Honduras Files WTO Dispute Case Vs. Australia Over Tobacco IPR

Honduras announced today it has requested formal consultations with Australia under the World Trade Organization dispute settlement procedures, charging that Australia’s public health law requiring tobacco to be sold in plain packaging violates the WTO intellectual property agreement.

The small Central American nation follows Ukraine in challenging the Australia law at the WTO. Ukraine requested consultations with Australia on 13 March (IPW, WTO/TRIPS, 14 March 2012). They argue a violation of the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

“Honduras has decided to take this action given that Australia’s law contravenes several WTO obligations on intellectual property rights and technical barriers to trade, and given the serious economic consequences that this measure would have on Honduran tobacco exports,” the Honduras Secretary of Industry and Commerce said in a press release [pdf].

At issue is a law requiring all tobacco products to be sold in plain packaging as of 1 December 2012. Australian authorities say the method has been tested and is shown to be effective in reducing the public health plague of smoking, and that it is a suggested approach under the World Health Organization Framework Convention on Tobacco Control.

The Honduras announcement comes on the final day of a meeting at the WHO of the Framework Convention on Tobacco Control that focussed on illicit trade in tobacco products. WHO also held a meeting on economic alternatives to tobacco. Sources said the WHO meeting saw a debate over the definition of counterfeit tobacco products and decided in the end today to declare that the convention does not address intellectual property rights.

WHO Director General Margaret Chan has called on the world to support Australia in its effort to fight tobacco and the powerful tobacco industry (IPW, WHO, 22 March 2012).

Honduras said it is a party to the convention and “is in favour of legitimate measures to reduce smoking prevalence.”

“Plain packaging, however, is not an appropriate measure to address smoking prevalence and is not in conformity with Australia’s WTO obligations,” Honduras said.

“Australia’s law clearly infringes intellectual property rights by requiring that trademarks for tobacco products be displayed in standard font and size,” it added. The plain packaging requirements “would defeat the basic function of a trademark, which is to allow consumers to distinguish between products of different companies.”

Honduras also said that the tobacco industry has been part of its history for more than a century, and that it employs several hundred thousand people directly and indirectly throughout the supply chain in the country, which it said translates into tens of millions of dollars for its economy.