Plain packaging and the interpretation of the TRIPs agreement.

• Author: Frankel, Susy
• Position: I. Introduction through IV. Trademark Rights B. Use and Article 20 in Context 1. Registration vs. Use, p. 1149-1181

ABSTRACT

Plain packaging of cigarettes as a way of reducing tobacco consumption and its related health costs and effects raises a number of international trade law issues. The plain packaging measures adopted in Australia impose strict format requirements on word trademarks (such as Marlboro or Camel) and ban the use of figurative marks (colors, logos, etc.). As a result, questions have been raised as to plain packaging's compatibility with the World Trade Organization's (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement).

WTO members can validly take measures to protect and promote public health, but in doing so they must comply with the WTO agreements. In order to determine compliance, a proper method to interpret applicable WTO rules is indispensable for the stability and predictability of the world trading system. In this Article, the authors consider the proper interpretation of the TRIPS Agreement as it applies to plain packaging regulations using the Vienna Convention on the Law of Treaties (VCLT). The VCLT has been adopted several times in WTO disputes as a set of interpretive rules. The authors argue that the interpretation of the TRIPS Agreement in the cases filed in 2012 against Australia by a number of developing countries after Australia's adoption of the plain packaging legislation is likely to impact future cases involving the TRIPS Agreement and specifically the method and approach to be used to interpret it. As such, the cases will likely impact other public health issues (beyond tobacco use) and the interpretation of the TRIPS Agreement in several other contexts.

The two major issues discussed in this Article are (a) Article 20 of the TRIPS Agreement, which prohibits certain unjustified encumbrances on the use of trademarks, and Co) the debate about the nature of trademark owners" rights in the TRIPS Agreement. The latter issue has been referred to as the "right to use" debate--namely, whether trademark owners have a right to use trademarks protected under the TRIPS Agreement. The authors contend that the issue is better seen as a debate over the nature and scope of trademark owners" rights and interests that the TRIPS Agreement seeks to protect. Specifically, the Article argues that the fact that the principal rights of trademark owners under the TRIPS Agreement are rights to exclude others from using their mark (or "negative rights") is not determinative of the issue but rather should inform the interpretation of Article 20 in light of the TRIPS Agreement's object and purpose.

TABLE OF CONTENTS I. INTRODUCTION II PLAIN PACKAGING AND THE TRIPS AGREEMENT IN CONTEXT A. TRIPS Agreement Issues B. Cigarettes are a Public Health Issue C. Australia's Plain Packaging Law D. Framework Convention on Tobacco Control (FCTC) and Evidence about Plain Packaging III. THE RULES OF TREATY INTERPRETATION IV. TRADEMARK RIGHTS A. The Nature of the Article 20 Obligation B. Use and Article 20 in Context 1. Registration vs. Use 2. Exclusive Rights C. The Negative-Rights Argument in Context 1. "Rights Conferred," Article 16.1, 16.2, and 16.3 2. The Constitutional Property Case in Australia 3. Conclusions on the Nature of Trademark Rights D. Legitimate Interests of Trademark Owners V. THE ROLE AND MEANING OF ARTICLE 8 OF THE TRIPS AGREEMENT VI. BURDEN OF PROOF VII. CONCLUSION I. INTRODUCTION

This Article is about the rules of interpretation of the World Trade Organization's (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (the TRIPS Agreemen0 1 and their application to the plain packaging of cigarettes, a matter which is subject to formal dispute-settlement proceedings at the WTO as of this writing. (2)

The rules of international treaty interpretation are important. They provide a degree of consistency so that those who are part of that rules-based system can use interpretation to predict outcomes not only of potential and existing disputes but also as a guide to the boundaries that international agreements place on the formulation and interpretation of WTO members' laws. The principles of interpretation are thus important for the integrity of the international intellectual property regime. It is crucial to keep these principles intact. Conversely, to defy proper interpretation of international intellectual property agreements in the area of plain packaging to achieve (valid) public policy objectives may have negative consequences in several arenas unrelated to tobacco.

