International arbitration court rejects challenge to Australia cigarette logo ban

SYDNEY – Tobacco giant Philip Morris has suffered another setback in its efforts to challenge an Australian law that bans tobacco companies from placing logos on their cigarette packs and forces them instead to feature graphic health warnings.

Hong Kong-based Philip Morris Asia Ltd., which had argued Australia’s law constitutes a sweeping ban on trademarks, said on Friday that the Permanent Court of Arbitration in Singapore determined that it had no jurisdiction to hear the tobacco company’s case.

Philip Morris said it would review the court’s decision, which brings to an end the tobacco giant’s latest challenge to Australia’s tough packaging restrictions.

Australia became the first country in the world to mandate plain cigarette packs with no brand logo or colours permitted when the law went into effect in 2012. Cigarette packs are now uniformly brown and feature graphic warnings, including photos of cancer-riddled mouths and gangrenous toes. Tobacco companies fought the law, arguing it violated intellectual property rights and devalued their trademarks, but Australia’s highest court upheld it.

“There is nothing in today’s outcome that addresses, let alone validates, plain packaging in Australia or anywhere else,” Marc Firestone, Philip Morris International Senior Vice-President and General Counsel, said in a statement.

“It is regrettable that the outcome hinged entirely on a procedural issue that Australia chose to advocate instead of confronting head on the merits of whether plain packaging is legal or even works.”

The Australian minister responsible for tobacco policy said plain packaging meets all of the country’s international legal obligations.

“Smoking does untold harm to Australians, causing deaths from cancer, lung and heart disease, and hurting families,” Minister for Rural Health Fiona Nash said in a statement.

The Public Health Association of Australia dubbed the arbitration court’s decision a major victory.

“The tobacco industry’s desperate legal efforts have failed yet again,” the group’s tobacco spokesman, Mike Daube, said in a statement. “They are the big losers, but the thousands who will not die from smoking are the winners. The tobacco companies are desperate to prevent plain packaging here and internationally because they know it works.”

The World Trade Organization is considering challenges to Australia’s law by several member states who argue the rules restrict trade and violate trademark rights.