WTO: Tobacco Plain-Packaging Battle Flares Up; Sports And IP Issues Take The Field

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The World Trade Organization intellectual property committee last week agreed on a draft decision on disputes that are not in direct violation of WTO IP rules but where one country’s measures negatively affect another country’s expected benefits. Plain packaging for tobacco products was also discussed as Ireland is preparing to introduce such a measure meant to discourage tobacco use, and some countries presented their views on the importance of IP rights in sports.

The WTO Council on Trade-Related Aspects of Intellectual Property Rights (TRIPS) met on 10-11 October.


The Dominican Republic made an intervention under “other business” about a proposed Irish measure to introduce plain packaging of tobacco products in an attempt to discourage smoking for public health reasons, according to sources. Plain packaging for tobacco products has been a motive of discontent for a number of countries, which have challenged Australia, which first introduced plain packaging measures, under the WTO rules.

In September, Indonesia became the fifth country to initiate a dispute settlement procedure challenging Australia. Cuba, the Dominican Republic, Honduras, and Ukraine, also have initiated dispute settlement procedures (IPW, WTO/TRIPS, 22 September 2013). Those countries have argued that plain packaging would not only put the countries introducing it in breach of their WTO obligations, including under TRIPS, but would impose a severe economic burden on their economies.

Ireland Goes Tobacco-Free

Ireland announced on 28 May its intention of becoming the “second country in the world to introduce plain pack cigarettes,” according to a Irish Minister of Health press release. Some 5,000 people die every year from tobacco-related diseases, the release said, and “to replace the smokers who quit, the tobacco industry needs to recruit fifty new smokers in Ireland every day just to maintain smoking rates at their current level.” Plain packaging is one out of several measures to be adopted in the country, the release said.

The release said that “Standardised packaging of tobacco products will remove all form of branding – trademarks, logos, colours and graphics. The brand name would be presented in a uniform typeface for all brands and the packs would all be in one plain neutral colour.”

On 3 October, Irish Health Minister James Reilly launched a Tobacco Free Ireland initiative, according to a release, along with a report [pdf] of the Irish Tobacco Policy Review Group. The report gives a set of recommendations to reach the goal of a tobacco-free Ireland by 2025, including the use of plain packaging.

World Health Organization Director General Margaret Chan, in a release on 7 October, encouraged EU parliamentarians to complete the revision of the EU Tobacco Products Directive, and warned against the lobbying of the tobacco industry. In 2012, she supported Australia’s High Court decision to dismiss a legal challenge from the tobacco industry against Australia’s tobacco legislation.

According to a WTO official, countries standing against plain packaging measures are claiming that they would prevent them from using intellectual property in marketing efforts, and in certain cases geographical indications, such as Cuba regarding Cuban cigars. They also say that it would facilitate smuggling of tobacco products and be a disincentive to further innovations.

Supporters of plain packaging assert that the TRIPS Agreement allows them to give priority to health in particular under the WHO Framework Convention on Tobacco Control, to which 168 countries are signatories.

Australia, New Zealand, Canada, Norway, Uruguay and the European Union supported the Irish initiative, the official said. A source from the European Union told Intellectual Property Watch that Ireland had not adopted legislation yet, and that the review of the EU Tobacco Products Directive did not contain any specific reference to plain packaging.

Supporters of the Dominican Republic were Cuba, Honduras and Nicaragua, the official said, noting that China had adopted a neutral position, saying that countries can take measures to protect public health but those should be consistent with TRIPS. The Dominican Republic asked Ireland to withdraw its policy until the legal challenge against Australia’s plain packaging law is settled in the WTO, according to a WTO source.

IPRs Key for Sports, Say Some Countries

In a new area for the WTO, the US, EU, Mexico, Jamaica, and Trinidad and Tobago joined together to present IPRs as a vital component of sport , helping to raise money and producing innovation. But some countries expressed concern that the TRIPS Council attention might be distracted from subjects they considered more important such as food security, biodiversity or health, sources told Intellectual Property Watch.

