May 31, 2010

Despite having some of the most progressive anti-smoking legislation in the world, the South African government says it would consider the possibility of further restrictions, including generic unbranded cigarette packaging.

Asked by News24 whether South Africa would follow Australia in its bid to see all branding removed from cigarette packaging, the Department of Health responded: “The South African government, mainly the Department of Health, will still consider any effective measure which will relieve the harmfulness of tobacco products to human beings which includes young people.”

The department said it had “made huge improvements in the past years regarding this particular issue”.

This comes after the Australian announced in April that starting from July 1, all tobacco companies will be legally compelled to remove branding from their product packaging.

Legal action ‘inevitable’

However, marketing commentator Jonathan Cherry said it would be best if the South African government waited for the Australian situation to play itself out first before committing to removing all branding from cigarette packaging.

“The tobacco industry will probably lock government in a court battles for years,” Cherry told News24.

He said whatever precedent is set by the “inevitable” legal battle will determine whether other countries follow suit.

Cherry said South African laws were “very advanced and strict already” and that attempting to go the Australian way might fuel the growth of the counterfeit cigarette industry.

“People are always going to like cigarettes. Locking down the industry like that would open it up to counterfeiting. With branding, you can tell counterfeit cigarettes from real ones,” he said.

He said, as in Australia, the move might end up costing the government a lot of money as branding is protected under intellectual property law.

Compensation

“To deny someone to use their own property one would have to pay compensation,” he said.

It has been reported that the Australian government could end up paying up to A$3bn a year to tobacco companies in compensation.

The National Council Against Smoking has commended the Australian government for proposing the law.

“I certainly think it is a step in the right direction. The Australian government is very courageous,” said the council’s Dr Yussuf Saloojee noting, like Cherry, that the “heavy tobacco lobby” would challenge the law’s adoption.

He also praised the South African government’s efforts.

“Since 1994 there has been a very significant fall in tobacco consumption,” he said.

Cigarette sales falling in SA

According to Saloojee, statistics show that about 40 billion cigarettes were sold in South Africa in 1991, compared to 23 billion reflected in the latest statistics.

According to current legislation the government has the power to decide what appears on cigarette packs and vending machines.

The health department said work on legislation that would see photographic warnings placed on cigarette packaging was still ongoing.

“The process thus far is that the national task team is busy working on the draft regulations and testing the first set of pictures,” it said.

It said the draft would be gazetted for public comment before it can be finalised.

 

Source: News24.com (May 25, 2010)

May 31, 2010

With an announcement on Monday, Philippines has finalized requirements so that graphic health information will appear at the top 30% of the front, and the top 60% of the back.  A separate law (which continues in force) requires a 30% text warning to appear on the front.  Thus total messages on the front would be 60%.

 

Source: Department of Health News Release (May 24, 2010)

May 14, 2010

Massachusetts is poised to become the first state in the nation to force retailers to prominently display graphic warnings about the perils of smoking right where cigarettes are sold – at tobacco sales racks and next to cash registers.

Images of ominously darkened lungs, damaged brains, and diseased teeth could start appearing before the end of the year in more than 9,000 convenience stores, pharmacies, and gas stations, if a proposal by the state Department of Public Health is approved as expected. Other posters would direct smokers to where they can get help to stamp out their habit.

Retailers who refuse to display the signs within 2 feet of tobacco displays and cash registers could face fines of $100 to $300.

A retail industry group reacted yesterday with dismay, arguing that cramped corner stores are already burdened by too many regulatory dictums.

The initiative needs the approval of the state Public Health Council – an appointed panel of doctors, disease trackers, and consumer activists – but board members yesterday expressed unequivocal support. Since the 1990s, Massachusetts has been at the vanguard of US efforts to reduce tobacco use, the leading cause of preventable deaths in the United States.

The signs are modeled on a nothing-left-to-the-imagination campaign in New York City, where signs showing the health effects of smoking began sprouting in 11,500 shops last December. Massachusetts health authorities provided copies of the New York City posters as an illustration of what their campaign will look like.

