Smoke but no fire – HC decides tobacco plain packaging constitutionally valid

Today the High Court handed down its decision on the validity of the Tobacco Plain Packaging Act 2011 (Cth); with a majority of the Court of the opinion that the plain pack legislation is not contrary to Section 51(xxxi) of the Constitution (JT International SA v Commonwealth of Australia; British American Tobacco Australasia Limited & Ors v The Commonwealth of Australia; [2012] HCA 30). However, the specific reasons for the decision will be published at a later date.

At a press release in Canberra Attorney General Nicola Roxon, was pleased to announce that the government had “taken on big tobacco and won. They threatened us with expense; they threatened us with legal action… [but the] tobacco companies no longer have any excuse… it is time for [them] to get on with implementation [of the legislation]”.

The Tobacco Plain Packaging Act 2011 (Cth) aims to improve public health by discouraging the use of tobacco products through tough regulation of packaging and appearance of tobacco products. This includes a specific prohibition on the use of trademarks, and marks generally, appearing on retail packaging for tobacco products.

The plaintiffs (British American Tobacco, Philip Morris, Imperial Tobacco, Van Nelle Tabak Nederland and JT International SA) sought to rely upon the restraint upon the legislative power of the Commonwealth Parliament found in s 51(xxxi) of the Constitution, which empowers the Parliament to make laws with respect to “the acquisition of property on just terms“. The plaintiffs argued that some or all of the provisions of the Act were invalid because they were an acquisition of the plaintiffs’ property otherwise than on just terms. However, at least a majority of the Court is of the opinion that the Tobacco Plain Packaging Act 2011 is not contrary to s 51(xxxi), and as such, the Tobacco Plain Packaging Act 2011 (Cth) is valid.

Impact on trade mark law in Australia

In light of the validity of the Tobacco Plain Packaging Act 2011, there several issues that arise for Australian trade mark owners and applicants, including:

  •    The right to register but not use a mark in respect of tobacco products;
  •    Impact on an applicant’s ability to demonstrate use of a tobacco-related trade mark for the purpose of section 41(5) and (6) of Trade Marks Act 1995; and
  •    Possible breach of Australia’s international obligations under the TRIPS agreement.

The World Trade Organisation (WTO) does have a forum for dealing with trade related disagreements, and Ms. Roxon did acknowledge that taking the matter further was an option for the tobacco companies (for example to the WTO). However, she maintained that the High Court decision will only strengthen the Australian government’s position on the international stage.

If you have any queries regarding the impact of this decision on the registerability, validity or use of trade marks in Australia, please contact a registered Trade Mark attorney.