Plain packaging – the silent (trade mark) killer for tobacco products?

19 Jul 2017

A topic which has been much debated and legally contested the world over is the call for the use of plain packaging in respect of tobacco products.

Legislation demanding this change stems from the obligation of contracting parties to the World Health Organisation’s Framework Convention on Tobacco Control (WHO FCTC) to amend their domestic legislation to, inter alia, ban all tobacco advertising, promotion and sponsorship.

Australia was one of the first countries to amend its legislation. In compliance with its obligations in terms of the WHO FCTC, Australia enacted the Tobacco Plain Packaging Act of 2011. The aim of this legislation includes the improvement of public health by discouraging members of the public from taking up smoking or the use of tobacco products or to give up such use.  This legislation requires, inter alia, that cigarette packs or cartons be rectangular in shape with straight edges and devoid of any embellishments or shape. It also requires that the carton have a matt finish and, unless stated otherwise in the Regulations, that it be a “drab dark brown” colour. The legislation permits the use of the tobacco brand or business name on cigarette packs, but that use is also severely restricted. For instance, on the front outer surface of a cigarette pack, the brand may only appear once on the centre of the outer packaging and must appear below the health warnings in the same orientation as all health warnings.

In light of the onerous requirements imposed by this legislation, it was vehemently contested by the tobacco industry and went so far as needing to be considered by a World Trade Organisation (WTO) dispute-settlement panel. The panel was established in 2014 and had to consider consultations between Australia and 11 other countries and the EU. A decision was expected in May 2017. A decision has allegedly been reached and communicated to the parties to the dispute, but there have been unofficial reports suggesting that the WTO has upheld the legislation on the ground that it qualifies as a legitimate public health measure.

From a South African perspective, our most relevant legislation regulating the use, sale and advertisement of tobacco products is the Tobacco Products Control Act 83 of 1993 (‘the Act”). In compliance with our own obligations in terms of the WHO FCTC, this legislation has been amended more than once. The most notable amendment to this Act was the ban on tobacco advertising and sponsorship in August 2009. Section 6(bA) of the Act also makes provision for the Minister of Health to later prescribe in Regulations to the Act what information can be displayed on the packaging of a tobacco product, including any insert.

South Africa has, to date, amended its domestic legislation in line with international trends aimed at improving public health.  In fact, a new bill and additional regulations which further regulate the packaging of tobacco products at the point of sale is anticipated and it is further expected that South Africa will call for plain packaging and the use of graphic images on tobacco products aimed at discouraging members of the public, particularly the youth, from taking up smoking.

While the underlying reason for this expected change in legislation is indeed noble, the rights of the tobacco industry to trade will be further limited. At the heart of this limitation is the use of the industry’s trade marks. Indeed, there has already been a challenge to our current tobacco legislation to the Constitutional Court on the basis that it unfairly limits the right to freedom of expression and the right to access to information, but the Court found that the limitation of these rights was justified.

If South Africa follows suit and imposes requirements similar to those in Australia discussed above, the use of, at least, shape, colour, logo and label trade marks on cigarette cartons and wrappers may well be prohibited. Considering the exclusive right to use a mark which is granted to the holder of a trade mark registration, one can immediately see the conflict and the restriction on trade mark owners’ rights.

It will be interesting to see whether the anticipated legislation and further limitation of the right to make exclusive use of one’s trade mark is contested in South Africa, as it has been in so many jurisdictions around the world.

In the meantime, leaders in the tobacco industry would be well-advised to consider alternative innovative methods for purposes of distinguishing their products.

See also: The Advertising Standards Authority and British American Tobacco

(This article is provided for informational purposes only and not for the purpose of providing legal advice. For more information on the topic, please contact the author/s or the relevant provider.)