Tobacco Packaging Measures Under International Investment Law: The Claims against Uruguay and Australia’ in Alberto Alemanno and Enrico Bonadio (original) (raw)
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Recent challenges to tobacco packaging measures brought under international investment law shed light on a variety of intellectual property issues. This chapter focuses on the intellectual property aspects of two related disputes: the claim brought by Philip Morris Asia Ltd (Philip Morris Asia) against Australia under the 1993 Agreement between the Government of Hong Kong and the Government of Australia for the Promotion and Protection of Investments (Hong Kong–Australia Bilateral Investment Treaty (BIT)) and the claim brought by FTR Holding SA (Switzerland) (FTR), Philip Morris Products SA (Switzerland) (PMP) and Abal Hermanos SA (Abal) against Uruguay under the 1988 Agreement between the Swiss Confederation and the Oriental Republic of Uruguay concerning the Reciprocal Promotion and Protection of Investments (Switzerland–Uruguay BIT). Both of these disputes involve government adoption of regulatory measures that directly affect the branding, labelling and packaging of tobacco products. They also relate to aspects of the World Health Organization Framework Convention on Tobacco Control (WHO FCTC), negotiated under the auspices of the World Health Organization (WHO), to which Australia, Uruguay and Hong Kong are parties (with Switzerland as merely a signatory). Part 2 of this chapter provides a brief overview of the tobacco packaging measures implemented by Uruguay and Australia. While these legislative schemes share the objective of improving public health through tobacco control, they vary in the way they pursue that objective.
This chapter uses the Hong Kong-Australia BIT as a case study to illustrate how plain packaging measures are likely to fare in international investment law. It examines in detail the investment claim made by Philip Morris Asia Limited ('PMA') against Australia under the BIT, including matters associated with the jurisdiction of an established arbitral tribunal, the relevance of potential local remedies and the nature of PMA's investment in Australia. In assessing Australia's options in light of the PMA claim, it is concluded that PMA likely has a relevant investment to found jurisdiction in a claim under the BIT, and that Australia would have difficulty extinguishing such a claim. In light of this, Australia may wish to consider modification of some of its BITs to clarify that the parties never intended public health measures to be caught by investor-State claims. It is further argued that the only breach of the Hong Kong-Australia BIT that PMA might be able to make out relates to expropriation, which is countered by evidence collected by the Australian government concerning the health effects of plain packaging. In the event of an adverse award against Australia, PMA may face enforcement difficulties for reasons of public policy and sovereign immunity.
Public Health and Plain Packaging of Tobacco: An Intellectual Property Perspective
South Centre Research Paper 108, 2020
In 2018, a World Trade Organization (WTO) Panel ruled that plain packaging of tobacco products was consistent with Australia’s obligations under the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and was in the interest of public health. Plain packaging restricts the use of logos, colours and brand images to reduce the demand for and consumption of tobacco products by diminishing their advertising appeal. This paper discusses the intellectual property aspects triggered by the implementation of plain packaging, examines the best practices for its implementation and provides an analysis of Australia’s case from the public health perspective. It also highlights the main arguments used in the dispute against Australia and provides practical guidance for WTO Members on implementing measures to protect public health.
BOXED IN? AUSTRALIA'S PLAIN TOBACCO PACKAGING INITIATIVE AND INTERNATIONAL INVESTMENT LAW
This article uses Australia as a case study to identify the issues that may arise in ensuring compliance of plain tobacco packaging measures with international investment law. It explains how the tobacco industry could use investor-state dispute settlement under Australia's investment protection agreements, as Philip Morris Asia Limited has done in its claim under the Australia-HK bilateral investment treaty. It then considers whether the tobacco industry would satisfy the threshold requirement of having made a relevant investment, before considering whether plain packaging could be considered an expropriation or a breach of the fair and equitable treatment obligation or another investment standard. The article concludes that Australia has strong arguments that plain packaging is consistent with its international investment obligations.
