TOBACCO PLAIN

PACKAGING IN
AUSTRALIA
IMPLICATIONS OF THE WTO DISPUTES

Professor Andrew D Mitchell

Faculty of Law, Monash University
 While most of the tobacco industry’s claims and predictions
have been duly discredited, its greatest concern – the domino effect – has
been justified. Once even one country with a population of 23 million
showed that plain packaging could be implemented, others would see
it as something feasible.1

1  Simon Chapman and Becky Freeman, Removing The Emperor’s Clothes: Australia and Tobacco Plain Packaging (Sydney University Press, 2014) vii.
TOBACCO PLAIN
PACKAGING IN
AUSTRALIA
IMPLICATIONS OF THE
WTO DISPUTES
Professor Andrew D Mitchell
Faculty of Law, Monash University
Tobacco plain packaging in Australia: implications of the WTO disputes/Andrew D Mitchel

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Contents
Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iv

1. Australia’s plain packaging laws: overview . . . . . . . . . . . . . 1

The introduction of Australia’s plain packaging measures. . . . . . 1

Australia’s suite of measures . . . . . . . . . . . . . . . . . . . . . . 1

The rationale of the TPP measures. . . . . . . . . . . . . . . . . . . 2

2. The WTO disputes. . . . . . . . . . . . . . . . . . . . . . . . . . 3

The dispute settlement process. . . . . . . . . . . . . . . . . . . . . 3

The Panel and Appellate Body decisions. . . . . . . . . . . . . . . . 4

3. Implications of the WTO dispute. . . . . . . . . . . . . . . . . . 15

A. Evidentiary and practical implications. . . . . . . . . . . . . . . . 15

B. Legal implications. . . . . . . . . . . . . . . . . . . . . . . . . . . 18

iii
Acknowledgements
This report was authored by Professor Andrew D Mitchell, Faculty of Law, Monash University.

The report reflects the joint work of the WHO Tobacco Free Initiative in the Regional Office for the Eastern
Mediterranean and the Public Health Law and Policies team in the Health Promotion Department at WHO Headquarters.
Editorial inputs were provided by Benn McGrady and Fatimah El-Awa of WHO. Professor Andrew D Mitchell also
gratefully acknowledges comments and suggestions from Lauro Locks, Hannu Wager and Maryam Aldoseri of the
World Trade Organization.

iv
1
The introduction
of Australia’s plain
Australia’s plain
packaging laws: overview
and their packaging (e.g. stylized word marks,
composite marks and figurative marks) is prohibited.
The TPP Act permits the brand, company or business
name and the variant name of the tobacco product

packaging measures (including where they are trademarks) to be printed

In 2011, the Australian Government introduced Tobacco
Plain Packaging measures (TPP measures) as part of a
comprehensive suite of new and existing tobacco-control
measures. The TPP measures were implemented
through the Tobacco Plain Packaging Act 2011 (Cth)
(TPP Act), which became law on 1 December 2012.2
The TPP measures fully standardise the appearance
of tobacco products and their retail packaging. The
measures affect all types of tobacco products sold in
Australia, including cigarettes, little cigars (also known
as ‘cigarillos’) and bidis.3 Broadly speaking, the TPP
measures implemented under the TPP Act prescribe
two categories of requirements:4
Trademark and other marking requirements,
i which ban or limit the use of certain logos,
brand imagery, symbols, images, colours and
promotional text on tobacco products and
their packaging; and
Physical packaging requirements, which
ii require all tobacco packaging and products to
be of certain prescribed shapes, dimensions,
colours and finishes, and to be made of certain
prescribed materials.
Under the TPP measures, the use of certain
trademarks and other marks used on tobacco products
on the packaging, but only in a typeface, colour, style
and font size prescribed by the regulations.5 The
appearance of tobacco packs is fully standardised. For
instance, cigarette packs and cartons must be made of
cardboard and be in a matte finish and drab dark brown
colour (Pantone 448C). Embellishments, coloured glues
or adhesives, and noises or scents that could constitute
advertising, are not permitted. The appearance of
tobacco products themselves is also fully standardised.
For example, cigarette paper casing must be white, or
white with an imitation cork tip, and may only feature
an alphanumeric code.
Australia’s suite of
measures
The TPP measures operate in conjunction with other
legislative requirements that were not challenged in
the WTO disputes. As part of its ‘comprehensive suite’
of tobacco-control measures, the Australian
Government also introduced a 25% increase to tobacco
excise, increased its investment in anti-smoking
campaigns, and introduced restrictions on tobacco
advertising on the internet.6 At the same time as it
introduced the TPP measures, the Australian
Government increased the size of graphic health
warnings (GHWs) on tobacco packaging.7 These
measures were introduced in addition to existing
tobacco-control measures in Australia, including high

2  Tobacco Plain Packaging Act 2011 (Cth) (‘TPP Act’). The TPP measures were also implemented through the Tobacco Plain Packaging Regulations 2011
(Cth) and the Trade Marks Amendment (Tobacco Plain Packaging) Act 2011 (Cth).
3  TPP Act (n 2), Section 4(1); TPP Bill Explanatory Memorandum, p. 9; and TPP Regulations, Regulation 1.1.3.
4  See TPP Act (n 2) ss 18-19, 20-22.
5  Ibid s 20(3); Tobacco Plain Packaging Regulations 2011 (Cth) rr 2.4.1-2.4.2.
6  Kevin Rudd, ‘Anti-Smoking Action’ (Media Release, 29 April 2010) <https://pmtranscripts.pmc.gov.au/release/transcript-17255>; Australian
Government, ‘Taking Preventative Action – A Response to Australia: The Healthiest Country By 2020 – The Report of the National Preventative Health
Taskforce’ (Report, 15 May 2010) 61-85.
7  The Competition and Consumer (Tobacco) Information Standard 2011 (Cth) requires that GHWs feature on 75% and 90% of the front and back of the
pack respectively: ss 9.13, 9.19.

1
 Tobacco plain packaging in Australia: implications of the WTO disputes

rates of tobacco excise, media campaigns, smoke-free

workplace and public spaces legislation, bans on the The rationale of the
retail display and point-of-sale promotion of tobacco
products, prohibitions on the use of the deceptive TPP measures
cigarette descriptors ‘light’ and ‘mild’, limits on The TPP Act states that its objective is to ‘improve
duty-free imports, government subsidies of smoking public health’ by discouraging people from taking
cessation medications, and Quitline funding (a up smoking or using tobacco products, encouraging
telephone helpline offering assistance with tobacco people to stop using tobacco products, discouraging
cessation).8 people from relapsing, and reducing people’s exposure
to tobacco product smoke. The TPP measures are
intended to achieve these objectives by reducing the
The TPP measures appeal of tobacco products to consumers, increasing the
effectiveness of GHWs on retail packaging of tobacco
fully standardise products, and reducing the ability of such packaging to
the appearance mislead consumers about the harmful effects of using
tobacco.9 The TPP Act also states that it seeks to give
of tobacco products and effect to Australia’s obligations under the World Health
their retail packaging. The Organization Framework Convention on Tobacco Control
(WHO FCTC).10 The Guidelines for Implementation of
measures affect all types Articles 11 and 13 of the FCTC recommend that Parties
consider adopting tobacco plain packaging (TPP) as part
of tobacco products sold in of a comprehensive approach to tobacco control.11
Australia.

8  Chapman and Freeman (n 1) xiv-xv.

9  TPP Act (n 2) ss 3(1)(a), 3(2).
10  Ibid s 3(1)(b).
11  Guidelines for Implementation of Article 11 of the WHO Framework Convention on Tobacco Control (decision FCTC/COP3(10)) [46]; Guidelines for
Implementation of Article 13 of the WHO Framework Convention on Tobacco Control (decision FCTC/COP3(12)) [15]-[17] <https://www.who.int/fctc/
treaty_instruments/adopted/en/>

2
2 The WTO disputes
The now-concluded disputes between Australia and
various other countries at the World Trade Organization
(hereafter the WTO Dispute) are the only WTO disputes
thus far to consider TPP measures. The WTO dispute
lasted over 8 years and was one of three unsuccessful
the Dispute Settlement Body (DSB) for the establishment
of a panel to hear its claim.15 On 13 March 2012, Ukraine
made such a request in relation to Australia’s TPP
measures, which was followed by further requests by
Honduras, the Dominican Republic, Indonesia and Cuba.16
legal challenges to Australia’s TPP measures.12 On 5 May 2014, the panels were ‘composed’, meaning that
the panellists were selected. The same panellists were

The dispute appointed to hear all five disputes, which were resolved
to be heard together on a single harmonised timeline.17

settlement process Any WTO Member that has a substantial interest in

The WTO dispute settlement process is governed
by the Dispute Settlement Understanding (DSU), an
agreement between members of the WTO (Members)
containing the rules for dispute settlement.13 WTO
Members may make a complaint that another Member
has acted inconsistently with its obligations under
a WTO Agreement. The first stage of the dispute
settlement process is a bilateral consultation process
between the parties, which is aimed at resolving the
dispute without recourse to litigation.14
Only after the parties have failed to resolve the dispute
through consultations may a Member make a request to
a matter may join a dispute as a third party. Third
parties may make written and oral submissions and
attend third party sessions. A record 41 WTO Members
requested to join the disputes as third parties.18
Once a panel report has been circulated, the parties
to the dispute (but not third parties) may appeal that
report. Such appeals are heard by the Appellate Body.19
Unlike a panel, the Appellate Body is a permanent body
that is not reconstituted to hear each individual dispute.
Article 17.6 of the DSU provides that appeals may only
relate to questions of law, rather than a panel’s factual
findings.20 However, a party may challenge the way in

