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Tobacco Companies to Sue Government for Introduction of Plain Packaging for Cigarettes.

Written by Fozia Cheychi on 29 May 2015

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Tobacco companies are preparing to launch what could be one of the biggest ever legal cases against the British government for trademark losses as a result of the introduction of plain packaging for cigarettes.

Two of the largest tobacco companies- Phillip Morris International (PMI), owners of Marlboro and British American Tobacco (BAT) have already filed lawsuits.

PMI have said that they are prepared to seek “fair compensation” for the introduction of the measures.

The companies are seeking compensation which could run into billions of pounds as a result of companies being stripped of the right to use their branding on packaging.

The plain packaging legislation was approved in March 2015 and specifies that there should be no branding on cigarettes packaging.

It will be argued that this measure of forcing companies to use plain packaging on their products will amount to a serious deprivation of their valuable intellectual property in the form of trademarks and as such they will essentially lose their brand identity. For this they are seeking compensation.

At present the leading cigarette brands are instantly recognisable and the tobacco industry is worth an estimated £11 billion.

In papers filed at the High Court they further claim that the measures violate European intellectual property laws. The Department of Health said that it would not let the policy “be held to ransom by the tobacco industry”.

The legal challenges had been expected. The tobacco industry has opposed the changes from day one. The measures are expected to be introduced in March 2016 and full roll out is expected by 2017.

Similar legislation has been introduced in Australia where plain packaging has coincided with a fall in smoking; this legislation in Australia has already been subject to an unsuccessful lawsuit.

Marc Firestone, PMI’s senior vice president and general counsel stated “We respect the government’s authority to regulate in the public interest, but wiping out trademarks simply goes too far. He added “countries around the world have shown that effective tobacco control can co-exist with respect for consumer freedoms and private property”.

A spokesperson for BAT stated that the company “had no other choice” to launch legal action” and added “Any business that has property taken away from it by the state would inevitably want to challenge and seek compensation”.

It is understood that other tobacco giants are also considering similar lawsuits.

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