Thursday, 9 June 2011

Plain packaging and intellectual property arguments

Professor Simon Chapman, a tobacco control careerist, defends plain packaging with vigour. He believes that the worries of intellectual property experts, the British, French, Canadian and Lithanian governments and an Australian senate report dating back to 1995 are misplaced, on both the advisability of the policy and its potential to create positive health outcomes. Just yesterday we reported how concern about this policy has reached Washington.

I'm no policy expert but its seems to me that no government should expect to wipe out the brand identity of products and not expect manufacturers to react with court action. It amounts to destruction of property, on a vast scale. As discussed in the clip below, possessing intellectual property (and this includes branding) implies being able to trade on it. Simon Chapman's argument appears to be that if the government destroys brands without either itself or a third party gaining directly from their destruction this is somehow allowable. It's okay as long as the government doesn't take these brands for its own use, or give it away to another party. Quoting Professor Mark Davison, Chapman explains:
"The extinction of rights or the reduction of rights is not relevant. The government or a third party must acquire property as a consequence of the legislation.
“The government does not wish to use the tobacco trade marks. Nor does it want third parties to do so. It does not desire to or intend to acquire any property. The proposition that prohibitions on the use of property do not constitute an acquisition of property was confirmed by the High Court as recently as 2009. In that case, the High Court held that the government was entitled to extinguish property rights in licences of farmers to take bore water.”
The implication that government can actually destroy property (intellectual or otherwise) if it can satisfy a court that it doesn't accrue any direct benefit does not reassure many of the opponents of plain packaging, many of whom fear that legal action could result in enormous pay-outs that the taxpayer will ultimately have to pay. This is the line of radio presenter Alan Jones (a self-confessed smoke-hater, but he explores this issue with an open mind – on smoke, anyway!) in this discussion with Alan Bennett, adjunct professor of law at Sydney University. (Much of the same material is covered here.) Jones discusses many angles, including the lack of evidence that plain packaging will reduce smoking rates, and international concern about trade related property rights agreements (TRIPS is a World Trade Organisation ruling).

The discussion is well worth a listen – Professor Bennett points out that plain packaging will create two classes of intellectual property holders, namely tobacco companies, who are not allowed to exploit their intellectual property, and all other intellectual property holders, who can exploit their brands and trade marks to make as much money as they wish. Since even Australian Health Minister Nicola Roxon knows there is no empirical evidence that plain packaging will work, since it has never been tried before, it is hard to say that there will be any public health benefit. Arbitrarily destroying a single industry's property when nobody benefits does seem to be pointless at best, and vindictive at worst. I think I prefer Alan Bennett's reasoning to Simon Chapman's. I hope he's right anyway.

LATE EDIT – a group of tobacco-producing nations led by the Dominican Republic has also spoken against the policy at a meeting of the World Trade Organisation in Geneva – concerned about damage to the tobacco trade. Confusing intention with effect, the Australian trade minister described the move as 'not anti-trade' but 'anti-cancer'.  The idea of the policy is to prevent tobacco purchasers paying more because they like specific brands – it will bring tobacco prices down. Its effect is more likely to be anti-trade and (if tobacco is as dangerous as they say it is) pro-cancer!


Anonymous said...

If it brings tobacco prices down, then doesn't that just make tobacco more affordable for the underage smokers they are trying to prevent from buying tobacco.

First they took private property rights with the smoking ban. Now they will take trademark and branding rights. That is a danger in and of itself and contrary to right of free trade.

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