Legal action has been initiated by tobacco giant Philip Morris against the Australian government concerning the proposed removal of company logos from cigarette packages. These logos would be replaced with disturbing images depicting cancerous mouths, ill children, and bulging, blinded eyes.
The new regulations aim to make cigarette packaging less appealing to smokers, positioning Australia as the most stringent country regarding tobacco advertising. Several cigarette manufacturers have expressed their outrage and threatened legal action, claiming that the new rules unlawfully reduce the value of their trademarks. Philip Morris stands out as the first among them to file a compensation claim.
Philip Morris spokeswoman Anne Edwards stated, “We would anticipate that the compensation would amount to billions.”
The proposed legislation, expected to be introduced to Parliament in July, would prohibit cigarette manufacturers from presenting their logos, promotional text, or colorful imagery on cigarette packs. Instead, brand names will be displayed in a small, uniform font, accompanied by extensive health warnings and shocking, full-color illustrations depicting the consequences of smoking. The implementation of this law will occur over six months, starting in January 2012.
Hong Kong-based Philip Morris Asia Limited, which owns the Australian subsidiary Philip Morris Limited, has submitted a notice of claim contending that the legislation infringes upon a bilateral investment treaty between Australia and Hong Kong.
The tobacco firm asserts that the treaty safeguards companies’ properties, which includes intellectual property such as trademarks. Edwards commented that the plain packaging initiative severely devalues the company’s trademark.
“Our brands are fundamentally one of our most vital assets as a company — they help us compete and allow us to differentiate our products,” Edwards explained. “This move … effectively amounts to the confiscation of our brand in Australia.”
The government has refuted claims that the plan violates any legal statutes and maintains its position.
“Our government is resolute in taking every measure possible to minimize the harm caused by tobacco,” declared Health Minister Nicola Roxon. “We will not be intimidated by threats from tobacco companies or their legal maneuvers.”
Prime Minister Julia Gillard similarly dismissed Philip Morris’ threats. “We will not be influenced by the intimidation tactics of big tobacco,” she asserted.
The legal notice initiates a three-month period for negotiations between the two parties. Philip Morris has indicated that if a “satisfactory outcome” is not achieved by the conclusion of this period, it will pursue arbitration.