Effects of plain packaging on the Intellectual Property Rights of stakeholders

The world is now waiting for the World Trade Organization’s decision on the validity of plain packaging measures on tobacco products in Australia. If found to be valid, this could have a huge impact, not only on the tobacco products, but to other consumer goods deemed dangerous to health.

Plain packaging measures arise from the government’s legitimate interest and duty to protect and improve public health through the reduction of health risks associated with the consumption of certain products (e.g., alcohol, tobacco, etc.) which may have adverse effects on an individual’s health.

Australia is the first country to have a comprehensive plain packaging law, and it requires that all outer surfaces of tobacco retail packaging be in a specified color. The law also prohibits use of tobacco industry logo, brand imagery, colors, and promotional text on tobacco products and retail packaging, other than the brand and variant names which must appear in a standard color, position, font style and size.

While the Philippines, at present, does not have any formal plan of adopting plain packaging measures, some groups have pushed for the same. At present, we only have a Graphic Health Warning law which requires graphic health warnings on the bottom 50% of the front and back of tobacco packages, and a ban on misleading descriptors. However, should the WTO favor the Australian government in its implementation of plain packaging measures, it is foreseen that other countries will follow suit.

WTO’s impending pronouncement will also have an effect on other industries which manufacture or produce products deemed dangerous to health.

In a recent discussion sponsored by the International Chamber of Commerce in Singapore, Mike Ridgway of the Consumer Packaging Manufacturers Alliance mentioned that in other countries, there is a call to apply plain packaging not only to tobacco products, but to other products such as alcohol, junk food, soft drinks, and even on cereal boxes.

Clearly, plain packaging will change the landscape of how these industries will now conduct their business, especially on how they market their brand.

While the purpose of the plain packaging law is commendable, plain packaging may be said to restrict, if not totally remove, the use of brand names, logos, or product design elements from the packaging of products. Plain packaging measures will deprive a trademark owner of protection of its intellectual property rights. Such measures will erode more than a century of intellectual property protection, according to a letter sent by the ASEAN Intellectual Property Association to the WTO.

With the implementation of plain packaging measures and because of the uniformity in appearance and packaging, consumers are likely to perceive products as similar in terms of quality and characteristics.

Thus, price will become the primary distinguishing and competing factor, and producers will be forced to cut prices at the expense of a product’s quality and innovation. Moreover, due to the lack of distinctiveness, infringers will be encouraged to pass off or infringe the trademarks as it would be easier for counterfeiters to reproduce such plain packaging.

In view of the impact to the intellectual property rights of trademark owners, plain packaging measures may be considered to adversely affect the intellectual property rights of trademark owners.

The views and opinions expressed in this article are those of the author. This article is for general informational and educational purposes and not offered as and does not constitute legal advice or legal opinion.

Joan Janneth M. Estremadura is an Associate of the Intellectual Property Department of the Angara Abello Concepcion Regala & Cruz Law Offices (ACCRALAW).

830-8000

jmestremadura@accralaw.com.