIPS Agreement, particularly as tobacco products were generally exported by developing countries. Given the complexity and all the concerns connected with the issue, however, his delegation believed that Members needed to go deeper into the debate on the relationship between TRIPS, intellectual property rights, trademarks and protection of public health, and that further debate and study was required on this issue.
211. The representative of Norway said that it was within a Member's right to implement necessary measures in order to protect public health. Her delegation trusted that the Australian measures would be implemented in a manner that was consistent with the TRIPS Agreement. She said that Norway had also implemented a number of measures to combat smoking, and she would follow developments regarding the plain packaging issue with great interest.
212. The representative of Mexico said that, while recognizing Australia's efforts to protect public health and ensure full protection of its citizens, her delegation would nevertheless like to reiterate the high level of concern on the draft bill. Even measures taken to protect public health had to comply with the TRIPS Agreement, in particular Articles 8 and 20 which had been repeated various times in interventions made by others. It was clear that this proposal could go beyond these protection requirements and could actually be counter-productive and have undesired results, for example by increasing consumption through a reduction in price. Her delegation believed that the Australian proposal went beyond the scope of international instruments in this area.
213. The representative of China said that the Australian draft bill had the legitimate objective to protect human health by introducing legislation on plain packaging on tobacco products, with the aim to reduce their appeal to consumers and increase the effectiveness of health warnings. Although Articles 15 and 16 of the Bill provided some assurances for the effect of a trademark or an industrial design, Article 14 stipulated that a trademark and industrial design could be prevented from use on tobacco products, or the conditions of their use could be specified, which had led to some debate on its compatibility with the TRIPS Agreement. Noting that the measure was currently only a draft bill for comment, he said that China would keep a close watch on its development.
214. The representative of the Dominican Republic thanked Australia for its explanations and said that the Dominican Republic had no intention to question the right of countries to enact legitimate policies to protect public health, which was the sovereign right of each state which the Dominican Republic supported. But her delegation wanted to make sure that Members who take such steps also abide by their commitments in the WTO and other international fora, and take into the account the possible effects on trade flows of small and vulnerable economies in developing countries. Her delegation hoped that Australia had taken this message on board, and was looking forward to further collaboration on this issue in the future.
215. The representative of Australia thanked delegations for the discussion and said that, while emphasising again the very clear public health policy underpinning of the proposed legislation and Australia's absolute determination to reduce smoking rates, her delegation would also like to reassure Members of its continued commitment to framing legislation and policies in line with Australia's international obligations.
216. The representative of the World Health Organization (WHO) said that the WHO viewed tobacco use as one of the greatest threats to public health the world has ever faced. Tobacco consumption currently killed nearly six million people a year through direct use and the deadly effects of second-hand smoke, and an average of one person every six seconds and one in ten adults succumbed to tobacco use. Tobacco was indeed the single most preventable cause of death in the world today. It was the only legal consumer product that killed up to half of those who used it as intended and recommended by the manufacturer. Moreover, tobacco was a prominent risk factor for six of the eight leading causes of death in the world. The economic costs of tobacco use were equally as devastating as the public health costs, killing people at the height of their productivity. Yet these disastrous consequences continued in large part due to aggressive and widespread marketing and practices by multinational tobacco companies, including through the use of targeted and precisely designed tobacco product packaging aiming to initiate and maintain addiction among consumers.
217. He said that a strong and irrefutable body of evidence had demonstrated that product packaging traditionally served as one of the tobacco industry's central vehicles in initiating and maintaining addiction to their lethal products among consumers. For example, detailed analyses of tobacco industry documents had illustrated that tobacco companies viewed product packaging as a critical marketing strategy in promoting brand image in order to increase their market share, and target vulnerable segments of the population, including women and children. Peer-reviewed research indicated that plain packaging on tobacco products would increase the impact of health warnings, reduce false and misleading messages that deceive customers into believing that some tobacco products are safer than others, and reduce the attractiveness of products to segments of the population specifically targeted by tobacco companies. Given that the majority of smokers began a lifetime of addiction before the age of 18, plain packaging would severely restrict the industry's capacity to appeal to young people. In the context of the tactics employed by the tobacco industry to use tobacco packaging to mislead consumers with respect to the level of risk to which consumers are exposed, he said plain packaging also circumvented and avoided communication of disparate levels of harm.
218. He said that the tobacco industry would vehemently lobby in opposition to the introduction of plain packaging legislation, even in the face of overwhelming evidence. Fundamentally, the introduction of plain packaging would represent the inability of tobacco companies to appeal to consumers in ways to which they are accustomed, and, in this way, could affect the tobacco industry's economic interests. It was important to note that this nature of opposition to effective tobacco control policies was a traditional tactic employed by the tobacco industry as tobacco companies had operated for decades with the sole purpose of compromising public health policies in order to expand market share. WHO was of the view that a discussion in this forum of these legitimate tobacco control measures would have a substantial impact on tobacco consumption and, in turn, on the national burden of disease attributed to non-communicable diseases, which represented 60 per cent of all deaths worldwide.
