[Intl-tobacco] PM trade threats to Thai tobacco rules

[Robert Weissman]

The latest scene of action in the emerging conflicts over tobacco
control and global trade and intellectual property rules is occurring in
Thailand. Thailand is preparing to follow the lead of Canada and Brazil
in requiring large graphic health warnings on cigarette packaging.
Philip Morris has responded as it did in the Canadian case, arguing that
such measures not only violate Thai law, but Thailand's obligations
under the World Trade Organization's intellectual property rules (known
as TRIPS).

Below are three items on the controversy, two clips from Thai papers,
and the Philip Morris memo and letter challenging the Thai regulations. 

Essential Action will soon be following this up with action items.

______________
Robert Weissman



Legal experts back graphic warnings, downplay threats
Tobacco firms `would lose court challenge'
by Anjira Assavanonda
Source: Bangkok Post, 2002-05-07, via tobacco.org
URL: http://www.bangkokpost.com/News/07May2002_news09.html

Legal experts yesterday backed the Public Health Ministry's move to press
ahead with graphic health warnings on cigarette packets
despite the threat of legal action from manufacturers.

Somkid Lertpaitoon, head of Thammasat University's public law
department and a former charter writer, rejected claims by Philip
Morris (Thailand) Ltd that the move breached the constitution.

``The company has the right to sue the ministry, but I believe it
will lose in court,'' said Mr Somkid.

A draft ministry announcement requiring manufacturers and importers to
print coloured graphic health warnings on cigarette packets will be sent
to Public Health Minister Sudarat Keyuraphan for backing.

Philip Morris (Thailand) has written to Mrs Sudarat saying the
warnings are likely to obscure brand information and infringe on
the company's right to communicate with customers.

Mr Somkid said if the warnings were based on fact there should be
no problem. Cigarettes posed a health risk to consumers and the
government was entitled to warn people.

``The problem, if it is to be considered, depends on whether the
graphic warnings have carried any exaggerated information. If they are
based on fact, then there'll be no problem,'' Mr Somkid said.

Graphic warnings were probably no different from text warnings
which already appear.

``If such a move had been unlawful, the governments of Canada and
Brazil which have already endorsed such regulations should have
also faced legal action,'' said Mr Somkid.

The ministry plans another regulation by the end of September
making air-conditioned restaurants and catering facilities
smoke-free.

At the moment restaurants have to keep two zones, with the
non-smoking zone covering at least 75% of the area.

Restaurant operators are worried the regulations will be bad for
business.

Prakit Vathisathokkij, secretary-general of the Foundation for
Anti-Smoking Campaign, said a US survey indicated that smoke-free
rules had not resulted in a loss of income for restaurants.

The survey, by the Texas Diseases Control Office, found most
smoke-free restaurants earned the same and some even brought in
more.

``Smoke-free restaurants will protect not only consumers, but also the
health of their own staff. It will be much better for customers who come
in families, particularly those with small children.''



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Thailand to Have Graphic Warnings on Cigarette Packets
Source: Xinhua Newswire, 2002-05-06, via tobacco.org
http://news.xinhuanet.com/english/2002-05/06/content_382424.htm

 BANGKOK, May 6 (Xinhuanet) -- Thailand plans to be the third
country in the world after Canada and Brazil to have graphic health
warnings printed on cigarette packets, the health ministry
announced Monday.

According to a statement from the ministry, a new regulation will
require all cigarette producers and importers to color-print the
graphic health warning on their product packaging within one year.

The move has already been approved by the National Committeefor
Control of Tobacco Use and will soon be sent to Health Minister
Sudarat Keyuraphan for final endorsement before enforcement.

Thai officials said the graphic warnings will include
colorfulpictures of illnesses caused by smoking, including lung
cancer,heart failure, chronic obstructive pulmonary disease,
stroke,erectile dysfunction, premature aging, oral cancer and
stained teeth.

The graphics will also warn that cigarettes can lead toaddiction to other
drugs and damage a foetus if a smoker ispregnant, while
smoking can harm or eventually kill nonsmokers whoinhale it
passively.

Hathai Chitanont, president of the Institute for Thai
HealthPromotion, said he believed the graphic warnings will be
moreeffective than the already available forms of letters, because
"asingle picture can say more than a thousand words."He cited the
example of Canada, saying within a year of thegraphic warnings
appearing on cigarette packets in that country,44 percent of the
smokers said they felt like quitting and 58percent said they became more
concerned about their health.In addition, Thailand has
recently decided to ban smoking inall restaurants nationwide,
starting September.



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PHILIP MORRIS (THAILAND) LTD.

 Date February 27, 2002

Subject: Graphic Health Warning Regulation
To  Khun Sudarat Keyuraphan
  Minister of Public Health
CC:  Khun Pongpol Adireksarn
  Deputy Prime Minister
  Khun Varathep Ratanakorn
  Deputy Minister of Finance
  Khun Suchon Wattanapongvanich
  Managing Director, Thailand Tobacco Monopoly
Enclosure: Aide-Memoir dated February 27, 2002

Reference is made to the Regulation proposed by the Ministry of Public
Health that would require manufacturers and importers of cigarettes to
display graphic health warnings on cigarette packs.

