R. (on the application of BRITISH AMERICAN TOBACCO (UK) LTD) v SECRETARY OF STATE FOR HEALTH

[2016] R.P.C. 22 791 R. (on the application of BRITISH AMERICAN TOBACCO (UK) LTD) v SECRETARY OF STATE FOR HEALTH QUEEN’S BENCH DIVISION (ADMINISTRATIVE COURT) Green J.: 10, 11 and 14-18 December 2015 and 19 May 2016 [2016] EWHC 1169 (Admin); [2016] R.P.C. 22 H1 Trade Marks – Goodwill – Copyright – Designs – Tobacco marks – Standardised packaging – Delegated legislation – Judicial review – Whether invalid – Proportionality – Whether violation of property rights – Whether goodwill attaching to trade marks protectable as “property” under the European Convention on Human Rights – Whether any wider rights granted by the Charter: The nature of trade mark rights – Whether trade mark or other intellectual property rights expropriated or merely circumscribed – Whether compensation payable – Whether unitary character of Community trade marks inviolable – Whether Parliament competent to make the relevant regulations H2 This report concerns a series of applications for judicial review brought by the manufacturers of tobacco products and the manufacturers of the paper used around cigarette filter tips (“the claimants”) challenging the validity of The Standardised Packaging of Tobacco Products Regulations 2015 (“the Regulations”) under international law, EU law, human rights law and domestic common law. The Regulations, which were intended to give effect to European Parliament and Council Directive 2014/40/EU (“the TPD”) and the Framework Convention on Tobacco Control (“FCTC”), imposed upon manufacturers various restrictions as to the appearance both of the packaging of the products and the products themselves. Some of the key restrictions are set out at [236] to [240] and [248] of the judgment. However these included limiting the colour of the packaging of a tobacco product to a drab brown with a matt finish and restricting the text which could appear on that packaging. Other than standardised text as to the number of cigarettes and producer, only the brand name and the variant of cigarette were permitted and even then only in a specified font, orientation and size. However the Regulations did not ban the sale of cigarettes, permitted a brand name to appear on the pack and also permitted the identity of the producer to be placed on the pack. The various challenges to the validity of the Regulations were grouped into 17 separate grounds and essentially fell into seven categories: (i) a challenge to the validity of the Regulations on grounds that they purported to be based upon art.24(2) of the TPD which was itself illegal1; (ii) challenges to the way in which the evidence submitted by the tobacco industry had been treated during the consultation process leading up to the adoption of the Regulations; (iii) lack of proportionality on the basis (a) that the Regulations were neither appropriate nor suitable to achieve their H3 1 This had been the subject of a reference to the Court of Justice on which judgment was handed down shortly before the judgment reported here: see C-547/14 Philip Morris Brands SARL v Secretary of State for Health, EU:C:2016:325, [2016] ETMR 36, CJEU. The judgment effectively dismissed the various attacks of the validity of the TPD which had been mounted in that case. [2016] R.P.C., Issue 11&12 ß Crown Copyright 792 H4 R. V SECRETARY OF STATE FOR HEALTH stated objective, (b) that they were not necessary as there were less extreme measures which could have been adopted and would have been of equal efficacy, and (c) that the Regulations amounted to an intolerable and unlawful interference with the tobacco companies’ private law rights of property; (iv) violation of the principle of respect for property under art.1 of the First Protocol of the European Convention on Human Rights (“the Convention”), art.17 of the Charter of Fundamental Rights of the European Union (“the Charter”) and at common law; (v) technical challenges to the vires of the Regulations on grounds, inter alia, of misdirection of law, failure to address relevant considerations and exceeding the jurisdiction and competence of the UK (including questions as to whether the Regulations violated the unitary character of Community trade marks and designs and compatibility with the TRIPS Agreement); (vi) a challenge to the legality of the consultation process; and (vii) a further challenge by the companies making the paper for cigarette tips (“the tipping claimants”) on the basis that the TPD did not allow Member States to impose regulations on branding or advertising upon the tobacco products themselves and that the relevant provision of the Regulations (reg. 5) was disproportionate for want of proper supporting evidence in any event. Action in Smoking and Health (“ASH”) intervened. The judgment, which runs to 1000 paragraphs, is not reported here in full. This report instead focuses primarily on those parts of the decision which concern issues (iii)(c) and (iv). The opening section of the judgment, Section A, which sets out the judge’s overall conclusions, is set out in its entirety as is Section D, which sets out the relevant legislative framework. However the following parts of the judgment are omitted: . Section C. The Consultation Process Leading up to the Promulgation of the Regulations ([90]-[149]); . Section F. GROUND 2: The “Limited” Weight Attached to the Claimants’ Evidence ([276]-[404]); . Most of Section G. GROUND 3: Proportionality – The Regulations are Inappropriate ([406]-[629], but retaining the judge’s conclusion under this head and those paragraphs concerning the limits of judicial decision making in a case such as the present, i.e. [630]-[647]) . Section M. GROUND 10: Breach of Art.16 Fundamental Charter ([858]-[864]) . Section O. GROUND 11: Misdirection in Law – Failure to Apply the Test in Art.24(2) TPD ([884]-[904]); . Section Q. GROUND 13: Alleged Unlawful Consultation ([919]-[932]); . Section R. GROUND 14: The Regulations Infringe Article 34 TFEU ([933]-[934]); . Section S. GROUND 15: Failure to Await the Outcome of the Reference in Philip Morris ([935]-[948]); . Section T. GROUND 16: The Tipping Paper Challenge: Regulation 5 is Ultra Vires ([949]-[979]); . Section U. GROUND 17: Regulation 5 is disproportionate ([980]-[1000]). H5 The claimants argued, inter alia, that the Regulations sought to close down their ability to market cigarette brands, such ability having already been significantly curtailed by existing legislation. They contended that the packaging and products themselves had effectively become the only places where they could use their trade marks and that they were therefore critical. Against this background, the Regulations would effectively destroy their brands and amounted to the de facto deprivation of Published by Oxford University Press for the Intellectual Property Office [2016] R.P.C. 22 H6 H7 H8 793 their rights, particularly their trade marks and goodwill. Two of the claimants (namely, Imperial Tobacco and BAT) also relied up (...truncated)