High Court rejects plain packaging challenge

In the cases of JT International SA V Commonwealth Of Australia and British American Tobacco Australasia Limited & Ors v Commonwealth Of Australia [2012] HCA 30 the High Court of Australia has dismissed a challenge to the validity of the Federal Government’s Tobacco Plain Packaging Act 2011 (Cth) (the TPP Act).

Under the provisions of the TPP Act, manufacturers of tobacco products would be required to sell these goods in plain packaging, described as being dark olive brown in colour. The brand name will appear on the package but only in a standard printed form.

The TPP Act was introduced as part of a suite of measures intended to reduce the national smoking rate in Australia. The Government’s objective is to try to reduce rates to 10 percent by 2018 and halve the smoking rate of Aboriginal and Torres Straight Islanders.

The tobacco companies sought to rely on Section 51(xxxi) of the Australian Constitution, which provides Parliament with the powers to make laws with respect to “the acquisition of property on just terms from any State or person for any purpose in respect of which the Parliament has power to make laws”. The companies argued that the provisions of the TPP Act were invalid because they represented an acquisition of their property, namely their intellectual property including trade marks, other than on just terms and without proper compensation. In response, the Government argued that it was only trying to regulate what appears on the boxes and was not acquiring any trade marks.

In reaching this decision, at least a majority of the court have decided that the provisions of the TPP Act are not contrary to section 51(xxxi) of the Constitution, and have made relevant orders. The full reasons for the High Court’s decision will be published in the near future.

Developments in this case and the High Court’s decision have been closely monitored by other foreign governments that are interested in passing similar legislation, including the United Kingdom, New Zealand, India, Hong Kong and some states in the United States. The TPP Act is due to be fully implemented from December 1, 2012. The High Court has ordered the tobacco companies to pay the Federal Government’s legal costs.