WT/DS435/R/Add.1, WT/DS441/R/Add.1  
WT/DS458/R/Add.1, WT/DS467/R/Add.1  
 
28 June 2018  
(18-4060) Page: 1/225 
  Original: English  
 
   
 
 
AUSTRALIA – CERTAIN MEASURES CON CERNING TRADEMARKS,  
GEOGRAPHICAL INDICAT IONS AND OTHER PLAIN  PACKAGING 
REQUIREMENTS APPLICA BLE TO TOBACCO PRODU CTS AND PACKAGING  
REPORT S OF THE PANEL S  
Addendum  
 
This addendum  contains Annexes A to C to the Report s of the Panel s to be found in document  
WT/DS435/R, WT/DS441/R, WT/DS458/R, WT/DS467 /R. 
 
 
_______________  
 WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 •  WT/DS467/R/Add.1  
 
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LIST OF ANNEXES  
ANNEX  A 
WORKING PROCEDURES O F THE PANEL  
Contents  Page  
Annex  A-1 Working Procedures of the Panel  A-2 
Annex  A-2 Additional Working Pr ocedu res Concerning Strictly Confidential I nformation  A-9 
ANNEX B  
ARGUMENTS OF THE PAR TIES 
Contents  Page  
Annex  B-1 Integrated executive summary of the arguments of Honduras  B-2 
Annex  B-2 Integrated executive summary of the arguments of the Dominican Republic  B-31 
Annex  B-3 Integrated executive summary of the arguments of Cuba B-60 
Annex  B-4 Integrated executive summary of the arguments of Indonesia  B-77 
Annex  B-5 Integrated executive summary of the arguments of Australia  B-96 
ANNEX  C 
ARGUMENTS OF THE THI RD PARTIES  
Contents  Page  
Annex  C-1 Executive summary of the arguments of Argentina  C-2 
Annex  C-2 Executive summary of the arguments of Brazil  C-6 
Annex  C-3 Executive summary of the arguments of Canada  C-11 
Annex  C-4 Executive summary of the arguments of  China  C-14 
Annex  C-5 Executive summary of the arguments of the European Union  C-18 
Annex  C-6 Executive summary of the arguments of Guatemala  C-22 
Annex  C-7 Executive summary of the arguments of Japan  C-28 
Annex  C-8 Executive summary of the arguments o f the Republic of Korea  C-32 
Annex  C-9 Executive summary of the arguments of Malawi  C-34 
Annex  C-10 Executive summary of the arguments of New Zealand  C-37 
Annex  C-11 Executive summary of the arguments of Nicaragua  C-40 
Annex  C-12 Executive summary of t he arguments of Nigeria  C-43 
Annex  C-13 Executive summary of the arguments of Norway  C-49 
Annex  C-14 Executive summary of the arguments of Oman  C-53 
Annex  C-15 Executive summary of the arguments of Peru  C-55 
Annex  C-16 Executive summary of the argument s of the Philippines  C-56 
Annex  C-17 Executive summary of the arguments of Singapore  C-58 
Annex  C-18 Executive summary of the arguments of South Africa  C-62 
Annex  C-19 Executive summary of the arguments of Chinese Taipei  C-64 
Annex  C-20 Executive summa ry of the arguments of Thailand  C-65 
Annex  C-21 Executive summary of the arguments of Turkey  C-70 
Annex  C-22 Executive summary of the arguments of Uruguay  C-75 
Annex  C-23 Executive summary of the arguments of Zambia  C-77 
Annex  C-24 Executive summary of  the arguments of Zimbabwe  C-79 
 
 
 WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 ANNEX  A 
WORKING PROCEDURES O F THE PANEL  
Contents  Page  
Annex  A-1 Working Procedures of the Panel  A-2 
Annex  A-2 Additional Working Pr ocedures C oncerning  Strictly Confidential I nformation  A-9 
 WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/ R/Add.1  
 
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ANNEX A -1 
WORKING PROCED URES OF THE PANEL1  
Adopted on 17 June 2014,  
as amended on 1 October 2014  and 15 December 20142 
1.  In its proceedings, the Panel shall follow the relevant provisions of the Understanding on Rules 
and Procedures Governing the Settlement of Disputes (DSU).  In addition, the following Working 
Procedures shall apply.  
2.  Pursuant to Article 9.3 of the DSU, the timetables in DS434, DS435, DS441, DS458 and DS467 
are harmonized. The Panel shall, to the greatest possible extent, conduct a single panel process, 
with a single record, resulting in separate reports contained in a single document, taking into 
account the rights of all Members concerned and in such a manner that the rights that parties or 
third parties would otherwise have enjoyed are in no way impaired.  
General  
 
3.  The deliberations of the Panel and the documents submitted to it shall be kept confidential. 
Nothing in the DSU or in these Working Procedures shall preclude a party to the disputes 
(hereafter "party") or a third party to the disputes (hereaf ter "third party") from disclosing 
statements of its own positions to the public. Members shall treat as confidential information 
submitted to the Panel by another Member which the submitting Member has designated as 
confidential. Where a party or third pa rty submits a confidential version of its written submissions 
to the Panel, it shall also, upon request of a Member, provide a non -confidential summary of the 
information contained in its submissions that could be disclosed to the public.  Further to a joi nt 
request by the parties, the Panel adopted additional procedures for the protection of Strictly 
Confidential Information (SCI).3 
3bis. Any document submitted, and information otherwise conveyed to the Panel by a party or 
third party, including Strictly C onfidential Information ("SCI"),4 that is not otherwise in the public 
domai n, shall only be used by any other party or third party, including their outside advisers and 
experts, for the purposes of these disputes and for no other purpose. In particular, an y document 
submitted, and information otherwise conveyed to the Panel, including SCI, shall not be used by 
any other party, third party, and/or their outside advisers and experts, in connection with any 
other proceedings in which Australia’s Tobacco Plain Packaging Act 2011 (Cth) is under challenge 
("related proceedings"). Any document submitted, and information otherwise conveyed to the 
Panel, excluding SCI, may be disclosed to a claimant and/or its employees, or to a company 
affiliated to a claimant and/o r the employees of an affiliated company ("claimant") in related 
proceedings, only for the purposes of consulting or seeking advice from the claimant as an outside 
adviser or expert in preparing a party’s or third party’s argument or evidence in these disp utes. 
4.  The Panel shall meet in closed session. The parties, and Members having notified their interest 
in the disputes to the Dispute Settlement Body in accordance with Article 10 of the DSU, shall be 
present at the meetings only when invited by the Pan el to appear before  it.  
5.  Each party and third party has the right to determine the composition of its own delegation 
when meeting with the Panel. Each party and third party shall have the responsibility for all 
members of its own delegation and shall e nsure that each member of such delegation acts in 
                                                
1 The panels established in DS434, DS435, DS441, DS458 and DS467 are referred to collectively in 
these Working Procedures as "the Panel ". 
2 These Working Procedures were originally adopted on 17 June 2014. T hey were amended on 
1 October  2014 and 15 December 2014.  
3 See the Additional Procedures Concerning Strictly Confidential Infor mation, adopted on 
1 October  2014, and as amended on 15 December 2014.  
4 As defined in the Additional Procedures Concerning Stric tly Confidential Information referred to in 
paragraph 3.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 accordance with the DSU and these Working Procedures, particularly with regard to the 
confidentiality of the proceedings.  
5bis. Notwithstanding paragraph 5, a claimant in related proceedings shall not be p ermitted to 
attend substantive meetings of the Panel, except if attendance is for the purposes of giving expert 
evidence on behalf of a party or third party.  
Submissions  
 
