A look at Australia's plain packaging laws

A new paper by Tania Voon examines the impact of Australia's new plain packaging laws on the issue of intellectual property in Australia. 

Background

Introduced in 2011, the Australian government's mandating of 'plain packaging' for tobacco came as a world first. The legislation and associated regulations made it mandatory for cigarettes to be sold in drab dark brown packets without logos or advertisements, and with graphic health warnings covering 75 percent of the front of the pack and 90 percent of the back. 

Legal Challenges

In response, several legal challenges were brought, primarily concerning the intellectual property of tobacco companies, including trademarks. Ukraine, Honduras and the Dominican Republic commenced disputes against Australia in the World Trade Organization (‘WTO’). Philip Morris Asia Limited launched an investment arbitration against Australia alleging violation of the bilateral investment treaty between Australia and Hong Kong. An unsuccessful challenge was also launched under Australia’s Constitution by several tobacco companies, with the High Court deciding in late 2012 that the Act does not violate section 51(xxxi) of the Australian Constitution, which prohibits acquisitions of property by government other than on just terms. It was reasoned by the majority that "an acquisition does not arise simply as a result of the extinguishment of rights28 or the ‘loss of trade or business’;29 section 51(xxxi) ‘does not give protection to “the general commercial and economic position occupied by traders,”" and as such, the Act did not involve the acquisition of property.   Conclusion   Ms Voon concludes that "the reasoning and decision in this case are relevant to the ongoing challenges to Australia’s plain packaging measure within the WTO and pursuant to the Hong Kong–Australia BIT. In particular, the conclusions of the High Court of Australia as to the nature and scope of intellectual property rights under Australian law may be pertinent to questions before the arbitral tribunal and the WTO Panel concerning the extent to which the Act impairs those rights." Voon also notes that the outcome of the Australian constitutional challenge is important with respect to other countries considering plain tobacco packaging, such as the UK and New Zealand.