1. The document discusses Australia's plain packaging legislation for tobacco products and the various legal challenges that have been brought against it. It outlines constitutional challenges in Australia that were dismissed, as well as ongoing arbitration under a bilateral investment treaty and disputes at the WTO. 2. It also discusses other countries considering similar legislation, the public health goals of reducing the appeal and misleading perceptions of tobacco, and advocacy efforts regarding bilateral investment treaties and obligations under the WHO Framework Convention on Tobacco Control. 3. The tobacco industry has attempted to use investment treaties to challenge tobacco regulations in other countries as well, but public health advocates argue these treaties should be reformed to allow for health exceptions or that plain packaging is consistent with a

1. Bad Things Can Come in Small Packages Too:
The Global Movement Towards Plain
Packaging
Dr. Allyn Taylor

2. Overview
• Plain Packaging and Public Health
• Plain Packaging and National
Action
• Legal Challenges to Australia’s
Plain Packaging Law:
• Constitutional
• Bilateral Investment Agreement
• World Trade Organization
(WTO)
• Framework Convention on Tobacco
Control (FCTC) and and Plain
Packaging
• Advocacy
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3. Plain Packaging and Public Health
• The tobacco industry treats cigarette packaging as
a critical aspect of marketing and invests significant
research and funds into designing packaging that is
appealing to specific groups, especially young
people.
• Plain packaging legislation:
• reduces appeal of smoking.
• makes warnings and images more noticeable &
effective.
• reduces likelihood consumers will acquire false
perception about the safety of tobacco
products.

4. Plain Packaging and Public Health
• Australia’s plain packaging rules
stipulate:
• brand names can only be displayed
on the lower front, the top, and the
bottom of the packages.
• brand names must be displayed in a
standard font, style, and color.
• the outer and inner surface of the
retail packaging must be a drab dark
brown color and have a matte finish.
• packaging may not have any
decorative ridges, embossing,
bulges, or other decorative
irregularities and must be made of
cardboard
http://www.yourhealth.gov.au/

5. Plain Packaging: National Action & Litigation
• Australia is the only country to date to formally adopt plain packaging
legislation.
• Ireland, New Zealand and the United Kingdom have announced
intentions to introduce similar plain packaging legislation. Plain
packaging has also being considered by Canada, France, India, South
Africa, and the European Union.
• Since adopting plain packaging legislation, Australia has faced multiple
legal challenges in separate forums:
• The Australian legal system:
• Constitutional challenges dismissed by Australia’s High Court.
• International arbitration pursuant to the Australia-Hong Kong Bilateral
Investment Treaty (Ongoing).
• WTO challenge and dispute resolution procedure for alleged
violation of commitments under three WTO treaties (Ongoing).

6. 1. Australia’s Plain Packaging Litigation:
the Constitutional Challenge
• Australian plain packaging legislation was challenged by four tobacco
companies in the High Court of Australia: British American Tobacco, Imperial
Tobacco, Japan Tobacco, and Philip Morris.
• Tobacco industry groups’ two principle arguments:
• (1) The restrictions on groups’ property and related rights (including
trademarks, copyrights, patents, and etc.) by the Tobacco Plain
Packaging Act and Regulations constituted an acquisition of property for
which just terms had not been provided.
• (2) The Act gives the Commonwealth the use of, or control over, tobacco
packaging in a way that amounts to an acquisition of industrial property
for which just terms had not been provided.
• High Court of Australia’s response to industry arguments:
• (1) Court determined that while the tobacco industry’s business may be
harmed, the Commonwealth does not, as a result of the Act, acquire
something in the nature of property itself.
• (2) Court argued that the Act’s requirements are no different than any
other legislation requiring labels warning against the use or misuse of a
product and such labels do not affect an acquisition of property.

7. 2. Australia’s Plain Packaging Arbitration:
The Investor/State Dispute Mechanism under
the Australia- Hong Kong Bilateral Investment
Treaty (BIT)
http://thumbs.dreamstime.com/; http://www.zoomnews.es/ ; https://www.tachnat.com/

8. The Investor/State Dispute: Arbitration Under
the Australia-Hong Kong BIT
• In 2011, Philip Morris Asia (PMA), a Hong Kong-based company,
served a notice of arbitration against Australia’s plain packaging
legislation under the auspices of a Hong Kong-Australia bilateral
investment treaty.
• The arbitration is ongoing.
• PMA’s claims plain packaging legislation:
• Unlawfully expropriates PMA’s investments and intellectual
property w/o compensation (Art. 6.1).
• Does not provide full protection and security for PMA’s
investments in Australia (Art. 2(2)).
• Unreasonably impairs PMA’s Australian investments (Art.
2(2)).
• Breaches Australia’s international obligations relating to
PMA’s investments under WTO Agreements and the Paris
Convention for the Protection of Industrial Property.
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9. • The tobacco industry’s use of BIT investor-state arbitration
provisions to dampen governmental efforts to regulate tobacco is
a troubling development for national and global tobacco control
and may induce a “regulatory chill”, especially in low-income
states lacking resources to battle the tobacco industry
• The tobacco industry has challenged or threatened to challenge
point-of-sale tobacco display limitations in countries including
Australia, Canada, Norway, and Uruguay under the international
investment rules of BITs.
• In February 2010, Philip Morris alleged that Uruguay’s new
tobacco regulations, which mandated that health warnings cover
over 80% of the package, violated several provisions of the
Swiss-Uruguay BIT and filed a request for arbitration.
Bilateral Investment Treaties (BITs)
and Public Health