This Article is not suggesting that countries are prevented from regulating public health in general or tobacco more specifically. Indeed, it asserts that they must be free to do so. However, they must also comply with international agreements that they willingly ratified or adhered to. Membership in international agreements almost always curtails some aspects of national autonomy. Some might say that is exactly why they are created. For example, few would argue that a WTO member could validly ban all imports of cigarettes but allow sales of domestic ones without violating WTO obligations. (3) This Article seeks to show how a robust approach to legal interpretation can support legitimate public health aims and why, by the same token, keeping interpretation rules intact is the best method for promoting future public health, and more broadly public interest goals that "collide" with the TRIPS Agreement norms, to succeed in the future.

To achieve the above-stated objectives, this Article, therefore, seeks to illuminate how the TRIPS Agreement should be interpreted in light of the Dispute Settlement Understanding (DSU), (4) which governs disputes over alleged infringements of WTO agreements, including the TRIPS Agreement. The core of the DSU's interpretation rules is the adoption of Articles 31 and 32 of the Vienna Convention on the Law of Treaties (VCLT). (5) The VCLT rules of interpretation and their use by tribunals have been much discussed. (6) Articles 31 and 32 are recognized as the customary international law of interpretation of treaties. (7)

Many parties to the TRIPS Agreement are also parties to bilateral investment treaties (BITs). This article is about the interpretation of the TRIPS Agreement, not BITs. (8) From an interpretation perspective, classifying a trademark as an investment asset suggests that it means something different from, or perhaps additional to, a trademark as an intellectual property right. (9) Although the investment aspect is not part of the TRIPS Agreement, it may be part of the international arrangements between the parties to a WTO dispute. (10) However, even if both parties to a WTO dispute also have a BIT between them that includes intellectual property as an investment asset, the BIT still does not directly impact the interpretation of the TRIPS Agreement at the WTO. (11) Further, the resolution of any dispute under the BIT will take place in a forum that is separate from the WTO. (12) The terms of the BIT may require TRIPS Agreement consistency with, for example, compulsory licensing measures. (13) However, a BIT tribunal could potentially interpret the TRIPS Agreement in a different way than a WTO panel or the Appellate Body. It is a separate question, and beyond the scope of this Article, as to whether the WTO would take any notice of a BIT arbitral decision and what effect that might have. It may, however, be an issue should the BIT disputes relating to plain packaging be determined before the TRIPS Agreement disputes. (14)

This Article proceeds as follows. Part II discusses the necessary context--namely, the relevant TRIPS Agreement articles (Part II.A); smoking as a public health issue (Part II.B); the Australian legislation under scrutiny at the WTO (Part II.C); and the Framework Convention on Tobacco Control (FCTC) (15) and evidence about plain packaging (Part II.D). Part III discusses applicable interpretation rules of the VCLT. Part IV considers the rights that trademark owners may claim under the TRIPS Agreement and may allege are breached in opposition to governments trying to impose a ban or severe restrictions on the use of trademarks. It begins by discussing Article 20, which is central to the plain packaging issues as it clearly articulates a legitimate interest of trademark owners. Its centrality arises because the effect of preventing trademark owners from using their trademarks is, in the words of Article 20, an encumbrance that is "detrimental to its capability to distinguish the goods or services of one undertaking from those of other undertakings." (16) This Article then discusses the context of Article 20 (as VCLT interpretation requires), particularly the trademark minimum standards under the TRIPS Agreement, including Articles 15, 16, 17, and 19. There are arguments about these provisions being breached independently of Article 20. (17) Some of the discussion about the TRIPS Agreement trademark standards will also be relevant to potential arguments about their breach; however, for reasons expanded below, the core focus is on Article 20. A key aspect of the discussion of the substantive provisions of the TRIPS Agreement is the scope of trademark owners' rights and legitimate interests. Part of this discussion is what, if any, legitimate interests trademark owners have to use their trademarks and what the significance of "negative rights" is in that discussion. Part V turns to the role of Article 8, which is part of the General Provisions (18) of the TRIPS Agreement, and its applicability to the interpretation of Article 20. Article 8 both provides context for Article 20 and is relevant to the VCLT-based interpretation of the TRIPS Agreement's object and purpose because it quite simply is a statement about the object and...