Big Tobacco took the British government to court on Thursday, arguing that the UK’s “plain packaging” law which will take effect next May, unlawfully takes away its intellectual property.
Companies including Philip Morris International, British American Tobacco, Japan Tobacco International and Imperial Tobacco Group are challenging the legislation because it will prohibit all forms of branding on tobacco packaging, including colors and logos.
The rule, known as “plain packaging,” would also require graphic warnings illustrating the health problems smoking can cause. It aims to reduce smoking’s death toll by making the packs less attractive.
“Smoking is catastrophic for your health and kills over 100,000 people every year in the UK,” said a spokesman for the Department of Health. “Standardized packaging is an important public health measure aimed at discouraging children from smoking and helping smokers to quit.”
The case will be heard in a six-day hearing at London’s Royal Courts of Justice.
Tobacco companies argue that the law represents the seizure of their property without any compensation.
“Our trademarks have a capital value … and that value has been effectively removed,” said David Anderson of law firm Freshfields, representing Japan Tobacco International in court. He argued that trademarks are an “instrument of commercial strategy.”
“Since there is no compensation at all …. They must be considered unlawful for that reason alone,” he also said.
In Australia, the only country to have so far implemented plain packaging, the companies say there has been an increase in black market tobacco and sales of lower-priced cigarettes.
The companies failed in their legal challenge to the Australian law, but have said they are more confident about the UK challenge because they only have to prove under UK law that their intellectual property was illegally taken.
Aside from Australia and Britain, plain packaging has been approved in Ireland, Hungary and France, while over a dozen other countries — including Belgium, Canada and Pakistan — have either proposed or are talking about proposing, similar measures.
“In total we count 20 countries with some level of interest or focus on pursuing some type of plain packaging regulation,” said Wells Fargo analyst Bonnie Herzog in a recent note. She said those countries represent 30 percent of global cigarette retail sales, excluding China and the United States.