Philip Morris (Thailand) Limited (the "Company) is an importer of
cigarettes under a license from the Excise Department. The Regulation
should not be issued for the following reasons:

1. It would impose an undue burden on the Company in that Ministerial
Regulation (No. 6) B.E. 2543 already requisitions 33.3% of the total area
of a cigarette pack for the prescribed textual health warning.

2. The Regulation would impair the use of the Company's valuable
trademarks by obscuring the marks on the pack face and thereby
undermining the trademarks' functions of brand identification and
communication with the Company's customers. Packaging is more important
for cigarettes than other products since all forms of advertising are
banned by the Tobacco Products Control Act.

3. The Company has the right to communicate with its customers through
its display of trademarks and logos. Any attempt to limit this right must
be necessary to achieve a legitimate public purpose. The imposition of
the graphic health warnings would limit this right unnecessarily because
existing health warnings already cover one third of the pack.

4. Trademarks are valuable property of the Company and are protected by
the Trademark Act B.E. 2534, the Penal Code, as well as by the Agreement
on Trade-Related Aspects of Intellectual Property Rights (TRIPS) of which
Thailand is a member. TRIPS provides that the USE of a trademark shall
not be unjustifiably encumbered by special arrangements, such as use in a
special form or manner detrimental to its capability to
distinguish the goods or services of one undertaking from those of other
undertakings. The Regulation would violate this principle.

For the reasons stated above, which are explained in more detail in the
attached Aide-Memoir, the Company requests that the Ministry of Public
Health consider these issues when considering whether to require graphic
health warnings on cigarette packages. The Company welcomes an
opportunity to discuss the issues raised in this submission whith the
Ministry. The person to contact is:

Patrick Rekart
Director, Corporate Affairs


Respectfully submitted
PHILIP MORRIS THAILAND LIMITED


Paul R. Dillman, Jr.
General Manager




PHILIP MORRIS (THAILAND) LTD.

Aide - Memoire

To: The Minister of Public Health
Re: Graphic Health Warning Regulation
Date: February 27, 2002

This Aide-Memoire is an attachment to the letter to the Minister of
Public Health, dated February 27, 2002 on the same subject matter
(hereinafter referred to as the "Regulation").

The Aid-Memoire sets out the reasons why the Government should carefully
reconsider any proposal to require graphic and /or oversized health
warnings on cigarette packages.

1. Legal Authority to issue Health Warning

The Minister of Public Health is empowerd to prescribe the "basis, manner
and conditions in respect of which the labels and the statements in the
labels are to be displayed." These prescriptions must be
published in the Government Gazette.1  The manufacturer or importer of
tobacco products (including cigarettes) must display labels on their
packaging before removing them from the place of manufacture or
importing them into the country.2

2. How this legal authority is exceeded in the case of the Regulation

In issuing a regulation, an administrative agency or a Minister do so in
a manner that does not impose an undue burden on the people, or which
constitutes an undue exercise of his or her discretion. Non-compliance
with this requirement would entitle an aggrieved party to apply for
protection from the Administrative Court.3

It is submitted that the Regulation violates this statutory requirement
in the following respects:
--------------------------------------------
1 Tobacco  Products Control act B.E. 2535, s. 12.
2 Ibid., s. 13.
3 The act Establishing the Administrative Courts and Procedure in
administrative Courts B.E. 2542, s. 9(1).



a) The Regulation imposes an undue burden on the people and is an undue
exercise of the Ministry of Public Health's discretion.

Ministerial Regulation (No. 6) B.E. 2543) already requisitioned 33.3% of
the total area of a cigarette pack for the prescribed health warning. The
prescribed language of the health warning is adequate to warn the public
of the hazards of smoking and to enable them to make an
independent and informed judgment on whether or not to smoke. There is no
need to require the display of the graphics on the packs.

The graphic warnings provision is also not proportionate to the
Government's policy to protect public health. To the extent that graphic
warnings are designed to repel and shock consumers and to overwhelm and
disparage tobacco trademarks, they amount to a Government anti-tobacco
advertising campaign. This action by the Government constitutes an undue
exercise of its discretion. The Company does not oppose the Government's
anti-smoking advertisement, but this should not be done on the Company's
property and at the Company to expense. It is simply unreasonable to
force a tobacco company such as the Company to advertise against the use
of its own product, particularly given the array of other media
available to the Government to conduct such anti-tobacco advertisements.

If it issues such a Regulation, the MOPH will abuse its
regulation-making power to achieve a needlessly burdensome harassment and
to interfere with legitimate commerce.

b) The Government's action in passing the Regulation is unlawful in that
it obstructs the use of the Company's trademark.

