CANBERRA Aug 15 Australia's highest court will
rule on the world's toughest anti-cigarette marketing laws on
Wednesday in what has become a major test case for global
tobacco companies in their fight against restrictions on the
sale of their products.
Australia's laws will force tobacco companies to remove all
branding from cigarette packets from this December, and allow
tobacco to be sold only in plain olive-coloured packages which
carry graphic health warnings.
The laws follow World Health Organisation recommendations,
and are being closely watched by Britain, Norway, New Zealand,
Canada and India, which are considering similar measures t o help
Tobacco giants British American Tobacco, Britain's
Imperial Tobacco, Philip Morris and Japan Tobacco
challenged the laws in Australia's High Court, claiming
the rules were unconstitutional because they effectively
extinguished their intellectual property rights.
"My prediction is that the government will win, in light of
past precedent and how the arguments proceeded," intellectual
property law expert Matthew Rimmer, from the Australian National
University, told Reuters.
"Other countries, such as the United Kingdom and potentially
Norway and India, will be looking to see if the threats of the
tobacco industry are merely bluster, or if they have some force
to them," he said.
A win for the government would be a blow to tobacco
companies and would end any domestic challenges to plain
packaging. All political parties in Australia support the plain
packaging laws, passed by parliament in November, so there is
little hope a future government would overturn the laws.
The plain packaging rules do, however, still face a number
of challenges under global trade rules.
Australia is already fighting trade complaints in the World
Trade Organization (WTO) from three nations; Ukraine, Honduras
and the Dominican Republic, who claim the laws unfairly restrict
trade, although their trade with Australia is negligible.
Tobacco companies have also signalled a potential challenge
under a bilateral Australia-Hong Kong investment agreement.
Rimmer said tobacco companies could also use a proposed new
Trans Pacific Partnership (TPP) trade deal to mount a further
challenge if the TPP agreement includes controversial
investor-state dispute settlement provisions.
Australia has strongly opposed lobbying by big business to
include investor-state dispute settlement provisions in the TPP
because that would undermine the ability of a government to pass
Rimmer said a surprise tobacco company win could force the
government to either re-jig the laws so they comply with
Australia's constitution, or to compensate tobacco companies for
the loss of any trademark marketing rights.
He said the High Court challenge rested on tobacco company
claims that the government has effectively taken their
intellectual property and trade marks without paying
The case hinges on rights under the Australian constitution
that say the government acquisition of property must be on just
But the government argued it has not acquired any property,
leaving the tobacco companies in ownership of the trademarks,
and that the laws were needed to protect public health.
The plain packaging laws have been championed by Australia's
Attorney-General Nicola Roxon, who was previously health
minister and whose father was a smoker who died of oesophageal
cancer when she was 10.
Australia wants to cut the number of smokers from around 15
percent of the population to 10 percent by 2018. Authorities say
smoking kills around 15,000 Australians a year.
The World Health Organisation estimates more than 1 billion
people around the world are regular smokers, with 80 percent in
low and middle income countries.
Industry analysts are worried plain packaging laws could
spread to emerging markets like Brazil, Russia and Indonesia and
threaten sales growth.