6.  Before the first substantive meeting of the Panel with the parties, each party sh all submit a 
written submission in which it presents the facts of the case and its arguments, in accordance with 
the timetable adopted by the Panel. Each party shall also submit to the Panel, prior to the second 
substantive meeting of the Panel, a written rebuttal, in accordance with the timetable adopted by 
the Panel.  
7.  A party shall submit any request for a preliminary ruling at the earliest possible opportunity 
and in any event no later than in its first written submission to the Panel. If a complaina nt 
requests such a ruling, Australia shall submit its response to the request in its first written 
submission. If Australia requests such a ruling, the complainant or complainants shall submit their 
response to the request prior to the first substantive me eting of the Panel, at a time to be 
determined by the Panel in light of the request. Exceptions to this procedure shall be granted upon 
a showing of good cause.  
8.  In each dispute, each party shall submit all factual evidence to the Panel no later than du ring 
the first substantive meeting, except with respect to evidence necessary for purposes of rebuttals, 
answers to questions or comments on answers provided by the other party. Exceptions to this 
procedure shall be granted upon a showing of good cause. Wh ere such exception has been 
granted, the Panel shall accord the other party a period of time for comment, as appropriate, on 
any new factual evidence submitted during or after the first substantive meeting.  
9.  A party wishing to incorporate by reference or rely upon arguments and/or evidence submitted 
by another party or third party may do so provided that it clearly identifies the specific arguments 
and/or evidence it refers to and their source.  
10.  Where the original language of exhibits is not a WTO working language, the submitting party 
or third party shall submit a translation into the WTO working language of the submission at the 
same time. The Panel may grant reasonable extensions of time for the translation of such exhibits 
upon a showing of good  cause. Any objection as to the accuracy of a translation should be raised 
promptly in writing, no later than the next filing or meeting (whichever occurs earlier) following 
the submission which contains the translation in question. Any objection shall be accompanied by a 
detailed explanation of the grounds of objection and an alternative translation.  
11.  In order to facilitate the work of the Panel, each party and third party is invited to make its 
submissions in accordance with the WTO Editorial Guide for Panel Submissions attached as 
Annex  1, to the extent that it is practic al to do so.  
12.  To facilitate the maintenance of the record of the dispute and maximize the clarity of 
submissions, each party and third party shall sequentially number its exhib its throughout the 
course of the dispute. For example, exhibits submitted by Ukraine could be numbered UKR -1, 
UKR-2, etc. If the last exhibit in connection with the first submission was numbered UKR -5, the 
first exhibit of the next submission thus would be  numbered UKR -6. To avoid duplication of 
exhibits, the parties may submit joint exhibits by numbering them accordingly, for example as 
JE-1, JE-2, etc.  Each party may also cross -refer to an exhibit submitted by another party by using 
the number attributed  to the exhibit by the party who initially submitted it. Each party is also 
invited to provide a list of exhibits together with the relevant submission.  
13.  In the interest of full transparency and harmonization of the timetable in DS434, DS435, 
DS441, D S458 and DS467, each party is encouraged to make its written communications to the 
Panel, including written submissions, any preliminary submissions and written answers to 
questions available to the parties in the other disputes at the time that they are s ubmitted to the 
Panel.  ..... WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/ R/Add.1  
 
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 14.  In the interest of full transparency and harmonization of the timetable in DS434, DS435, 
DS441, DS458 and DS467, each party is encouraged to make its written submission in advance of 
the first substantive meeting with the Panel,  as well as its written rebuttal in advance of the 
second substantive meeting with the Panel5, available to the third parties in the other disputes at 
the time that they are submitted to the Panel.  
Questions  
 
15.  The Panel may at any time pose questions to the parties and third parties, orally or in writing, 
including prior to each substantive meeting.   
Substantive meetings  
 
16.  Each party shall provide to the Panel the list of members of its delegation in advance of each 
meeting with the Panel and no later than 5.00  p.m. on the fifth working day preceding the first day 
of the meeting .  
17.  In the interest of full transparency and harmonization of the timetable in DS434, DS435, 
DS441, DS458 and DS467, the parties agree that the substantive meetings ref erred to in 
paragraphs 18   and 19   shall take place in the presence of the parties to all five disputes.  
18.  The first substantive meeting of the Panel with the parties shall be conducted as follows:  
a. The Panel shall first invite each complainant to ma ke an opening statement to present its 
case, in the order in which the disputes were filed. Subsequently, the Panel shall invite 
Australia to present its point of view. Before each party takes the floor, it shall provide 
the Panel and other participants at  the meeting with a provisional written version of its 
statement. In the event that interpretation is needed, each party shall provide additional 
copies for the interpreters, through the Panel Secretary. Each party shall make available 
to the Panel, the ot her parties and the third parties6 the final version of its opening 
statement, preferably at the end of the session at which the opening statement is 
delivered, and in any event no later than 9.00  a.m. on the first working day following 
that session.  
b. After the conclusion of the statements, the Panel shall give each party the opportunity to 
ask each other questions or make comments, through the Panel. Each party shall then 
have an opportunity to answer these questions orally. Each party shall send in writ ing, 
within a timeframe to be determined by the Panel, any questions to the other parties to 
which it wishes to receive a response in writing. Each party shall be invited to respond in 
writing to the other party's written questions within a deadline to be determined by the 
Panel.  
c. The Panel may subsequently pose questions to the parties. Each party shall then have an 
opportunity to answer these questions orally. The Panel shall send in writing, within a 
deadline to be determined by it, any questions to th e parties to which it wishes to 
receive a response in writing. Each party shall be invited to respond in writing to such 
questions within a deadline to be determined by the Panel.  
d. Once the questioning has concluded, the Panel shall afford each party an opportunity to 
present a brief closing statement, with the complainants presenting their statements 
first, in the order in which the disputes were filed. Each party shall make available to the 
Panel, the other parties and the third parties7 the final versi on of its closing statement, 
                                                
5 Third parties' access to the parties' written rebuttals shall be subject to the Additional Procedures 
Concerning Strictly Confidential Information, adopted on 1 October 2014, and as amended on 15 D ecember 
2014.  
6 Third parties' access to the final version of the parties' opening statements at the Panel's first 
substantive meeting shall be subject to the Additional Procedures Concerning Strictly Confidential Information, 
adopted on 1 October 2014, an d as amended on 15 December 2014.  
7 Third parties' access to the final version of the parties' closing statements at the Panel's first 
substantive meeting shall be subject to the Additional Procedures Concerning Strictly Confidential Information, 
adopted o n 1 October 2014, and as amended on 15 December 2014.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 preferably at the end of the meeting, and  in any event no later than 5.00  p.m. on the 
first working day following the meeting.  
19.  The second substantive meeting of the Panel with the parties shall be conducted as follows:  
a. The Panel shall ask Australia if it wishes to avail itself of the right to present its case 
first. If so, the Panel shall invite Australia to present its opening statement, followed by 
the complainants, in the reverse order to that in which the disputes we re filed. If 
Australia chooses not to avail itself of that right, the Panel shall invite the complainants 
to present their opening statement first, in the reverse order to that in which the 
disputes were filed. Before each party takes the floor, it shall p rovide the Panel and 
other participants at the meeting with a provisional written version of its statement. In 
the event that interpretation is needed, each party shall provide additional copies for the 
interpreters, through the Panel Secretary. Each party  shall make available to the Panel, 
the other parties and the third parties8 the final version of its opening statement, 
preferably at the end of the meeting, and in any event no later than 5.00  p.m. o n the 
first working day following the meeting.  
b. After the conclusion of the statements, the Panel shall give each party the opportunity to 
ask each other questions or make comments, through the Panel. Each party shall then 
have an opportunity to answer these questions orally. Each party shall send in writing , 
within a deadline to be determined by the Panel, any questions to the other parties to 
which it wishes to receive a response in writing. Each party shall be invited to respond in 
writing to the other parties' written questions within a deadline to be det ermined by the 
Panel.  
c. The Panel may subsequently pose questions to the parties. Each party shall then have an 
opportunity to answer these questions orally. The Panel shall send in writing, within a 
deadline to be determined by it, any questions to the p arties to which it wishes to 
receive a response in writing. Each party shall be invited to respond in writing to such 
questions within a deadline to be determined by the Panel.  
d. Once the questioning has concluded, the Panel shall afford each party an opp ortunity to 
present a brief closing statement, with the party that presented its opening statement 
first, presenting its closing statement first. Each party shall make available to the Panel, 
the other parties and the third parties9 the final version of it s closing statement, 
preferably at the end of the meeting, and in an y event no later than 5.00  p.m. on the 
first working day following the meeting.  
Third parties  
 
