The Plain Tobacco Packaging Bill 2011 is on the agenda of the Australian Federal Parliament - the fight back from the big tobacco companies has begun with a series of Freedom of Information Act (FOI) applications which directed to the release of what big tobacco hope, as discussed by tobacco.org, are embarrassing statements and reports of the Department of Health, along the lines that not many people are expected to give up smoking as a result of the Plain Tobacco Packaging legislation that is currently before the Australian Federal Parliament. That may very well be conclusions in reports that are released by the Department of Health, but I say – so what!
If the current generation of smokers will not quit as a result of the current ad campaign with the man coughing blood – then no public policy directed to reducing tobacco smoking will have an effect. But then policies like the Plain Tobacco Packaging legislation are directed to the younger generations, so as to destroy the glamour associated with cigarette branding with generic packaging across all brands of cigarettes.
The importance of banding tobacco products was brought home to me in the 1990’s when I noticed that all my friends that were smokers purchased cigarettes that used purple in their branding. The ad campaign in the 1990’s used very sophisticated ads, in which the logo was removed, leaving the colour purple to sell the product - 98% of consumers surveyed associated the ads with the brand of cigarettes.[1]
This blog is not about the public health policy related to tobacco, which is covered by the Croaky website; the focus of this blog is controversy over the extent to which the Plain Tobacco Packaging Bill 2011 may limit the exercise of intellectual property rights in trademarks and designs if that is enacted.
The Bill requires cigarettes to be sold in ‘plain packaging’. Therefore to advance the public health policy of discouraging cigarette use the Bill prevents the tobacco companies from using trade marks and other branding on cigarette packaging. Conservative commentators responded to the previous plain packaging legislative proposal by asserting that as well as having the consequence that Australia will be in breach of obligations under international trade and IP treaties regarding the recognition of trademarks, the legislation would be unconstitutional in respect to the “acquisition of property on just terms” protection in s. 51(xxxi) of the Australian Constitution. Wilson (2010)[2] argued that the enactment of Plain Tobacco Packaging legislation would expose the Commonwealth government to compensation claims from the tobacco companies.[3]
The short answer to the I.P. treaty point is the bill does not interfere with the registration of trade marks by tobacco companies, (that is, the ‘recognition’ of those marks under Australian law; and that while the bill prohibits a specific use of the marks on packaging for tobacco products, with the trade mark owners retaining the bundle of property rights including ability to use the trade marks in ways that are not prohibited by legislation; those uses of their trade marks may have no value to tobacco companies – but they are selling cancer sticks, so big tobacco is undeserving of sympathy.
A key part of big tobacco’s strategy is directed to the argument that the Plain Tobacco Packaging legislation breaches constitutional protections of property in the trade marks. The protection provided by s. 51(xxxi) can be argued not to be an absolute protection, as it acts as a protection of property interests and not as a protection of the general commercial and economic value of that property.[4] An example of that difference can be seen in the treatment of legislation that limited the ability of owners of artworks of national significance to export those works without a permit.
In the David Waterhouse case,[5] the Full Federal Court (which included Gummow J, now a member of the High Court of Australia) stated that “[m]erely to extinguish or diminish a proprietary right vested in a person does not necessarily result in the acquisition of that proprietary right by the Commonwealth or another. There must be something in addition of a proprietary nature that has been acquired.”[6] The refusal to grant an export permit under the Protection of Movable Cultural Heritage Act 1986 (Cth) was argued in the David Waterhouse case to constitute an acquisition for the purposes of s. 51 (xxxi). The Full Federal Court rejected the claim and held that that limits on exporting the artwork did not result in any direct or indirect taking of any form of property interest in the artwork.[7] What can be taken from this decision is that legislation that limits the exercise of property rights (including intellectual property rights) can be argued to breach the “acquisition of property on just terms” protection in s. 51 (xxxi) of the Australian Constitution.
