The implementation of plain packaging for cigarette packs in the United Kingdom exactly one year ago was a huge step backwards for the country that historically has pioneered trade mark usage rights.
The U.K. Trade Marks Registration Act of 1875 codified some of the world’s first protections for the visual representation of trademarks allowing the artistic expression of logos and brands to become more prevalent in commerce, it also elevated trademark registration to be prima facie evidence of the exclusive right to use the mark by the owner.
The Bass beer company, owner of one of the oldest trademarks still in existence, wasted no time registering every possible version of its brand. The company had been hit by counterfeiters that were slapping their labels on inferior beer or filling empty Bass bottles with cheaper ale, nearly ruining their 100-year-old reputation. The new law allowed Bass greater certainty when pursuing costly legal action to defend its reputation and allowed it to enter into lucrative licensing deals with other breweries. Of course, infringement cases declined dramatically.
It should be no surprise to British lawmakers that plain packaging policies that remove the right to use trademarks and to differentiate products would have the same effect as their near absence did more than a 140 years earlier – especially the proliferation of counterfeits that fund criminal syndicates and terrorists.
The U.K.’s plain packaging policy is intended to reduce smoking by removing the appeal of packs, but by removing branding all companies are forced to have the same visual representation — dramatically reducing the information conveyed to the consumer and increasing the ease for criminals to make fraudulent products. Guess what happened?
Since implementing the policy, cigarette smoking has increased in the U.K. according to the Smoking Toolkit Study by 0.7 percent, and the black market for counterfeit cigarettes has expanded, according to the Tobacco Manufacturers Association.
In fact, only six months into full plain packaging implementation trading standards departments and Retail Express identified the U.K.’s first counterfeit plain packaged packs, and Her Majesty’s Revenue and Customs office noted a 33 percent increase in illicit trade from the year before.
Plain packaging has had the same unintended consequences in Australia and France. In the later the Minister of Health, Agnes Buzyn, was able to admit “official sales of cigarettes increased in France, the neutral package did not reduce the official sale of tobacco.” France is also home to Europe’s largest illicit cigarette market, incidentally the criminal activity has been linked to funding of terrorism as well as attacks in France.
Plain packaging proponents remain undeterred, however, and have proposed expanding it to fatty foods, sugary drinks, and alcohol. This would only open the door for the same criminals to expand their product line. Brand Finance has estimated the total loss the beverage industry in brand value alone to be $293 billion, or the economy of Finland.
Regardless of its plain failure, removing the ability of companies and individuals to use their trademarks is a significant restriction of market freedom and violates several international treaty obligations. No government should restrict rights in order to meet goals set by bureaucrats.
Yet unaccountable bureaucrats at the World Health Organization remain committed to removing intellectual property rights protections around the world for tobacco products. In March, the Property Rights Alliance responded to the WHO’s continued efforts to promote the harmful policy with an open letter signed by an international coalition of 72 think tanks urging “the WHO and governments around the world to stop infringing on intellectual property rights with plain packaging policies.”
In many countries across the world, cigarette smoking is on the decline, and they’ve been able to do it without infringing on property rights. Note, after Australia introduced plain packaging “for the first time in more than 2 decades, the daily smoking rate did not significantly decline” according to the country’s National Drug Household Survey.
New tools like e-cigarettes have emerged that promise to intensify the downward trend. Doctors including the U.K.’s Royal College of Physicians have come out in full force to endorse the novel technological breakthrough that allows users to ween themselves off nicotine while avoiding 95 percent of the harm associated with traditional smoking. Yet the WHO encourages regulating it like a normal tobacco product.
Philip Thompson is a fellow with the Property Rights Alliance, an affiliate of Americans for Tax Reform.