Trademarks are valuable intellectual property. This is evident in the
protection afforded by Thai law to trademarks. The Company's trademarks
are registered in Thailand and are protected under the Trademark act B.E.
25344 and the Penal Code.5

The trademarks are also protected under International Law, i.e. The
Agreement on Trade-Related Aspects of Intellectual Property Rights
(TRIPS) of which Thailand is a member.

Dominant packaged-based graphic advertisements impair valuable trademark
rights of the cigarette importers/manufacturers. Large, multi-colored
graphics would, for several reasons, destroy the trademarks and the
package design.

First, color graphics placed on the package will overwhelm the
manufacturers' ability to use the package for its main purposes, which
are brand identification and communication. Graphic warnings impair the
trademark rights by homogenizing the packaging and making it harder for
trademark owners to distinguish their products in the marketplace.
------------------------------------------
4 Trademark Act B.E. 2534, s. 45 states: "No person may institute a
lawsuit for violation of a trademark which is not registered, or may
demand compensation therefor. The provision of this section does not
preclude an action by an owner of a trademark which is not registered
from instituting a lawsuit against a person who passes off a product as
that of the trademark owner."
5 The Penal Code, s. 273, for example, states: "Whoever forges the
registerd trademark of the other person, whether it be registered within
or outside the Kingdom, shall be punished with imprisonment not
exceeding three years or fine not exceeding six thousand Baht, or both."


Second, trademark designs with fewer elements are more effective. That
effectiveness is destroyed by adding multi-colored graphics to the
package.

Finally, packaging is more important for cigarettes than other products
since all forms of advertising and marketing are banned by the Tobacco
Products Control Act.

TRIPS, Article 20 provides:

"The use of a trademark in the course of trade shall not be
unjustifiably encumbered by special arrangements, such as use with
another trademark, use in special from or use in a manner detrimental to
its capability to distinguish the goods or services of one undertaking
from those of other undertakings."

Graphic warnings violate multiple aspects of Article 20. For instance, a
regulation permitting trademarks to be displayed with repulsive graphics
that overwhelm the trademark imagery would qualify as a "special
requirement, such as …use in a special form…." One apparent purpose and
probable effect of graphic warnings its to overwhelm the trademark and
trade address and make it harder for the Company to compete throughout
brand differentiation. In  this way, graphic warnings are certainly
"detrimental" to the function of trademarks and therefore violate TRIPS.
We believe that the Royal Thai Government should not pass laws that
violate its international treaty obligations.

3. The Regulation violates the Company's constitutional right to
communicate with its customers.

Paragraphs one and two of section 39 of the Constitution of the Kingdom
of Thailand 1997 states:

"Section 39. A person is free to express his opinion, speak, write,
publish, advertise and communicate by other methods.

The freedom in paragraph one cannot be limited, except by legal
provisions relating to the preservation of national security, protection
of rights, liberty, honor, reputation, family rights or the right of
privacy of others, preserving public order or good morals of the people,
or to prevent or curtail the degradation in spirit or health of the
people…."

Section 39 of the Constitution embodies the principle of freedom of
speech and communication. For the Government to take away or further
reduce the space on the cigarette packet on which the Company displays
its trademark amounts to a violation of the freedom of speech and
communication under this section. This freedom cannot be limited except
by legislation (granted, the Tobacco Products Act), but only to the
extent necessary. This is pursuant to section 29 of the Constitution
which states:

"Section 29. The Limitation of the right and freedom of a person as
enshrined in the Constitution may not be done, unless authorized by a
specific law for the purpose stated in the Constitution, and only to
extent necessary [emphasis added.] [Such law] may not affect the essence
of such right and freedom.

The law in paragraph one must have general application and must not be
intended to apply to a particular circumstance or person. The law must
also specify the enabling provisions of the Constitution.

The provisions in paragraphs one and two shall apply to rules and
regulations issued pursuant to the specific law mutatis mutandis."

The Company has the right to communicate with its customers through its
brand name. Any attempt to limit this right must be done within the
extent necessary. The imposition of the graphic health warning is not
necessary. The objective of consumer protection should be the
dissemination of truthful information concerning not only the risks
relating to smoking (which can be achieved through textual warnings) but
also the origin and the type of products (not all cigarettes are the
same). Ministerial Regulation (No. 6) B.E. 2543 already provided for
ample textual health warnings. The regulation violates section 3 of the
Constitution and is not excused by section 2 because it is an
unnecessary measure and infringes upon the essence of the freedom of
speech and communication guaranteed by section 39.

4. Conclusion

The Company requests that the Ministry of Health consider these issues
when considering whether to require graphic health warnings on cigarette
packages. The Company welcomes an opportunity to discuss the issues
raised in this submission with the MOPH. The person to contact is:

Patrick Rekart
Director, Corporate Afairs

Respectfully submitted,
PHILIP MORRIS THAILAND LIMITED


(Paul  R. Dilman, Jr.)
General Manager



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