New Rules Governing the Presentation and Sale of Tobacco and Related Products Enter into Force.
The Directive 2014/40/EU related to the tobacco products entered into force on May 20, 2016, shortly after the Court of Justice issued its Judgment of 4 May 2016, C-547/14, “Phillips Morris“, stating that the Directive in question is valid, despite that various representatives of the tobacco industry has challenged some of its provisions.
It should be recalled that the new Directive establishes rules governing the manufacture, presentation and sale of tobacco and related products.
In relation to the presentation of the product in particular, the space for the placement of the trademark is being reduced, taking into account that the health warnings double their size and will now occupy the 65% of both sides of the packaging. Also, the warnings will be placed in the superior part of the package, so that the trademarks and other distinctive signs will have to be placed necessarily below.
From the trademark perspective, Article 13 is one of the most controversial provisions of the Directive, whose validity has been challenged before the Court of Justice. The provision at hand prohibits in the labeling and presentation of the product of elements or features that:
“(a) promotes a tobacco product or encourages its consumption by creating an erroneous impression about its characteristics, health effects, risks or emissions; labels shall not include any information about the nicotine, tar or carbon monoxide content of the tobacco product; (b) suggests that a particular tobacco product is less harmful than others or aims to reduce the effect of some harmful components of smoke or has vitalising, energetic, healing, rejuvenating, natural, organic properties or has other health or lifestyle benefits; (c) refers to taste, smell, any flavourings or other additives or the absence thereof; (d) resembles a food or a cosmetic product; (e) suggests that a certain tobacco product has improved biodegradability or other environmental advantages”.
According to paragraph 3 of said article, the elements and features that are prohibited may include, but are not limited to, “texts, symbols, names, trademarks, figurative or other signs”.
The industry has pointed out, in particular, that Article 13 is a violation of the right to freedom of expression, does not follow the principles of proportionality and that the objectives pursued by the new legislation might be achieved by other, less restrictive, means, like for example the regulation of the use of the elements and features referred to in the provision concerned instead of prohibiting them or obliging to add certain additional warning.
The Court did not share this thesis and replied by saying that the proposed measures would not be effective enough to guarantee the protection of the health of consumers, taking into account that the elements and features mentioned in Article 13 may encourage, on their own, the consumption of tobacco. Therefore, it cannot be considered that those elements may be included for the purpose of giving consumers clear and precise information, inasmuch as they are intended more to exploit the vulnerability of consumers of tobacco products who, because of their nicotine dependence, are particularly receptive to any element suggesting there may be some kind of benefit linked to tobacco consumption, in order to vindicate or reduce the risks associated with their habits.
The Court also considered that the restrictions concerning the presentation of the products are equally valid and appropriate.
In particular, the Court argued that the new measures did not go beyond the limits of what is appropriate and necessary, taking into account the need to guarantee a high level of protection of human´s health. The Court added that the impact on the ability of manufacturers to communicate information about the product concerned to consumers is not disproportionate, since the area reserved for the warnings allows for a sufficient space for that type of information on the unit packets.
The Directive establishes only minimum requirements and allows the Member States to adopt stricter measure that may include, in particular, the imposition of generic or plain packaging, which obliges manufacturers to place their trademarks in standard font and prevents them from including any other distinctive features like colors, logos, images etc.
Such stricter approach in transposing the Directive has been adopted by the governments of United Kingdom, France, Ireland and Hungary. Furthermore, it is worth recalling that the adoption of a similar legislation by Australia is the origin of a dispute initiated by Ukrania, Indonesia, y Dominican Republic against the Austral country before the WTO Dispute Settlement Body.
Spain is currently in the last phase of the implementation of the Directive, although a more restrictive regulation is not expected. The draft Royal Decree that will regulate the manufacture, presentation and sale of the tobacco product and related product is available here (in Spanish).
It is very likely that this legislative trend towards greater protection of public health will go beyond the tobacco sector in the following years, taking into account that the adverse effects of other unhealthy products have also major impact on public health expenditure. The affected industry may include the manufacturer of alcoholic beverages, the food industry and, especially, the manufacturers of sugared drinks, high fat and high sugar foods as well as the so-called “junk food” or the oil and automotive industry, given the impact they have on the environment and the air quality.
Thus it seems we need to get ready for new restrictive regulations on packaging that can affect the legitimate use of the trademarks and, in particular, their function of indicating the commercial origin of the products. preventing consumers from distinguishing among different manufacturers. These regulations can also diminish the goodwill of the trademarks, achieved as a result of important investment by their holders over the years.
However, it looks like this is the price that the manufacturers of tobacco and other unhealthy products will have to pay in order to be able to continue marketing their products. In terms of health issues, the balance is increasingly shifting from the private to public interest.
Related Posts:
- Four Recent Judgments of the Spanish Supreme Court relating to Trademarks (III): “Champín”
- Trademark Use of Petroleum-related Products Wholesale Operators by Retail Distributors under Royal Decree 1085/2015
- Commercial use in the market as evidence of unfair advantage – A brief comment on the GC decision “Master Cola”
- The repair clause (“must match”): Is it applicable in cases of trademark infringement? – Brief Analysis of the Spanish case law