September 19, 2010 - Earlier this year, Australia became the first country to announce plans to make tobacco companies use plain, uncolored cigarette packs with few or no logos that bear only graphic health warnings. The law is scheduled take effect July 1, 2012.
Companies use cigarette packs as a promotional medium to reinforce the brand imagery that sells cigarettes. Pack designs link to advertising that communicates aspirational traits like elegance, health, coolness, femininity, machismo or freshness. The plain-packaging law removes another avenue through which tobacco companies promote their products, and could has a positive impact on rates of chronic, tobacco-caused diseases. (Philip Morris Astroturfs Australia's Plain Cigarette Pack Law, Source: Sydney Morning Herald, PRWatch.org, 9/11/2010)
"Introducing plain packaging just takes away the ability of a consumer to identify our brand from another brand, and that's of value to us," Imperial Tobacco Australia spokeswoman Cathie Keogh told Australian Broadcasting Corp. radio, adding that the company plans to take legal action.
On April 29, 2010 Health Minister Nicola Roxon said the legislation will be carefully drafted to hold up against any legal challenge. "We have firm advice that this action can be taken," she said. (Australia - U.S. Chamber of Commerce expresses concern about cigarette plain-packaging..)
Ministerial briefing notes obtained by The Australian say plans to force plain packaging of cigarettes "may not be consistent with Australia's intellectual property treaty considerations" and warn that tobacco companies may seek compensation from taxpayers. The Constitution and international trade agreements prevent the government from stripping or devaluing property without compensation on "just terms", including intellectual property rights such as trademarks.
One independent estimate has put the possible compensation cost at as high as $3 billion. But Health Minister Nicola Roxon insists the government will press on with the measure despite the likelihood of a High Court challenge from the tobacco companies.
The government says it has "robust" legal advice backing its move. But IP Australia, the agency that administers trademarks and other intellectual property, has warned that even if making plain packaging mandatory were not found to constitute an acquisition of property, cigarette companies may still be able to seek compensation.
"Requiring plain packaging would make it easier for counterfeit goods to be produced and would make it difficult to readily identify these," it said in a brief to the then parliamentary secretary for health, Richard Marles, copied to Ms Roxon last
Trademark attorney: Tobacco companies have no case on plain packaging by Glen Gordon, Tobacco Facts, 5/5/2010.
Cigarette companies have funnelled over $5 million into a campaign against plain cigarette packaging.
References: Taxpayer may take wrap rap for plain package cigarettes, Christian Kerr, The Australian, 9/15/2010; Australia to Ban Logos on Cigarette Packs, Lauren Frayer, Aol News, 4/29/2010