219. Another representative of the WHO said that the WHO Framework Convention on Tobacco Control (FCTC) was the first international treaty negotiated under the auspices of the World Health Organization. The Convention had been developed in response to the globalization of the tobacco epidemic and was an evidence-based treaty that reaffirmed the right of all people to the highest standard of health. It had been adopted by the World Health Assembly on 21 May 2003 and had entered into force on 27 February 2005. It had since become one of the most rapidly and widely embraced treaties in the United Nations history. The Convention currently had 173 Parties and she noted that, of the 153 WTO Members, 138 were party to the FCTC, and thus subject to the obligations it contained.
220. She said that the WHO FCTC contained a number of provisions relevant to the issue of plain packaging of tobacco products. Article 3 of the WHO FCTC set out the collective objectives of the parties in negotiating the FCTC in the following terms: "to protect present and future generations from the devastating health, social, environmental and economic consequences of tobacco consumption and exposure to tobacco smoke by providing a framework for tobacco control measures to be implemented by the Parties at the national, regional and international levels in order to reduce continually and substantially the prevalence of tobacco use and exposure to tobacco smoke."
221. The general obligations of the parties to the WHO FCTC were set out in Article 5 of the FCTC, and included the development and implementation of comprehensive multi-sectoral national tobacco control strategies, plans and programs in keeping with the convention and any future protocols. In addition, Article 5 made it clear in paragraph 2 (b) that each party to the WHO FCTC had committed itself to adopting, implementing and periodically updating and reviewing effective legislative, executive, administrative and/or other measures aimed at inter alia preventing and reducing tobacco consumption.
222. She said that in addition to these general obligations, the parties to the WHO FCTC had committed themselves to certain specific obligations, including in respect of measures relating to the reduction of demand for tobacco products. Among these agreed measures were non-price measures to reduce demand for tobacco products, including the obligation on parties to adopt and implement effective legislative, executive, administrative or other measures necessary to fulfill their obligations under Articles 8 to 13 of the FCTC. Importantly, Article 7 also included the obligation, through the Conference of the Parties, to propose appropriate guidelines for the implementation of Articles 8 to 13. In terms of specific obligations, Article 11 of the Convention required Parties to adopt and implement effective measures in respect of the packaging and labelling of tobacco products, including health warnings and other appropriate messages.
223. She said that Article 13 of the WHO FCTC had to be read in light of the broad definition of "tobacco advertising and promotion" contained in Article 1(c) of the FCTC as follows: "'tobacco advertising and promotion' means any form of commercial communication, recommendation or action with the aim, effect or likely effect of promoting a tobacco product or tobacco use either directly or indirectly." Article 13 of the FCTC required parties to undertake a comprehensive ban of all tobacco advertising, promotion and sponsorship.
224. As already noted, Article 7 of the WHO FCTC required the Conference of the Parties - the FCTC's governing body, which comprised all 173 parties to the FCTC - to adopt guidelines for the implementation of certain of the obligations undertaken by the parties, including those in Articles 11 and 13. With respect to the preparation of guidelines under the FCTC, she said that this was an intergovernmental process in which the parties to the Convention created working groups in which the text of the guidelines was elaborated by representatives nominated by the parties before being sent to the Conference of the Parties for consideration for adoption. Members should note that the
Conference of the Parties had adopted all guidelines by consensus. Resources and references used in the development of the guidelines for implementation were made available to the public on the WHO FCTC website.
225. She said that Members had already referred to the guidelines for the implementation of Articles 11 and 13 which specifically referred to taking measures in respect of plain packaging of tobacco products as a means of implementing party obligations to undertake a comprehensive ban of all tobacco advertising.
226. She said that it might also be of interest to Members of the TRIPS Council to note two recent decisions of the Conference of the Parties of the FCTC, the governing body of the Convention which met every two years, most recently in November 2010 in Punta del Este, Uruguay. The first decision of interest was the Punta del Este Declaration (FCTC/COP4(5)) regarding public health policy, international trade and the activities of the tobacco industry, which specifically references Articles of the TRIPS Agreement as well as the Doha Declaration on the TRIPS Agreement and Public Health. The second COP Decision of interest in this context (FCTC/COP4(18)) requested, inter alia, the FCTC Secretariat to cooperate with the WTO Secretariat with the aim of sharing information on trade-related tobacco control issues. She said that all decisions were available on the WHO FCTC website - http://www.who.int/fctc/en/.
227. She informed the Council that a draft protocol to eliminate illicit trade in tobacco products was currently under negotiation. The protocol would deal with certain matters, including counterfeit products, illicit trade and the like. The final session of the Intergovernmental Negotiating Body, open to all parties to the FCTC, was expected to take place in March 2012.
228. The Council took note of the statements made.