20.  In the interest of full transparency and harmonization of the timetable in DS434, DS435,  
DS441, DS458 and DS467, a complaining party's first written submission in one dispute shall be 
deemed to be an exercise of its third party rights in the other four disputes. Arguments presented 
as a third party only shall be clearly identified as such.  
21.  The Panel shall invite each third party to transmit to the Panel a written submission prior to 
the first substantive meeting of the Panel with the parties, in accordance with the timetable 
adopted by the Panel. Each third party is encouraged to submit a single submission, clearly 
identifying the dispute(s) to which its views relate. Third party written submissions shall not 
exceed 50 pages per third party irrespective of whether a third party chooses to submit a single 
written submission.  
22.  In the in terest of full transparency and harmonization of the timetable in DS434, DS435, 
DS441, DS458 and DS467, each third party is encouraged to make its written submission to the 
                                                
8 Third parties' access to the final version of the parties' opening statements at the Panel's second 
substantive meeting shall be subject to the Additional Procedures Concerning Strictly Confidential I nformation, 
adopted on 1 October 2014, and as amended on 15 December 2014.  
9 Third parties' access to the final version of the parties' closing statements at the Panel's second 
substantive meeting shall be subject to the Additional Procedures Concerning St rictly Confidential Information, 
adopted on 1 October 2014, and as amended on 15 December 2014.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/ R/Add.1  
 
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 Panel available to the parties and third parties in the other disputes, at the time  that it is 
submitted to the Panel.  
23.  Each third party shall also be invited to present its views orally during a session of the first 
substantive meeting, set aside for that purpose, in a statement the duration of which shall be set 
by the Panel prior  to that session. In the interest of full transparency and harmonization of the 
timetable in DS434, DS435, DS441, DS458 and DS467, the parties agree to allow all third parties 
having expressed interest in one or more of the five disputes to be present duri ng the entirety of 
the third party session, and third parties to each of these disputes are encouraged to allow their 
presentations and responses to questions during the third party session to take place in the 
presence of the parties and third parties in the other disputes.  
24.  Each third party shall provide to the Panel the list of members of its delegation in advance of 
this session and no later than 5.00  p.m. on the fifth working day preceding this session.   
25.  The third -party session shall be condu cted as follows:  
a. The Panel shall first hear the arguments of the third parties, in alphabetical order.   
b. Third parties present at the third -party session and intending to present their views 
orally at that session, shall provide the Panel, the partie s and all other third parties with 
provisional written versions of their statements before they take the floor. Third parties 
shall make available to the Panel, the parties and other third parties the final versions of 
their statements, preferably at the e nd of the session, and in any event no later than 
5.00 p.m. on the first working day following the session.    
c. After the third parties have made their statements, the parties may be given the 
opportunity, through the Panel, to ask the third parties ques tions for clarification on any 
matter raised in the third parties' submissions or statements. Each party shall send in 
writing, within a timeframe to be determined by the Panel, any questions to a third party 
to which it wishes to receive a response in wri ting.  
d. The Panel may subsequently pose questions to the third parties. Each third party shall 
then have an opportunity to answer these questions orally. The Panel shall send in 
writing, within a timeframe to be determined by it, any questions to the thi rd parties to 
which it wishes to receive a response in writing. Each third party shall be invited to 
respond in writing to such questions within a deadline to be determined by the Panel.  
Descriptive part  
 
26.  The description of the arguments of the partie s and third parties in the descriptive part of the 
Panel reports shall consist of executive summaries provided by the parties and third parties, which 
shall be annexed as addenda to the reports. These executive summaries shall not in any way serve 
as a sub stitute for the submissions of the parties and third parties in the Panel's examination of 
the case.  
27.  Each party shall submit an integrated executive summary of the facts and arguments as 
presented to the Panel in its written submissions and oral stat ements, in accordance with the 
timetable adopted by the Panel. This integrated summary may include a summary of responses to 
questions. The integrated executive summary submitted by each complainant shall not exceed 30 
pages. The integrated executive summa ry submitted by Australia shall not exceed 40 pages. The 
Panel will not summarize in the descriptive part of its report, or annex to its report, the parties' 
responses to questions.  
28.  Each third party shall submit an executive summary of its arguments a s presented in its 
written submission and statement in accordance with the timetable adopted by the Panel. This 
summary may also include a summary of responses to questions, where relevant. The executive 
summary to be provided by each third party shall not  exceed 5  pages.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 Interim review  
 
29.  Following issuance of the interim reports, each party may submit a written request to review 
precise aspects of the interim report in the respective dispute and request a further meeting with 
the Panel, in accordance with the timetable adopted by the Panel. The right to request such a 
meeting shall be exercised no later than at the time the written request for review is submitted.  
30.  In the event that no further meeting with the Panel is requested, each party may su bmit 
written comments on the other party's written request for review, in accordance with the timetable 
to be adopted by the Panel. Such comments shall be limited to commenting on the other parties' 
written requests for review.  
31.  The interim reports, a s well as the final reports prior to their official circulation, shall be kept 
strictly confidential and shall not be disclosed.  
Service of documents  
 
32.  The following procedures regarding service of documents shall apply:  
a. Each party and third party s hall submit all documents to the Panel by filing them with 
the DS  Registry (office No. 2047).  
b. Each party and third party shall file its documents with the DS Registry and serve copies 
on the other parties (and third parties where appropriate) by 5.00  p.m. (Geneva time) 
on the due dates established by the Panel.  
c. Each party and third party shall file with the DS Registry eight (8) paper copies of all 
documents it submits to the Panel, except executive summaries submitted in accordance 
with paragraphs 27  and 28   above, and exhibits. Exhibits may be provided on CD -ROM 
or DVD. In this case, six (6) CD -ROMs or DVD and two (2) paper copies of such exhibits 
shall be filed. The paper copies of such exhibits shall be filed no later than 5 p.m. 
(Geneva time) o n the first working day following the due date established by the Panel 
for the documents to be submitted.  The DS  Registrar shall stamp the documents with 
the date and time of the filing.  
d. Each party and third party shall also provide an electronic cop y of all documents it 
submits to the Panel on the due date, in PDF and in Microsoft Word format, either on a 
CD-ROM, a DVD, or as an e -mail attachment. If the electronic copy is provided by e -
mail, it should be addressed to ****@wto.org , with a copy to ****.**** @wto.org , 
****.**** @wto.org , ****.**** @wto.or g, ****.**** @wto.org , ****.**** @wto.org  
and ****.****@wto.org . If a CD -ROM or DVD is provided, it shall be filed with the DS 
Registry. The electronic PDF versio n shall constit ute the official version for the purposes 
of the record of the dispute.  
e. Each party shall serve any document submitted to the Panel directly on the other party 
to the dispute. Each party shall, in addition, serve on all third parties havin g notified 
their interest in the dispute its written submissions in advance of the first substantive 
meeting with the Panel.  
f. Each third party shall serve any document submitted to the Panel directly on all of the 
parties and on those other third partie s having notified their interest in the same 
dispute. Each party and third party shall confirm, in writing, that copies have been 
served as required at the time it provides each document to the Panel.  
g. A party or third party may submit its documents to a party or third party in electronic 
format only.  
h. The procedure described in subparagraph g. shall also apply to submissions filed 
pursuant to paragraphs 13,  14 and 22.  
i. The Panel shall provide the parties with an electronic version of the descriptiv e part, the 
interim report and the final report, as well as of other documents as appropriate. When 
the Panel transmits to the parties or third parties both paper and electronic versions of a 
document, the paper version shall constitute the official versio n for the purposes of the 
record of the dispute.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/ R/Add.1  
 
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 33.  The Panel reserves the right to modify these procedures as necessary, after consultation with 
the parties.  
 