12  In 2012, the High Court of Australia dismissed claims by tobacco companies that the TPP measures are inconsistent with the Australian Constitution
because they constitute an acquisition of property otherwise than on just terms: JT International SA v Commonwealth and British American Tobacco
Australasia Limited v Commonwealth of Australia (2012) 250 CLR 1. In 2015, a challenge was brought by Phillip Morris Asia under the 1993 bilateral
investment treaty between China SAR, Hong Kong and Australia, but was dismissed because Phillip Morris engaged in an ‘abuse of process’: Philip
Morris Asia Limited (Hong Kong) v The Commonwealth of Australia (Award on Jurisdiction and Admissibility) (Permanent Court of Arbitration, Case No.
2012-12, 17 December 2015).
13  Marrakesh Agreement Establishing the World Trade Organization, opened for signature 15 April 1994, 1867 UNTS 3 (entered into force 1 January 1995)
annex 2 (‘Understanding on Rules and Procedures Governing the Settlement of Disputes’) (‘DSU’).
14  For a more detailed overview of the dispute settlement process, see World Trade Organization, ‘The process — Stages in a typical WTO dispute
settlement case’, World Trade Organization (Web Page) <https://www.wto.org/english/tratop_e/dispu_e/disp_settlement_cbt_e/c6s2p1_e.htm >
15  DSU (n 13) article 4.7.
16  The Ukraine later withdrew its complaint: World Health Organization, ‘Ukraine’s decision to withdraw its complaint at WTO: an evidence-based move’,
WHO Framework on Tobacco Control (Web Page, 9 June 2015) <https://www.who.int/fctc/ukrainestmnt/en/>
17  World Trade Organization, Procedural agreement between Australia and Ukraine, Honduras, The Dominican Republic, Cuba and Indonesia, WTO Docs
WT/DS434/12, WT/DS435/17, WT/DS441/16, WT/DS458/15, WT/DS467/16 (28 April 2014).
18  This number counts the European Union and its then 28 Member States as one.
19  The Appellate Body has been formally inoperative since December 2019 because the United States has blocked the appointments/reappointments
of Appellate Body Members. This has left the Appellate Body with less than the minimum Members it requires to hear appeals: see DSU (n 13)
article 17.1. Many of the reasons for the ongoing vacancy impasse and the United States’ dissatisfaction with the Appellate Body relate to the length of
appeals, which according to the United States, is caused partly by the Appellate Body’s approach to Articles 11 and 27.6 of the DSU (these provisions
are explained below): see Office of the United States Trade Representative, ‘Statements by the United States at the Meeting of the WTO Dispute
Settlement Body’ (29 June 2020) <https://geneva.usmission.gov/wp-content/uploads/sites/290/Jun29.DSB_.Stmt_.as-deliv.fin_.public13218.pdf>
17-18. See also Office of the United States Trade Representative, ‘Statements by the United States at the Meeting of the WTO Dispute Settlement Body’
(27 August 2018) 10-31 <https://geneva.usmission.gov/wp-content/uploads/sites/290/Aug27.DSB_.Stmt_.as-delivered.fin_.rev_.public.pdf>
20  DSU (n 13) article 17.6.

3
 Tobacco plain packaging in Australia: implications of the WTO disputes

which a panel has approached its assessment of facts
under Article 11 of the DSU, which states that a panel
must ‘make an objective assessment of the matter
before it, including an objective assessment of the facts
of the case’.21 A panel’s compliance with Article 11 is a
legal question and can therefore be appealed.
animal or plant life or health’.25 Article 2.2 seeks to
ensure that such ‘technical regulations’ do not create
unnecessary obstacles to international trade.26
The Panel approached its determination of whether
the TPP measures are inconsistent with Article 2.2 by
considering:

The Panel and whether the TPP measures constitute a

Appellate Body i ‘technical regulation’;

decisions
On 28 June 2018, the Panel circulated a document
that consolidated four panel reports, containing the
Panel’s findings in relation to each dispute (hereafter
the Panel report). It dismissed all claims brought by
the complainants. On 19 July 2018 and 23 August 2018
respectively, Honduras and the Dominican Republic
notified the DSB of its intention to appeal certain
issues of law in the Panel report.22 The Appellate Body
circulated its report on 9 June 2020.
Before the Panel, the complainants argued that
Australia’s TPP measures were inconsistent with its
obligations under two WTO Agreements: the Agreement
on Technical Barriers to Trade (TBT Agreement), and
the Agreement on Trade-Related Aspects of Intellectual
Property Rights (TRIPS Agreement).23 On appeal,
Honduras and the Dominican Republic limited their
appeals to the Panel’s findings concerning Article 2.2
of the TBT Agreement, and Articles 16.1 and 20 of
the TRIPS Agreement.24 The findings of the Panel and
the Appellate Body in relation to these provisions are
summarised below.
The TBT Agreement: Article 2.2
The complainants argued that the TPP measures
are inconsistent with Australia’s obligations under
Article 2.2 of the TBT Agreement, which requires
that ‘technical regulations shall not be more trade-
restrictive than necessary to fulfil a legitimate objective’
such as the ‘protection of human health or safety,
ii
whether they are implemented to fulfill a
legitimate objective; and
whether they are ‘more trade-restrictive than
iii necessary’ to fulfil that objective.
1. Technical regulations
Both parties agreed that the physical packaging
requirements constitute technical regulations. However,
Australia argued that the trademark and other
marking requirements fall outside the scope of the
TBT Agreement and are strictly relevant to the TRIPS
Agreement.27 The Panel found, however, that all of the
TPP measures are covered by the TBT Agreement. For
the Panel, the TPP measures ‘constitute a technical
regulation, [because they lay] down characteristics for
the appearance and packaging of tobacco products
(including requirements relating to the manner in which
trademarks may be displayed on tobacco products
and packaging), and [mandate] compliance with
those characteristics.’28 With respect to trademarks in
particular, the Panel noted that the definition of ‘technical
regulation’ in the TBT Agreement covers regulations
dealing with symbols, packaging, marking or labelling
requirements as they apply to a product.29 Contrary
to Australia’s argument, the Panel concluded that the
mere fact that the regulations affect the use of signs
also protected as trademarks was not a valid reason to
exclude the TPP measures’ trademark and other marking
requirements from the scope of the TBT Agreement.30

21  Ibid article 11.

22  Cuba and Indonesia did not appeal and their respective panel reports were adopted by the DSB on 27 August 2018.
23  Cuba also claimed that the TPP measures were inconsistent with Australia’s obligations under Article IX:4 of the General Agreement on Tariffs and
Trade, which deals with geographical indications. The Panel’s dismissal of this claim was not challenged on appeal.
24  The Panel made various findings on various other provisions of the TRIPS Agreement that were not appealed. These include provisions relating to
the protection of the use of trademarks (Article 6quinquies of the Paris Convention (1967) as incorporated by Article 2.1 of the TRIPS Agreement,
and Articles 15.4 and 16.3 of the TRIPS Agreement), provisions relating to unfair competition (Article 10bis paragraphs (1), (3)(1) and (3)(2) of the
Paris Convention (1967) as incorporated by Article 2.1 of the TRIPS Agreement), and provisions relating to the protection of geographical indications
(Articles 22.2(b) and 24.3 of the TRIPS Agreement). Discussion of these findings is beyond the scope of this paper, but has been explored elsewhere:
Ernst-Ulrich Petersmann, ‘How to Reconcile Human Rights, Trade Law, Intellectual Property, Investment and Health Law? WTO Dispute Settlement
Panel Upholds Australia’s Plain Packaging Regulations of Tobacco Products’ (European University Institute, Department of Law, Working Paper LAW
2018/19) 14-24 <https://cadmus.eui.eu/bitstream/handle/1814/60064/LAW_2018_19.pdf?sequence=1&isAllowed=y>
25  Marrakesh Agreement Establishing the World Trade Organization, opened for signature 15 April 1994, 1867 UNTS 3 (entered into force 1 January 1995)
annex 1A (‘Agreement on Technical Barriers to Trade’) article 2.2 (‘TBT Agreement’).
26  Ibid.
27  Australia – Certain Measures Concerning Trademarks, Geographical Indications and Other Plain Packaging Requirements Applicable to Tobacco
Products and Packaging, WTO Doc WT/DS457/R (28 June 2018) [7.108] (‘Australia – Tobacco Plain Packaging’).
28  Ibid [7.182]. See also [7.128], [7.142]-[7.143], [7.163]-[7.169].
29  Ibid [7.143].
30  Ibid [7.106]. See also [7.153], [7.158].

4
 The WTO disputes

2. Legitimate objective and Article 2.5
of the TBT Agreement
The parties to the dispute agreed that the objective of
the TPP measures is the protection of public health in
relation to the use of tobacco products in Australia.31
However, the parties’ precise characterisation of the
objective differed. The complainants characterised
the objective as ‘the improvement of public health
by reducing smoking prevalence’.32 Australia
characterised it as the reduction in smoking rates by
reducing the appeal of tobacco products, increasing
the effectiveness of GHWs, and reducing the ability
of packages to mislead consumers.33 The Panel
agreed with Australia that a characterisation based on
smoking prevalence alone would not capture the TPP
Act’s broader objectives. However, it agreed with the
complainants that Australia had sought to conflate its
policy objectives with the means or mechanisms by
which those objectives could be fulfilled. Nevertheless,
the Panel indicated that these mechanisms could be
‘highly relevant’ to its analysis of the TPP measures’
contribution to their objective.34 Ultimately, the Panel
determined that the TPP measures’ legitimate objective
was ‘to improve public health by reducing the use of,
and exposure to, tobacco products’.35
Article 2.5 of the TBT Agreement creates a rebuttable
presumption that a technical regulation does not
create an unnecessary obstacle to international trade
whenever that technical regulation is ‘prepared,
adopted or applied for’ one of the legitimate objectives
mentioned in Article 2.2, and ‘is in accordance with
relevant international standards’.36 The purpose of
Article 2.5 is to promote international harmonisation
of technical regulations and facilitate trade.37 Australia
argued that the Guidelines for Implementation of
Articles 11 and 13 of the WHO FCTC (hereafter the
TPP Guidelines) are an international standard, and that
the complainants had not rebutted the presumption
provided for by Article 2.5.38 Australia argued that
the TPP measures were adopted ‘in accordance with’
the TPP Guidelines because they were adopted to
‘give effect’ to Australia’s obligations under the WHO
FCTC.39 The Panel was therefore required to determine
whether the TPP Guidelines constitute an ‘international
standard’ for the purposes of Article 2.5.
The Panel found that the TPP Guidelines do not
constitute an ‘international standard’ because the
‘guidelines’ that they provide are not intended for
‘common and repeated use’.40 The Panel concluded that
the WHO FCTC Guidelines are intended to ‘assist Parties
in meeting their obligations’ under the WHO FCTC and
that they provide important guidance in that respect.41
However, WHO FCTC Parties intending to devise plain
packaging measures ‘in accordance with’ the TPP
Guidelines would have a range of options available to
them, and two Members may implement plain packaging
measures that are significantly different in terms of their
requirements but that are still both consistent with the
Guidelines.42 For the Panel, the different ways in which
plain packaging is recommended under the two TPP
Guidelines reflects the flexibility accorded to WHO FCTC
Parties in determining the most appropriate manner
of addressing packaging as a component of effective
tobacco control measures under the WHO FCTC.43 The
Panel also concluded that the TPP Guidelines are not
an ‘international standard’ because, taken in isolation
from their context as part of the WHO FCTC, they do not
constitute a ‘document’ containing a ‘standard’.44 These
findings were not challenged on appeal.45
The Panel clarified that these conclusions would have
no bearing on the relevance of the WHO FCTC and
the Guidelines to other aspects of its analysis, and no
adverse implications for the other aspects of Australia’s
defence.46 As explained in more detail below in Part III,
the Panel repeatedly referred to the WHO FCTC
throughout its report and used it as evidence in various
parts of its analysis.

