Tobacco Plain Packaging: A Judge’s View from Germany

22-05-2018

Tobacco Plain Packaging: A Judge’s View from Germany

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Unlike some other EU member states, Germany has not implemented tobacco plain packaging legislation. Ed Conlon spoke to Judge Neugebauer of the Düsseldorf Higher Regional Court about the key questions in this area.

“My prediction is that tobacco plain packaging will arrive in Germany only when the European Union prescribes it for the whole Union. I don’t think the German government will do anything that it doesn’t have to do,” says Ralf Neugebauer, a Judge at the Düsseldorf Higher Regional Court (Germany).

Judge Neugebauer—an IP specialist who sits on a panel with two other judges at the appeals court—explains that tobacco plain packaging legislation is not mandatory for EU member states. In 2014, the European Union did adopt Directive 2014/40/EU, which places restrictions on the manufacture, presentation, and sale of tobacco and related products, but it does not require tobacco products to be placed in plain packets.

Only a handful of member states have implemented plain packaging provisions in their national legislation, including the United Kingdom and France. In 2012, Australia became the first country in the world to introduce such laws, sparking intense discussions about the legality and effectiveness of plain packaging. Germany has yet to follow suit, despite having implemented Directive 2014/40/EU provisions on health warnings, which appear on the front, back, and sides of tobacco packets.

Asked why his home nation has chosen to steer clear of plain packaging laws, Judge Neugebauer, who handles approximately 200 cases on trademarks, designs, copyright and unfair competition every year, says he assumes the German government thinks the measures provided by the Directive are sufficient for protecting health. “As far as I know, there is no law in the making,” he says. He admits, however, that “you can’t rule it out—sometimes politics takes an unpredictable path.”

While Germany has chosen not to require plain packaging, the overall tobacco advertising regime in the country is about to become stricter. Beginning in 2020, all tobacco advertising will be banned. Such advertising is already banned on media, including TV, radio, print, and the Internet, so the restrictions kicking in in 2020 will apply to advertisements appearing in other areas, including the cinema and on street placards.

“If you can’t use your trademark anymore, you could argue it’s an expropriation.”

This will mark a big change in Germany, since currently, “there are tobacco commercials in movie theaters and at every corner,” Judge Neugebauer says.

One of the core legal issues in the tobacco plain packaging area is the amount of brand restriction necessary to constitute expropriation. He explains that courts in several countries have ruled that even when 80 percent of the package has to be covered by health warnings that does not count as an expropriation.

“I think that’s reasonable; you can still recognize the brands,” Judge Neugebauer says.

“But I’m not so confident for plain packaging because if you can’t use your trademark anymore, you could argue it’s an expropriation,” he says. In Germany, expropriation without compensation to the brand owner is forbidden, including by national law and free trade agreements, he explains.

The counter argument is that a trademark does not give the proprietor the right to use it per se; it merely allows the owner to prevent others from using the mark—which would mean the removal of the mark would not amount to expropriation.

INTA adopted a Board Resolution in 2015 stating that “plain and highly standardized packaging measures being considered or imposed by governments should be rejected or repealed since they violate various international treaties and national laws on trademark protection” and that “governments should use less drastic alternatives to address health and safety goals, such as public educational campaigns which do not violate international and national law and expropriate valuable trademark rights.”

Judge Neugebauer believes “this issue needs some more discussion, as there have been some decisions (including from the Court of Justice of the European Union) indicating that the trademark from registration onwards transfers a right to the owner to use it; on the other hand, some decisions say it’s a negative right only, by which it can keep others from registering it.”

Germany doesn’t have a jury system, but Judge Neugebauer jokes that “the jury’s still out” on this particular issue. 

Non-Use

One question that Judge Neugebauer has been pondering concerns non-use of a restricted trademark. If a rights owner is prevented from displaying its trademark on its product, that might be a legitimate reason for non-use, Judge Neugebauer says. “But for how long?” he asks.

“Let’s say a company does not put a trademark on its product for 20 years—will it still be on the register and can the company still prevent others using it, maybe for different products?”

The issue of non-use does not appear to have been addressed by courts in jurisdictions that have adopted plain packaging laws, Judge Neugebauer adds.

Even though Germany has yet to implement plain packaging, and may be unlikely to do so, Judge Neugebauer says “you never know when the law may be changed, so I monitor what other jurisdictions have done.” He admits he cannot speculate on how successful plain packaging laws have been, noting that measuring success is not an easy task.

 

tobacco, plain packaging, INTA, INTA 2018, trademarks, EU, Düsseldorf Higher Regional Court, Judge Neugebauer, Ralf Neugebauer

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