Plain Packaging: The Expropriation Debate
Professor Spyros Maniatis
Head, Centre for Commercial Law Studies
Queen Mary University of London
Maniatis, 2014
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Plain Packaging: The Expropriation Debate
WHO Framework Convention On Tobacco Control (2003)
Article 11: Packaging and Labelling of Tobacco Products
No direct reference to plain packaging.
Guidelines on the implementation of Article 11:
Plain packaging
46. 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 style (plain packaging). This may
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.
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Plain Packaging: The Expropriation Debate
TRIPs, Article 16 “The owner of a registered trademark shall have
the exclusive right to prevent ...”
TRIPs, Article 17: “Members may provide limited exceptions to the
rights conferred by a trade mark, such as fair use of descriptive
terms, provided that such exceptions take account of the legitimate
interests of the owner of the trade mark and of third parties.”
According to WTO Panels this means “a limited derogation that does
not undercut the body of rules from which it is made”.
Is there a distinction to be made between registrations of composite
marks on the one hand and “split” registrations (separate
registrations of word marks and get up – without words – marks ).
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Plain Packaging: The Expropriation Debate
The WTO Panel in EC – TMs and GIs has acknowledged the
“legitimate interests” of trade mark owners in preserving the trade
mark’s “capacity to distinguish” as “badges of interest” and
“conveyors of messages” that includes the interest in “using its own
trade mark in connection with the relevant goods and services of its
own”. This must also take account “of the trade mark owner’s
interest in the economic value of its mark arising from the reputation
that it enjoys and the quality that it denotes”.
Positive v Negative / Exclusionary Rights Approach
Trade marks owners can still exclude others from using their trade
marks but there are limitations regarding their own use.
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Plain Packaging: The Expropriation Debate
From a European perspective note the post-harmonization shift from
the language of exhaustion based on the origin function to the
recognition of the legitimate interest of trade mark proprietors,
delineated by the functions of a trade mark, as the starting point for
protection..
Article 16 of TRIPs also provides for the adoption of Article 6bis of
the Paris Convention. Would the right be lost due to non use?
Exclusionary language but is the right in essence expropriated?
TRIPs Article 20: “use of a trade mark in the course of trade shall
not be unjustifiably encumbered by special requirements, such as
use with another trade mark, use in a special form or use in a
manner detrimental to its capability to distinguish the goods or
services of one undertaking from those of other undertakings.”
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Plain Packaging: The Expropriation Debate
Plain packaging: “special form” and “detrimental” but is it
“unjustifiable”?
Protecting health v protecting against confusion or even deception
(arguments regarding counterfeiting).
Does Article 20 cover both exclusionary and positive rights?
Do the WHO guidelines provide sufficient justification?
Advertising and promotion restrictions have been adopted and
enforced but they where part of the FCTC provisions not the
guidelines.
Note the approach of the CJEU in C-491/01 and C-324/09.
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Plain Packaging: The Expropriation Debate
C-491/01
149 While the right to property formed part of the general principles
of Community law, it was not an absolute right and had to be
reviewed in relation to its social function. Consequently, its exercise
could be restricted provided that those restrictions, in fact,
corresponded to objectives of general interest pursued by the
Community and did not constitute a disproportionate and intolerable
interference impairing the very substance of the rights guaranteed.
153 The restrictions on the trade mark right which could be caused
by Art.7 of the Directive did in fact correspond to objectives of
general interest pursued by the Community and did not constitute a
disproportionate and intolerable interference, impairing the very
substance of that right.
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Plain Packaging: The Expropriation Debate
C-324/09
81 When certain information, which is required as a matter of law ...
is missing, the trade mark’s function of indicating origin is impaired
in that the mark is denied its essential function of guaranteeing that
the goods that it designates are supplied under the control of a
single undertaking which is responsible for their quality.
82 In the third and final place, as the Advocate General has
observed at point 76 of his Opinion, the question whether or not the
offer for sale, or the sale, of trade-marked goods without their
packaging and thus without certain information required under
Article 6(1) of Directive 76/768 is a criminal offence under national
law does not affect the applicability of EU rules concerning
intellectual property protection.
