Now it's in the UK and EU:
Two of the world's biggest tobacco companies have challenged the legality of the UK government's plain packaging regulations.
British American Tobacco and Philip Morris filed legal objections at the High Court in London on Friday.
They claim that the new rules are illegal because they take away their trademark intellectual property.
The Department of Health has responded saying that it refuses to be "held to ransom by the tobacco industry".
If successful, the tobacco companies may secure huge payouts from the British government.
British American Tobacco and Philip Morris say that stopping them from using their trademarks goes against English and EU property law.
...
In their filings, both companies say that it violates EU law for a company to be able to use its trademark in Europe, but not the UK.
They also argue that the plain packaging law prevents the free movement of goods. According to Philip Morris, the UK's law should have been postponed until the European Court of Justice had reached its decision on the matter.
Philip Morris has more details here:
PMI’s filing asserts that:
- The regulations unlawfully deprive PMI of its trademarks. A core doctrine of English and EU law is that there must be fair compensation for deprivations of property, a remedy that the regulations do not provide.
- The regulations violate the EU law that says Community trademarks can be used by identical means throughout the EU, which would be impossible if the UK government bans their use in the UK.
- The regulations obstruct the free movement of goods through means that are neither necessary nor proportionate to achieving the UK government’s public health objectives.
- A case from the English High Court is already before the European Union’s Court of Justice to decide whether standardized packaging is permissible under the EU’s recently enacted tobacco product directive. If not, then the UK regulations would be invalid. It would have been far sounder to hear from the Court of Justice before issuing the regulations.
Trademarks convey a product’s quality and other attributes and help consumers select from competing brands in a crowded marketplace. In this and other ways, trademarks are key to a market economy.
The UK case will presumably raise similar issues as the previously rejected Australia lawsuit, although with slightly different legal standards (BAT notes: "British American Tobacco did not ultimately prevail in Australia due to a unique requirement in the Australian constitution that meant it would only win the case if it could prove the Australian Government had received a benefit by removing its brands. That requirement does not exist in the UK.") The EU case, by contrast, will have some additional issues.
My sense is that if plain packaging were adopted in the U.S., the litigation would be mostly about free speech, rather than focusing on property rights, but I'm not sure there are any clear answers on how such an issue would play out in the U.S. context.
The intersection of trademark law and property rights is at a crucial stage of development. I'm kind of surprised I haven't seen more people writing about this and taking a position on one side or the other -- it's a real chance to shape the future of law and policy. But maybe they have and I missed it.