“If somebody is trying to quit smoking and they go back to the store and they’re tempted – oh, just one pack – we hope this will help them make a different choice,” said Lois Keithly, director of the Massachusetts Tobacco Cessation and Prevention Program.

The campaign is being underwritten by $316,000 in federal stimulus money from the Centers for Disease Control and Prevention, which will allow the state to provide the materials to retailers without charge. Because the posters will be produced by outside vendors, a spokeswoman for the state Department of Public Health said, it conforms to the intent of the stimulus law, providing jobs in a sour economy.

Graphic images portraying the damage wrought by smoking have been a hallmark of antismoking campaigns in Europe for years. But, in the United States, admonitions on cigarette packs and at stores have tended to rely on words rather than pictures.

“And they’re just very ineffective at this point,” said Eileen Sullivan, policy director for the state’s tobacco control program.

The Retailers Association of Massachusetts has not decided how gamely it will fight the proposal, but the organization’s president, Jon Hurst, left little doubt that most shopkeepers will respond coolly to another mandate. That may prove especially true at convenience stores, where tobacco sales constitute a significant share of business.

“Do you really have to have additional graphic signage and multiple layers of it at each cash register?” said Hurst, whose alliance has 3,100 members. “If you warn on everything, those warnings become essentially meaningless. They already have signage on alcohol, tobacco, lottery, they have signage on price accuracy.”

The maker of Marlboro and other top-selling brands, Philip Morris USA, said it believes warnings should be uniform nationally and established by the federal government, which has been given expanded authority over tobacco marketing.

In New York, the graphic signs have met with little resistance from retailers and consumers, said Anne Pearson, an attorney with the city’s Bureau of Tobacco Control.

“There’s a large body of evidence showing these graphic images are very effective,” Pearson said. “They can communicate information in a way that text just can’t, and they can also communicate a message to people regardless of their level of literacy and regardless of the language they speak.”

The Massachusetts Public Health Council is expected to vote on the graphic posters in August, but the only misgiving members expressed yesterday was whether the campaign would be rendered in enough languages to reach the state’s increasingly diverse population.

“We need to help our immigrant populations deal with this,” said Dr. Michele David, a council member.

The regulations will vary, depending on whether stores have tobacco displays or, instead, keep cigarettes and other tobacco products behind the counter. The biggest signs – those displayed next to racks freighted with tobacco goods – will measure 8 1/2-by-11-inches; cash register signs will be smaller.

Regardless of the size, the intent, tobacco control specialists said, is the same: to help the 77 percent of Massachusetts smokers who say they want to quit finally do it.

“To have something there to remind them how horrible, how addictive this is, to tell them how to get help, we think it will be a very, very powerful tool for counteracting the power of tobacco advertising at the retail outlet,” said Eric Lindblom, policy research director at the Campaign for Tobacco-Free Kids in Washington.

 

Source: The Boston Globe (May 13, 2010)

May 7, 2010

In response to last week’s plans by the government to restrict cigarette packaging to plain and standardised designs, the cigarette industry has warned that it will protect its intellectual property rights and claim compensation from the government. I saw a figure of $3 billion as a possible amount for that compensation. The government has denied that compensation would be needed. So who has the better case?

In my view, the government has the stronger position. No one is disputing that the government can restrict the appearance of packaging for goods; it already does this. But the government must pay compensation if it takes control over any property, and in this case the cigarette companies are complaining that they are losing some of their intellectual property rights, primarily their trademark and copyright intellectual property of their present cigarette packaging.

The problem the companies will have with this approach is that the new plain packaging will include the trademark, albeit in small-sized black letters in a standard font and position on the packet. Otherwise the consumer will not be able to ask for their preferred cigarettes at the point of sale.

Most trademarks are registered in just this form, as plain words in upper case, and this type of registration covers the word in whatever form it is actually used - irrespective of whether it is in a fancy script or in a special colour or surrounded by graphics and attractive patterns.

For example, the word mark Winfield is Australian trademark registration No.369487 dating from December 18, 1981, and owned by British American Tobacco (BAT).

