Smoke 'em if you got 'em: intellectual property rights in the tobacco industry going up in smoke.

• Author: Lease, Kristen

The Tobacco Plain Packaging Act (TPPA) was passed in Australia in 2011 and set restrictions on the appearance of tobacco packages. The restrictions limited the use of trademarks to only the brand name, and banned any use of distinctive colors or images. Tobacco growing nations believed this restriction on trade dress violated Article 20 of the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement, which guarantees that no restriction may unjustifiably encumber intellectual property. Article 8 of the TRIPS Agreement, however, allows for encumbrances when it is intended to promote the protection of public health and safety. The tobacco growing nations brought a complaint to the World Trade Organization (WTO), alleging the TPPA violated the TRIPS Agreement.

This Note analyzes the WTO case law to determine whether the tobacco growing countries will succeed on their claim, or if Australia may successfully argue the TRIPS Article 8 health exception allows the restriction. The Note also discusses the purpose of the WTO--whether the WTO is the best mediator between a government's right to implement health-based restrictions and an intellectual property holder's guaranteed right of freedom from restrictions, and the potential ramifications of the WTO's decision. This Note concludes that the TPPA is an unjustifiable encumbrance under the TRIPS Agreement and that the WTO's Dispute Settlement Panel should find the TPPA violates the TRIPS Agreement.

CONTENTS I. Introduction II. Background III. Article 20 Analysis A. The Restrictions Ultimately Serve as a Ban on Tobacco Trade Dress for Tobacco Packages 1. Restrictions Cause Consumer Confusion 2. Restrictions Could Result in a Loss of Tobacco Companies' Trademark Rights in Australia IV. Article 8 Analysis A. Whether a Restriction is Necessary B. Effectiveness of the Restriction V. Intent of TRIPS and the WTO and a Balance of the Articles VI. Potential Impact If the WTO Upholds the TPPA VII. Conclusion I. INTRODUCTION

Big Tobacco is the bad guy in everyone's story. Big Tobacco is the company that knows its products will kill a person, and possibly those around the smoker, and yet it still pushes its products on people. Big Tobacco is not concerned with the health of its consumers; Big Tobacco is only concerned with the economic bottom line. It is almost impossible to escape the image of Big Tobacco as the greedy villain.

Comedian John Oliver reinforced this stereotype on his show, Last Week Tonight with John Oliver, by mocking the legal maneuvers of Philip Morris International, the epitome of Big Tobacco. (1) Philip Morris International engaged in numerous legal battles in an attempt to prevent countries, such as Australia, (2) Togo, (3) and Uruguay, (4) from incorporating graphic pictorial warning labels and reducing or removing the trade dress of tobacco companies.

Oliver smarmily stated, "it's clear what each side wants: countries want to warn their citizens about the health dangers of smoking tobacco; tobacco companies want to be able to present branded images that they've spent time and money to cultivate. So now I suggest a compromise. I present to you the new face of Marlboro: Jeff the Diseased Lung in a Cowboy Hat." (5)

The parodied new mascot looks exactly as it sounds: an anthropomorphized diseased lung wearing a large yellow cowboy hat and red cowboy boots. The lung is covered in dark spots and has a cigarette in its mouth. Oliver gleefully states how popular it is with children. Jeff, the Diseased Lung in a Cowboy Hat, is the perfect blend; he embodies the countries' health-based fears and Phillip Morris's former Marlboro Man cowboy campaign. This mascot calls out Philip Morris for its corporate villainy. While Oliver's segment is a humorous jab at Big Tobacco, it is not the entire story to this legal battle.

Imagine a man walking into a convenience store after realizing he ran out of milk at home. He grabs the half-gallon and strolls up to the cashier, intending to buy a pack of cigarettes as well. The man glances at the wall behind the counter, making sure the store has his brand--Marlboro Red. Searching the wall for the crisp red and white package with a regal crest in the middle, the man suddenly wrinkles his brow in confusion. Staring back at him are emaciated, cancer ridden bodies with rotting teeth, and blackened lungs. He asks the clerk in an uncertain tone if she has his brand, his Marlboro Reds. The clerk turns to the wall, squinting to read the tiny print at the bottom of each package. Finally the clerk spots the Marlboro Reds, and hands them to the man so he can complete his purchase.