 
 WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 ANNEX A -2 
ADDITIONAL WORKING P ROCEDURES CONCERNING  STRICTLY CONFIDENTIA L 
 INFORMATION1 
Adop ted on 1 October 2014 , as amended on 15 December 2014  
The following procedures apply to strictly confidential information (SCI) submitted in the course of 
the Panel proceedings.  
1. For the purposes of these proceedings, Strictly Confidential Information (SCI)  means any 
financial, commercial or government confidential information: (a) that is clearly designated as 
such by the party or third party submitting it; (b) that is not otherwise accessible to the general 
public; and (c) that is commercially sensitive or , in the case of government confidential 
information,  the release of which could reasonably be considered to cause or threaten to cause 
harm to the public interest, including by impairing the ability of the government to conduct its 
work. Each party and th ird party  shall act in good faith and exercise restraint in designating 
information as SCI . The Panel shall have the right to intervene in any manner that it deems 
appropriate, if it is of the view that restraint in the designation of SCI is not being exer cised. If a 
party, or the Panel, contests the designation of information as SCI, the party or third party 
designating the information shall provide reasons for the designation within three (3) working 
days. After giving the parties an opportunity to commen t on the justification provided within three 
(3) working days, the Panel shall decide on the designation of the information.  
2. As required by paragraph 3 of the Working Procedures of the Panel2, the deliberations of 
the Panel and the documents submitted to i t shall be kept confidential.  Further, as required by 
Article 18.2 of the DSU a party or third party having access to information designated as SCI 
submitted in these Panel proceedings shall treat it as confidential and shall not disclose that 
information other than to those persons authorized to receive it pursuant to these working 
procedures. Each party and third party is responsible for ensuring that its employees, outside 
advisers and experts comply with these Additional Working Procedures to protect SC I. 
3. Panel Members and employees of the WTO Secretariat assigned to the present dispute 
shall have access to SCI submitted in these proceedings. Employees of the Governments of 
Ukraine, Honduras, Dominican Republic, Cuba, Indonesia, and Australia shall have access to SCI 
submitted in these Panel proceedings to the extent necessary for their involvement in their official 
capacity in DS434, DS435, DS441, DS458 or DS467 proceedings. Subject to paragraph 4 of the 
Working Procedures of the Panel, parties may give access to SCI to outside advisers and experts 
providing assistance to the parties in these proceedings and their clerical staff. SCI, whether 
submitted as part of a document or in oral form to the Panel, shall not be disclosed to employees, 
officers or com mercial agents of an enterprise engaged in the tobacco industry, including in the 
production, export or import of tobacco products, or employees or officers of an industry 
association of such enterprises, unless the information is business confidential inf ormation that 
pertains exclusively to the enterprise of which the person is an employee, officer or commercial 
agent.  
4. Third parties to these Panel proceedings shall receive the confidential versions of the first 
written submissions of the parties to the Pa nel and redacted versions of exhibits to the first written 
submissions of the parties where those exhibits contain SCI. In  addition, third parties shall receive 
the parties' written rebuttals, the final version of the parties' opening and closing statement s at 
the Panel's first and second substantive meetings, and any exhibits to these, with the 
                                                
1 These additional procedures were originally adopted on 1 October 2014  in accordance with the Panel's 
Working Procedures adopted on 17 June 2014, as amended on  1 October 2014 . These additional procedures 
are hereby amended in accordance with the Panel's Working Procedures as  further amended on 
15 December  2014.  
2 Adopted on 17 June 2014, as amended on 1 October 2014, and as further amended on 
15 December  2014.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/ R/Add.1  
 
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 understanding that third parties shall receive redacted versions of such rebuttals, statements or 
exhibits where these contain SCI.  
5. The redacted versions of the par ties' written rebuttals and statements mentioned in 
paragraph 4, as well as any exhibits thereto or to the parties' first written submissions, containing 
SCI shall be sufficient to convey a reasonable understanding of the nature of the information at 
issue. Employees of the Governments of third parties to any of the above listed disputes, and their 
outside advisers, may request access to the non-redacted version of an exhibit to a party's first 
written submission containing SCI for the purpose of participat ing effectively in the Panel 
proceeding. The Panel, in consultation with the parties, shall decide whether to grant access to 
such SCI, taking into consideration the sensitivity of the information and the need for the third 
party to see the information in order to ensure that their interests as a third party are fully taken 
into account. If granted, the third party's access to such SCI will take place on the premises of the 
WTO Secretariat, unless good cause is shown for an alternative arrangement. Third pa rties shall be 
entitled to review, but not to copy, the SCI accessed on the premises of the WTO Secretariat.  
6. Each party and third party shall maintain a list of the names of all outside advisers and 
experts provided with access to SCI. The list shall be u pdated when additional outside advisers or 
experts are provided with access to SCI.  
7. A party or third party submitting or referring to SCI in any document submitted to the 
Panel (including in any exhibits) shall mark the cover and the first page of the docu ment 
containing any such information with the words "Contains Strictly Confidential Information". The 
specific information in question shall be enclosed in double brackets, as follows: [[xx.xxx.xx]], and 
the notation "Contains Strictly Confidential Informa tion" shall be marked at the top of each page 
containing the SCI. In the case of an oral statement containing SCI, the party or third party 
making such a statement shall inform the Panel before making it that the statement will contain 
SCI, and the Panel w ill ensure that only persons authorized to have access to SCI pursuant to 
these Additional Working Procedures are in the room to hear that statement.  
8. Any SCI that is submitted in binary -encoded form shall be clearly marked with the 
statement "Strictly Con fidential Information" on a label on the storage medium, and clearly 
marked with the statement "Strictly Confidential Information" in the binary -encoded files.  
9. The parties, third parties, the Panel, the WTO Secretariat, and any others permitted to 
have acc ess to documents containing SCI under the terms of these Additional Working Procedures 
shall store all documents containing SCI so as to prevent unauthorized access to such information.  
10. The Panel will not disclose in its report any information designated a s SCI under these 
Additional Working Procedures. The Panel may, however, make statements of conclusion based on 
such information. Before the Panel makes its final report(s) publicly available, the Panel shall give 
each party or third party an opportunity t o ensure that any information it has designated as SCI is 
not contained in the report(s).  
11. At the conclusion of the dispute3, and within a period to be fixed by the Panel, each party 
shall return all document s (including electronic material) containing SCI , submitted during the 
Panel proceedings, to the party that submitted such documents, certify in writing to the Panel and 
the other parties that all such documents have been destroyed, or otherwise protect the SCI 
against public disclosure, consistent with  the party's obligations under its domestic laws. The WTO 
Secretariat shall have the right to retain one copy of each of the documents containing SCI for the 
archives of the WTO.  
12. If a party formally notifies the DSB of its decision to appeal pursuant to Ar ticle 16.4 of the 
DSU, the Secretariat will inform the Appellate Body of these procedures and will transmit to the 
Appellate Body any SCI governed by these procedures, including any submissions containing 
information designated as SCI under these working p rocedures. Such transmission shall occur 
separately from the rest of the Panel record, to the extent possible.    
                                                
3 Where this is defined as when (a) the Panel or Appellate Body report is adopted by the DSB, or the 
DSB decides by consensus not to adopt the Panel or the Appellate Body report; (b) the authority for the 
establishment of the Panel lapses under Article 12.1 2 of the DSU; or (c) a mutually satisfactory solution is 
notified to the DSB under Article 3.6 of the DSU.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 13. At the request of a party, and in consultation with the other parties, the Panel may apply 
these working procedures or an amended form of thes e working procedures to protect information 
that does not fall within the scope of the information set out in paragraph 1. The Panel may, with 
the consent of the parties, waive any part of these procedures.  
 