31  Ibid [7.213].

32  Ibid [7.200]-[7.203].
33  Ibid [7.207].
34  Ibid [7.230].
35  Ibid [7.232].
36  TBT Agreement (n 25) article 2.5 (emphasis added).
37  Panel Report, Australia – Tobacco Plain Packaging [7.271] quoting Appellate Body Report, European Communities – Trade Description of Sardines, WTO
Doc WT/DS231/AB/R (26 September 2002) [214]-[215].
38  Panel Report, Australia – Tobacco Plain Packaging [7.254], [7.257].
39  Ibid [7.256]. See TPP Act (n 2) s 3(1)(b).
40  An ‘international standard’ is a (i) ‘document’, (ii) ‘approved by a recognized body’, (iii) ‘that provides for “rules”, “guidelines” or “characteristics”’, (iv) ‘for
products or related processes and production methods’, (v) ‘for common and repeated use’, (vi) ‘with which compliance is “not mandatory”’: see Panel
Report, Australia – Tobacco Plain Packaging [7.281].
41  Ibid [7.396]-[7.397]. See also [7.327].
42  Ibid [7.386].
43  Ibid [7.388].
44  The Panel stated: ‘it is not clear… which elements or components within the… FCTC Guidelines would form a “document” encapsulating the totality
of the “rules, guidelines or characteristics”, that a WTO Member would be required to follow’: ibid [7.330]. It was necessary that all relevant product
requirements ‘be identifiable with sufficient clarity to allow a “comparative assessment” to be properly conducted, to determine whether the challenged
measure is “in accordance with” with that international standard’: at [7.331]. See also [7.396].
45  Appellate Body Report, Australia – Certain Measures Concerning Trademarks, Geographical Indications and Other Plain Packaging Requirements
Applicable to Tobacco Products and Packaging, WTO Docs WT/DS435/AB/R WT/DS441/AB/R (9 June 2020) [6.6] (‘Australia – Tobacco Plain Packaging’).
46  Ibid [7.403]-[7.405]. See also [7.412]-[7.417].

5
 Tobacco plain packaging in Australia: implications of the WTO disputes

3. More trade restrictive than l Pre- and post-implementation evidence of distal

necessary outcomes, which was intended to demonstrate the
The parties and the Panel agreed that an assessment of impact on behavioural outcomes that the above
whether a technical regulation is ‘more trade-restrictive mechanisms were designed to bring about (e.g.
than necessary’ involves a ‘relational analysis’, or a intentions or attempts to quit);51 and
weighing and balancing of the following factors:47
l Post-implementation evidence of the actual
l the degree of contribution made by the measure to impact on smoking behaviours (e.g. initiation and
the legitimate objective; cessation).52

l the trade-restrictiveness of the measure;
l the nature of the risks and the gravity of
consequences that would arise from non-fulfilment
of the objective pursued through the measure; and
l the existence of reasonably available, less trade-
restrictive, alternative measures.
3.1 Contribution to the legitimate
objective
3.1.1 The Panel
The complainants argued that the measures do not,
and would not, contribute to the reduction in the
use and exposure to tobacco products. The Panel’s
summary and analysis of the evidence of the TPP
measures’ contribution occupied 166 pages of its
report.48 This evidence included studies undertaken
prior to the implementation of the TPP measures about
the hypothesised effects of the TPP measures
(pre-implementation evidence), and evidence of the
TPP measures’ actual effects since implementation
(post-implementation evidence).49
The evidence included:
l Pre- and post-implementation evidence of the TPP
measures’ proximal outcomes, which was intended
to show the measures’ impact on the mechanisms
by which the measures were designed to work
(e.g. reduction in appeal, increased effectiveness
of GHWs, and reduced capacity of packaging to
mislead);50
The Panel disagreed with the complainants’ arguments
that various methodological limitations in the pre-
implementation evidence meant that the conclusions
drawn from such evidence was flawed.53 The Panel’s
conclusion was supported by various independent
reviews of the studies and literature.54 The Panel also
considered that post-implementation evidence suggested
that the TPP had had some impact on the effectiveness of
GHWs, and that actual smoking behaviours had changed
since implementation.55 Having considered the ‘totality’
of the evidence, the Panel ultimately found that ‘the TPP
measures, in combination with other tobacco-control
measures maintained by Australia… are apt to, and do in
fact, contribute to Australia’s objective of reducing the
use of, and exposure to, tobacco products’.56
3.1.2 The Appellate Body
On appeal, the appellants argued that the Panel erred
in its findings about the TPP measures’ contribution to
Australia’s objective. They argued that the Panel erred in
its application of Article 2.2 and challenged the Panel’s
examination of the ‘totality of the evidence’.57 As a
number of the appellants’ arguments made in relation to
the Panel’s application of Article 2.2 entirely overlapped
with their arguments under Article 11 of the DSU, the
Appellate Body addressed those arguments together.58
The Appellate Body noted that the ‘sheer volume’
of the appellants’ claims under Article 11 was
‘unprecedented’.59 It recalled that a claim that a panel
has failed to conduct an objective assessment is a
‘serious allegation’ and that an ‘egregious error’ by
a panel is required to satisfy it.60 It emphasised that

47  Ibid [7.31] citing Appellate Body Report, United States – Certain Country of Origin Labelling (COOL) Requirements, WTO Docs WT/DS384/39 WT/
DS386/40 (11 December 2015) [374] (‘US – COOL’) and Appellate Body Report, United States – Measures Concerning the Importation, Marketing and
Sale of Tuna and Tuna Products, WTO Doc WT/DS381/AB/R (16 May 2012) [318].
48  This number excludes a 150-page annex containing the Panel’s analysis of the post-implementation evidence: see Panel Report, Australia – Certain
Measures Concerning Trademarks, Geographical Indications and Other Plain Packaging Requirements Applicable to Tobacco Products and Packaging
(Appendices), WTO Docs WT/DS435/R/Suppl.1, WT/DS441/R/Suppl.1 WT/DS458/R/Suppl.1, WT/DS467/R/Suppl.1 (28 June 2018).
49  See Panel Report, Australia – Tobacco Plain Packaging [7.485], [7.492], [7.539]. See generally McCabe Centre for Law and Cancer, ‘The WTO Panel
Report in Australia – Plain Packaging: Findings and Implications’ (Discussion Paper, November 2018) 17-18.
50  See Panel Report, Australia – Tobacco Plain Packaging [7.491], [7.498].
51  See Ibid [7.491], [7.495]-[7.498].
52  See Ibid [7.493], [7.497].
53  Ibid [7.232], [7.1027].
54  Ibid [7.1028].
55  Ibid [7.1036]-[7.1037].
56  Ibid [7.1025], [7.1043].
57  Appellate Body Report, Australia – Tobacco Plain Packaging [6.20].
58  Ibid [6.24], [6.26].
59  Ibid [6.48].
60  Ibid.

6
 The WTO disputes

it would not ‘entertain attempts by the appellants to
resubmit their factual arguments under the guise of
challenging the objectivity of the Panel’s assessment of
the facts of the case’.61 Broadly, the appellants argued
that the Panel’s intermediate conclusions based on
the pre-implementation evidence, and their ultimate
conclusions based on the pre- and post-implementation
evidence, were reached in error.
Honduras argued that that the Panel erred because
it failed to offer a reasoned and adequate explanation
of the evidence or treated evidence in a one-sided
manner. It argued that the Panel was incorrect in
concluding that the methodological limitations of the
post-implementation evidence (e.g. a focus on ‘non-
behavioural’ and ‘proximal’ outcomes) were not ‘fatal’.62
The Dominican Republic argued that the Panel failed
to consider certain evidence that directly contradicted
Australia’s argument and the Panel’s own conclusion
that tobacco packaging conveyed positive messages.63
smoking behaviours.65 The Appellate Body noted
that the Panel had considered independent, expert
evidence in assessing the strength of the main body
of evidence.66 The Dominican Republic’s argument
was also rejected; there was no direct contradiction
between the Dominican Republic’s evidence, which
concerned perceptions of tobacco product packaging
as a whole, and the evidence considered by the Panel,
which concerned the perceptions of branding elements
on the package alone.67
The appellants made numerous discrete and complex
claims about the Panel’s treatment of the post-
implementation evidence.68 The Appellate Body rejected
these claims, noting that many of them were based on
a misapprehension of the Panel’s findings,69 that they
depended on the onus of proof being incorrectly placed
on Australia rather than the complainants,70 and that they
concerned the accuracy or merit of the Panel’s factual
findings rather than the objectivity of its analysis.71

The Appellate Body rejected Honduras’ claim and noted
that the complainants bore the burden of providing
credible evidence to prove that the TPP measures
are incapable of contributing to its objective.64 The
Panel had considered that the studies’ focus on non-
behavioural outcomes ‘does not…constitute an inherent
flaw, provided… [it] is understood as constituting one
component of a broader evidence base’ and that the
TPP measures were designed to act on these ‘non-
behavioural’ or ‘proximal’ outcomes in order to affect
3.2 Trade-restrictiveness
3.2.1 The Panel
The complainants presented numerous arguments
before the Panel concerning the trade-restrictiveness
of the TPP measures. The Panel found the TPP
measures to be trade-restrictive in so far as a decrease
in the demand for tobacco products would reduce
the total volume of imported tobacco products.72 The
arguments that later became relevant to the Appellate
Body’s decision are summarised in the table below.

61  Ibid [6.50].

62  Ibid [6.57], [6.65], [6.68].
63  Ibid [6.79]-[6.81].
64  Ibid [6.77].
65  Appellate Body Report, Australia – Tobacco Plain Packaging [6.70] quoting Panel Report, Australia – Tobacco Plain Packaging [7.555].
66  Ibid [6.73]-[6.77].
67  Ibid [6.91]-[6.92].
68  Ibid [6.103]-[6.345].
69  Ibid [6.269].
70  Ibid [6.278]-[6.279].
71  Ibid [6.287], [6.295]. One Division Member agreed with the majority’s ultimate findings and conclusions, but disagreed that ‘it was necessary to
examine in detail the appellants’ claims that the Panel erred in determining the degree of contribution of the TPP measures to Australia’s objective’: at
[6.524], [6.536]. The Member reasoned that the appellants’ arguments about the Panel’s assessment, if made out, could call into question the Panel’s
finding that the TPP measures are apt to contribute to their objective, but that they could not vitiate the Panel’s finding that the complainants had not
demonstrated that the TPP measures are not apt to contribute to their objective: at [6.531]. For the dissenting Member, this latter finding remained
undisturbed on appeal: at [6.534].
72  Panel Report, Australia – Tobacco Plain Packaging [7.1200], [7.1204], [7.1207].

7
 Tobacco plain packaging in Australia: implications of the WTO disputes

Complainants’ Panel’s findings

arguments73
TPP measures alter the Mere modification of the competitive environment did not show trade-
competitive environment of restrictiveness. As the TPP measures are not discriminatory, evidence of
producers in the Australian market actual trade effects was required.