In 2008 the High Court in Telstra v Commonwealth,[8] warned against use of descriptive and rhetorical arguments over what are property rights. The David Waterhouse case would indicate that it is possible to attenuate the value of intellectual property, such as by prohibiting the use of a registered trade mark, without being an acquisition of a property right by the Commonwealth.[9]
The Consultation Paper to the Plain Tobacco Packaging Bill 2011 notes the possible arguments under by s. 51(xxxi) of the Constitution; with clause 11(1) of the Exposure Draft genuflecting to the protection of property rights provided by s. 51(xxxi), by stating that the “Act does not apply to the extent (if any) that its operation would result in an acquisition of property from a person otherwise than on just terms.” There is an additional statement in s. 11 (2) that is directed to the use of trade marks in accordance with regulations (if there is a constitution problem with the Act). Also s. 15 (again for what appears to be an apparent abundance of caution) protects the trade marks against applications for non-use of a trade mark; with s. 16 being directed to preserving rights under the Designs Act 2003 in respect of cigarette packaging.
The message that can be taken from big tobaccos’ current P.R. campaign is a High Court challenge is inevitable. It appears the parliamentary drafting is designed to avoid the sudden death of the legislation - if there is an adverse ruling on the s. 51(xxxi) claim - the plain packaging regime will linger on in the form of some, yet to be drafted, regulations. That abundance of caution may not be needed as it is my view that the government can successfully defend a s. 51(xxxi) challenge to the Plain Tobacco Packaging legislation.
It is curious also that s. 12 also acknowledges the “Act does not apply to the extent (if any) that it would infringe any constitutional doctrine of implied freedom of political communication.” I can see the day when every cigarette package will contain the trade marked logo with a plea below that the laws must change to protect these valuable property rights ¡
On that day a rendition of “The Laws Must Change” & “I'm Gonna Fight For You J.B.” by John Mayall & the Bluesbreakers will be the theme music for the television ad campaign - with the line “I’m going to fight for you J.B.” changed to be “I’m going to fight for you John Player” ¡
[1] Underhill, Paco (2010). Buyology: Truth and Lies About Why We Buy. Broadway Business. pp. 85
[2] T. Wilson, 'Governing in ignorance: Australian governments legislating, without understanding, intellectual property,' (26 April 2010) Institute of Public Affairs (occasional paper) <http://www.ipa.org.au/publications/1795/governing-in-ignorance:-australian-governments-legislating,-without-understanding,-intellectual-property>.
[3] Ibid. In the range of $378m to $3,027m per year.
[4] Federal Council of the British Medical Association in Australia v The Commonwealth (1949) 79 CLR 1; [1949] HCA 38. Dixon J at 270-271. See also M. Heller, 'The boundaries of private property' (1999) 108(5) Yale L. J. 1163-1223. Heller considers US cases on ‘taking’ by the government without just compensation. Heller notes that the U.S. Supreme Court has held that “the denial of one traditional property right does not always amount to a taking. At least where an owner possesses a full 'bundle' of property rights, the destruction of one 'strand' of the bundle is not a taking, because the aggregate must be viewed in its entirety”: Andrus v Allard, 444 US 51 (1979). 65-66.
[5] David Waterhouse v Minister for the Arts and Territories (1993) 119 ALR 89; 43 FCR 175 (FCAFC).
[6] Ibid. [36] per Black CJ & Gummow J.
[7] Australian Tape Manufacturers Association Ltd v The Commonwealth (1993) 176 CLR 480; [1993] HCA 10. (Blank Tapes case) per Mason CJ, Brennan, Deane & Gaudron JJ at 58; Dawson & Toohey JJ at 79 (McHugh J agreeing at 80).
[8] 234 CLR 210; 82 ALJR 521; 243 ALR 1; [2008] HCA 7.
[9] David Waterhouse case, ibid. [36] per Black CJ & Gummow J., who comment that the word “property’ in s. 51 (xxxi) is to be construed liberally, however, they adopted the observation in the Blank Tapes case that “it must be possible to identify an acquisition of something of a proprietary nature”.” Australian Tape Manufacturers Association Ltd v The Commonwealth (1993) 176 CLR 480; [1993] HCA 10. (Blank Tapes case) per Dawson & Toohey JJ at 79 (McHugh J agreeing at 80).
No comments:
Post a Comment