 
_______________WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 ANNEX  B 
ARGUMENTS OF THE PARTIE S 
Contents  Page  
Annex  B-1 Integrated executive summary of the arguments of Honduras  B-2 
Annex  B-2 Integrated executive summary of the arguments of the Dominican Republic  B-31 
Annex  B-3 Integrated executive summary of the arguments of Cuba B-60 
Annex  B-4 Integrated executive summary of the arguments of Indonesia  B-77 
Annex  B-5 Integrated executive summary of the arguments of Australia  B-96 
 WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 ANNEX  B-1 
INTEGRATED EXECUTIVE  SUMMARY OF THE ARGUM ENTS OF HONDURAS  
I. INTRODUCTION  
1. This dispute is about whet her Australia has breached its WTO obligations through the means 
by which it has sought to change consumer behaviour relating to smoking. The dispute is not 
about whether smoking is dangerous or whether it affects the health of many people in Australia 
and around the world – it is and it does. Similarly, the dispute is not about whether governments 
have the right to regulate tobacco products and to take measures to decrease smoking prevalence 
and consumption – clearly they do. Indeed, Honduras has itself im plemented comprehensive 
tobacco regulation measures and shares Australia 's goal of reducing smoking prevalence and 
tobacco consumption. Honduras certainly does not wish to constrain a government 's ability to 
regulate tobacco products in a WTO -consistent ma nner where necessary and justifiable. Honduras 
differs with Australia on the critical point that no matter how legitimate the objective that a WTO 
Member pursues through domestic regulation, it must also respect its WTO obligations. Honduras 
considers the means chosen to fulfill Australia 's smoking reduction objective are unlawful, 
ineffective and disproportionate.  
2. Australia maintains the "plain packaging measures " at issue in this dispute through the 
following legal instruments: (i) the Tobacco Plain P ackaging Act 2011, Act No. 148 of 2011, "An 
Act to discourage the use of tobacco products, and for related purposes " ("TPP Act "); (ii) the 
Tobacco Plain Packaging Regulations 2011 (Select Legislative Instrument 2011, No. 263), as 
amended by the Tobacco Pla in Packaging Amendment Regulation 2012 (No. 1) (Select Legislative 
Instrument 2012, No. 29) ( "TPP Regulations "); and (iii) the Trade Marks Amendment (Tobacco 
Plain Packaging) Act 2011, Act No. 149 of 2011, "An Act to amend the Trade Marks Act 1995, and 
for related purposes " ("Trade Marks Amendment Act 2011 "). 
3. The plain packaging measures impose a number of requirements that seek to standardize 
the presentation of the product and the packaging of tobacco products in Australia. Most notably, 
Australia 's TPP Act provides that "[n]o trade mark may appear anywhere on a tobacco product " 
other than as permitted by the TPP Regulations. The TPP Act also provides, inter alia , that "[n]o 
trade mark may appear anywhere on the retail packaging of tobacco products ", permitting the 
appearance of only the brand, variant, business or company name and other marks pursuant to 
the relevant legislative requirements. The appearance of the brand name is regulated by the TPP 
Act and the TPP Regulations. The TPP Act further requir es that tobacco product packages be "drab 
dark brown " (specified as Pantone 448C in the Regulations) in a matte finish, with no other 
colours, logos or brand features visible on the package, other than the brand and variant name in 
a standardised form and font below the graphic health warnings ( "GHWs "). Tobacco product 
packaging will continue to contain GHWs, which are increasing from 30 to 75 percent of the front 
surface of each package and continue to cover 90 per cent of the back surface of the package. The 
TPP Act and TPP Regulations also regulate the physical features of retail tobacco packaging, 
imposing a standardised type and size of packaging. Cigarette packs and cartons must have a 
standardised shape with no decorative elements, and cigarette packs  must have flip -top openings. 
The lining of cigarette packs must only be foil backed with paper or a material allowed by the 
TPP Regulations. Similar standardisation requirements are imposed on cigars and their packaging.  
4. As explained in greater detail below, Honduras claims that Australia 's plain packaging 
measures are inconsistent with its obligations under the Agreement on Trade -Related Aspects of 
Intellectual Property Rights ( "TRIPS Agreement ") and the Agreement on Technical Barriers to 
Trade ( "TBT A greement "). 
5. The tobacco sector is an essential part of Honduras ' economy. Internationally, the high 
quality tobacco grown by Honduras is becoming more and more in demand to manufacture cigars. 
This favours cigar exports, which generate large amounts of local employment in specific areas of 
the country, such as the Department of El Paraíso situated in Honduras ' eastern region. The 
tobacco industry produces benefits in the primary and secondary sectors of the tobacco value and 
supply chain. In 2011, Hondur as' cigar exports amounted to USD 80 million, while cigarette 
exports totalled USD 30 million. In the period 2006 -2010, the Honduran tobacco sector made WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 annual contributions of 0.4 per cent to the country 's Gross Domestic Product. Moreover, the 
tobacco sec tor generates almost 14,000 direct and indirect jobs in Honduras. Honduras aspires to 
develop high -value tobacco -related trademarks and geographical indications ( "GIs") in the future. 
Indeed, the loss of the opportunity to compete on the basis of high -value brands, including in the 
cigar segment, is one of the reasons why Honduras has decided to initiate this dispute.  
6. As a general matter, it must also be noted that the World Health Organization 's Framework 
Convention on Tobacco Control ( "FCTC") does not require that Parties implement plain packaging 
measures in their jurisdiction. Article 11 of the FCTC requires Parties to adopt and implement 
effective measures to ensure that tobacco product packaging and labelling do not promote a 
tobacco product "by any  means that are false, misleading, deceptive or likely to create an 
erroneous impression ". There is no reference to plain packaging in Article 11 of the FCTC. Article 
13 of the FCTC requires Parties to undertake a comprehensive ban of all tobacco advertisi ng, 
promotion and sponsorship, in accordance with their constitution or constitutional principles. There 
is no reference to plain packaging in Article 13 of the FCTC. Neither do the FCTC Guidelines for 
Article 11 and Article 13 impose any obligation to ado pt plain packaging. These non -binding 
Guidelines merely suggest that Parties "should consider " the adoption of plain packaging. The 
record shows that, at the time these Guidelines were considered for adoption, the WHO 's legal 
counsel noted that "restrictin g or eliminating registered trademarks might be seen in some 
jurisdictions as an infringement of those trademark rights " and that "the situation was not the 
same in all countries since it depended on national law and the international obligations of the 
State concerned ". The "consideration " that the Guidelines recommend should clearly include an 
examination of whether such measures would be consistent with the Party 's obligations under 
international law, such as the obligations under the WTO Agreements for those Parties also 
Members of the WTO. Honduras notes that t he FCTC itself requests Parties to adopt "effective " and 
"evidence -based " tobacco control measures. In Article 2.1, the FCTC provides that "stricter 
requirements " that go beyond what is required b y the FCTC, like plain packaging, must be "in 
accordance with international law ", which includes WTO law.  
II. AUSTRALIA 'S PLAIN PACKAGING ME ASURES VIOLATE THE T RIPS AGREEMENT  
A. INTRODUCTION  
7. The importance of intellectual property rights to modern socie ty and the global economy is 
evident. Intellectual property rights are present in the goods and services that are bought and sold 
on a daily basis. Trademark protection is thus an essential part ofthe multilateral trading system. 
Trademarks are an essentia l instrument of fair competition. Intellectual property rights are private 
rights that WTO Members must protect. Part II, Section 2 of the TRIPS Agreement imposes a 
number of obligations on Members in terms of the protection of a special category of intell ectual 
property rights, trademarks. In so doing, the TRIPS Agreement disciplines the regulatory freedom 