TPP measures harm the
competitive opportunities of
imported tobacco products by
restricting producers’ ability to
differentiate their products
The TPP measures were likely to limit the opportunity of producers
to differentiate their products, but this modification of the competitive
environment would not, by itself, constitute a restriction on ‘competitive
opportunities’ that would have a limiting effect on international trade.74
The TPP measures would not necessarily make it more difficult for new
brands to enter the market. The TPP measures would likely make market-
entry easier by diminishing brand loyalty, and the opportunity for brand
awareness was already relatively low in Australia.75

TPP measures have a limiting The TPP measures had not resulted in a reduction in the total value of trade
effect on the volume and value of (because, as the complainants argued, consumers were likely to ‘downtrade’ or
trade in tobacco products switch from premium to non-premium products), but this reduction in value may
occur in the future because of a reduction in consumption or a fall in prices.76

3.2.2 The Appellate Body
On appeal, the appellants argued that the Panel erred
in both its interpretation and application of Article 2.2.
Interpretation of Article 2.2: Trade-Restrictiveness of
the TPP Measures
The appellants argued that the Panel should have
interpreted Article 2.2 such that any limitation on
‘competitive opportunities’ is sufficient to demonstrate
trade-restrictiveness, and that it erred by requiring
that, where a challenged measure is not discriminatory,
evidence of ‘actual trade effects’ is necessary to
demonstrate trade-restrictiveness.77
The Appellate Body agreed with the Panel that a mere
modification in the conditions of competition will not
necessarily be sufficient for a conclusion about the
degree, if any, of a measure’s trade-restrictiveness.78
The Appellate Body confirmed that, where a measure
discriminates between imported and non-imported
products (national treatment) or between the products
of different Members (most-favoured-nation treatment),
a modification in the conditions of competition may be
sufficient to establish trade-restrictiveness. However,
where the measure is not discriminatory (as with
the TPP measures), further evidence of ‘actual trade
effects’ may be required to demonstrate the measure’s
trade-restrictiveness.79 The Panel’s interpretation
was consistent with these principles and it did not
interpret Article 2.2 such that evidence of ‘actual
trade effects’ is always required.80 The Appellate Body
also confirmed that panels may take into account all
relevant evidence before concluding on the degree of
trade-restrictiveness, rather than focusing on a subset
of evidence (e.g. about a measure’s design, its structure
or its anticipated impact).81
Application of Article 2.2: Trade-Restrictiveness of the
TPP Measures
In relation to the Panel’s application of Article 2.2, the
appellants claimed that the Panel should have found:
l that a reduced opportunity for consumers to
differentiate products on the basis of brands
demonstrated that the TPP measures are trade-
restrictive;
l that the TPP measures would result in a reduction
in the value of imported tobacco products because
of ‘downtrading’, or consumers shifting from
premium to non-premium products in response to
the TPP measures.82

73  Ibid [7.1163]-[1164], [7.1172]-[7.1175], [7.1188]-[7.1192], [7.1226]-[7.1228], [7.1247].

74  Ibid [7.1167].
75  Ibid [7.1179]-[7.1187].
76  Ibid [7.1225].
77  Appellate Body Report, Australia – Tobacco Plain Packaging [6.377], [6.381], [6.391].
78  Ibid [6.389].
79  Ibid [6.385].
80  Ibid [6.391].
81  Ibid [6.393], [6.406].
82  Ibid [6.403].

8
 The WTO disputes
The Appellate Body rejected the first argument on the
basis that the Panel correctly found that some imported
products would benefit from a reduced opportunity
for brand-differentiation, because consumer loyalty
to other, competing imported products would be
reduced.83 It rejected the second argument on the basis
that the Panel, in its role as fact-finder, was entitled to
choose the weight it gave to the evidence in concluding
that the evidence did not show that the TPP measures
did, or necessarily would, lead to a reduction in value.84
3.3 The Risks of non-fulfillment
Article 2.2 of the TBT Agreement provides that
‘technical regulations shall not be more trade-
restrictive than necessary… taking account of the
risks non-fulfillment would create’.85 The harmful
effects and health risks associated with tobacco use
were not contested by the parties.86 Australia referred
to various World Health Organization documents in
pointing out that the magnitude of the global tobacco
epidemic and the serious harms caused by tobacco use
(including in Australia) are well-established, that all
tobacco products are highly addictive, that there is no
safe level of tobacco use or safe level of exposure to
second-hand or environmental tobacco smoke, and that
tobacco use harms nearly every organ in the body.87
Australia pointed out that tobacco use is the world’s
leading cause of preventable morbidity and mortality,
and is responsible for the deaths of nearly 6 million
The WTO dispute
lasted over 8 years
and was one of three
unsuccessful legal challenges
to Australia’s TPP measures.
83  Ibid [6.408].
84  Ibid [6.423].
85  Panel Report, Australia – Tobacco Plain Packaging [7.1256].
86  See eg ibid [7.1263], [7.1265], [7.1269], [7.1270].
87  Ibid [7.1274].
88  Ibid [7.1275], [7.1305].
89  Ibid [7.1287].
90  Ibid [7.1310], [7.1316].
91  Ibid [7.1309].
92  Panel Report, Australia – Tobacco Plain Packaging [7.1324] citing Appellate Body Report, United States – Measures Concerning the Importation,
Marketing and Sale of Tuna and Tuna Products, WTO Doc WT/DS381/AB/R (16 May 2012) [322]; Appellate Body Report, United States – Certain
Country of Origin Labelling (COOL) Requirements, WTO Docs WT/DS384/AB/R WT/DS386/AB/R (29 June 2012) [374]-[378]; Appellate Body Report,
United States – Certain Country of Origin Labelling (COOL) Requirements — Recourse to Article 21.5 of The DSU by Canada And Mexico, WTO Docs WT/
DS384/AB/RW WT/DS386/AB/RW (18 May 2015) [5.197].
93  Panel Report, Australia – Tobacco Plain Packaging [7.1721].
9
people annually.88 The Panel found that the risk of the
TPP measures not fulfilling their objective is that public
health would not be improved because the use of, and
exposure to, tobacco products would not be reduced.89
In relation to the gravity of these consequences, it
found that ‘it is widely recognized, and undisputed in
[the] proceedings, that the public health consequences
of the use of, and exposure to, tobacco… are particularly
grave’ and are ‘especially grave for youth’.90 In reaching
these conclusions, the Panel made particular reference
to the recognition given to the gravity of these
consequences in the WHO FCTC.91 These findings were
not challenged on appeal.
3.4 Alternative measures
3.4.1 The Panel
As observed by the Panel, whether a measure is
more trade-restrictive than necessary to achieve
a particular objective and therefore creates an
unnecessary barrier to trade may be established on
the basis of a ‘comparative analysis’ between the
challenged measure and alternative measures.92 The
existence of one or more alternative measures that
make an equivalent contribution to achieving the
same objective as the challenged measure, that are
less trade-restrictive (taking account of the risks that
non-fulfillment would create), and that are reasonably
available to the Member implementing the challenged
measure, may show that the challenged measure is
more trade-restrictive than necessary to achieve its
objective. Before the Panel, the complainants identified
four alternative measures it said were reasonably
available to Australia. The Panel found that each
alternative, either individually or in combination,93
would not make an equivalent contribution to
Australia’s health objective and/or would not be
less-trade restrictive than the TPP measures. The
alternatives and the Panel’s corresponding findings are
summarised in the table below.
 Tobacco plain packaging in Australia: implications of the WTO disputes

The alternative measures and

the Panel’s corresponding findings
Alternative measures94 Panel’s findings

Raising the minimum

1
legal purchase age for
a Would only affect the availability of tobacco products to

individuals below the purchasing age of 21, whereas the
tobacco from 18 years TPP measures would address all age groups and other
to 21 years. aspects of tobacco demand.95

b Unclear that the measure would have less of a limiting

effect on trade.96

Raising the level of

2
taxation for tobacco
a Would not address the promotional effects of tobacco
packaging that the TPP measures seek to address.97
products.
b Not necessarily less trade-restrictive, because it would be
targeted at reducing tobacco consumption, and therefore
tobacco imports, to the same extent as the TPP measures.98

Raising the minimum

3
legal purchase age for
a Was not less trade-restrictive and would not make an
equivalent contribution for similar reasons as those given
tobacco from 18 years to in respect of the alternative taxation measure.99
21 years.

Pre-vetting individual
4
tobacco packages and
a The use of discretion and the potential for error would
leave regulatory gaps that the TPP measures would
products before allowing otherwise fill (e.g. the possibility of differentiation and
them entry into the packaging elements that could lead to greater consumer
Australian market. appeal, a likelihood of consumers being misled, distraction
from GHWs).100

b Not less trade-restrictive because it would have similar

effects on international trade and lead to increased
implementation and compliance costs.101

94  Ibid [7.1392], [7.1472], [7.1546], [7.1629].

95  Ibid [7.1459]-[7.1460].
96  Ibid [7.1412]-[7.1417].
97  Ibid [7.1526]-[7.1527].
98  Ibid [7.1491].
99  Ibid [7.1583], [7.1614].
100  Ibid [7.1682]-[7.1685].
101  Ibid [7.1651]-[7.1654].

