Tobacco trademarks – Plain packaging implemented in France

Published onApril 2015

On 14 April 2015, French Parliament adopted the Law aiming to modernize the health system, which includes measures for prevention of smoking, and in particular imposes the plain packaging for tobacco products.

The French law transposes almost immediately the European Directive of 3 April 2014 (1), which:

  • Increases the size of health warnings(consisting of persuasive texts and shocking images (2)), covering now 65% of the surface of the packets and which must be placed at the top part of the packet in order to increase their visibility;
  • Establishes size and shape parameters for packaging of tobacco products;
  • Prohibits texts, symbols, names, trademarks, figurative or other signs on packets promoting the flavour, positive properties, environmental benefits or economic costs.

The Directive leaves it to Member States to decide whether or not to introduce further requirements concerning the standardisation of the packaging of tobacco products.

French Parliament has chosen to take these additional measures, establishing plain packaging as of May 20, 2016 (3):

The unit packets, outside packaging and wrappers of cigarettes and roll-your-own tobacco, cigarette paper and cigarette rolling papers are neutral and standardized.

A decree in Council of State will detail conditions of neutrality and uniformity, including shape, size, texture and color, and how to apply trademarks and denominations on these materials.”

Shall therefore be prohibited any distinctive elements, aside from the brand name, present on the packages, such as slogans, logos, combination of ornamental elements and colors, all particularly recognizable and allowing smokers to easily identify the desired product.

These measures were already recommended by the World Health Organization Framework Convention on Tobacco Control of May 2003 (4), the provisions of which are binding on the Union and its Member States.

The neutrality of the package is usually justified by the need to protect public health, in particular teenagers and young people and discourage them from smoking by shocking them and making cigarette packages less attractive. Plain packaging would also increase visual attention to health warnings on cigarette packs for non-smokers and weekly smokers.

Besides, given the various existing restrictions and prohibitions, the only place where trademarks for tobacco products can still be displayed and used is precisely their packaging. Therefore, the French law provisions deprive trademark owners from the right to use their trademarks other than as word marks.

Numerous questions arise.

Financial compensation for trademark owners

According to the Convention of Human Rights, expropriation without financial compensation related to its value will normally constitute a disproportionate interference.

In the present case, French law annihilates the rights of tobacco makers to use their figurative trademarks as well as the value of those rights. But as far as we know, French government did not make any provision in this respect.

Do the French provisions respect international obligations, in particular the World Trade Organisation’s agreement? (5)

Five countries, three cigar makers (Honduras, Dominican Republic and Cuba), and two exporters of cigarettes (Ukraine and Indonesia) have been challenging since 2012 Australia’s law on plain packaging before the World Trade Organisation. Grounds are mostly based on the TRIPS.

The decision is expected on 2016.

Are these measures proportionate and justified on grounds of public health according to EU principle of proportionality?

This principle requires that measures implemented through Community provisions be appropriate for attaining the objective pursued and not go beyond what is necessary to attain it. Legality is controlled by the Court of Justice of the European Union.

The Courts already judged that “the Community legislature must be allowed a broad discretion in an area such as that involved in the present case, which entails political, economic and social choices on its part, and in which it is called upon to undertake complex assessments. Consequently, the legality of a measure adopted in that sphere can be affected only if the measure is manifestly inappropriate having regard to the objective which the competent institution is seeking to pursue”  (6).

By increasing “the percentage of the surface area on certain sides of the unit packet of tobacco products to be given over to those indications and warnings, in a proportion which leaves sufficient space for the manufacturers of those products to be able to affix other material, in particular concerning their trademarks, the Community legislature has not overstepped the bounds of the discretion which it enjoys in this area”.

And concerning the trademark MILD SEVEN, “While that article entails prohibition, in relation only to the packaging of tobacco products, on using a trade mark incorporating one of the descriptors referred to in that provision, the fact remains that a manufacturer of tobacco products may continue, notwithstanding the removal of that description from the packaging, to distinguish its product by using other distinctive signs. In addition, the Directive provides for a sufficient period of time between its adoption and the entry into force of the prohibition”.

It remains to be assessed whether the limited space reserved to the trademark holder and/or the prohibition to use the figurative trademark does or does not excessively affect the economic interests of the manufacturers of tobacco products and if those provisions are necessary to ensure a high level of public health protection.

Will the French provisions facilitate counterfeiting and smuggling?

The cigarette market particularly lends itself to the development of unlawful trade and plain packaging would be likely to increase the risks of fraud.

The absence of distinctive, decorative and figurative signs such as logo, ornamentation, colours and/or typeface would facilitate reproduction and thus counterfeiting.

Besides, it would be practically impossible for customs authorities to distinguish real goods from imitations, thus undermining the efforts made to date by the customs authorities, especially to implement an effective policy to fight counterfeiting.

Could the unused figurative trademarks be cancelled?

If used in major countries such as Germany, Spain or Italy, the Community trademarks could not be cancelled for non-use in France. As regards French figurative trademarks, the prohibition of French law could be considered as valid reasons of non-use (7).

The fight against smoking is therefore strongly engaged in France while the actions for the protection and recognition of industrial property rights still go on.

© INSCRIPTA

(1) Directive 2014/40/EU of 3 April 2014 on the approximation of the laws, regulations and administrative provisions of the Member States concerning the manufacture, presentation and sale of tobacco and related products.

(2) Specified in the picture library here: http://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32014L0109

(3) Here (in French only): http://www.assemblee-nationale.fr/14/ta/ta0505.asp

(4) See the WHO Framework Convention on Tobacco Control guidelines, Article 11: Each Party shall, within a period of three years after entry into force of this Convention for that Party, adopt and implement, in accordance with its national law, effective measures to ensure that: (a) tobacco product packaging and labelling do not promote a tobacco product by any means that are false, misleading, deceptive or likely to create an erroneous impression about its characteristics, health effects, hazards or emissions, including any term, descriptor, trademark, figurative or any other sign that directly or indirectly creates the false impression that a particular tobacco product is less harmful than other tobacco products. These may include terms such as “low tar”, “light”, “ultra-light”, or “mild”; and (b) each unit packet and package of tobacco products and any outside packaging and labelling of such products also carry health warnings describing the harmful effects of tobacco use, and may include other appropriate messages.

(5) Agreement on Trade-related aspects of Intellectual Property rights or TRIPS, Article 8-1: “Members may, in formulating or amending their laws and regulations, adopt measures necessary to protect public health and nutrition, and to promote the public interest in sectors of vital importance to their socio-economic and technological development, provided that such measures are consistent with the provisions of this Agreement.

Article 20: “The use of a trademark in the course of trade shall not be unjustifiably encumbered by special requirements, such as use with another trademark, use in a special form or use in a manner detrimental to its capability to distinguish the goods or services of one undertaking from those of other undertakings.

(6) ECJ, Case C-491/01, 10 December 2002, paragraphs 79, 80 and 123: “With regard in particular to the protection of public health, it follows from Article 95(3) EC that the Community legislature, in harmonising the legislation, must guarantee a high level of protection, taking particular account of any new development based on scientific facts. Progress in scientific knowledge is not, however, the only ground on which the Community legislature can decide to adapt Community legislation since it must, in exercising the discretion it possesses in that area, also take into account other considerations, such as the increased importance given to the social and political aspects of the anti-smoking campaign.

(7) See Article 19-1 of TRIPS: “Circumstances arising independently of the will of the owner of the trademark which constitute an obstacle to the use of the trademark, such as import restrictions on or other government requirements for goods or services protected by the trademark, shall be recognized as valid reasons for non-use”.