Australia’s introduction of plain packaging of cigarettes, which is a world first, has prompted international legal challenges under both the World Trade Organization (WTO) and the bilateral investment treaty between Australia and Hong Kong. These international legal challenges raise questions as to how scientific evidence used to justify public health measures is, or should be, treated in international economic law. For instance, what is the significance of uncertainty or gaps in scientific knowledge? How should a tribunal or panel treat divergent scientific opinions? What quantity and quality of scientific evidence is required to establish a causal connection between a measure and its objectives under the applicable standard of proof? Certain features of Australia’s plain packaging laws make these questions particularly pertinent: they will be operating amongst a suite of other measures directed at the same objective; they will be implemented in a context where external social forces may seek to undermine their impact; and this is the first time they have been tried anywhere in the world. These factors make it difficult to measure their effectiveness in the real world with precision. However, despite these difficulties, we find that both, investor-State tribunals and WTO panels and the Appellate Body have demonstrated a welcome degree of flexibility in how they approach scientific evidence. That said, a number of key areas of uncertainty remain in international economic law, and the disputes over plain packaging could play an important role in bringing clarity to those areas.
The John Marshall Review of Intellectual Property Law, 2013
Plain packaging, a new tobacco control tool being considered by a growing number of countries, mandates the removal of all attractive and promotional aspects of tobacco product packages. As a result of plain packaging, the only authorized feature remaining on a tobacco package is the brand name, displayed in a standardized font, size, color, and location on the package. At issue is the meaning of "use" of trademarks on plain packaging, and whether plain packaging amounts to the creation of an invalid encumbrance. The tobacco industry and other regulated sectors (including wine, fast-food, and pharmaceuticals) also believe that plain packaging jeopardizes trademark rights and contravenes certain Constitutional provisions. In particular, they argue that governments do, and are, in fact, capable of "acquiring," property, or that governments could be construed as "taking" property on unjust terms, contrary to Constitutional guarantees. The tobacco industry's efforts to fight plain packaging in the courts have, however, proven futile thus far-particularly in Australia. This article, after introducing the reader to the dawn and rationale of plain packaging from a quasilegal and marketing perspective, examines the compatibility of normative arguments for plain packaging within the international framework for trademark protection (as preserved in the TRIPS Agreement). It then looks at the way in which these arguments and that framework have shaped the constitutional validity of plain packaging of tobacco products in the United States and Australia. In drawing on these jurisdictions that, alongside the European Union, incorporate rather aggressive tobacco control legislation, this paper highlights the nuanced geographic and legal contexts that complicate global regulatory control, which play an important role in advancing global public health in the face of trade-related objections. Finally, this paper proposes methods for dealing with current legal challenges to global tobacco control regulations and suggests that there are strong arguments to deny private entities that seek to establish a successful case by purporting to invalidate plain packaging legislation.
The TRIPs Compatibility of Australia's Tobacco Plain Packaging Legislation
(2013) 16 Journal of World Intellectual Property 197
The use of tobacco entails negative health consequences. In fact, it is reported that had the ill effects of tobacco been known much earlier in time, tobacco would have been a banned substance. Yet, in today's context tobacco has become part of legitimate trade, and the livelihoods in countries that export tobacco heavily depend on trade in tobacco. In the circumstances, could governments intervene on health and public policy grounds and regulate the manner in which tobacco products are marketed and sold? If so, to what extent? These are precisely the questions that fuel the gruelling dual between tobacco companies and health conscious countries, such as Australia that has recently enacted legislation making mandatory the plain packaging of tobacco products from December 2012. The Australian legislative measure, namely the Tobacco Plain Packaging Act 2011 (Cth), is currently under attack in several fronts, including the World Trade Organisation, though recently the Australian High Court upheld the constitutionality of the plain packaging legislation. The purpose of this paper is to approach the question of the legality of government intervention in totally prohibiting the striking elements of tobacco packaging from a purely international trademark law point of view. First, the paper identifies the scope of trademark protection as set out in the Agreement on the Trade Related aspects of Intellectual Property Rights (“TRIPs”) and then goes on to analyse the Australian plain packaging law in the context of its own trademark legislation. Thence, the paper considers whether the Australian plain packaging legislation complies with the core provisions on trademark protection enshrined in TRIPs, and lastly provides a possible compromise to reconcile the competing interests.
