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April 23rd, 2013:

Sebastien Aymeric: Tobacco industry’s plain packaging fight a lost cause

By Sebastien Aymeric

5:30 AM Tuesday Apr 23, 2013

  • Cigarettes are not different from any other FMCG product. Photo / Getty Images

Cigarettes are not different from any other FMCG product. Photo / Getty Images

If you’ll pardon the pun, there’s no doubt there will be plenty of fuming legal debates that go on once the idea of plain packaging of cigarettes moves beyond an idea and into everyday New Zealand life.

Intellectual property lawyers like myself are moved to ponder questions such as: does plain packaging amount to a breach of the New Zealand Bill of Rights Act? Is it a compulsory acquisition of property rights by the government? And, does it “unjustifiably encumber the use of a trade mark” in breach of our international obligations as a WTO member?

Before answering these questions, we must first look again at the importance of trade marks. Intellectual property rights such as trade marks and rights in packaging “look and feel”, together with associated reputation and goodwill can be a business’ most valuable assets.

A brand or logo acts as a “badge of origin” and enables customers to know what they are buying, and from whom it came.

This is particularly valuable in the fast moving consumer goods (FMCG) industry, where consumers have very distinct preferences for Pepsi over Coke, say, or Adidas rather than Nike.

These loyalties exist largely because it is marketing and branding, more than anything else, which make an FMCG product distinctive.

This is why New Zealand has strong intellectual property laws (such as the Trade Marks Act 2002, the Fair Trading Act 1986, and the common law tort of passing-off). It is critical for businesses to protect the intangible assets they have gained over the years.

Cigarettes are not different from any other FMCG product in the sense that they are interchangeable and it is brand rather than actual product content that is the key differentiator. It is therefore unsurprising that the tobacco industry becomes nervous when the New Zealand Government starts talking about following Australia and introducing plain packaging of tobacco products this side of the Tasman.

In fact, the industry has articulated a principled stance in defence of its intellectual property rights (in opposition to the proposal) and promised to legally challenge any introduction of such legislation.

Are tobacco companies entitled to the same protection offered by New Zealand law as any other business? The decision of the High Court of Australia to allow plain packaging certainly sets a persuasive precedent, and many legal commentators have since weighed in with their thoughts.

However one point missed by most commentators is that regardless of how much of a legal fight the tobacco industry puts up, and even how strong its legal position might be, the New Zealand judiciary has very limited power to override the clear intention of Parliament.

This has been shown in the courts before. One example can be found in the High Court’s decision in the 2000 retrial of Teina Pora.

It is a fundamental principle of law that a heavier penalty cannot be imposed than the one applicable at the time the offence was committed. Yet, the government of the time, as a result of public sentiment after a spate of high profile home invasion cases, legislated to increase non-parole periods from 10 years to 13 years for home invasion murders, even if committed before the commencement of the new legislation.

No amount of judicial interpretation enabled the High Court in December 2000 to avoid applying the Crimes (Home Invasion) Amendment Act 1999 and the Criminal Justice Amendment Act (No 2) retrospectively.

In that decision, Justice Keith delivered the majority opinion, stating that Parliament’s words and purpose were so plain that breaches of our Bill of Rights Act could not be removed by judicial interpretation.

Courts in New Zealand have always been reluctant to be interventionist or act as social engineers. Unlike in Australia and the United States which both have a written constitution, our legal and political system does not give our Supreme Court latitude to decide on social issues like plain packaging.

The one glimmer of hope is that the Prime Minister has indicated the Government would be guided by any ruling issued by the World Trade Organisation.

But in the absence of this, it seems the tobacco industry might be ultimately unsuccessful in any legal action to prevent plain packaging.

One thing is clear: the plain packaging debate demonstrates that intellectual property rights in the form of trademarks are powerful marketing tools indeed.

Why else would the tobacco industry fight so vehemently to retain them?

Sebastien Aymeric is an Auckland-based solicitor for intellectual property law firm James & Wells and a member of the litigation and commercialisation team.

ASH Daily News for 23 April 2013


Manchester: Police Commissioner backs plain cigarette pack plan

Greater Manchester’s Police and Crime Commissioner Tony Lloyd is backing plans to standardise cigarette packaging in a bid to deter youngsters from smoking and reduce the financial burden on public health care services.

He has also dismissed claims by tobacco companies that standardised packaging will increase the sale of illicit tobacco.

Source: Salford Online – 22 April 2013

Northern Ireland: Health Trust campaign to cut smoking in pregnancy

A Northern Ireland campaign to help women to stop smoking during pregnancy has been launched by midwives in the South Eastern Health Trust.

The trust’s figures show that 15% of its maternity patients smoke during their pregnancy, despite the damage it does to their unborn children.

Source: UK Wired News – 23 April 2013

Smoking shisha is a not safe alternative to cigarettes, warn experts

A study carried out by University of California San Francisco has found that whilst smoking shisha exposes users to different chemicals than cigarettes, they are still harmful.

Research chemist Peyton Jacob said: ‘People want to know if it is a lesser health risk if they switch from cigarettes to smoking a water-pipe on a daily basis.

‘We found that water-pipe smoking is not a safe alternative to cigarette smoking, nor is it likely to be an effective harm-reduction strategy.’

See also:
– Nine ways smoking a hookah can spread herpes and cause cancer, Rolling Out

Source: Daily Mail – 22 April 2013

USA: New York City proposes to raise the age at which tobacco can be purchased from 18 to 21

No one under 21 will be able to buy cigarettes in New York City, under a new proposal that marks the latest in a decade of moves to crack down on smoking in the nation’s largest city.

Source: Mail Online – 22 April 2013

US supreme court rejects challenge to new cigarette labeling

The U.S. Supreme Court has rejected a tobacco industry challenge to a controversial 2009 federal law that mandates graphic warning labels on cigarettes. The high court refused to hear the case, essentially upholding a lower court ruling in favour of the government’s labeling changes.

Source: Medical News Today – 22 April 2013

USA: California mulls $2 tax for cigarettes

California’s anti-smoking advocates are asking their legislature to back a $2 state tax hike on cigarettes – double the increase voters rejected last year – on the heels of President Barack Obama’s urging a federal cigarette tax increase earlier this month.

The proposed increase in California would lift its excise tax on a pack of cigarettes to $2.87, steeply raising the cost of smoking in the most populous U.S. state to help fund health-care programs.

Source: Reuters – 22 April 2013