The situation does not seem entirely grave--it only momentarily confuses the man trying to buy cigarettes and the clerk is able to grab the right package after a minute of searching. Trademark erosion, however, thrives on these little moments. These are the moments where a customer might be too overwhelmed to sift through packages and ultimately give up on purchasing the good. The increased search cost becomes a burden on the consumer. This increased search cost is what Australia relied on when it passed the Australian Tobacco Plain Packaging Act (TPPA), restricting trade dress on tobacco packages. Australia hoped to deter tobacco consumers from purchasing tobacco products to promote a healthier lifestyle. (6) The price for this healthier world, though, is the repression of intellectual property rights.

The World Trade Organization (WTO) will decide if Australia's TPPA violates the Trade-Related Intellectual Property Rights Agreement (TRIPS), which sets a minimum level of intellectual property rights' protection across the world. There is a battle between WTO case law and public policy on which is a more appropriate guiding force for achieving reduced tobacco usage: consumers' rights or public health restrictions. The issue lies in the language of the TRIPS Agreement. The WTO must decide: (1) is the TPPA is an encumbrance of trademark rights; and (2) does the public health exception to the protection of intellectual property rights apply. I believe that because the answer is in the negative on both questions, the WTO should, therefore, require Australia to remove the trade dress repression requirements from the TPPA.

2. BACKGROUND

   Although fewer people worldwide are smoking daily, population growth has increased the number of smokers. (7) The knowledge of the health dangers caused by tobacco may have led to the decrease in smoking. Scientific studies consistently find that tobacco leads to coronary heart disease, stroke, and lung cancer. (8) Institutions such as the World Health Organization (WHO) recognize serious risks associated with tobacco usage and strive to eradicate the use. (9) Tobacco usage, such as smoking, is universally regarded as dangerous by the medical community and by policy makers.

   In addition to health groups, governments across the globe wage war on tobacco. Governments regulate the tobacco industry with taxes and advertising restrictions in hopes of reducing tobacco usage. (10) Certain taxes are placed on tobacco products to sway the consumer from purchasing them, as well as providing the government with more tax dollars to cover potential medical costs associated with tobacco use. (11) There are also limits on when and where consumers can use these products. (12) Examples of these regulations include a ban on advertising tobacco products. (13) Despite these efforts, tobacco is used by a growing amount of the population. (14) With the obvious issues associated with tobacco consumption, it seems only natural that health organizations and governments attempt to limit the further use of tobacco. So, in the battle against tobacco, intellectual property rights are the unintentional casualties.

   The TPPA is a piece of legislation that works to greatly reduce the consumers' ability to identify the brand they smoke. (15) The Australian Parliament passed the TPPA in December (2011), in an attempt to curb tobacco usage in Australia. (16) According to the TPPA, packaging "must be drab dark brown." (17) There is an exception that allows trademarks of the actual name of the brand to appear on the package, but any other logos, designs, or colors may not appear. (18) There are also numerous restrictions for the product names that may appear on the tobacco package, such as restricting font to ten point Lucida Sans in either black or white ink. (19) This effectively serves as a ban on tobacco trade dress. The goal is to make the tobacco packages less appealing to consumers, specifically youths who have not used tobacco yet, but might in the future. (20) The plain packaging requirements are paired with the requirement to display graphic images of certain negative health effects resulting from the use of tobacco. (21)

   Though governments have previously placed restrictions on tobacco advertising, the TPPA's restriction aggressively infringes on the intellectual property of tobacco companies by placing excessive limitations on the package. Advertising is meant to sell the specific product and the advertisement is viewed by the consumer in isolation from the competitor's products. (22) In real life, when purchasing a product a consumer will be faced with the competitors' products side-by-side on the shelf. Though trade dress is partly created to make the product more alluring and marketable than a purely utilitarian package, the primary goal of trade dress is to assist consumers in distinguishing one product from another. (23) A government limitation on a consumer's ability to distinguish products from each other is too far reaching of a restriction.

   These trademark restrictions prompted a legal reaction from the tobacco companies. British American Tobacco, Imperial Tobacco Australia Limited, Philip Morris, and Japan Tobacco International unsuccessfully sued the Australian government over the TPPA's trademark ban, alleging it was a taking...