Czech Yearbook of International Law - Regulatory Measures and Foreign Trade - 2013, 2013
Plain packaging is the WHO’s new concept to fight the global tobacco epidemic. Already adopted in Australia, other countries are certain to follow and are already evaluating its introduction. However, plain packaging is not as carefree and unproblematic as the WHO considers it to be. The idea of dictating to tobacco producers the way they must present their product provokes heavy protest on political and legal levels. This article analyses the compatibility of plain packaging with WTO-law.
INVESTMENT POLICY BRIEF, 2021
This Policy Brief aims to provide a concise analysis of the international investment dispute involving Philip Morris subsidiaries and the Republic of Uruguay. It depicts the main legal and political background that preceded the case, analyzes the decision reached by the arbitral tribunal, and assesses the award's major regulatory and policy implications. It intends to contribute to the discussions on how and to what extent States can adopt tobacco control measures without violating their international obligations to protect the investment and intellectual property of tobacco companies. The main lesson that can be learned from the analysis of the Philip Morris v. Uruguay case is that investors rights are not absolute and can be relativized when there is a clash between private and public interests, such as in the case of public health. As a result, claims such as indirect expropriation and fair and equitable treatment can be dismissed. Finally, one of the main consequences is the progressive change in the design of international investment treaties, containing more provisions related to the right to regulate. *** Ce rapport sur les politiques vise à fournir une analyse concise du différend international en matière d'investissement opposant les filiales de Philip Morris et la République d'Uruguay. Il décrit les principaux événements juridiques et politiques qui ont précédé l'af-faire, analyse la sentence rendue par le tribunal arbitral et examine ses principales répercussions du point de vue réglementaire et politique. Il entend contribuer aux discussions concernant la possibilité pour les États d'adopter des mesures de lutte antitabac qui ne seraient pas contraires aux obligations internationales en matière de protection des investissements et au droit de proprié-té intellectuelle des sociétés de tabac. La principale leçon que l'on peut tirer de l'analyse de cette affaire est que les droits des investis-seurs ne sont pas absolus et peuvent être remis en cause en cas de conflit entre les intérêts privés et l'intérêt général lié notamment à des impératifs de santé publique. En conséquence, toute demande fondée sur une expropriation indirecte et l'absence de traitement juste et équitable peut être rejetée. Il en résulte une évolution progressive dans la conception des traités internationaux en matière d'investissement, qui contiennent davantage de dispositions relatives au droit de légiférer. *** Este informe de políticas pretende facilitar un análisis conciso de las diferencias internacionales sobre inversiones que afectan a las filiales de Philip Morris y a la República del Uruguay. Describe los principales antecedentes jurídicos y políticos que precedieron al caso, analiza la decisión tomada por el tribunal arbitral y evalúa las repercusiones reglamentarias y de políticas más importantes de la sentencia. Tiene la intención de contribuir a los debates sobre cómo y en qué medida pueden los Estados adoptar medidas de control del tabaco sin incumplir sus obligaciones internacionales de proteger la inversión y la propiedad intelectual de las empresas tabacaleras. La principal enseñanza que se puede extraer del análisis del caso Philip Morris c. el Uruguay es que los derechos de los inversores no son absolutos y se pueden relativizar cuando existe un enfrentamiento entre los intereses privados y públicos, como en el ámbito de la salud pública. Como consecuencia, se pueden desestimar reclamaciones como las de expropiación indirecta y trato justo y equitativo. Por último, cabe señalar que una de las principales consecuencias es el cambio progresivo en el diseño de los tratados internacionales de inversión, que contienen más disposiciones relativas al derecho a regular.