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CANBERRA, Australia -- Australia's High Court yesterday upheld a new law that prohibits tobacco companies from displaying their logos on cigarette packs, a ruling that could set a global precedent, according to an Associated Press report.
Starting in December, cigarette packs will be olive-colored and feature graphic health warnings and photos showing the effects of smoking on teeth, mouths, eyes and more. Tobacco companies challenged the law, arguing that the value of their trademarks would be destroyed without the ability to display brand designs, logos and colors on the packs.
Tobacco companies British American Tobacco, Philip Morris International, Imperial Tobacco and Japan Tobacco International are worried that the court's ruling could set a global precedent that would cut their brand values worldwide, according to the report.
"Many other countries around the world ... will take heart from the success of this decision today," Attorney General Nicola Roxon stated after the court ruling. "Governments can take on big tobacco and win and it's worth countries looking again at what the next appropriate step is for them."
The tobacco companies also argued that the government would unfairly benefit from the law by using cigarette packs as a platform to promote its own message without compensating them. Under Australia's constitution, the government may acquire the property of others only on "just terms."
Philip Morris stated it intends to pursue compensation through the terms of a bilateral investment treaty between Australia and Hong Kong. "There is still a long way to go before all the legal questions about plain packaging are fully explored and answered," said company spokesman Chris Argent in a statement.
Meanwhile, British American Tobacco and Imperial Tobacco stated they would comply with the law but cautioned against the rise of counterfeiters.
"Although the (law) passed the constitutional test, it's still a bad law that will only benefit organized crime groups which sell illegal tobacco on our streets. ... The illegal cigarette black market will grow further when all packs look the same and are easier to copy," said British American spokesman Scott McIntyre in a statement.
However, Australia Health Minister Tanya Plibersek stated that there are other ways to battle counterfeiting, such as the use of alphanumeric codes.
The court ordered the challenging tobacco companies to pay the government's legal fees, but withheld its reasons for the ruling. They will be released later this year, reported the AP.
The battle over the law may not be over yet; a potential challenge could arise through the World Trade Organization (WTO). Members Ukraine, Honduras and the Dominican Republic, all tobacco-growing countries, have made official requests for consultation on plain packaging. This is the first step in the WTO's dispute resolution process. The countries argue that that the laws contravene Australia's international obligations regarding trade-related aspects of intellectual property, said the AP.
The new law isn't the only restriction on cigarette advertising; tobacco ads have been banned from radio and television since 1976, and restrictions have tightened to include print and online ads as well as retail outlets, according to the report.