10. • Unlike relevant WTO agreements,
BITs do not generally include
provisions that provide states with
flexibility to protect public health.
• Arbitration proceedings may
completely lack transparency -
neither the proceedings nor the final
award may be made public:
– The rules of the UN Commission
on International Trade Law permit
arbitration proceedings to be held
outside the country whose
regulation is being challenged by
an ad hoc tribunal.
Bilateral Investment Treaties
and Public Health
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11. • To prevent the tobacco industry from challenging tobacco
regulations through BITs, states should:
• develop new strategies and measures to ensure that
bilateral investment treaties are not manipulated by the
tobacco industry.
• ensure that states retain the right to protect their
populations within any bilateral investment treaty.
• consider renegotiating investment treaties to include
exceptions for the protection of public health and exclude
investor-state arbitration provisions.
• Australia has announced it will oppose the inclusion of
investor-state arbitration in future free trade agreements in
part because of tobacco industry challenges to its plain
packaging legislation.
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Bilateral Investment Treaties:
The way Forward for Public Health

12. 3. Australia’s Plain Packaging Litigation:
Challenges through the WTO
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• Indonesia, Ukraine, Honduras, the Dominican Republic, and Cuba
are seeking WTO dispute panel rulings arguing Australia’s plain
packaging law violates global trade rules.
• Challenges to plain packaging under WTO Law under:
• the General Agreement on Tariffs and Trade (GATT) 1994.
• the Agreement on Technical Barriers to Trade (TBT).
• the Agreement on Trade Related Aspects of Intellectual
Property Rights (TRIPS).
• The complaints by all five countries against Australia are ongoing.
• The WTO Director-General established dispute panels for the
five countries on May 5, 2014.
• Challenges to plain packaging have drawn the support of US
business groups like the US Chamber of Commerce, the
National Association of Manufacturers, and the United States
Council for International Business.

13. WTO & GATT (1994)
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• The WTO challenges to Australia’s plain
packaging legislation under the GATT
assert:
• Australia’s plain packaging
legislation violates Art. III.4 of the
GATT because the measures “fail to
respect the national treatment
requirement… by not providing
equal competitive opportunities to
imported tobacco products and
foreign trademark right holders as
compared to like domestic tobacco
products and trademark right
holders.”
• Exceptions to GATT rules:
• GATT Art. XX(b) permits measures
necessary to protect human health.

14. WTO & Technical Barriers to Trade
Agreement (TBT)
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• The WTO challenges to Australia’s plain
packaging legislation under the TBT assert:
• Australia’s plain packaging legislation
violates Art. 2.1 of the TBT because it
fails to respect national treatment
requirements by “not providing equal
competitive opportunities to imported
foreign trademark right holders as
compared to domestic…”
• Australia’s plain packaging legislation
violate Art. 2.2 of the TBT because they
are more trade-restrictive than
necessary to achieve Australia’s
objective of reducing the appeal of
tobacco products.

15. WTO & TRIPS
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• The TRIPS Agreement establishes a minimum
set of standards for the protection of
intellectual property rights, including
trademarks. TRIPS applies to all trademarks,
including tobacco packaging.
• Flexibilities “enshrine a high degree of
domestic regulatory autonomy with respect
to health protection.”

16. WTO & TRIPS
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• The WTO challenges to Australia’s plain
packaging under TRIPS arise under a
number of TRIPS articles (Arts. 1.1, 2.1, 3.1,
15, 16, 20, 27).
• Art. 20 claim is perhaps most relevant.
Challengers assert Australia’s plain
packaging legislation violates Art. 20
because it unjustifiably encumbers the
use of tobacco industry trademarks
through special requirements such as
“use with another trademark, use in a
special form, or use in a manner
detrimental to its capability to
distinguish the goods or services of one
undertaking from those of other
undertakings.”

17. WTO Dispute Panels
• Ongoing WTO cases are
seen by many as a means to
delay and discourage plain
packaging measures.
• The Ukraine/Australia
WTO panel took over
two years to be
composed.
• Legal scholarship suggests
that Australia’s plain
packaging laws are on firm
legal ground
“Plain” Packaging
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18. Plain Packaging & the FCTC
http://smokefreepartnership.org/

19. Plain Packaging & the FCTC
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• FCTC establishes binding international legal obligations for national governments
that have ratified the treaty.
• Health advocates argue that the WHO FCTC gives countries the right to use plain
packing to promote public health objectives.
• In it’s plain packaging proposal, the New Zealand Ministry of Health argued
that New Zealand should institute plain packaging as part of its obligations
under FCTC Articles 11 and 13.
• FCTC support of plain packaging under Article 13:
• Art. 13 obligates States Parties to institute a comprehensive ban on all
tobacco advertising, promotion, and sponsorship.
• The FCTC State Parties developed non-binding Guidelines to help parties
meet their obligations under the Convention. The Guidelines for Art. 13 state
that “parties should consider adopting plain packaging requirements to
eliminate the effects of advertising or promotion on packaging.”

20. Advocacy
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21. Areas of Focus for Advocacy
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• Clarify or renegotiate BITs to
include exceptions or exemptions
for tobacco control measures.
• Increase coordination regarding
tobacco control across
government ministries.
• Stress obligations under the FCTC
Art. 13 to institute a
comprehensive ban on all tobacco
advertising, promotion, and
sponsorship and, pursuant to the
Guidelines for Art. 13, adopt plain
packaging requirements.

22. Areas of Focus for Advocacy
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• Stress that plain packaging is consistent with international legal
obligations and a state’s plenary authority to protect public health
under international law:
• Plain packaging represents “an exercise of sovereign regulatory
power which restricts the exploitation of IP rights to protect and
promote an important public interest, namely public health.”
• Plain packaging represents a logical step in a state’s long-
running efforts to reduce tobacco use “through the
implementation of a comprehensive programme of tobacco
control measures” and, as such, does not violate any “legitimate
expectations” of investors or obligations requiring states to
maintain stable and predictable regulatory environments.
(Liberman).