The UK government is to formally delay any decision on the introduction of plain packaging legislation for cigarettes. However, the Scottish public health minister has indicated that Scotland may still proceed to introduce this legislation regardless of current EU legislative machinations.

This news comes following the European Parliament Committee on the Environment, Public Health and Food Safety (ENVI) vote on 10 July 2013 on the latest proposed revisions of Directive 2001/37/EC on the approximation of the laws, regulations and administrative provisions of the Member States concerning the manufacture, presentation and sale of tobacco products (“Tobacco Products Directive” or “TPD”). The proposal included changes covering packaging and labelling which included a requirement for cigarette packs to include health warnings covering at least 75% of the front and back surfaces. Member States would also be permitted to opt for introducing further requirements of “plain packaging” (the removal of any branding and labeling) if they wished to do so. The inclusion of the plain packaging option in the Tobacco Products Directive was defeated in four separate votes. It was not all good news for tobacco companies, however, with the Committee voting in favour of health warning labels that will cover 75% of the packaging.

Various intellectual property rights organisations have strongly opposed the introduction of plain packaging and 75% health warning labelling. In a joint statement released prior to the vote, these organisations called on the members of the ENVI Committee to vote against these aspects of the revised Tobacco Products Directive. The statement rejected the proposals as a matter of policy. The view of these intellectual property rights organisations is that even the 75% health warning labelling will seriously hamper the use of trade marks. The statement also highlighted the value of trade marks both to tobacco companies and to consumers. For the consumer, trade marks are relied on as signposts of genuine goods and services. The more difficult the use of a trade mark is, the more difficult it will be for consumers to distinguish between brands. For the tobacco companies, trade marks allow them to establish and promote a brand over a period of time. Restrictions on the use of trade marks, they argue, would rob tobacco companies of the goodwill acquired through years of investment in a particular brand and restrict consumers’ freedom of choice. It would also have the unwanted side effect of making counterfeiting easier. The statement goes on to make clear that “[w]here there is a need to achieve important public policy objectives, such as improving public health, any proposed legislation and/or policy options must ensure the preservation of an appropriate balance between achieving the policy objective and maintaining with legitimate IP and other proprietary rights, especially when there is no compelling evidence that extreme measures will help to achieve the public policy objectives. Additionally, such legislation could have a spill-over or domino effect on other products and industries, especially those which are already subject to specific mandatory constraints such as alcohol, food, medicines, confectionery, beverage, cosmetics and automotives.”

There are also other legal obstacles to contend with. Those opposing the proposed changes have pointed to provisions of international treaties including the Agreement on Technical Barriers to Trade (TBT), the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) and even the European Convention on Human Rights and the EU Charter of Fundamental Rights and Freedoms which they believe may stand in the way of such legislation. While these international agreements may impede the push for greater labelling restrictions, it is important to bear in mind that they do not provide absolute protection for the trade marks of tobacco companies. All of these agreements permit some degree of restriction if it is in the public interest. If the current Australian and Irish plain packaging measures prove to be effective in discouraging smoking, tobacco companies will have their work cut out in seeking to establish that the public interest does not outweigh their rights as the trade mark holders or, in the case of the TBT, the goal of removing barriers to trade. It remains to be seen whether the Australian and Irish measures will have the desired effect. In particular, it will be interesting to see whether they result in an increase in the trade of counterfeited cigarettes. A number of countries have brought challenges against Australia’s plain packaging regime under TRIPS through the World Trade Organisation’s dispute settlement procedure.

Back in the EU, the ENVI Committee’s report on the proposed revisions of the Tobacco Products Directive will be presented to European Parliament for a vote in Plenary session in September 2013 when the proposed revisions may be even further amended. Therefore, it appears that the road ahead for use of trade marks on tobacco packaging in the EU still remains long and uncertain.