10
 The WTO disputes
3.4.2 The Appellate Body
Application of Article 2.2: Contribution of Alternative
Measures
On appeal, the appellants argued that the Panel erred
in finding that the alternative measures would not make
an equivalent contribution to Australia’s objective. The
appellants made two claims in this respect:102
l that the Panel incorrectly rejected an equivalent
contribution by finding that the alternative
measures would contribute to Australia’s objective
through mechanisms different to those employed
by the TPP measures, and that the alternative
measures do not address the design features of
the TPP measures; and
l that the Panel took into account the synergies
that the TPP measures would create with other
existing tobacco-control measures, but did not
take into account the synergies that the alternative
measures would create with the existing measures.
The Appellate Body agreed with the appellants that
the Panel had erred. In addressing the first issue,
the Appellate Body noted the principle that ‘[an]
alternative measure may achieve an equivalent degree
of contribution in ways different from the technical
regulation at issue’ and confirmed that what is relevant
is ‘the overall degree of contribution that the technical
regulation makes to the objective pursued’.103 The
Panel had erred by focusing on the TPP measures’
mechanisms in order to find that the alternative
measures would not make an equivalent contribution
to the TPP measures’ objectives. As these mechanisms
did not constitute objectives of the TPP measures, they
could not form a proper basis for the finding that the
alternative measures made less of a contribution. It
was irrelevant to their overall contribution that they did
not address the design features of the TPP measures.104
In relation to the second issue, the Appellate Body
concluded that whether, and to what extent, a measure
creates synergies with other measures is just one
factor informing a measure’s ‘overall’ degree of
contribution; it is relevant but not decisive.105 Because
the Panel found that the TPP measures and alternative
measures were both apt to make a ‘meaningful’
contribution to Australia’s objective, and because
the Panel found that the alternative measures could
102  Appellate Body Report, Australia – Tobacco Plain Packaging [6.481].
103  Ibid [6.498] (original emphasis).
104  Ibid [6.498].
105  Ibid [6.499], [6.502].
106  Ibid [6.503].
107  Ibid [6.467], [6.475]-[6.479].
108  Panel Report, Australia – Tobacco Plain Packaging [7.1724]-[7.1732].
109  Ibid [7.1729].
110  See above n 24.
11
make such a contribution without considering their
interaction with existing measures, it was illogical for
the Panel to have found that the TPP measures are
necessarily more effective than its alternatives because
of the TPP measures’ synergies with other existing
measures.106
Application of Article 2.2 Trade-Restrictiveness of
Alternative Measures
The appellants argued that the Panel erred in its
assessment of the trade-restrictiveness of the
alternative measures because of the same errors the
Panel was alleged to have made in relation to the
trade-restrictiveness of the TPP measures. However,
the Appellate Body rejected these arguments on the
same grounds.107
4. Consistency with Article 2.2
Having weighed each of these considerations against
one another, the Panel concluded that Australia’s TPP
measures are no more trade-restrictive than necessary
to fulfill their legitimate objective of protecting
public health.108 It therefore concluded that the TPP
measures are consistent with Australia’s obligations
under the TBT Agreement. In reaching this conclusion,
the Panel noted that the ‘TPP measures are… not
intended to operate as a stand-alone policy, but… were
implemented as part of “a comprehensive suite of
reforms to reduce smoking and its harmful effects”
in Australia’ and that it had given ‘due weight… to the
fact that the TPP measures operate in conjunction
with a number of other wide-ranging tobacco control
measures’.109
Although the Appellate Body found that the Panel had
erred in reaching its conclusion about the contribution
of the alternative measures, it agreed with the Panel
about their trade-restrictiveness. It therefore upheld
the Panel’s overall conclusion that the TPP measures
are no more trade-restrictive than necessary, and that
they are consistent with Australia’s obligations under
the TBT Agreement.
The TRIPS Agreement: Article 20
The complainants made several claims about the
consistency of the TPP measures with various
provisions of the TRIPS Agreement.110 The most
significant of those claims was that the TPP measures
violated Article 20 of the TRIPS Agreement. Article 20
 Tobacco plain packaging in Australia: implications of the WTO disputes
requires that the ‘use of a trademark in the course of
trade shall not be unjustifiably encumbered by special
requirements.’111
The following elements must be established in order to
find that a measure is inconsistent with Article 20:
i the existence of ‘special requirements’;
that such special requirements ‘encumber’
ii ‘the use of a trademark in the course of
trade’; and
iii that they do so ‘unjustifiably’.
1. Special requirements and encumbrance
The Panel found that the TPP measures fall within
the legal meaning of the term ‘special requirement’
because they must be complied with, have a close
connection with and specifically address the use
of trademarks, and are limited in application to the
use of trademarks on tobacco retail packaging and
products.112 The Panel found that the TPP measures
also encumber the use of trademarks in the course
of trade to the extent that they restrict the manner
in which certain word marks may be displayed on
tobacco products and packaging, and expressly
disallow (and thereby hinder and obstruct) the
use of stylized word marks, composite marks and
figurative marks.113 The Panel therefore rejected
Australia’s argument that a total prohibition on certain
trademarks (such as that on figurative trademarks),
rather than a requirement that merely controls the
way in which they may be used, does not engage
Article 20 of the TRIPS Agreement.114 The Panel also
concluded that the ‘use’ of a trademark extends
beyond use for the purpose of distinguishing goods
and services from one another; it also includes use
for promotional purposes.115 The Panel also rejected
Australia’s argument that the TPP measures do
not encumber trademarks ‘in the course of trade’
because ‘the course of trade’ culminates at the point
of sale; the phrase ‘in the course of trade’ relates to
commercial activities that extend beyond the buying
and selling of goods.116
111  Marrakesh Agreement Establishing the World Trade Organization, opened for signature 15 April 1994, 1867 UNTS 3 (entered into force 1 January 1995)
annex 1C (‘Agreement on Trade-Related Aspects of Intellectual Property Rights’) article 20.
112  Panel Report, Australia – Tobacco Plain Packaging [7.2241], [7.2243].
113  Ibid [7.2242], [7.2244].
114  Ibid [7.2236].
115  Ibid [7.2286].
116  Ibid [7.2252], [7.2261]-[7.2263].
117  Ibid [7.2295]-[7.2296], [7.2309], [7.2322], [7.2324]-[7.2326].
118  Ibid [7.2329], [7.2332].
119  Ibid [7.2430].
120  Ibid [7.2598].
121  Ibid [7.2598].
12
2. Unjustifiability
The parties took different approaches to the meaning
of ‘unjustifiably’ under Article 20. The complainants
argued that the measure in question must have more
than merely a ‘rational connection’ to the objective
sought to be achieved by the measure. They also
argued that the term ‘unjustifiably’ means that the
measure must be necessary, in the sense that there are
no alternative measures that would achieve the same
level of contribution to the objective, but which would
be less encumbering on trademark use.117 Australia
argued that only a rational connection between the
measure and objective must be shown, and disagreed
that notions of necessity are imported into Article 20 by
the term ‘unjustifiably’.118
The Panel concluded that a determination of
unjustifiability involves consideration of the following
factors:119
the nature and extent of the encumbrance
a resulting from the special requirements,
bearing in mind the trademark owner’s
legitimate interest in using its trademark and
thereby allowing the trademark to fulfil its
intended function;
the reasons for which the special
b requirements are applied, including any
societal interests they are intended to
safeguard; and
c whether these reasons provide sufficient
support for the resulting encumbrance.
The Panel therefore accepted the complainants’
arguments that something more than a ‘rational
connection’ is required; the reasons for the
measure must also provide ‘sufficient support’
for the encumbrance. The Panel, however, also
accepted Australia’s argument that determination of
unjustifiability sets a lower threshold than the test
of necessity set by other WTO provisions, and does
not require consideration of alternative measures.120
However, the Panel indicated that the availability of
alternative measures could, in a particular case, ‘call
into question’ whether the reasons for a measure
sufficiently support the resulting encumbrance.121
 The WTO disputes
2.1 Nature and extent of encumbrance
The Panel found that the TPP measures prevent a
trademark owner from using the promotional function
of the figurative elements of trademarks to convey
any message about the product, and from thereby
extracting economic value from the use of such design
features. It noted that the TPP measures’ prohibitions
in this respect are ‘far-reaching’.122 However, the
Panel noted that this effect is partly mitigated by word
marks (brand names and variants) being allowed
in a restricted form, and that the complainants had
not sought to demonstrate that consumers had been
unable to distinguish products from one another.123
2.2 Reasons for the special requirement
The Panel recalled its earlier finding about the objective
pursued by Australia through the TPP measures, and
noted that ‘the Appellate Body has recognized the
preservation of human life and health as a value that
is “both vital and important in the highest degree”.’124
It also noted the importance and legitimacy of public
health as a policy concern, as indicated by Article 8 of
the TRIPS Agreement, the WHO FCTC, and the Doha
Declaration.125
2.3 Sufficient support
2.3.1 The Panel
The Panel noted that the TPP measures ‘address
an exceptionally grave domestic and global health
problem involving a high level of preventable morbidity
and mortality.’126 It concluded that because the TPP
measures ‘in combination with other tobacco-control
measures maintained by Australia, are capable of
contributing, and do in fact contribute, to Australia’s
objective of improving public health’, the reasons for
the special requirements provide sufficient support
for the resulting encumbrances.127 It also found it
significant that Australia is, through the TPP measures,
pursuing its public health objective in line with its
commitments under the FCTC.128
The Panel concluded that the TPP measures are not
inconsistent with Australia’s obligations under Article
20 of the TRIPS Agreement.129
122  Ibid [7.2569].
123  Ibid [7.2570].
124  Ibid [7.2586]-[7.2587].
125  Ibid [7.2588]-[7.2589]. Article 8 states that ‘Members may, in formulating or amending their laws and regulations, adopt measures necessary to protect
public health’: TRIPS Agreement (n 111) article 8. Paragraph 4 of the Doha Declaration states: ‘the TRIPS Agreement does not and should not prevent
Members from taking measures to protect public health’: Declaration on the TRIPS Agreement and Public Health, WTO Doc WT/MIN(01)/DEC/2 (14
November 2001) (Ministerial Declaration) (‘Doha Declaration’).
126  Panel Report, Australia – Tobacco Plain Packaging [7.2592].
127  Ibid [7.2592].
128  Ibid [7.2595]-[7.2596].
129  Ibid [7.2606].
130  Appellate Body Report, Australia – Tobacco Plain Packaging [6.636]-[6.637], [6.656].
131  Ibid [6.641]-[6.643].
132  Ibid [6.659].
133  Ibid [6.659] (emphasis added).
13
2.3.2 The Appellate Body
On appeal, the appellants claimed that the Panel erred
in its interpretation and application of Article 20.
Interpretation of Article 20
In respect of the Panel’s interpretation, Honduras
argued that:130
l the Panel, by interpreting ‘unjustifiably’ as the
absence of good reasons for a measure, incorrectly
interpreted Article 20 as a broad policy exception;
and
l the Panel erred by approaching the issue of
unjustifiability by considering the three factors
outlined above; and
l the Panel should have interpreted Article 20 such
that a measure must be at least shown to be
necessary before it can be said to be justifiable;
and
l the Panel erred by relying on the Doha Declaration
to inform its interpretation of Article 20.
The Appellate Body clarified that Article 20 does not
proscribe all special requirements that encumber
trademark use, but only those that do so unjustifiably.
As Article 20 presupposes that there are circumstances
in which governments can encumber trademark use
justifiably, it rejected Honduras’ view that Article 20
created a general prohibition on ‘governmental
encumbrances on use’ with limited exceptions.131
Rather, ‘Members enjoy a certain degree of discretion
in imposing encumbrances on the use of trademarks
under Article 20’.132
Importantly, the Appellate Body upheld the Panel’s
finding that something more than a rational connection
between the special requirement and its objective
must be found: a ‘complainant [must] demonstrate
that a policy objective… does not sufficiently support
the encumbrances’.133 The Appellate Body agreed with
the Panel that such a demonstration ‘could’ include
 Tobacco plain packaging in Australia: implications of the WTO disputes
consideration of the three factors set out by the Panel
(outlined above at the beginning of this section).134
The Appellate Body also confirmed that a measure
need not be necessary in the sense of there being no
less-encumbering alternatives. Such an interpretation
would overlook the drafters’ intention to use the
word ‘unjustifiably’ rather than a term reflecting the
notion of necessity present in other WTO Agreement
provisions.135 Importantly, the Appellate Body also
agreed with the Panel’s view that alternative measures
may feature as a factor in an overall determination of
whether there is sufficient support for a measure.136
The Appellate Body found it unnecessary to make a
definitive statement on the legal status of the Doha
Declaration because it found that the Panel had
correctly relied on the general principle of treaty
interpretation reflected in the Doha Declaration: that
an Agreement should be interpreted in light of its
objectives, which are partly contained in Article 8 of the
TRIPS Agreement.137
Application of Article 20
Honduras argued that the Panel erred in assessing the
nature and effect of the encumbrance by not focusing
on the distinguishing function of trademarks.138
However, the Appellate Body concluded that the
Panel appropriately examined a trademark owner’s
legitimate interest in extracting economic value from
the promotional function of a trademark, given that
the complainants did not seek to establish an actual or
potential inability in consumers to distinguish between
tobacco products as a result of the TPP measures.139
134  Ibid [6.651], [6.659].
135  Ibid [6.653]-[6.655].
136  Ibid [6.653].
137  Panel Report, Australia – Tobacco Plain Packaging [7.2407]-[7.2411]; Appellate Body Report, Australia – Tobacco Plain Packaging [6.657]. See Doha
Declaration (n 102) paragraph 5(a).
138  Ibid [6.664].
139  Ibid [6.672].
140  Ibid [6.700].
141  Ibid [6.706]-[6.707].
142  Panel Report, Australia – Tobacco Plain Packaging [7.1923], [7.1934].
143  Appellate Body Report, Australia – Tobacco Plain Packaging [6.574].
144  Ibid [6.587]-[6.588].
145  Ibid [6.582]-[6.586], [6.599].
14
Finally, Honduras argued that the Panel erred by giving
the WHO FCTC and its Guidelines undue legal weight in
concluding that the encumbrances on trademark use
are sufficiently supported.140 However, the Appellate
Body concluded that the the WHO FCTC and its
Guidelines simply provided additional factual support
and confirmed conclusions that the Panel had already
reached about the importance of the TPP measures’
objectives.141
The TRIPS Agreement: Article 16
The parties made it clear at the panel stage that
they were not arguing that Article 16 of the TRIPS
Agreement confers a positive right to use.142 However,
following further submissions at the appeal stage, the
Appellate Body understood Honduras to argue that
Article 16.1 confers upon a trademark owner the right
to use its trademark, that certain aspects of Article 16.1
require Members to protect the distinctiveness of
a trademark through use, and that Members must
guarantee a minimum level of protection relating to the
distinctiveness and use of trademarks.143 The Appellate
Body confirmed the Panel’s view that Article 16.1 of
the TRIPS Agreement does not confer on a trademark
owner a positive right to use a trademark or preclude
a government from regulating or preventing such
use.144 Rather, Article 16.1 ensures that each WTO
Member provide trademark owners with a means,
under domestic law, of exercising their exclusive
right to prevent unauthorised parties from using their
trademark.145
3 Implications of
the WTO dispute
Australia’s WTO dispute has various implications for
other WTO Members seeking to introduce similar TPP
measures, as well as for the WTO-consistency of other
tobacco-control measures. As was anticipated prior to
circulation of the Appellate Body’s report,146 most of the
Panel’s findings and conclusions were left undisturbed.
Since the introduction of Australia’s TPP measures,
16 other WTO Members have introduced and partially
or fully implemented their own TPP measures. They
are France, the United Kingdom, New Zealand, Norway,
Ireland, Saudi Arabia, Hungary, Turkey, Thailand,
Uruguay, Slovenia, Israel, Canada, Singapore, Belgium,
and the Netherlands.147 13 of those Members have done
so since the Panel’s report was circulated. Singapore’s
and the Netherlands’ TPP measures came fully into
force as recently as 1 July 2020 and 1 October 2020
respectively, shortly after the Appellate Body handed
down its decision.148 Three other countries have passed
TPP laws that will come into force at later dates, and
TPP laws are being considered at various levels of
government in numerous other countries.
These developments show that the world is following
Australia’s lead in the implementation of new and more
effective tobacco-control measures. The Appellate
Body’s affirmation of the legality of Australia’s TPP
measures under WTO law means that countries are
likely to follow suit in implementing similar measures,
and that they may do so with confidence about the
legal status of those measures under WTO law. This
confidence has become increasingly important, as
many governments who consider or seek to propose
new TPP and other tobacco-control measures are
subject to a ‘chilling’ effect, where the threat of legal
action discourages them from implementing regulatory
changes.149 The next sections explore the practical and
legal implications of the WTO dispute in greater depth.
A. EVIDENTIARY AND PRACTICAL
IMPLICATIONS
The relationship between health and trade law
The Panel and Appellate Body decisions confirm that
the promotion of public health, sought to be achieved
by tobacco-control measures, is well-recognised
as a legitimate objective for the purposes of WTO
Agreements. Such recognition has been demonstrated
by WTO bodies in the past,150 but trade law has at times
been seen to be at odds with public health initiatives.151
The Appellate Body did not object to the Panel’s
findings that the TPP measures’ overall objective of
protecting public health is a legitimate objective for the
purposes of the TBT Agreement and is a valid reason
for imposing special requirements under Article 20 of
the TRIPS Agreement.
As well as demonstrating that public health and
tobacco-control are legitimate objectives, the decisions
also confirm the importance of those objectives
and their relatively strong weight in the evaluative
assessments required to be undertaken by WTO