of Members. The TRIPS Agreement reflects a number of principles of trademark protection that are 
fundamental, namely, that the functional criterion of "distinctiveness " is the essence of the 
trademark; that the validity and protectability of a trademark is to be examined on an individual 
basis and not as part of a group based on, for example, the type of trademark or the nature of the 
product; that tradem arks are private and exclusive rights the scope of protection and power of 
enforcement of which depend on the action or inaction of the trademark owner; that "use" of the 
mark is essential to the creation, maintenance and enforcement of trademark rights; t hat 
trademarks are to be protected "as is" and thus in the form that they are registered and used; and 
that trademarks are important elements of "fair competition " in the market. These different 
principles are reflected in the text of the TRIPS Agreement. It is this text that forms the basis of 
Honduras ' claims. Australia 's plain packaging measures are inconsistent with each of these 
principles and thus violate the TRIPS Agreement because they deny the functional nature of 
trademarks as signs to distinguish  products.  
8. In response to practically all of Honduras ' claims under the TRIPS Agreement, Australia 
argues that the acceptance of Honduras ' arguments would mean that WTO Members will no longer 
be able to regulate or ban the sale of products that pose ris ks to health or to adopt comprehensive 
advertising bans for tobacco products because such general product or advertising bans would 
violate the TRIPS Agreement. These concerns are without merit. The TRIPS Agreement provides 
ample flexibility and policy spa ce to Members to deal with trademarks that pose concerns from a 
public health perspective both at the stage of registration and thereafter when the trademark is 
used on a product in the market. There is no need to eviscerate trademark rights in order to WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 regulate products that may be harmful to health. The fact that the sale of products can be 
restricted or prohibited is clear from Article 19.1 of the TRIPS Agreement, which explicitly 
recognises that Members may adopt measures banning products, even though t hese measures 
may affect incidentally the use of the trademarks for those products. Furthermore, to the extent 
that it is the trademark rather than the product that is a cause of concerns, the TRIPS Agreement 
provides broad regulatory authority to deal wit h such trademark -specific concerns based on an 
individual assessment of the mark. Article 6 quinquies (B) of the Paris Convention and Article 15.2 
of the TRIPS Agreement (relating to registration and validity of trademarks), and Article 20 (in so 
far as it c oncerns flexibility for use -related requirements) allow Members to take measures to deal 
with specific trademarks that are considered to be misleading or deceptive for example. Thus, 
contrary to Australia 's assertions, Honduras ' interpretation of the TRIPS  Agreement does not lead 
to the conclusion that the TRIPS Agreement prevents restrictions on the sale of addictive and/or 
dangerous products. Australia 's general rebuttal arguments erroneously suggesting that Honduras 
is developing an absolute and positive  "right to use " argument that would unduly restrict 
regulatory policy are in error, and merely seek to divert the Panel 's attention from the proper 
scrutiny of the consistency of the plain packaging measures with WTO law. The TRIPS Agreement 
does not preve nt Members from regulating the product or banning product advertisements. As 
evidenced by the Australian advertisement ban in place since 1992, trademarks can still maintain 
their distinctiveness, and trademark rights can still be enforced when allowed to be used on 
products, even under a general ban on advertising.  
B. AUSTRALIA 'S PLAIN PACKAGING ME ASURE S ARE INCONSISTENT W ITH 
ARTICLE  15.4 OF THE TRIPS AG REEMENT  
9. Honduras submits that Australia 's trademark restrictions on tobacco products and retail 
packa ging violate Article 15.4, read in the context of Article 15.1 of the TRIPS Agreement, by 
preventing inherently non -distinctive signs from ever acquiring distinctiveness through use. A sign 
that is not distinctive, either inherently or as a result of its u se, cannot be registered as a 
"trademark ". Under the plain packaging measures, the nature of the goods (namely, tobacco 
products) to which the sign is to be applied, is the reason for not permitting the use of the non -
inherently distinctive sign. Therefore , the nature of the goods forms an obstacle to the registration 
of those otherwise non -inherently distinctive signs as "trademarks " in violation of Article 15.4 of 
the TRIPS Agreement.  
10. Article 15.4 provides that "[t]he nature of the goods  or services t o which a trademark is to 
be applied shall in no case form an obstacle to registration of the trademark ". The "goods " at issue 
are "tobacco products " that are defined in Section 4 of the TPP Act  and fall within the scope of the 
plain packaging measures. Ar ticle 15.1 defines the term "trademark " in a broad manner as: "[a]ny 
sign, or any combination of signs, capable of distinguishing the goods or services of one 
undertaking from those of other undertakings ". Importantly, Article 15.1, third sentence, further  
establishes that "[w]here signs are not inherently capable of distinguishing the relevant goods …, 
Members may make registrability depend on distinctiveness acquired through use " (emphasis 
added). Thus, use is a critical condition precedent for the regist ration of such signs, explicitly 
recognised in the TRIPS Agreement. In fact, use is the only means by which an inherently non -
distinctive sign may acquire distinctiveness for a particular product. Inhibiting use, by definition, 
poses an obstacle to the abi lity of non -distinctive signs to acquire distinctiveness and, as a result, 
to become eligible for registration.  
11. According to Article 15.1 (third sentence), WTO Members "may" make registrability of 
inherently non -distinctive marks dependent on distinct iveness acquired through use. Australia has 
exercised this option in its Trade Marks Act 1995 , which focuses heavily on use permeating all 
aspects of the "life cycle " of a trademark in Australia. It is thus clear that the assessment of 
distinctiveness of a n inherently non -distinctive mark under Australia 's Trade Marks Act 1995  would 
necessarily have to focus upon the extent of the use  of this mark prior to the filing date of the 
application for its registration. The extent of use would thus be determinative  of whether the mark 
would be registered.  
12. In light of the above background, the plain packaging trademark restrictions, by prohibiting 
the use of non -word marks (such as design, figurative, or composite marks), make it impossible 
for an applicant to ac quire distinctiveness through actual and extensive use. This prohibition of the 
use of non -inherently distinctive signs applies only to tobacco products. Australia, therefore, has WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 created an obstacle to registration based on the nature of the goods in a ma nner inconsistent with 
Article 15.4 of the TRIPS Agreement.  
13. Australia has not presented any evidence showing that non -inherently distinctive signs that 
acquire distinctiveness through use can be registered as trademarks for tobacco products. Instead, 
Australia attempted to rebut Honduras ' claim by making general assertions that are not supported 
by the text of the TRIPS Agreement and that misrepresent the effect of the plain packaging 
measures under Australian law. First, Australia alleged that the comp lainants confuse a "sign" with 
a "trademark ", and it asserts that a non -inherently distinctive "sign" that has not yet acquired 
distinctiveness through use is not a "trademark " and must not be registered as such. This 
argument is based on circular reasonin g and an overly formalistic interpretation of the terms in 
Article 15.4, isolated from their context. Article 15 focuses on signs that either are distinctive or 
acquire distinctiveness through use and therefore can be registered as trademarks  and obtain th e 
protection guaranteed by the TRIPS Agreement. The focus of Honduras, and other complainants, 
on signs and whether these signs can be registered as trademarks, without the nature of the 
product to which they apply being an obstacle to eventual registratio n, is thus entirely appropriate 
and consistent with the text and context of Article 15.4. Second, Australia made an 