The European Union in their statement said most IP rights are involved in the sports sector, including trademarks, patents, designs, copyright, and broadcasting. The size of the audience attracted by sport “has boosted sponsorship from businesses that want to publicise their trademarks and brands,” the delegate said, but without these businesses with trademarks to advertise, a lot of the sport would not exist.

“Gross value added of sport in the EU economy is 1.76% and the share of sport in employment amounts to 2.12% (comparable to agriculture, forestry and fishing combined),” the EU statement said.

“One major problem faced by trademark owners in the sports sphere is counterfeit products,” the delegate said. “Sporting goods, apparel and clothing are one of the most copied sets of items and always figure very high up the ladder of statistics of customs seizures and are found massively in shops and markets.” The interception of live broadcast signals are also of acute concern, said the delegate.

Jamaica, in its statement [pdf], said, “The magnitude of the sports industry can be measured by the revenue generated by sports and the earning power of top international athletes. It is estimated that the global sporting industry is valued at over USD400 billion,” the delegate said.

“At the individual level, international athletes such as Tiger Woods, Roger Federer, Kobe Bryant and our very own Usain Bolt earn millions of dollars in endorsements. Sports is, therefore, no longer just an enjoyable activity, it is big business,” he said.

An illustration of poor awareness of IP rights led to Jamaica’s first bobsled team not being able to benefit from the proceeds accruing to the movie “Cool Runnings” directly based on the Jamaica’s team story, he said. Various factors led to this situation, he said, among which was “insufficient knowledge of their IP and other rights”.

“Jamaica’s Usain Bolt is undoubtedly one of the most famous personalities in the world of sports. Regrettably, some entities have sought to cash in on his name without permission. Although Bolt’s management team has trademarked his name, we’ve seen several trademark infringement cases,” he said.

Jamaica, he said, “is seeking to advance its work in IP, which, along with Sports, are vital pillars of the country’s national development agenda.”

Countries supporting the discussion were Switzerland, Canada, Japan, South Korea, Paraguay, and Brazil, which is to host the next soccer world cup in 2014.

Tech Transfer Tensions

Also on the agenda was the annual review of the TRIPS Agreement provisions (Article 66.2) on developed countries providing incentives for their companies and institutions to transfer technology to least developed countries (LDCs). During the TRIPS Council, a WTO official reported that during a workshop on the subject before the TRIPS Council meeting, LDCs referring to detailed reports submitted by 15 developed countries said the “vast amount of information is difficult to digest.”

India said, according to its statement posted by Knowledge Ecology International, “It is unfortunate that the LDCs have to demand monitoring and full implementation of the TRIPS Council decision IP/C/28 taken in 2003. The provisions of Art 66.2 are clear and unambiguous and they put an obligation on the developed countries to provide incentives to their enterprises and institutions.”

“Despite the flexibility provided to the developed countries by not specifying the nature of incentives, the end product of the provision – i.e to create a sound and viable technological base in the Least developed countries, seems to be a pipe dream.”

India said the approach of developed countries to technology transfer was “mostly ritualistic and non-serious.” According to a WTO official, the US rejected the accusation and offered to help the Indian delegation understand its detailed report, while the EU, said the source, noted the hundreds of millions of euros spent under the provisions “cannot be called ritualistic.”

IP and Health, Tariffs In Question

Meanwhile, this session of the TRIPS Council was also expected to review the implementation of the so-called “Paragraph 6” system, which refers to an August 2003 WTO decision on the implementation of Paragraph 6 of the 2001 Doha Declaration on the TRIPS Agreement and Public Health. The decision provides for a temporary waiver to TRIPS Article 31(f) which states that products made under compulsory licensing must be predominantly for the domestic market, for the benefit of countries with no drug manufacturing capabilities.

A 2005 amendment to the TRIPS will make this decision permanent when two-thirds of the membership has accepted the decision, according to the WTO. The deadline for countries to accept the decision comes at the end of 2013, after several extensions (IPW, WTO/TRIPS, 1 December 2011). TRIPS Council members approved a new two-year extension but decided to pass the final decision to the WTO General Council, the WTO official said.

