At the last session of the World Trade Organization Trade-Related Aspects of Intellectual Property Rights (TRIPS) Council, the Dominican Republic challenged an Australian draft law requiring plain packaging for tobacco products as being incompatible with its WTO obligations, eclipsing other agenda items. The TRIPS Council also addressed other regular agenda items such as related to biodiversity and public health, according to sources.

The protection of public health versus trade interests was at the heart of the discussion among delegates while the tobacco industry issued a submission against the Australian law detailing the potential contradictions of the law with several international trade agreements.

In April, the Australian government released an “exposure draft” [pdf] of its tobacco plain packaging bill 2011 as part of the national health reform.

Under the law, “the regulations may prohibit (either entirely or subject to conditions) the use of trade marks, logos, brands or business or company names on packaging or on tobacco products. The regulations may also specify other requirements (such as colour requirements) for the appearance of packaging and tobacco products.”

According to a public consultation paper [pdf], the Australian government is planning to introduce the legislation by 1 July 2012.

In this paper, the government said it announced in April 2010 “that the legislation to implement plain packaging of tobacco products would be in place by 1 January 2012 and full compliance with the legislation would be required by 1 July 2012.” The Tobacco Plain Packaging Bill 2011 will be introduced in the winter 2011 parliamentary sittings.

A public consultation was opened in April inviting stakeholders to provide written submissions by 6 June. According to the Council of Australian Governments, the Council has agreed a target of “reducing the smoking rate among the Australian population to 10 percent by 2018, and halving the smoking rate among Aboriginal and Torres Strait Islander people.”

According to a source, the Dominican Republic challenged the Australian legislation on TRIPS Article 15, on trademarks and protectable subject matter, and on Article 20 on other requirements of trademarks. Some countries were supportive of the Dominican Republic, such as Cuba, Nicaragua, Honduras, the Philippines, and Zambia, the source said.

The Dominican Republic argued that some tobacco-exporting countries whose economies rely on that trade would be harmed by the Australian legislation, a source told Intellectual Property Watch. According to the WTO, the Dominican Republic said, “it has ‘serious and grave’ concerns that the proposed law would also violate the WTO’s intellectual property agreement and the linked Paris Convention.”

India mentioned that some studies suggest that plain packaging helps in detracting potential customers and India also quoted the Framework Convention on Tobacco Control (FCTC) of the World Health Organization (WHO), according to an Indian official.

The Guidelines for implementation of Article 11 of the WHO Framework Convention on Tobacco Control [pdf] states that parties to the convention “should consider adopting measures to restrict or prohibit the use of logos, colours, brand images or promotional information on packaging other than brand names and product names displayed in a standard colour and font style (plain packaging).”

India did not comment on the specific elements of the Australian legislation but restricted its comments “on the larger question of the interplay between the TRIPS agreement and the right of a member to pursue policy objectives like protecting public health,” the official said. India said in particular that TRIPS Article 8 provides enough flexibility to protect public health, and added that the Doha Declaration “makes it clear that the TRIPS agreement does not and should not prevent members from taking measures to protect public health,” he added.

Tobacco Industry Opposes Australian Law, Lobbies in Geneva

On 6 June, the British American Tobacco company (BAT) submitted comments [pdf] to the Australian public consultation saying that plain packaging requirements were “likely to place Australia in breach of its obligations” under TRIPS, in particular because WTO members have to comply with the provisions of the latest version of the Paris Convention for the Protection of Industrial Property, administered by the World Intellectual Property Organization.

BAT also said in their comments that plain packaging would also breach the WTO General Agreement on Tariffs and Trade (GATT), and the WTO Agreement on Technical Barriers to Trade.

There is no “real-world” evidence that plain packaging will result in a reduction in smoking prevalence, BAT said in the comments, citing a May 2011 Deloitte report which it commissioned, that found that packaging laws have not directly reduced smoking. Unintended consequences could include more counterfeit and illicit products on the market, they said.

It is unclear how WTO rules on counterfeiting and trademarks would be affected by the Australian law.

BAT also sent around documents with their arguments to some Geneva missions. Law firm King and Spalding was requested by BAT to analyse the relationship between the WHO tobacco convention and the WTO agreements in the context of Australia’s proposed law. The resulting King and Spalding report concluded, “Australia’s proposed plain packaging requirements far exceed what is necessary for Australia to comply with any binding FCTC obligations. If enacted as currently drafted, the plain packaging requirements would clearly violate Australia’s WTO obligations, in particular under the TBT and TRIPS Agreements.”

The document also stated: “In sum, because the [FCTC] guidelines are non-binding and only hortatory, it is not possible for them to conflict directly with WTO Agreements.”

A developed country told Intellectual Property Watch that incompatibility between the TRIPS and the Australian legislation could not be established during the meeting last week, as countries argued that for public health reasons, restrictive measures to TRIPS could be taken.

Relationship between TRIPS and CBD

The short TRIPS Council session was held on 7 June. Other subjects on the agenda were the relationship between TRIPS and the UN Convention on Biological Diversity, a long-discussed waiver to facilitate access to medicines in developing countries, and the possible amendment of TRIPS paragraph 27 3(b).

TRIPS Article 27.3 (b), which deals with the exclusion from patentability of plants or animals other than non-biological and microbiological processes and the compulsory protection of plant varieties, was one of the topics tackled by the council. Bolivia reiterated its proposal to amend Article 27.3 (b) to prohibit all forms of patenting of life as an essential part of the mandate in the Doha Development Round.

A group of countries including Brazil, China, Colombia, Ecuador, India, Indonesia, Peru, Thailand, the Caribbean and Pacific Group of States, and the African Group, reaffirmed their request to create a new article to TRIPS requiring disclosure of origin of genetic resources and/or associated traditional knowledge in patent applications.

According to the group’s draft decision [pdf] to enhance mutual supportiveness between the TRIPS agreement and the CBD, Article 29 of TRIPS “is incomplete without the disclosure of origin of genetic resources and/or associated traditional knowledge.” The group is requesting that an Article 29bis be created.

The topic did not bring much discussion, according to sources, with essentially the restatement of known positions. A number of countries, especially developed countries, are reluctant to amend the TRIPS agreement.

Discussions on Health Waiver Pushed To Next Meeting

Another subject discussed was a public health waiver to TRIPS to allow developing countries without manufacturing capabilities to access drugs. Under the waiver nicknamed “paragraph 6” in reference to the 2001 Doha Declaration on TRIPS and Public Health, countries can use compulsory licences to manufacture generic medicines exclusively for export the medicines to countries that cannot manufacture them themselves.

Paragraph 6 has only been used once and has been alleged to be very cumbersome by some countries. Positions on paragraph 6 remained the same, according to sources. In particular, some countries, such as India, support the setting up of a workshop involving non-governmental organisations and representatives of industry to discuss the implementation of paragraph 6. Some countries deem that the discussions should be limited to WTO members.

According to the WTO, the TRIPS Council will consider the next review of the paragraph 6 system in the next meeting, tentatively scheduled from 25-26 October. The waiver is still in place under a temporary agreement reached on 30 August 2003. In December 2005, WTO members agreed to make it a permanent amendment to TRIPS. To date, 34 members, counting the European Union as one, have accepted the amendment to TRIPS. The amendment will take effect when two-thirds of the membership accepts it.