unsubstantiated assertion that Section 28 of the TPP Act  ensures that the operation of the Act does 
not prevent trademark owners from regist ering their marks. Australia has never adequately 
explained how this provision ensures that, under the plain packaging measures, an owner is 
allowed to register an inherently non -distinctive sign  in connection with a tobacco product as a 
trademark. Section  28 does not address the fundamental obligation under Australia 's trademark 
law that only signs that are distinctive merit trademark protection. In particular, pursuant to 
Section 41(3) of the Trade Mark Act 1995,  non-inherently distinctive signs will not be able to be 
registered and protected in Australia unless they have been used in Australia to such an extent 
that they do in fact distinguish the goods to which they apply . Section 28 of the TPP Act  does not 
address matters regulated by Section 41(3) of t he Trade Mark Act  – it mainly protects against the 
loss of registration or protection that could otherwise have been the consequence of the 
requirement of genuine use of the trademark for maintaining registration and protection.  
C. AUSTRALIA 'S PLAIN PACKAG ING MEASURE S ARE INCONSISTENT W ITH 
ARTICLE  16.1 AND ARE NOT JUS TIFIE D UNDER ARTICLE 17 O F THE 
TRIPS  AGREEMENT  
14. Australia 's plain packaging measures violate Article 16.1 of the TRIPS Agreement, which sets 
forth the minimum guaranteed level of protection to be provided to owners of registered 
trademarks, namely the exclusive right of the owners to enjoin unauthorised third -party uses of 
their registered trademarks. The scope of protection guaranteed under Article 16.1 depends on the 
owner 's ability to use its mark and the resulting strength of the mark in the marketplace. The 
more use is made of the mark, the stronger the mark; and the stronger the mark, the greater its 
scope of protection vis -à-vis unauthorised third -party uses. These fundamental principle s are 
commonly recognised, including in Australia 's own legislation, which emphasises the importance of 
the use of trademarks. The inherent dependence of the use of trademark to afford protection to 
the trademark has been acknowledged by many third parties  and authoritative IP associations, 
including the International Association for the Protection of Intellectual Property ( "AIPPI ") and 
MARQUES. Based on a survey of its domestic AIPPI chapters, the Association adopted a Resolution 
in September 2013 stating:  "The continuous and extensive use of a trademark can have an effect 
on its scope of protection (see, e.g. Article 16 (2) and (3) TRIPS with express reference to Article 
6bis Paris Convention), and can contribute to the notoriety, reputation and/or the goo dwill/value of 
the mark. In consequence, a restriction in the nature of plain packaging amounts to a serious 
impairment of the trademark rights and can cause considerable damage to the trademark right 
holder ". MARQUES, the leading European trademark associ ation, noted in its amicus curiae  brief 
that, "[a] measure that prevents the mark from maintaining its scope of protection or from 
growing its notoriety and strength through use as intended is thus inconsistent with the rights 
conferred on registered trade mark owners under Article 16.1 TRIPS. For certain marks that are not 
inherently distinctive, like colours for example, a measure that prevents them from being used, 
like standardized packaging, could actually lead to these marks becoming 'generic ' again ". The link 
between use and distinctiveness/scope of protection of a trademark has also been explicitly 
acknowledged by the panel in EC – Trademarks and Geographical Indications (Australia) . 
15. Australia 's plain packaging measures significantly reduce – if not completely eliminate – the 
ability of the owners of tobacco -related trademarks to prevent their unauthorised third -party use WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 by prohibiting the use of a wide array of trademarks on tobacco products and packaging that were 
previously used to distinguish tobacco products, in a manner inconsistent with Article 16.1. The 
courts will find that there is no likelihood of confusion because the trademark has lost much of its 
strength as a result of mandatory non -use. This, in turn, will lead to a further weakenin g of the 
distinctiveness of the trademark as similar signs on similar products will likely be allowed to be 
used. This means that it is not just the original prohibition on use that weakens the trademark and 
its scope of protection; rather this prohibition  allows further encroachment on the previously 
protected "territory " of the trademark leading to what Professor Dinwoodie in his expert report 
finding that plain packaging violates Article 16.1 referred to as "death by a thousand cuts ". Article 
16 requires  Members to grant private rights of enforcement and protection in order to allow the 
trademark owner to protect the distinctiveness of the trademark. The strength of the mark and the 
level of protection are to be determined by the actions of the trademark owners exercising their 
private rights. Plain packaging reduces protection below this minimum guaranteed level.  
16. The most plausible situation in which an infringement could occur is with respect to the use 
of a similar trademark (e.g. a different word m ark with a similar combination of colours or design 
elements) on a similar product (e.g. electronic cigarettes or various tobacco accessories). The 
reduced ability of consumers to recognize the original trademark will make it easier for an 
unauthorised thi rd party to demonstrate that its use is not likely to deceive or cause confusion 
with the original mark, and, therefore, does not constitute an infringement of this mark. 
Consequently, the plain packaging measures prevent the owners of duly registered toba cco-related 
trademarks from enforcing their rights under Article 16.1, by enjoining unauthorised third -party 
uses.  
17. However, Honduras does not rule out that there could be a violation of Article 16.1 under 
other scenarios of infringements contemplated u nder this provision, in particular the use of 
identical signs, such as colours or design elements, on similar goods. As the distinctiveness of 
tobacco -related trademarks recedes and their protection weakens, it is likely that a usurper would 
be able to enc roach more closely on the registrant 's marks, possibly even including word -marks. 
The more distinctive a mark, the higher degree of protection it enjoys. The measures will have an 
even stronger effect on non -inherently distinctive signs registered as trade marks, as the 
distinctiveness of these signs (acquired through use) will (without their use) be even more 
weakened in the eyes of consumers. Such marks will inevitably lose their protection.  
18. Australia did not respond to Honduras ' arguments on the impor tance of the use of the mark 
to the strength of the trademark and thus to its scope of protection and the minimum guaranteed 
enforcement rights under Article 16.1 of the TRIPS Agreement. Instead, Australia addressed 
Honduras ' claim at an upstream, abstract  level, by claiming that Article 16.1 confers only a 
negative right to prevent the use of similar signs by third parties and not a "positive right to use " a 
trademark. In Australia 's view, Article 16.1 does not concern "the public regulatory relationship 
between owners of trademarks and sovereign governments ". A slight variation of the above 
argument is Australia 's contention that Article 16.1 does not create the "right of confusion ", and 
that Article 16.1 does not serve to protect the "economic function " of trademarks to distinguish the 
goods, because this would have otherwise implied the existence of a "positive right to use ". 
Honduras does not consider that the use of labels such as "negative rights " or "positive right to 
use" are helpful for the Panel 's work of interpreting and applying Article 16.1. These labels do not 
reflect treaty language and are thus not helpful to discerning the meaning of WTO provisions. More 
importantly, Honduras has never asserted that there exists an absolute positive right to use 
trademarks that results from their registration. Article 16 imposes an obligation on Members to 
guarantee a minimum level of private rights to trademark owners that allows them to successfully 
protect the distinctiveness and source -indicating function of their marks in the context of 
infringement proceedings. The TRIPS -obligation of WTO Members is to guarantee that the 