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Plain Packaging: The Expropriation Debate
TRIPs, Article 15(4): “the nature of the goods or services to which a
trade mark is to be applied shall in no case form an obstacle to
registration of the trade mark”.
Link between registration and use? Registration may be obtained
and maintained without use.
Does it have any positive value without use?
Trade mark law does not exist in a legislative / regulatory desert.
TRIPs, Article 8(1): “members may, in formulating or amending their
laws and regulations, . adopt measures necessary to protect public
health and nutrition, and to promote the public interest in sectors of
vital importance to their socio-economic and technological
development, provided that such measures are consistent with
the provisions of this Agreement.”
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Plain Packaging: The Expropriation Debate
Exception or interpretive tool?
Relevant factors:
Effectiveness?
How can it be tested without being applied and tested?
Consumer surveys / consumer behavioural studies.
Proportionality?
Smokescreen?
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Plain Packaging: The Expropriation Debate
Paris Convention, Article 6 quinquies (B) (iii): trade marks can be
denied registration or invalidated ... “when they are contrary to
morality or public order and, in particular, of such a nature as to
deceive the public.”
A neutral provision?
Is tobacco a public order issue?
Lawfulness v Public Order.
Freedom of Commercial Speech argument?
Probably limited in Europe (commercial lagging behind political and
artistic), but would the US pose a challenge?
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Plain Packaging: The Expropriation Debate
Australia, Tobacco Plain Packaging Act 2011 – an Act to
Discourage the Use of Tobacco Products
The Act covers the relationship between marketer and consumer not
marketer and retailer.
Existing trade mark registrations are maintained (against non use
provisions) and new registrations may be obtained; restrictions
cover use.
Prescriptive plain packaging allowing two word marks only, no
logos, no trade dress.
Provision that if the prescriptive measures comprise an acquisition
of property not on just terms then there is an alternate plan “to the
extent necessary”.
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Plain Packaging: The Expropriation Debate
Request of Consultations by Ukraine, Honduras, Dominican
Republic, Indonesia and Cuba
i.Articles 16.1, 15.4, 20 and 2.1 TRIPS incorporating Article 6quinquies
Paris Convention (the measures: a) interfere with the enjoyment of rights in a
tm; b) introduce an obstacle to registration based on the nature of the goods; c)
impose unjustifiable encumberments to the use of a tm and detriment the tm’s
capability to distinguish tobacco products; d) fail to provide effective protection
to the tm “as it is”)
ii.Article 16.3 TRIPS (measures prevent owners of registered tms that are
“well-known” from enjoying the rights conferred by a tm) (Indonesia)
iii.Article 1 TRIPS (Australia’s failure to give effect to Article 20) (Ukraine)
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Plain Packaging: The Expropriation Debate
Request of Consultations by Ukraine, Honduras, Dominican
Republic, Indonesia and Cuba
iv.Articles 22.2(b) TRIPS and 2.1 TRIPS incorporating 10bis Paris
Convention (failure to: a) provide effective protection against acts of
unfair competition to nationals of other countries of the Union; b)
prevent acts that create confusion between goods of competitors; c)
provide effective protection against acts of unfair competition with
respect to geographical indications; d) prevent acts that create
consumer confusion as to the origin of the good) (not raised by
Ukraine)
v.Article 24.3 TRIPS (diminishing the level of national protection
afforded to geographical indications as compared to the level of
protection available prior to 01.01.1995) (not raised by Ukraine)
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Plain Packaging: The Expropriation Debate
Request of Consultations by Ukraine, Honduras, Dominican
Republic, Indonesia and Cuba
vi.Article 3.1 TRIPS (Non-compliance with the national treatment requirement
by favoring domestic traders)
vii.Articles 2.2 TBT (unnecessary obstacle to trade and more trade restrictive
than necessary to achieve legitimate health objectives)
viii.Article III:4 GATT 1994 and Article 2.1. TBT (the measures result in
treatment less favorable of imported products than of like products of national
origin)
ix.Article IX:4 GATT 1994 (the marketing requirements imposed materially
reduce the value and/or unreasonably increase the production cost of imported
cigar products) (Cuba)
x.No Justification Pursuant Articles 8 & 17 TRIPS (Honduras)
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