The World Trade Organization will not issue a ruling on whether Australia’s “plain packaging” tobacco law usurps foreign companies’ intellectual property rights until May, according to WTO documents circulated Tuesday, delaying a decision that was slated to arrive by the end of 2016.
A single WTO panel is weighing cases launched by the governments of Indonesia, Cuba, the Dominican Republic and Honduras asserting that Australian laws that ban all distinct branding from cigarette packages in favor of graphic warnings about the danger of the products. The case has teed up a high-stakes fight over the intersection of intellectual property rights and public health safeguards.
There is no precedent for such a law being challenged in Geneva, and the panel apparently needs more time to parse through the various legal issues at play.
“The panel wishes to advise that it now expects to issue its final report to the parties not before May 2017, in light of the complexity of the legal and factual issues that arise in this dispute,” the panel said in a statement circulated to the WTO.
Australia passed its packaging law in 2011 despite the protestations of numerous multinational corporations who viewed the measure as a direct threat to their use of trademarks and other branding mechanisms to promote their business. The four countries have said the law violates the WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights, or TRIPS, as well as the Agreement on Technical Barriers to Trade and the General Agreement on Tariffs and Trade.
At every step of the way, Australia has claimed that it has the right to curtail businesses’ trademarks in the name of public health. For the first time in the WTO’s history, the panel will have to grapple with how the TRIPS Agreement comports with a country’s right to pursue policy objectives that it deems necessary to safeguard the public’s welfare.
The legal battles over the plain packaging law began almost as soon as it went into effect, beginning with a case filed by Philip Morris Asia Ltd. under the Hong Kong-Australia bilateral investment treaty.
In that case, the panel handed a win to Australia, albeit on jurisdictional grounds, meaning that the WTO’s decision will likely be the first ruling to address the issue on the merits. Even when the decision does come down, the case will be far from settled as all parties will be entitled to a round of appeals.
Nevertheless, the case will continue to be closely watched not only by the litigants and others in the tobacco industry, but also by those companies selling products that could e subject to similar public health rules, such as alcoholic beverages or fatty and sugary foods.
–Editing by Katherine Rautenberg.