South Africa: Plain Packaging Debate Heats Up

Last Updated: 19 September 2014
Article by Rachel Sikwane

Most Read Contributor in South Africa, September 2018

The plain packaging debate has certainly moved up a gear. In South Africa, Professor Owen Dean of Stellenbosch University addressed an open letter to the Health Minister, Dr Aaron Motsoaledi, which was published in Business Day. In the letter, Dean called on the minister to reconsider any ideas he may have for plain packaging measures, in other words measures that place limitations on the rights of tobacco companies to display their trade marks on their products. The minister has, of course, made no secret of the fact that he favours plain packaging legislation, ever since the Australian High Court held that Australia's plain packaging legislation - which requires tobacco companies to sell their products in olive green packs, which contain graphic health warnings and the brand name (without stylisation or logo) in very small script - is not unconstitutional.

Dean concedes that Motsoaledi is quite entitled to take steps that dissuade people from smoking, but says that this does not extend to him acting unconstitutionally and depriving companies of their property rights. He also argues that plain packaging measures are bound to be ineffective.

Dean is scathing of the notion that the presence of logos on cigarette packs influences demand and is convinced that plain packaging legislation will contravene the property clause (section 25) of the Constitution. This section reads as follows: "No one may be deprived of property except in terms of a law of general application, and no law may permit arbitrary deprivation of property.' Dean's expropriation argument goes like this: 'In order to remain valid and extant, a trademark must continue to be used... Preventing a trademark from being used thus destroys that trademark and extinguishes the item of property that it constitutes.' He suggest that there will inevitably be a court challenge if legislation is introduced and he argues that there's no guarantee that South African courts will follow the approach of the Australian courts. The reason for this is that, in Australia, deprivation of property is only unconstitutional if it's accompanied by an acquisition of that property by another party (like the state), something that's not required in South Africa.

It's hard-hitting stuff from beginning to end. Dean starts off by accusing the minister of having 'declared war on trademarks, especially logos, as being tools or weapons of evil intent and effect.' And he ends by warning the minister against the 'the folly of proceeding with legislation that is unconstitutional', and urging him 'to take competent and informed legal advice' so that he can 'avoid embarrassment' and 'venturing into terrain where angels ought to fear to tread.'

No-one doubts that there will be a court challenge if plain packaging measures are introduced. But the tobacco companies will face an uphill battle. For starters, the Constitutional Court has ruled that IP rights do sometimes have to give way to other rights, such as the right of freedom of expression – I refer here to the famous case of SAB v Laugh-It-Off (Black Label v Black Labour) . We've also had the Supreme Court of Appeal rule that the legislation that prohibits tobacco adverting is lawful because it's a reasonable limitation of the right of freedom of expression. The court in that case spoke of 'powerful public health considerations' and 'international law obligations'. It referred also to the fact that other countries have 'accepted the link between advertising and consumption as incontrovertible and have imposed restrictions on the advertising and promotion of tobacco products.'

Then there'sthe argument that there's no expropriation in the case of plain packaging legislation because the Trade Marks Act provides that a trade mark registration that isn't used cannot be cancelled for non-use if the failure to use was due to factors beyond the owner's control – ' special circumstances in the trade'. And there's the fact that Louis Harms, former Deputy President of the Supreme Court of Appeal and South Africa's leading IP judge, has said that, in his view, plain packaging legislation will not contravene the property clause because it 'does not deprive the trade mark owner of any trade mark right, but only regulates or limits the exercise of that right.'

In the UK, Phillip Morris has warned that it will sue the British government for billions in compensation if it goes ahead with plain packaging (aka 'standardized packaging') legislation. The company pulled no punches when it issued this statement: 'Standardized packaging is a euphemism for government-mandated destruction of property. It is unlawful, disproportionate, and at odds with the most basic requirements of the rule of law.'

The UK trade mark professional body, the Institute of Trade Mark Attorneys (ITMA), has also entered the debate by making submissions on plain packaging to the UK government. It has pointed out that restrictions on the use of logo registrations will have implications that go beyond trade mark registrations being attacked (and possibly cancelled) for non-use. For example, a company that wants to register a trade mark must have a genuine intention to use that trade mark, something that it surely cannot have if the law prevents it from using the trade mark.

Given the money at stake here, and the fact that court proceedings are slow, this issue will be with us for many years to come.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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