Following votes in the House of Commons and House of Lords in March in favour of standardising cigarette packaging, we could see rules finalised that will force cigarette packets sold in England to adopt the same uniform look. David Cameron recently repeated his party’s commitment to introducing ‘healthy’ packaging in their manifesto. What this means is that whatever the brand, packets of cigarettes will have to be the same shape and size. Only a brand name in a standardised font and the graphic health warning image that must be displayed by law will be shown on the front of the packaging. The idea is that people who may be swayed to start or continue smoking because of the perceived ‘coolness’ of a particular brand may be dissuaded from doing so because of the lack of differentiation. The changes are aimed particularly at further reducing the number of young people who take up the habit every year.
The industry point of view
This move will of course leave tobacco firms unable to use the package design, logos and other recognisable elements of branding that they’ve paid significant sums over the years to protect through trademark registration. So, does this breach trademark rules and what are the potential intellectual property repercussions for other industries operating within England?
Unsurprisingly, the British American Tobacco (BAT) lobby is strongly opposed to plain packaging and is likely to pursue the matter in the courts when/if legislation comes into force. In a statement published on their website, BAT explains their view that it is not only their right to use trademarks but in doing so, some protection is provided to the consumer:
“We should be entitled to use our validly registered trademarks onpacks to distinguish our products from those of our competitors. Our trademarks are our intellectual property. We have created them and invested in them over many decades. Plain packaging denies us the right to use our trademarks. A trademark is also an important tool for consumers. As the British Brands Group has stated: “packaging legislation ignores the crucial role that branding play.”
Those against plain packaging on packets have expressed concern that it would allow cigarettes to be more easily counterfeited, which in turn will lead to tax losses and smokers potentially being exposed to other harmful substances. Representatives for British Industry have also come out against the decision, expressing trepidation that the legislation may impact on the reputation of England and the wider UK when it comes to intellectual property.
In an article for Cityam published in March, the director general of the CBI, John Cridland put forward his view that legislation for the tobacco industry may impact negatively on our entire IP system, harming investment in innovation and potentially jobs: “IP has never been so important and will continue to act as the hinge that will keep Britain open for business.”
“[…]The UK is ranked second only to the US [in the Global IP Centre Index] in providing businesses with a strong IP environment. This assists research and development (R&D) and drives foreign direct investment.”
On the opposite side of the fence are those who say that trademark registration is designed to prevent others from using the logos and designs of others and doesn’t specifically give you the right to put your trademark to use. What’s more, tobacco firms will still be able to use their brand name – they just won’t be able to display it as attractively as previously.
What the UK IP minster has said
There are some concerns that introducing plain packaging for cigarettes could lead to similar sanctions on other ‘unhealthy’ products such as junk food. In an attempt to provide reassurance on the issue, IP Minster Baroness Neville-Rolfe has said on the matter: “Let me assure you that my officials and I have been working tirelessly to ensure that the potential impact on brand and intellectual property has been given full and proper consideration. We have been sure to emphasise the vital role that brands play towards the UK’s economic wellbeing. I want to be clear that the government has no intention to extend standardised packaging to any product other than tobacco. The government sees the introduction of standardised packaging of tobacco as a unique approach to tackle smoking and its appalling effect on public health.”
The wider view point
Australia introduced plain packaging on cigarettes back in 2012 and is currently defending this decision in a case in front of the World Trade Organisation. However, it’s very unlikely that the huge consumer market in the US will follow suit. A statement on the Global IP Center website outlines beliefs that to do so would put the industry at higher risk of counterfeit production, potentially create trade barriers and may result in other finding themselves in the firing line. In summary: “The U.S. Chamber of Commerce strongly supports measures to protect public health and recognizes the importance of reducing smoking rates. However, we believe that standardized packaging — also known as “plain packaging” — undermines lawful protection of intellectual property, does not advance public health goals, violates international agreements, and sets a dangerous precedent for other industries.”
The next steps in the plain packaging debate
It will be very interesting to see how the plain packaging plans unfold, we can be sure other industries and other countries of the world will be watching when they do.