PHILIP Morris has launched an action suggesting the commonwealth is effectively planning to steal the company’s brand in contravention of a bilateral investment treaty Australia signed with Hong Kong 20 years ago.
But Ms Gillard says Labor isn’t about to be intimidated.
“We’re going to deliver cigarette packages in that drab green with no logos,” she told ABC Radio on Monday.
“We’re very confident of our position.”
Philip Morris spokeswoman Anne Edwards is equally convinced the cigarette maker has “an extremely strong case”.
She says if plain packaging is introduced companies should be compensated.
“By attempting to take our company property (brand) … it’s a very, very clear violation of the investment treaty that Australia has with Hong Kong,” Ms Edwards told Fairfax Radio.
But legal experts say things aren’t that clear cut.
A lawyer who’s had more experience than most fighting cigarette companies in court, Peter Gordon, believes Philip Morris is actually on shaky ground.
“The suggestion that the commonwealth is trying to take away the property rights of tobacco companies is of course a farcical proposition,” he told AAP.
“No one’s suggesting they’re not allowed to own these trademarks, they’re just suggesting they’re not allowed to use them in a way which improperly promote cigarette use among kids.”
Mr Gordon, formerly of Slater and Gordon, worked on the marathon Rolah McCabe cancer case against British American Tobacco until he was sued by the company himself.
He says while big tobacco is normally successful against smaller claimants it doesn’t have such a good track record against larger litigants it can’t outspend.
Manufacturers have had to cough up billions of dollars when they’ve gone up against the United States federal government, combined US states and even Australian retailers backed by a wealthy litigation funder.
“Every time that a sovereign nation or a sufficiently funded private litigant has taken them on over a good case they’ve won,” he said.
It’s a point Health Minister Nicola Roxon rammed home on Monday too.
“It may be that big tobacco are famous for taking on victims – we’ve seen that over the past decades,” she told reporters in Canberra.
“(But) this is a course of action which is in the public interest.
“We won’t be frightened off by threats of legal action.”
International law expert Don Anton thinks the commonwealth is right to argue plain packaging is about protecting peoples’ health – not stealing intellectual property.
“(It’s arguable that) public regulation for a public purpose is not direct or indirect expropriation and therefore is not prohibited by the investment treaty,” the Australian National University academic told ABC TV.
Fellow ANU expert Donald Rothwell says until Labor introduces its draft laws into parliament, which could occur as early as next week, it’s not even clear Philip Morris has a cause of action.
The company is yet to suffer any damage, Prof Rothwell told AAP.
“So I see this more as an attempt to fire a shot across the bows.”