Preserving the essential function of trademarks in the marketplace
The need for a study on the effects of packaging and labelling measures on
Intellectual Property (IP) protection.
I.
Background
The emerging trend of labelling and packaging measures adopted with the
purpose of addressing a wide range of public objectives creates a number of
questions from an IP perspective, in particular, on the new challenges that these
measures pose to the IP system and to the traditional forms of trademarks
usage1.
Unsurprisingly, these measures start getting in the radar of IP professionals and
trademark owners and, likewise, they increasingly become subject of intense
debate in international fora.2
For instance, in pursuing legitimate objectives such as reducing childhood
obesity or alcohol consumption, or to provide nutritional information to
consumers, a number of countries are either discussing or have put in place
labelling and packaging measures that limit or sometimes prohibit the use of
certain forms of IP, such as trademarks, geographical indications and designs.
Examples of labelling and packaging practices used to address these objectives
include recent proposals to place images of “Stop” signs on food high in fat,
sugar and salt in Chile, South Africa’s foodstuff regulation banning pictures of
infants or humanized figures in formula milk, Thailand’s proposal to prohibit the
use of wine labels that contain images of athletes, artists, singers or cartoons,
and Australia’s plain packaging for tobacco products, among others. In addition
to the aforesaid measures, a number of public calls have been made for the
introduction of marketing, labelling and packaging restrictions3 in products such
as alcohol, soft drinks, sugar and junk food. Moreover, even though medicines
have nothing in common with the products mentioned before, regulators seem to
be taking a similar approach towards prohibition of logos and colors in the
packages of pharmaceutical products. By the same token, a reduction in the
information on trademark use at “A Guide to Proper Trademark Use for Media, Internet
and Publishing Professionals”, available at the International Trademark Association’s website:
www.inta.org/Media/Documents/2012_TMUseMediaInternetPublishing.pdf
2 Minutes of meetings of the World Trade Organization (WTO) Committee on Technical Barriers
to Trade (TBT) and of the WTO Council for Trade Related Aspects of Intellectual Property Rights
(TRIPS) available at www.wto.org
3 A list of recent examples and calls for restrictive labelling and packaging measures is included
in the Annex.
1Further
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space available for trademarks due to requirements to include the molecule’s
generic name in a specific sized font might have consequences that have not
been fully assessed yet.4
Even though these initiatives may pursue legitimate objectives, they may have
undesired consequences to the IP system and therefore, worth to further explore
them in order to understand its effects on IP, including from a development
perspective.
II.
Possible Effects on the role of trademarks
While the essential role and function of trademarks both to inform consumers as
well as to build the reputation of companies in the marketplace is well-known and
recognized5, the effects of measures affecting labelling and packaging has got
less attention.
New labelling and packaging regulations frequently ban some type of trademarks
or some of its essential elements6, or yet require the use in a special form, or
restrict the space available to display the trademark, generally by mandating
warnings or other kind of signs or information, including nutritional information,
list of ingredients, instructions of use, storage conditions and country of origin,
among others.7
Some of the concerns that have been expressed so far include the potential of
these measures to undermine trademarks ability to fulfill their main function,
which is to distinguish the goods or services of one undertaking from those of
other undertakings.8 Or yet the potential impact in other intangible assets such as
the goodwill of companies, the reputation of trademarks owners and, last but not
least, in the valuation of trademarks.
4
More information available at http://www.managingip.com/Article/3450738/Whats-next-for-plainpackaging.html
5 A recent study by the World Intellectual Property Organization concludes that “Brands are an
indispensable guide for consumers and a means for companies to build a reputation and image in
the marketplace. By protecting their exclusivity, trademarks enable market economies to function
more effectively…. Firms of every size and from virtually every sector of the economy rely on
trademarks when seeking to gain edge on competitors”. World Intellectual Property Report, 2013,
Brands-Reputation and Image in the Global Marketplace, page 106, available at
http://www.wipo.int/edocs/pubdocs/en/intproperty/944/wipo_pub_944_2013.pdf.
6 Graphic symbols, logos and, in some jurisdictions, colors can constitute trademarks by
themselves.
7 A mandatory minimum font size to display this kind of information can have an impact in the
space available for trademarks.
8 Article 15 of the TRIPS Agreement establish that “any sign, or combination of signs, capable of
distinguishing the goods or services of one undertaking from those of other undertakings , shall
be capable of constituting a trademark”
2
In turn, these measures may have implications in various areas directly related to
the IP system such as innovation9, competition and particularly in consumer
protection. The latter since consumer’s ability to identify the source and
characteristics of the goods and make informed choices based on previous
experiences might be affected, for example, by reducing the space available for
trademarks.
Finally, given that trademarks are the most commonly used form of IP in
developing countries and that these countries are increasingly using trademarks,
and geographical indications to differentiate their products, achieve a position in
the marketplace and compete, these types of measures may have as well
development implications that have yet to be fully assessed.
III.
Proposal
As mentioned, although the goals and objectives of the aforesaid practices
receive broad attention, the consequences of these measures to IP and
particularly to the trademark system have not yet been sufficiently analyzed.
It is therefore suggested to undertake a technical analysis of the implications that
labelling and packaging measures may have on the IP system, including the
effects, if any, on consumer’s protection and their ability to exercise choice in
their purchasing decisions, in competition, innovation, and to consider as well its
development aspects.
(i) Specific objectives:
 To further study and understand the effects that labelling and packaging
measures may have for the trademark system, right holders and
consumers.
 To raise awareness on the IP community at large on the interaction
between labelling and packaging practices and the trademark system,
with a view to inform policy makers on the potential impact of their
decisions in this area.
 If applicable, to explore alternatives that avoid negative effects on IP and
consumer protection, while achieving other public interest objectives.
.
(ii) Topics to be discussed
As a WIPO report points out, “evidence has shown that branding is one of the most important
mechanisms for firms to secure returns to investments in research and development” World
Intellectual Property Report, 2013, Brands-Reputation and Image in the Global Marketplace
http://www.wipo.int/edocs/pubdocs/en/intproperty/944/wipo_pub_944_2013.pdf page 87.
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Topics to be considered may include the following10:
 Potential effects of packaging and labelling measures on trademarks
ability to distinguish goods affected by these measures.
 Potential effects in competition and consumer protection, including
medical risks associated with drug name mistakes.
 Minimum trademark size that is needed to provide consumers with
sufficient information on the quality, origin and characteristic of the
products.
 Potential impact on innovation and in the introduction of new products to
the market.
 Potential effects in the role that trademarks and geographical indications
play in fostering exports and market growth for developing countries.
 Possible effects of packaging and labelling measures in the valuation of
trademarks.
 Potential effects, from an IP perspective, of a minimum font size to display
information to consumers (i.e. labelling changes and redesign of
packages).
Some of this topics have been identified as requiring additional study in WIPO’s 2013 World
Intellectual Property Report “Brands-Reputation and Image in the Global marketplace” (see page
77).
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ANNEX
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