146  See eg Tania Voon, ‘Third Strike: The WTO Panel Reports Upholding Australia’s Tobacco Plain Packaging Scheme’ (2019) 20 Journal of World
Investment and Trade 146, 152; Australian Government (n 6) 181-182.
147  For a more detailed overview of these developments, see Cancer Council Victoria, ‘Timeline, international developments & major news stories’
<https://www.cancervic.org.au/plainfacts/timelineandinternationaldevelopments>
148  See eg Tobacco (Control of Advertisements and Sale) (Appearance, Packaging and Labelling) Regulations 2019 (Singapore).
149  See Jane Kelsey, ‘Regulatory Chill: Learnings From New Zealand’s Plain Packaging Tobacco Law’ (2017) 17(2) Queensland University Law Review 21,
22-26; Mitchell and Sheargold, Protecting the Autonomy of States to Enact Tobacco Control Measures Under Trade and Investment Agreements’ (2015)
24 Tobacco Control e147, e148.
150  See eg Appellate Body Report, United States – Measures Affecting the Production and Sale of Clove Cigarettes, WTO Doc WT/DS406/AB/R (4 April
2012) [235]-[236].
151  See generally Benn McGrady, Confronting the Tobacco Epidemic in a New Era of Trade and Investment Liberalization (World Health Organization, 2012);
Benn McGrady, ‘Health and International Trade Law’ in Gian Luca Burci and Brigit Toebes (eds), Research Handbook on Global Health Law (Edward
Elgar Publishing, 2018); Jeff Collin, ‘Tobacco Control, Global Health Policy and Development: Towards Policy Coherence in Global Governance’ (2012)
21 Tobacco Control 274; Petersmann (n 24) 2-4; Nicholas J Diamond, ‘The Final Say On Australia’s Plain Packaging Law at the WTO’, O’Neill Institute
(Web Page, 6 August 2020) <https://oneill.law.georgetown.edu/the-final-say-on-australias-plain-packaging-law-at-the-wto/>

15
 Tobacco plain packaging in Australia: implications of the WTO disputes

bodies. Significantly, the Panel concluded that the likely
health consequences that would follow from the TPP
measures’ non-fulfillment are ‘exceptionally grave’,152
and it noted the Appellate Body’s previous recognition
that those health objectives are ‘vital and important in
the highest degree’.153 The importance of public health
and tobacco-control weighed particularly heavily in
the Panel’s assessment of unjustifiability. The dispute
therefore reveals that WTO Agreements are being
interpreted in a way that leaves significant latitude for
public health measures.154
The WHO FCTC and TPP as an effective
tobacco-control measure
Perhaps most importantly, the decisions also make it
clear that TPP is recognised as an effective tobacco-
control measure and that it may be implemented
by Members without necessarily being inconsistent
with their WTO obligations. The Panel’s finding that
Australia’s TPP measures are ‘apt to, and do in fact,
contribute’ to its public health objectives provides a
foundation for future findings that other countries’ TPP
regimes will contribute to similar objectives.155
The decisions also confirm that the WHO FCTC can
provide a firm evidentiary basis for the importance of
addressing the tobacco epidemic, for tobacco-control
as a legitimate health objective, and for the acceptance
and recognition of TPP and other measures as effective
tobacco-control measures.156 This is consistent with
use of the WHO FCTC in the context of other legal
challenges at the WTO and in other fora.157 The Panel
noted that ‘it is not uncommon in WTO disputes for
parties to refer to, and panels and the Appellate
Body to rely on, non-WTO international instruments
as evidence of fact’ and that ‘the FCTC and certain
FCTC Guidelines have been specifically discussed and
relied upon as evidence in at least two previous WTO
disputes’.158 The Panel used the WHO FCTC to inform
itself about the seriousness of the tobacco epidemic
and the consequences of failing to address tobacco
use and exposure, as well as to aid its findings that
tobacco packaging is a form of promotion, that TPP is
a recommended way to reduce the appeal of tobacco
products, and that TPP may increase the effectiveness
of GHWs.159
The Appellate Body’s affirmation of the Panel’s
approach reinforces the particular role that the WHO
FCTC can play in WTO disputes. The WHO FCTC
cannot be used to legally justify a measure that would
otherwise be inconsistent with a Member’s WTO
obligations. However, it can be used as evidence to
assess or characterise the tobacco-control measure
in question.160 As explained above, the legal status
of the WHO FCTC and its Guidelines did not, for the
Panel, affect the use of those instruments for other
purposes (e.g. as the basis for factual findings) or in
others contexts (e.g. under other provisions).161 Thus
the Panel used the WHO FCTC and its Guidelines to
support its factual findings even though the latter was
found not to constitute an ‘international standard’
under Article 2.5 of the TBT Agreement. The precise
role of the WHO FCTC is further underscored by the
Appellate Body’s rejection of Honduras’ argument that
the Panel placed undue legal weight on the WHO FCTC
and its Guidelines in the Panel’s analysis of ‘sufficient
support’ under Article 20 of the TRIPS Agreement.
The Panel properly used the WHO FCTC to support
its factual findings and did not use the WHO FCTC as
a binding legal instrument or an interpretative tool.162
Importantly, parties to a dispute need not be bound to
a particular agreement or treaty for that agreement
to be used as evidence to aid a dispute body’s factual
assessments.163
The importance of evidence
The Appellate Body decision also confirms that a panel
is entitled to look at the totality of the evidence in
determining the contribution of a challenged measure
to its objective. This means that other countries may
use already-available pre-implementation evidence

