Member Article

The South African government is determined to ensure that in the country, as in a number of other countries, tobacco products are sold with little or no branding. Yes, the issue of tobacco plain packaging may have gone away for a while, but it is now clearly back on the agenda. The recent publication of the Draft Control of Tobacco Products and Electronic Delivery Systems Bill, 2018 makes that very clear.

The draft legislation deals with a range of issues, from prohibitions on smoking in public areas, to prohibitions on the advertising, promotion, sponsorship, distribution and display of tobacco products and electronic delivery systems. What’s most interesting from a trade mark point of view, however, is section 4, which is headed “Standardised packaging and labelling of tobacco products”. Section 4 requires the Minister of Health to prescribe standardised packaging and labelling for tobacco products. In particular, it requires the minster to prescribe:

• that the packaging of all tobacco products has a uniform plain colour and texture;
• the materials that can be used for packaging;
• that the appearance of any branding, logos or other promotional elements on or inside the packaging of a tobacco product is prohibited;
• that only the brand name and product name may appear on the packaging, and that this must be in a standard colour and typeface, together with manufacturer’s details, health warnings and tax stamps;
• the markings on, and the appearance of, an individual tobacco product, including the use of branding, trade marks and logos.

The intention is very clear: we will, seemingly, soon have plain cigarette packs that feature little more than the brand name of the product (in small script) and health warnings. There will be no logos and no colour schemes. Another aspect of the draft legislation that is of interest to those involved in branding is the appearance of the terms “brand stretching” and ”brand sharing”. What these terms relate to is the fact that it won’t be lawful for a tobacco brand to be used in relation to any other product (thereby creating an association), or for any other brand to be used in connection with a tobacco product (thereby creating an association). Regular readers of our articles will know that we have followed the plain packaging saga for some time. Welooked athow this issue kicked off in Australia, with the The Tobacco Plain Packaging Act, 2011. This legislation requires all brands of cigarettes to be sold in identical olive green packs featuring graphic images designed to put people off smoking. This legislation was challenged by tobacco companies, but the Australian High Court found that the legislation was lawful, and that it involved no unlawful expropriation of property. Interestingly, a number of countries, including Cuba, Indonesia, Honduras and Dominican Republic, took the issue of the Australian legislation to the World Trade Organization, but the judges of that organisation recently rejected that complaint. The judges made the point that six other countries, including Hungary, Ireland, France, New Zealand, Norway and Britain, have brought in plain packaging laws while six others, including Burkina Faso, Canada, Georgia, Romania, Slovenia and Thailand, have passed laws that still need to be implemented. We havealso followeddevelopments in the UK, where things have also gone against the tobacco companies, with the Court of Appeal upholding a High Court judgment that plain packaging regulations are lawful. What was interesting from a trade mark point of view, was that the UK court categorised the trade mark right as the negative right to exclude others from using it, rather than the positive right to use it. This negative right to stop others using the trade mark was, said the court, not affected by the plain packaging regulations. We havealso seenthe debate unfold in South Africa, with the tobacco companies claiming that the plain packaging requirements are tantamount to expropriation of property (a sensitive issue in South Africa right now). What the companies argue is that, since a trade mark registration that isn’t used can be cancelled by a third party, legislation that makes it impossible to use a trade mark registration is akin to expropriation. This argument seems to overlook the fact that a non-use claim can be excused in the case of “special circumstances”. It also glosses over the fact that the issue is only likely to arise with logo trade marks, as even the plain packaging requirements do envisage at least some (smallish) use of the brand name. Although this issue hasn’t yet come to court, it’s interesting to note that the South African Supreme Court of Appeal has ruled that a ban on tobacco advertising constitutes a justifiable limitation on a constitutional right. Clearly, there is still some way to go before plain packaging becomes a lawful requirement in South Africa, but it does seem to be getting ever-closer.

Gaelyn Scott

trade mark attorney director head of IP department [email protected] cell: +27 83 632 1445