Tobacco companies say government is “taking their property away”

With the House of Commons voting in favour of unbranded cigarette packaging, the companies say their brands will be compromised and that the legislation is an infringement of their intellectual property rights.

Proposed design for UK plain cigarette packaging, released by the Department of Health
Proposed design for UK plain cigarette packaging, released by the Department of Health

Tobacco companies have disputed MPs’ vote to implement unbranded cigarette packaging, saying that it is an infringement of their intellectual property (IP) rights.

This follows the House of Commons voting by a majority of 254 in favour of the legislation, which will result in plain packaging coming into action in May 2016 if the House of Lords follow the vote.

Companies such as British American Tobacco and Imperial Tobacco are threatening to take legal action if the House of Lords passes the legislation into law.

They say that their branding is effectively being taken away by the government and therefore that their IP rights are being infringed.

The standardisation will see all packaging take the same colour and typeface, alongside images depicting the consequences of smoking.

“Smoking remains one of our most significant public health challenges,” says public health minister Jane Ellison. “Almost 80,000 people in England alone die every year from ill health caused by smoking.”

She adds that standardised packing “would be bringing the prospect of our first smoke-free generation one step closer.”

British American Tobacco has said that it will commence a legal challenge against the government if the House of Lords supports the House of Commons yes-vote.

“This legislation is a case of the UK Government taking property from a UK business without paying for it,” says Jerome Abelman, corporate and regulatory affairs director at British American Tobacco. “Any business that has property taken away from it by the state would inevitably want to challenge and seek compensation.”

“No-one starts or continues to smoke because of the colour of the pack,” says Alex Gietz, director of Group Corporate Affairs at Imperial Tobacco. “We have a fundamental right to differentiate our brands from those of our competitors.”

Lee Curtis, partner and trademark attorney at law firm HGF, says that a trademark is a property right, and reducing a brand image can impinge on this.

“Companies have invested in a brand image and name over many decades, and how they use those is being restricted in some way,” he says. “It effectively reduces the built-up investment and good will in the brand over the years.”

He adds: “The whole point of plain packaging is to reduce that appeal, which tobacco companies are arguing that they’ve invested millions in. What they’re trying to say is that IP rights are the same as any other property rights. Whether that’s right or wrong from a health point of view is for the government and health authorities to make a decision on.”

“We are satisfied that we are acting lawfully in making this decision to proceed with the introduction of standardised packaging,” says a spokesperson for the Department of Health. “We would not be proceeding with this policy if we did not believe it to be defensible in the courts.”

They add: “Ministers believe the potential public health benefits far outweigh the risks of legal challenge and that steps to introduce this policy should begin immediately.”

According to the Department of Health, the House of Lords is expected to make its decision within the next few weeks.

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