Warning Labels Threaten Tobacco Trade-marks – Or do They?

Warning Labels Threaten Tobacco Trade-marks – Or do They?

Dan Whalen is a JD candidate at Osgoode Hall Law School

In late December, industry leader British American Tobacco won permission in Australian courts to pursue damages against a local importer for infringing upon one of its product’s trademarks by covering its packaging with health warnings labels. While the importer conceded that the labels may have partly or entirely obstructed said trademarks, it stressed that it was required by law to do so before the products could be sold in Australia. Indeed, the Australian government has undertaken some strong anti-smoking initiatives.

By 2012, all cigarettes sold in Australia must come in plain packaging with no industry or brand imagery save for “brand and product names in a standard colour, position, font style and size.” Debates over similar measures have raged in Canada, where the federal government recently announced that it will increase the size of such warning labels to cover 75% of both the front and back of cigarette packages and will include new and more impactful graphic images.

Not surprisingly, tobacco manufacturers and advocates have protested such initiatives. From a practical view, they argue, there is limited evidence that expanded warning labels or generic packaging actually provide the intended deterrence against smoking. From a legal perspective, they have challenged such diminution of their branding by citing regulations like Article 20 of the World Trade Organization’s Trade-Related Aspects of Intellectual Property Rights (TRIPS), which holds that “use of a trademark... shall not be unjustifiably encumbered by special requirements, such as... [mandating] use in [a] manner detrimental to its capability to distinguish goods and services [from one another].” There is further concern that such trademark attenuation will limit consumers’ ability to distinguish legally manufactured from contraband tobacco products, which poses issues related to tax revenues and organized crime, if not greater health risks.

It remains to be seen whether any of the foregoing will stand up to closer scrutiny, or whether tobacco manufacturers are merely blowing smoke. However, Australia, a fellow commonwealth nation, may prove to be a prescient battleground and signal the arguments and outcomes that we might expect in Canada.