2020 · Australia · Intellectual Property · International Trademark Law · IP Policy · Tobacco Plain Packaging · TRIPS Agreement

Is it Necessary to Consider Alternative Measures under Article 20 of the TRIPS Agreement?

This week, I continue with my analysis of the Appellate Body’s decision on the trademark issues in the Australia – Plain Packaging case. (For previous posts in this regard, see here and here). In this post, the focus will be on whether it is necessary to consider alternative measures when deciding whether an encumbrance is justifiable pursuant to Article 20 of the TRIPS Agreement.

In challenging the panel’s interpretation of Article 20 on appeal, Honduras contended, inter alia, that the panel was in error because it did not consider it necessary for states to opt for a less trademark-encumbering special requirement when imposing such special requirements.[1] In this regard, Honduras attempted to import a necessity test into Article 20 and it argued that encumbrances must at least be necessary in order to be justifiable.[2] If Honduras’ argument in this regard had been upheld, it would mean that a determination of whether an encumbrance is justifiable would necessarily entail a consideration of alternative measures. The Appellate Body however disagreed with Honduras in this regard and it held that:

Honduras’ suggestion that the encumbrances imposed by special requirements “must at least be ‘necessary’ in order to be ‘justifiable'” presupposes that the standard of “unjustifiability” under Article 20 should be at least equivalent to the standard of “necessity”. As noted, the use of the term “unjustifiably” in Article 20, as opposed to other provisions of the TRIPS Agreement, which refer to the concept of necessity, indicates that the degree of discretion granted to Members through the term “unjustifiably” is higher than it would have been, had a term conveying the notion of “necessity” been used. Therefore, we do not consider that the test of necessity, which includes a consideration of alternative measures, could be transposed into the examination of whether the use of a trademark is unjustifiably encumbered by special requirements under Article 20 of the TRIPS Agreement. This does not mean that, in the circumstances of a particular case, the existence of an alternative measure involving a lesser degree of encumbrance on the use of a trademark cannot be used as a consideration in evaluating the justifiability of special requirements and related encumbrances on the use of a trademark. However, such an examination is not a necessary inquiry under Article 20 of the TRIPS Agreement.[3]

The Appellate Body thus agreed with the panel’s approach of not including a consideration of alternative measures into its list of factors for determining whether the use of a trademark is being unjustifiably encumbered by special requirements.[4] According to the Appellate Body, to rule otherwise would go against the degree of freedom granted to states under Article 20.

Nevertheless, as part of its assessment of the third factor (i.e. whether the reasons for the special requirements provide sufficient support for the resulting encumbrances), the panel did consider some of the alternative measures proposed by the complainants.[5] However, on appeal, the Appellate Body clarified that the panel did not have to do this because of the broad degree of regulatory autonomy that Article 20 grants to states. According to the Appellate Body:

…we recall our understanding that, while it may be possible that, in the circumstances of a particular case, an alternative measure that would lead to at least an equivalent contribution could call into question whether the reasons for the adoption of the special requirements sufficiently support the resulting encumbrances on the use of the trademark, such an examination is not a necessary inquiry under Article 20. In our view, given the degree of regulatory autonomy provided to Members under Article 20 through the use of the term “unjustifiably”, an analysis of alternative measures is not required in each and every case, and does not provide decisive guidance in determining whether the encumbrances in question are imposed “unjustifiably”. We further recall our finding … above, that the Panel did not err in the interpretation of Article 20 of the TRIPS Agreement by not considering an examination of alternative measures to be a necessary element of an inquiry under Article 20.[6]

The approach of the Appellate Body with regard to the issue of alternative measures is highly commendable. Importantly, it respects and preserves the regulatory autonomy available to states to implement measures that they deem necessary to achieve specific public health objectives.

(An extended critical analysis of this dispute is contained in my forthcoming book on international intellectual property law)

[1] Australia – Plain Packaging, AB Report, para 6.652.

[2] Ibid.

[3] Ibid para 6.653.

[4] Ibid para 6.654.

[5] Australia – Plain Packaging, Panel Report, para 7.2598.

[6] Australia – Plain Packaging, AB Report, para 6.695.

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