It is often overlooked that the primary right obtained from trademark registration is a negative right; it is actually the right to prevent other people from (mis)using the trademark. The proprietors may use the mark themselves subject to other laws, but they actually gain from registration the right to take legal action that will stop third parties from using the mark on the same or similar goods.

So, the change to plain packaging will not adversely affect this right. For instance, in the future if someone were to manufacture in Australia Winfield cigarettes in their present packaging for export to other countries, BAT would still be able to take action to prevent this.

The situation with copyright is broadly similar. It basically confers the right to take action against third parties who are copying and misusing the owner’s old packaging artwork and this right is hardly diminished by requiring plain packaging.

About 2900 trademarks are current registered in Australia covering cigarettes, and there are another 180 or so pending applications. But consumers do not see 3000 different brands of cigarettes when they go into a shop. What is happening is that the cigarette companies in many cases are double dipping, and obtaining multiple trademark registrations for each brand they own.

There are 17 trademark registrations and applications including the word Winfield, 22 including Pall Mall, and 11 including Horizon. These registrations include the basic plain word mark - Horizon is registration 203429 dating from 1966, Pall Mall is registration 1062086 dating from 2005. But in addition to the plain version, which protects the mark in whatever appearance it is used, the cigarette companies have also re-registered the mark in a narrower form, including the get-up of the cigarette packaging.

BAT’s TM registrations  Nos.1226909, 1226913, 1226914, and 1226915 (without a colour restriction), all dating from 2008, cover different variations of the Pall Mall packaging:

It is unlikely that these registrations provide much additional protection over the broader 1062086 registration; perhaps they can help protect the logo, but possibly not, since it is really the presence of the Pall Mall words that make these distinctive, and in any case the ‘915 registration renders the first four redundant as it covers all possible colour variations of the logo.

This profligacy of trademark registrations, in many cases unnecessary from a trademark protection point of view, will inflate any claim to compensation to be made by the cigarette companies. In fact, the large number of trademark registrations of the whole appearance of the packaging in the light of prior registrations of plain word marks is fairly unusual in the trademark arena. I doubt if courts would be impressed by this approach.

An indication of why the government is now moving to enforce plain packaging can be gained from viewing BAT’s registrations Nos.1143366, 1143368, 1143369, 1143371,and 1129286:

Which provide an indication of the thinking of tobacco companies about where the packaging get-up may be trending, as well as perhaps giving the producers of the Mad Men television series pause for thought about their own intellectual property rights . These trademarks would seem to have a promotional aspect that would help negate the health warning on existing packets of cigarettes, should they be used.

The trademark register is also cluttered with many registrations of cigarette packaging and word marks that are probably no longer being used. For instance, BAT is still maintaining Strand as No.10699 dating from 1911 and Craven as registration No.2933 dating from 1906, which are seemingly no longer being used, though it is interesting imagining smokers asking for Craven brand cigarettes.

Such registrations would probably be invalid, because any registration for a mark that has not been used generally in a continuous period of three years is liable to be removed from the register, if an application to do so is made by a third party.

So for several reasons the intellectual property owned by cigarette companies will not be much affected by the restriction to plain packaging, or is based on redundant registrations directed to packaging variations of plain word marks that will still be being used. The cigarette companies could argue that the value of their goodwill in these redundant trademark registrations has been reduced and damaged, but assigning a value among the plethora of registrations will be difficult, and I believe probably will not much help the companies’ legal position.

Furthermore, the government is likely to be able to show a public benefit from restricting the packaging to a plain and standard form, by reducing the level of smoking in Australian society, as well as in improving its financial situation, because the new standard packaging should reduce smuggling of contraband cigarettes from overseas. Shops stocking traditional-looking packs of cigarettes will now be easy to spot as all Australian cigarettes will be distinctive in appearance, at least until other countries adopt similar procedures.

No doubt there will be more huffing and especially puffing from the cigarette companies about the requirement to use plain packaging, but ultimately, I believe this will prove futile.

 

Source: Crikey (May 8, 2010)