Some of the world’s largest tobacco companies have launched one of the biggest ever claims against the UK government over the legality of plain packaging regulations and the deprivation of highly valuable intellectual property. British American Tobacco, Philip Morris and Imperial Tobacco claim that the regulations – which prohibit the use of colours, design and trademarks on tobacco packaging, with full roll-out by 2017 – violate EU property law, which allow companies to use their trademark. Additionally, concerns have arisen that the easy replication of generic packs could fuel counterfeit trade.
The UK government first announced plain packaging regulations in 2013, shortly after a similar move in Australia, claiming that the advertisement of tobacco products encouraged children to take up smoking. From the outset this has been strongly opposed by tobacco firms, who state there is little supportive evidence; rather, they highlight official reports that suggest children are most influenced by their peers, and that the size of health warnings do not directly reduce tobacco consumption.
Interestingly, the outcome of the lawsuit is expected to be positive for tobacco companies either way. If successful, they may secure a collective compensation pay-out of as much as £11bn for trademark losses (to put this in perspective, this could almost singlehandedly wipe out the UK government’s planned welfare savings). If unsuccessful, they will need to spend less on marketing and production costs and the legal action may at least further delay implementation or discourage other countries from taking similar action.