152  Panel Report, Australia – Tobacco Plain Packaging [7.1310].

153  Ibid [7.1311], [7.2587].
154  See Suzanne Zhou and Jonathon Liberman, ‘Public Health, Intellectual Property, and the Trade and Investment Law Challenges to Australia and
Uruguay’s Tobacco Packaging Laws’ in Donald R Rothwell, Imogen Saunders, and Esmé Shirlow (eds), The Australian Year Book of International Law
Online (Brill, 2020) 75.
155  Panel Report, Australia – Tobacco Plain Packaging [7.1025].
156  Suzanne Zhou, ‘The WHO FCTC in the WTO Panel’s decision in Australia – Plain Packaging’, WHO FCTC Knowledge Hub on Legal Challenges (Web
Page) <https://untobaccocontrol.org/kh/legal-challenges/who-fctc-in-wto-plain-packaging-decision>. See eg Panel Report, Australia – Tobacco Plain
Packaging [7.1507]-[7.1508].
157  See generally Suzanne Zhou, Jonathan Liberman and Evita Ricafort, ‘The Impact of the WHO Framework Convention on Tobacco Control in Defending
Legal Challenges to Tobacco Control Measures’ (2019) 28 Tobacco Control s113.
158  Panel Report, Australia – Tobacco Plain Packaging [7.412].
159  Ibid [7.1309]-[7.1310], [7.663]-[7.666], [7.2595], [7.800]. See generally McCabe Centre for Law and Cancer (n 49) 26; Lukasz Gruszczynski and Margherita
Melillo, ‘The FCTC and its Role in WTO Law: Some Remarks on the WTO Plain Packaging Report’ (2018) 9(3) European Journal of Risk Regulation 564, 572.
160  Zhou (n 156). See Appellate Body Report, Australia – Tobacco Plain Packaging [6.707]; Panel Report, Australia – Tobacco Plain Packaging [7.412]-[7.417].
161  See generally above n 46. See Panel Report, Australia – Tobacco Plain Packaging [7.403]-[7.405]. It is recalled that the Panel’s findings on Article 2.5 of
the TBT Agreement were not challenged on appeal.
162  See Appellate Body Report, Australia – Tobacco Plain Packaging [6.700]-[6.707]. Notably, the Panel also said that ‘it is not uncommon in WTO disputes
for… panels and the Appellate Body to rely on, non-WTO international instruments… to inform the interpretation of specific provisions under a covered
agreement’, but did not use the FCTC in this way: Panel Report, Australia – Tobacco Plain Packaging [7.412] (emphasis added).
163  Zhou (n 156); Nathalie Devillier and Ted Gleason, ‘Consistent and Recurring Use of External Legal Norms: Examining Normative Integration of the FCTC
post-Australia – Tobacco Plain Packaging’ (2019) 53 Journal of World Trade 533, 537. At the time of the disputes (and at the time of writing), Cuba, the
Dominican Republic and Indonesia were not Parties to the WHO FCTC (Cuba had signed but not ratified it).

16
 Implications of the WTO dispute

of the TPP measures’ proximal and distal outcomes
to establish the efficacy of TPP. Other countries may
also rely on post-implementation evidence of the
actual impact of TPP measures in Australia, as well as
other countries where such measures have already
been implemented. This particular body of evidence
continues to grow.164 Importantly, the Appellate Body
decision confirms that a panel’s role as fact-finder gives
it some margin of discretion in how it approaches the
evidence available. The Panel’s approach in Australia’s
case confirms that a degree of flexibility is likely to
be afforded to parties in relation to the limitations of
certain evidence.165 The accepted role of the WHO FCTC
also means that less resourceful Members may rely
on it to support what little evidence those Members
are able to gather.166 As a lack of evidence is a common
challenge made by complainants about TPP in WTO
and other legal disputes,167 and substantial evidence is
generally required to contradict the evidence presented
by complainants, these findings are especially
important for countries seeking to implement TPP.
The TBT Agreement and scientific evidence
Another implication relates to the approach to scientific
evidence in particular, especially in the context of the
TBT Agreement. In its report, the Panel said that its
assessment of scientific evidence, for the purposes
of establishing the TPP measures’ contribution to
Australia’s objective, may include consideration of
whether such evidence ‘comes from a qualified and
respected source’, whether it has the ‘necessary
scientific and methodological rigor to be considered
reputable science’ or reflects ‘legitimate science
according to the standards of the relevant scientific
community’, and ‘whether the reasoning articulated on
the basis of the… evidence is objective and coherent’.168
The Panel borrowed these considerations directly from
the Appellate Body, which had outlined them in the
context of another WTO Agreement, the Agreement
on the Application of Sanitary and Phytosanitary
Measures.169 The Panel said that these types of
considerations for assessing scientific evidence may
also apply, with necessary modification, to the TBT
Agreement.170 The Appellate Body in this dispute did
not deal directly with the legality or propriety of this
approach,171 which means that future panels may seek
to adopt it. In any case, it is possible that the approach
falls under the margin of discretion afforded to a panel
in its role as fact-finder, and indeed, may contribute
to a finding under Article 11 that a panel has made an
objective assessment of the facts before it.172
The importance of a robust and comprehensive
policy framework
The fact that a panel is entitled and likely to consider
the totality of the evidence means that a suite of
tobacco-control measures will be important in
defending the legality of a TPP regime, especially
under provisions where alternative measures must
be considered (e.g. Article 2.2 of the TBT Agreement).
The Appellate Body did not question or object to what
has been described as a ‘key theme of the panel’s
reasoning’: consideration of the TPP measures in their
regulatory context.173 The decisions therefore give
recognition to the general view that a comprehensive
suite of measures increases the effectiveness of a
tobacco-control framework.174
The Panel emphasised that Australia’s broader suite
of comprehensive measures was relevant to its
assessment of the way in which the TPP measures
are applied and operate.175 The Appellate Body did
not question the Panel’s consideration of the extent
to which the TPP measures created ‘synergies’ with
other measures in assessing their contribution. Rather,
the Appellate Body questioned the Panel having
concluded that the alternative measures made less of a
contribution without having considered the interaction
of those alternatives with other measures.176 The
Appellate Body confirmed the principle that what is

164  See eg Australian Government, Post-Implementation Review Tobacco Plain Packaging 2016 (Report, 2016); Victoria M White et al, ‘Long-term impact of
plain packaging of cigarettes with larger graphic health warnings: findings from cross-sectional surveys of Australian adolescents between 2011 and
2017’ (2019) 28 Tobacco Control e77; Fabienne El-Khoury Lesueur et al, ‘Plain tobacco packaging, increased graphic health’ warnings and adolescents’
perceptions and initiation of smoking: DePICT, a French nationwide study’ (2019) 28 Tobacco Control e31.
165  Andrew Higgins, Andrew Mitchell and James Munro, ‘Australia’s Plain Packaging of Tobacco Products: Science and Health Measures in International
Economic Law’ in Bryan Mercurio and Kuei-Jung Ni (eds), Science and Technology in International Economic Law: Balancing Competing Interests
(Taylor and Francis Group, 2013) 122-123.
166  Zhou (n 156).
167  Benn McGrady, ‘Tobacco Plain Packaging and the Expanding Role of the WTO in Regulatory Oversight’ in Donald R Rothwell, Imogen Saunders, and
Esmé Shirlow (eds), The Australian Year Book of International Law Online (Brill, 2020) 76, 78.
168  Panel Report, Australia – Tobacco Plain Packaging [7.516] quoting Appellate Body Report, United States – Continued Suspension of Obligations in the
EC – Hormones Dispute, WTO Doc WT/DS320/AB/R (16 October 2008) [591]-[592].
169  Marrakesh Agreement Establishing the World Trade Organization, opened for signature 15 April 1994, 1867 UNTS 3 (entered into force 1 January 1995)
annex 1A (‘Agreement on the Application of Sanitary and Phytosanitary Measures’). See Appellate Body Report, European Communities – Measures
Concerning Meat and Meat Products (Hormones), WTO Doc WT/DS26/AB/R WT/DS48/AB/R [109].
170  Panel Report, Australia – Tobacco Plain Packaging [7.517]. Notably, the Panel referred to its assessment of the TPP measures’ contribution under
Article 2.2 of the TBT Agreement when it undertook the same analysis in the context of Article 20 of the TRIPS Agreement: at [7.2593].
171  See Appellate Body Report, Australia – Tobacco Plain Packaging [6.22] and footnote to [6.23].
172  This appears to have been the case in this dispute: see eg ibid at [6.73]-[6.77].
173  McCabe Centre for Law and Cancer (n 49) 24. See Appellate Body Report, Australia – Tobacco Plain Packaging [6.17]; Panel Report, Australia – Tobacco
Plain Packaging [7.1529], [7.1727], [7.2592].
174  Higgins, Mitchell and Munro (n 166) 121.
175  Panel Report, Australia – Tobacco Plain Packaging [7.506].
176  Appellate Body Report, Australia – Tobacco Plain Packaging [6.502].

17
 Tobacco plain packaging in Australia: implications of the WTO disputes

relevant is the overall degree of contribution, which
it found the Panel had misapplied.177 This means that
the extent to which a measure features as part of a
broader suite of measures, and the way in which it
interacts with those measures, will still be important in
defending a measure before a WTO body. It is not clear
that TPP would need to be a final resort, or feature
as a last step in a country’s regulatory framework,
especially under Article 20 of the TRIPS Agreement.
However, the dispute reveals that countries should
ensure that other, less trade-restrictive measures are
in place before implementing TPP. The implications of
the Appellate Body’s decision in relation to alternative
measures is further discussed below.
Characterising the objective
The way in which the legitimate objective of a
measure is formulated and characterised is important,
because that characterisation may influence a panel’s
assessment of whether a measure contributes to its
objective. The Appellate Body found that the Panel
had erred in using the TPP measures’ mechanisms
to assess the overall contribution of the alternative
measures. However, those mechanisms provided
important and valid context for the Panel’s assessment
of the TPP measures’ contribution to their objective.
The Appellate Body upheld the Panel’s focus on the
TPP measures’ intermediate effects (such as proximal
and distal outcomes), in addition to behavioural
outcomes regarding smoking prevalence. It is therefore
important that TPP measures are framed in their
proper regulatory context, and the means by which
they are intended to achieve their overall objective is
made clear in legislation and policy materials.
Legal challenges will be less likely, but may be
resource-demanding
Although the dispute has shown that the evidence
available supports TPP, and other Members may use
that evidence, it also reveals that defending legal
challenges by the tobacco industry may nevertheless
be costly, resource-demanding and time-consuming.
The Panel and Appellate Body decisions are likely
to dissuade tobacco companies from bringing
similar claims, and Members should continue to be
encouraged to introduce their own TPP measures.
However, WTO Members, particularly developing and
low-income countries, should remain aware of the
prospect of having to defend complex claims at the
panel and appellate stages.178 In light of other tobacco-
control disputes, governments should also be aware of
the possibility of other challenges under international
and domestic laws.179
Despite the Appellate Body’s apparent dissatisfaction
with the voluminous and complex nature of the
appellants’ claims, there is no indication that future
complainants and appellants will not necessarily seek
to bring claims of a similar character and magnitude
in the future. It is noteworthy that Article 11 of the
DSU, notwithstanding the ‘separate opinion’ of one
Division Member,180 provided the appellants with
the opportunity to make additional challenges to the
Panel’s findings of fact. Similar challenges in the future
may involve large amounts of evidence and require
a thorough re-examination of a panel’s assessment
of that evidence. This approach to WTO litigation has
become increasingly common.181
B. LEGAL IMPLICATIONS
The WTO decisions also have certain legal
implications which may be significant for the practical
implementation of tobacco-control measures generally,
as well as non-tobacco-control measures aimed at
protecting public health, such as those relating to food,
alcohol and pharmaceuticals.182
Only the threshold requirements under WTO
Agreements are likely to be engaged
The Panel’s and Appellate Body’s decisions in the WTO
dispute indicate that TPP measures (and other tobacco-
control measures) will generally engage certain WTO
provisions (such as Article 2.2 of the TBT Agreement
and Article 20 of the TRIPS Agreement) because
they will satisfy the initial or threshold stages of the
relevant legal tests (i.e. those that determine whether
a particular measure is captured by a provision). For
example, Australia’s TPP measures were found to
constitute both a ‘technical regulation’ for the purposes
of the TBT Agreement and a ‘special requirement’ for
the purposes of the TRIPS Agreement. It has been
pointed out that the Panel’s ‘broad’ interpretation of

