Tobacco packaging: cigarette companies lose Australian court case

Posted: 8/15/2012

From The Guardian:

Australia's highest court has endorsed cigarette plain-packaging laws that will force tobacco companies to remove branding from their products.

Tobacco companies British American Tobacco, Britain's Imperial Tobacco, Philip Morris and Japan Tobacco challenged the laws in Australia's high court, claiming the rules were unconstitutional because they effectively extinguished the companies' intellectual property rights.

The court found Australia's laws to force companies to remove all branding and sell tobacco only in generic olive green packets, which also carry graphic health warnings, were legal and did not breach trademark rights.

The laws, the toughest in the world, are in line with World Health Organisation recommendations and are being watched closely by Britain, Norway, New Zealand, Canada and India, which are considering similar measures.

The decision means that starting in December tobacco companies will no longer be able to display their distinctive colours, brand designs and logos on cigarette packs. The packs will instead come in a uniform shade of olive green and feature graphic health warnings and images such as cancer-riddled mouths and blinded eyeballs. The government hopes the new packs will make smoking as unglamorous as possible.

The tobacco companies are worried the law will set a global precedent that could slash billions of dollars from the value of their brands. They argued in court that they new rules violate intellectual property rights and devalue their trademarks. The government would unfairly benefit from the law by using cigarette packs as a platform to promote its own message, without compensating the tobacco companies, they said. Australia's constitution says the government can only acquire the property of others on "just terms".

British American Tobacco spokesman Scott McIntyre said it was disappointed with the court's decision but would comply with the law. "Although the [law] passed the constitutional test it's still a bad law that will only benefit organised crime groups which sell illegal tobacco on our streets," McIntyre said in a statement. "The illegal cigarette black market will grow further when all packs look the same and are easier to copy."

The court has withheld its reasons for the judgment until later this year.

Original here.