According to a WTO source, some members, such as the United States and the European Union, highlighted high tariffs as being an obstacle to access to medicines rather than IP, citing the trilateral study undertaken by the WTO, WHO and the World Intellectual Property Organization titled “Promoting Access to Medical Technologies and Innovation: Intersections between public health, intellectual property and trade.”

Page 77 of the trilateral study focusses on tariffs and says “many countries apply tariffs to bolster the competitive position of locally based companies in the domestic market in an attempt to preserve employment or promote the development of the industry (e.g. the local production capacities of the pharmaceutical sector), or to maintain a certain level of independence from international markets. For consumers, tariff protection can result in costly outcomes.”

The US also cited a WTO working paper [pdf] titled, “More Trade for Better Health? International Trade and Tariffs on Health Products” in which page 21shows a table of countries with the highest applied tariffs on health products. According to the paper, for “dosified” medicines, Nepal, Morocco, Pakistan, Russia and India impose tariffs above 10 percent.

The United States asked why countries which have high import duties on medicines complain about access when tariff barriers are contributing to high prices, the WTO official said. Some developing countries such as China and India said they did not see the link between high tariffs and the inability to access medicines, he said. According to a WTO source, India and China questioned the link between high tariffs and access to medicines since the tariffs could be used to encourage local production. They rather wanted to have more information as to why the Paragraph 6 system has only been used one, the source said.

Non-Violation Complaints

Non-violation complaints refer to situations when “a government can go to the Dispute Settlement Body even when an agreement has not been violated.… [A] non-violation complaint … is allowed if one government can show that it has been deprived of an expected benefit because of another government’s action, or because of any other situation that exists,” according to the WTO.

On November 2001, the WTO Ministerial Conference adopted a Decision on Implementation-Related Issues and Concerns, including a moratorium for “non-violation” complaints under TRIPS. This moratorium was originally decided for 5 years, and has been extended several times.

Last week, the TRIPS Council agreed on a draft decision to continue not to initiate non-violation disputes related to intellectual property rights until December 2015. WTO ministers are expected to officially adopt the decision at the 9th WTO Ministerial Conference in December, in Bali, Indonesia, according to the WTO.

Noteworthy is the fact that WTO members are looking at ways to find a way out of the cycle of extensions, after the ministerial meeting in Bali. The chair proposed possible actions, including a decision to allow non-violation dispute cases, extending the moratorium, and a decision not to allow non-violation complaints permanently, said the WTO official.

The decision that has to be agreed in Bali says: “We take note of the work done by the Council for Trade-Related Aspects of Intellectual Property Rights pursuant to our Decision of 19 December 2011 on ‘TRIPS Non-Violation and Situation Complaints’ (WT/L/842), and direct it to continue its examination of the scope and modalities for complaints of the types provided under subparagraphs 1(b) and 1(C) of Article XXIII of GATT 1994 and make recommendations to our next Session, which we have decided to hold in 2015. It is agreed that, in the meantime, Members will not initiate such complaints under the TRIPS Agreement.”

Biological Diversity, Green Tech: Unchanged Positions

According to a WTO source, members kept their positions in the discussion on the relationship between the TRIPS and the United Nations Convention on Biological Diversity. One issue is the disclosure of the source of the genetic resources and traditional knowledge in patent applications, which is strongly opposed by some developed countries. Supporters of discussing the disclosure amendment to TRIPS were Indonesia, Egypt, Brazil, Bangladesh, India, Colombia, Cuba, Ecuador, Switzerland, the EU and Sri Lanka, a WTO source said.

Venezuela opposed the patenting of life forms, as well as Bolivia (statement in Spanish) [pdf], according to sources.

Ecuador called for a declaration to be made at the Bali ministerial in December highlighting the flexibilities available in the TRIPS agreement, supported by Bolivia, Indonesia, Cuba and India, the WTO said. Ecuador submitted a paper [pdf] on environmental technologies and solutions to facilitate the transfer of those technologies to developing countries at the last session of the TRIPS Council, on 11-12 June (IPW, WTO/TRIPS, 13 June 2013).

The next TRIPS Council meeting is tentatively scheduled for 25-26 February 2014.


Catherine Saez may be reached at info@ip-watch.ch.

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