177  Ibid. See Panel Report, Australia – Tobacco Plain Packaging [7.1368]-[7.1369], [7.1731].
178  McGrady, ‘Health and International Trade Law’ (n 151) 107; Becky Freeman, ‘Australia’s decisive win on plain packaging paves way for other countries
to follow suit’, The Conversation (Web Page, 16 June 2020); Genevieve Wilkinson, ‘Big Tobacco’s decisive defeat on plain packaging laws won’t stop its
war against public health’, The Conversation (Web Page, 6 July 2020).
179  McGrady (n 168) 77-78. See eg R (British American Tobacco & Ors) v Secretary of State for Health [2016] EWHC 1169 (Admin); Philip Morris Brands Sàrl v
Uruguay (ICSID Arbitral Tribunal, Case No ARB/10/7, 8 July 2016); British American Tobacco v Attorney-General, Constitutional Court of Uganda, 28 May
2019; Swedish Match v Ministry of Health and Care Services, Case no 17-110415TVI-OBYF (Oslo District Court and Court of Appeal, 6 November 2017).
180  See above n 71.
181  Tania Voon and Alan Yanovich, ‘The Facts Aside: The Limitation of WTO Appeals to Issues of Law (2006) 40(2) Journal of World Trade 239, 247; Voon
(n 146) 155. The Appellate Body’s alleged countenance of this approach is at the centre of the current impasse instigated by the United States,
which has expressed its agreement with the separate opinion given by the dissenting Member: see above n 19; Office of the United States Trade
Representative, ‘Statements by the United States at the Meeting of the WTO Dispute Settlement Body’ (29 June 2020) <https://geneva.usmission.gov/
wp-content/uploads/sites/290/Jun29.DSB_.Stmt_.as-deliv.fin_.public13218.pdf> 17-18. For an overview of the United States’ concerns, see Office of
the United States Trade Representative, ‘Report on the Appellate Body of the World Trade Organization’ (Report, February 2020).
182  See generally Alberto Alemanno and Enrico Bonadio (eds), The New Intellectual Property of Health: Beyond Plain Packaging (Edward Elgar Publishing, 2016).

18
 Implications of the WTO dispute
these steps has the potential to subject more measures
to WTO challenge.183 However, in light of the evidentiary
implications outlined above, TPP measures and other
tobacco-control measures are unlikely to fall foul of
the more substantive requirements within relevant
provisions, such as the requirement under the TBT
Agreement that a technical regulation be no more
trade-restrictive than necessary or that under the
TRIPS Agreement that a special requirement shall not
unjustifiably encumber trademark use. Although the
TPP measures constituted ‘technical regulations’ and
‘special requirements’, they were found to be neither
more trade-restrictive than necessary, nor unjustifiable.
Therefore, provided there is sufficient evidentiary
support for public health measures such as TPP, the
consistency of those measures with WTO obligations
is likely to be upheld.184 It remains to be seen whether
a reduction in the ‘chilling’ effect on governments
brought about by Australia’s success will reduce the
number of challenges that these threshold elements
allow WTO bodies to entertain.185
The content of WTO Legal tests has
been clarified
Although TPP is likely to satisfy only the threshold
stages of WTO tests, the Panel and Appellate Body
decisions have nevertheless clarified certain aspects
of the more substantive requirements within WTO
provisions. This has implications for the way in which
tobacco-control and other health measures might be
assessed in the future. Such implications are important,
because assessments by WTO bodies are coming
to take an increasingly central role in the control
and regulation of public health measures. This is
reflected in the increased integration of different public
international law rules and frameworks (including the
WHO FCTC) into the multilateral trading system, as
well as panels’ wider focus on the broader question
of whether a measure is proportionate and their role
in thereby confirming the regulatory autonomy of
countries to develop tobacco control and other health
related measures.186
Trade-restrictiveness under Article 2.2
of the TBT Agreement
On the one hand, the Appellate Body did not overturn
the Panel’s interpretation of trade-restrictiveness,
by confirming that ‘actual trade effects’ may be
relevant. This means that it may be harder for
183  Zhou and Liberman (n 154) 74.
184  McGrady (n 168) 76.
185  Wilkinson (n 179).
186  McGrady (n 168) 81; Petersmann (above n 24) 24-29. See also McGrady, ‘Health and International Trade Law’ (n 151) 104.
187  Voon (n 146) 161, 164. See Appellate Body Report, Australia – Tobacco Plain Packaging [6.389].
188  Appellate Body Report, Australia – Tobacco Plain Packaging [6.386]-[6.387], [6.408].
189  Panel Report, Australia – Tobacco Plain Packaging [7.1200], [7.1204], [7.1207].
190  Voon (n 146) 171.
191  See Appellate Body Report, Australia – Tobacco Plain Packaging [6.491]; Panel Report, Australia – Tobacco Plain Packaging [7.1731]. For a more
detailed discussion of the Panel’s approach, see Voon (n 146) 168-170.
19
future complainants to characterise TPP as trade-
restrictive. Complainants will need to show that a
measure will have negative effects on competitive
opportunities, rather than show that they merely
modify the competitive environment.187 Measures may
also affect brand-differentiation, provided this does
not disadvantage imported products compared to
competing domestic products as a whole.188
On the other hand, the Panel found that the TPP
measures are trade-restrictive simply because they
would reduce demand for tobacco products and such
demand in Australia is exclusively met by imports.189
This direct and uncomplicated approach to trade-
restrictiveness indicates that other TPP measures
are likely to be trade-restrictive to some degree,
and much will depend on the market conditions for
tobacco products in the relevant country, as well as
other factors in the ‘relational analysis’ (the degree of
contribution, the consequences of non-fulfilment, and
the comparative contribution and trade-restrictiveness
of alternative measures). Importantly, the Appellate
Body did not overturn the Panel’s approach to the
trade-restrictiveness of alternative measures. This
means that those alternatives are likely to be as equally
trade-restrictive as the challenged TPP measure, and
that TPP measures are therefore likely to be no more
trade-restrictive than necessary.190 Again, this will likely
depend on the extent to which a Member has a robust
and comprehensive tobacco-control framework.
Equivalent contribution under Article 2.2 of the
TBT Agreement
The Appellate Body decision confirms that whether
an alternative measure can achieve an equivalent
contribution will be measured by reference to that
measure’s overall contribution, and not by reference
to the specific mechanism(s) chosen by a Member
to achieve its objective. This is because a measure
may make a contribution through ways different to
those in which the challenged measure makes its
contribution. In this respect, there seems to be a
divergence in the approaches of the Panel and the
Appellate Body. The Panel took a qualitative approach
to a measure’s contribution, while the Appellate Body
took a more quantitative approach.191 The Appellate
Body’s approach makes it theoretically easier to
formulate reasonably available alternative measures,
because such alternatives may still make a contribution
 Tobacco plain packaging in Australia: implications of the WTO disputes
even if they do not address the same mechanisms or
aspects that the challenged measure seeks to address.
However, the dispute demonstrates that this is unlikely
to have a significant practical impact on the successful
defence of TPP measures, because any such alternative
is likely to be as equally trade-restrictive as the
challenged measure.
Article 16.1 of the TRIPS Agreement confers
no positive right to use
The Appellate Body decision confirms that Article 16.1
cannot be used by the tobacco industry to challenge
TPP on the ground that it infringes a WTO Member’s
supposed positive right to use their intellectual
property. The provision only requires that Members
provide trademark owners the legal right, under
domestic law, to prevent others from using their
trademarks. It does not stop governments from
preventing a trademark owner from using their own
trademark. This removes a major avenue for any future
legal challenges to TPP measures.
‘Unjustifiability’ under Article 20 of the
TRIPS Agreement
The WTO dispute is the first case in which the scope
and content of the term ‘unjustifiably’ under Article
20 has been explored.192 In contrast to the Panel’s
interpretation of the threshold requirements under
Since the introduction
of Australia’s TPP
measures, 16
other WTO Members have
introduced and partially or
fully implemented their own
TPP measures.
192  See Panel Report, Australia – Tobacco Plain Packaging [7.2328].
193  Diamond (n 151).
194  Voon (n 146) 183; Zhou and Liberman (n 154) 74. .
195  Appellate Body Report, Australia – Tobacco Plain Packaging [6.654]-[6.655] quoting Panel Report, Australia – Tobacco Plain Packaging [7.2598].
196  Ibid [6.654]-[6.655].
197  McGrady (n 168) 81.
20
Article 20, its interpretation of ‘unjustifiably’ has
been seen to favour Members seeking to implement
measures.193 It is unclear what the requirement of
‘sufficient support’ requires, except that it is something
less than necessity and something more than a
‘rational connection’.194 However, for the Panel and the
Appellate Body, it was enough that the TPP measures’
health objectives were highly important, and that the
TPP measures would contribute to achieving those
objectives. In this regard, the importance of tobacco-
control generally outweighed the extensive effects on
trademark use brought about by the TPP measures.
The Appellate Body’s confirmation that Article 20 does
not require Members to demonstrate that a measure is
necessary (in the sense of there being no reasonably
available, less trademark-encumbering alternatives
that provide an equivalent contribution to the objective)
should further encourage Members to implement TPP
measures. However, Members should remain cognisant
that the availability of such alternative measures may
play a role in determining the justifiability of TPP or
other tobacco-control measures. This is because the
existence of such alternative measures may ‘inform
an assessment of’ or ‘call into question’ whether the
reasons for the adoption of special requirements
sufficiently support the resulting encumbrance on
trademark use.195 Whether this is so in any particular
case may depend on whether the Member has already
taken significant steps to developing its tobacco-
control framework. Nevertheless, the Appellate Body
decision indicates that TPP measures may in any case
be justifiable, provided the measures would contribute
to the particular Member’s health objective.196 As the
Panel’s three-step approach frames a panel’s task as
a broad evaluative analysis in which the focus is no
longer primarily on particular trade effects,197 tobacco
companies are likely to be further dissuaded from
bringing claims under Article 20, and any claims that
are brought are less likely to be successful.