European Tobacco Products Directive will affect the U.S. economy and violate the IP system!
May 31, 2013
Last Monday, May 27th, the Health Irish Minister James Reilly declared that the Irish Cabinet approved his plan to remove the ‘mobile advertisement’ for tobacco firms before World of No Tobacco Day, today Friday, May 31th. Ireland will become the second country after Australia to introduce plain pack cigarettes. In fact, the same policy, of plain packaging on all cigarette packs, has been already adopted, in Australia in December 2012. This kind of implementation could be adopted very soon, not only by the New Zealand Government, but also byEuropean Union.
Last December 2012, the European Commission has adopted its proposed revision to EU’s Tobacco Products Directive (TPD). The core of the EU TPD is focused not only on the outright ban or a “backdoor ban” on 10 percent of the cigarettes currently on the European market but also on standardizing cigarette packaging that more than doubles the size covering the 75 percent of the pack.
This EU directive represents a serious violation not only of the basic intellectual property rights system but also will affect the U.S tobacco exports (with a strong negative repercussion on North Carolina and Kentucky farmers.) For instance, according to Dr. Blake Brown from the North Carolina State University, “since North Carolina produces about 50 percent of U.S. tobacco, the North Carolina economy bears the largest economic impacts of a reduction in exports. Annual output from North Carolina tobacco farms could decline by $4.1 million for a 2 percent export reduction and $16.5 million for an 8 percent reduction in exports to the EU-27.”
As consequence, the TPD not only will force roughly 10 million smokers to find their product through illegal channels, thereby putting them at risk and hollowing out any potential revenue, but also represent of a huge violations of the any trademarks protection. The directive initially formulated to defend the health of the European citizens not only will increase the consumption of the counterfeit cigarettes, but also increased the power of regulation on the European market.
Property Rights Alliance denounces plain packaging and if enacted, will violate several international agreements to which the EU is a part. For example, it will affect the Trade-Related Aspects of Intellectual Property Rights (TRIPS) that is administered by the World Trade Organization; it will violate the Paris Convention, an international convention dealing with the protection of the industrial property (patents, industrial designs and trademarks); last but not least, it will affect the agreement on Technical Barriers to Trade (TBT) that deals with the procedure of testing and certifying conformity to technical regulations.
The protection of property rights, both physical as well as intellectual, is critical to the economic development of many economies. Creating and maintaining an environment where both forms of property are protected contribute to economic growth and stability of modern economies. We note that the EU revolves significantly around business related to intellectual property, whether it is pharmaceuticals, movies, music, books, software or inventions and industrial designs. As such, the continued protection of intellectual property rights is critical for the economy to continue to flourish.
Therefore, the protection of trademarks is a vital part of the protection of the intellectual property rights. Moreover, all manufacturers packaging is a critical way brand information is provided to consumers. Tobacco companies have a significant intellectual property rights through their trademarks, and demonstrated by the degree of brand loyalty in the market today. Plain packaging legislation would significantly erode the value of this property. As such, the TPD not only violates the legal rights of companies affected, but sets a very dangerous precedent for the future of a government unwilling to respect intellectual property rights internationally.