registered trademark owner will be able to successfully do so, if he so wishes. A measure that 
undermines negative enforcement rights of  trademark holders under Article 16.1 by diminishing 
the distinctive power of all trademarks registered with respect to a specific product (such as in 
casu plain packaging) would necessarily violate this provision that seeks to protect the 
distinctiveness of the trademark.  
19. Similarly, Honduras has never argued that Article 16.1 creates a "right to confusion ". 
Rather, Honduras noted that the "likelihood of confusion " is a normative assessment that is 
relevant in the context of any infringement proceeding.  The strength of the mark, as determined 
by the extent to which the mark is used in trade, is a key aspect of such a "likelihood of confusion " WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 assessment, as are the other key factors of the infringement analysis, such as the similarity of 
signs and simila rity of products.  
20. Section 28 of the TPP Act on which Australia relies to argue that the "negative " rights of 
trademark owners are not affected does not address the problem of the erosion of distinctiveness, 
and consequently the scope of protection, of registered tobacco -related trademarks resulting from 
the operation of the TPP Act . Similarly, Section 28 does not regulate the issue of the maintenance 
of protection of tobacco -related marks vis -à-vis their potential use by third parties.  
21. In light of t he above, Australia 's limited rebuttal fails to address the arguments of Honduras 
and thus Honduras ' prima facie  case of a violation of Article 16.1 stands. In the event the Panel 
finds the plain packaging trademark restrictions are inconsistent with Artic le 16.1, Honduras 
submits that these measures cannot be justified under Article 17 of the TRIPS Agreement. The 
plain packaging measures do not constitute "limited exceptions ", and they fail to take into account 
the legitimate interests of the owners of tob acco-related trademarks in using their original 
trademarks in connection with the relevant goods. In any event, Australia did not invoke the 
exception under Article 17.  
D. AUSTRALIA 'S PLAIN PACKAGING ME ASURE S ARE INCONSISTENT W ITH 
ARTICLE  2.1 OF THE TRIPS AGREEMENT AND ARTICL E 6QUINQUIES A(1) OF  THE 
PARIS CONVENTION  
22. Honduras further submits that the trademark restrictions are inconsistent with 
Article 6quinquies  of the Paris Convention, incorporated into the TRIPS Agreement through 
Article  2.1 thereof. Pursuant to this provision, a trademark registered in the country of origin, a 
WTO Member must be accepted for filing and protected "as is" in other WTO Members (i.e. "telle 
quelle " principle). This essentially means that WTO Members may not require that a  trademark, 
already registered in the country of origin, be modified or altered as a condition for acceptance for 
filing and protection  in their territory. WTO Members are obliged to accept for filing and to protect 
a trademark in the original form in whic h it was registered in the country of origin.  
23.  The plain packaging measures are inconsistent with Article 6 quinquies (A)(1) of the Paris 
Convention incorporated through Article 2.1 of the TRIPS Agreement, because Australia fails to 
protect, in its origi nal form, every tobacco -related trademark that has been previously registered 
in the country of origin. From a practical perspective, the obligation to afford "protection " 
necessarily requires Members to allow some minimal use of trademarks in the course o f trade, 
since use is of crucial importance for the acquisition, scope, maintenance and enforcement of 
trademark rights. This is true in particular for design (image) marks and composite marks, the 
protection of which may inherently depend on use, but also  for word-marks. Moreover, the 
TRIPS  Agreement itself, in its preamble and footnote 3, recognises that the term "protection " 
under Article 6 quinquies (A)(1) also applies to the use of the trademark.  
24. In response to Honduras ' claim, Australia asserts that  the requirement under Article 
6quinquies (A)(1) that a trademark "be accepted for filing and protected as is " refers merely to the 
protection conferred as a result of the registration, and does not set minimum standards with 
respect to how that trademark i s to be protected. Australia 's response is based on its erroneous 
understanding of the legal standard under Article 6 quinquies (A)(1), the nature of this provision 
within the TRIPS framework, as well as of Honduras ' claim. First, Article 6 quinquies (A)(1) 
establishes two independent  obligations: (i) to accept for filing "as is", and then (ii) to protect "as 
is" every trademark duly registered in the country of origin. Australia reads out from the scope of 
Article 6 quinquies (A)(1) the terms "protected  as is" by suggesting that Members satisfy the above 
two obligations by merely allowing the registration of trademarks "as is". Australia 's interpretation 
is, therefore, inconsistent with the principle of the effective treaty interpretation, recognised by the 
Appel late Body in previous disputes. Australia 's contention that Honduras ' claim is based on "the 
right to use " argument is also incorrect. Honduras has not argued that the terms of Article 
6quinquies  A(1) create a "right to use ". Rather, in Honduras ' view, the  ability to use a trademark is 
an integral part of the availability, acquisition, scope, maintenance and enforcement of trademark 
rights, and is, therefore, of crucial importance for the effective "protection " of a trademark "as is". 
This link between use and protection is recognized by the TRIPS Agreement and Australia 's own 
legislation. Australia has never disputed this link.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 E. AUSTRALIA 'S PLAIN PACKAGING ME ASURE S ARE INCONSISTENT W ITH 
ARTICLE  20 OF THE TRIPS AGRE EMENT  
1. The plain packaging measures are  special requirements that unjustifiably 
encumber the use of trademarks in the course of trade  
25. Australia 's plain packaging trademark restrictions are inconsistent with Article 20 of the 
TRIPS Agreement, which provides that "the use of a trademark in th e course of trade shall not be 
unjustifiably encumbered by special requirements, such as … use in a special form or use in a 
manner detrimental to its capability to distinguish the goods or services of one undertaking from 
those of other undertakings ". 
26. The plain packaging trademark restrictions constitute the "ultimate encumbrance ", because 
they prohibit the use of almost all trademarks on tobacco products and packaging in the course of 
trade (i.e. retail trade), and to the extent that they permit certa in word -marks, such as brand and 
variant names, they require use of such marks in a highly regularised, standardised form and font.  
27. The plain packaging measures encumber the use of a trademark "by special requirements ". 
This is so because the plain pac kaging measures impose requirements specifically and directly on 
the use of trademarks. In fact, the measures ' trademark restrictions fall under two of the three 
examples of "special requirements " listed in Article 20: (a) the use of a trademark in a speci al 
form; and (b) the use in a manner detrimental to the capability of a trademark to distinguish the 
goods of one undertaking from those of other undertakings. The trademark restrictions prescribe 
the use of a tobacco -related trademark in a special form, a s they only allow the display of 
particular types of word -marks (the brand and variant name in a standardized format) on tobacco 
products and retail packaging. All other types of trademarks (e.g. design (image) marks and 
composite marks) cannot be displaye d on tobacco products and packaging. In addition, the plain 
packaging trademark restrictions prescribe "use in a manner detrimental to the capability of a 
trademark to distinguish the goods  of one undertaking from those of other undertakings ". One of 
the c ore objectives of the plain packaging measures is to make all retail packages for tobacco 
products plain – i.e. by definition non -distinctive.  
28. The plain packaging measures encumber the use of the trademark "in the course of trade " 
because they prohibit  the use of certain tobacco -related trademarks (i.e. design (or image) marks 
and composite marks) and prescribe how word marks can be used on tobacco products and 
packaging "in retail sale which is undeniably encumbering the use of the trademark "in the co urse 
of trade ". 
29. The special requirements imposed by the plain packaging measures are "unjustifiable " by 
their very nature, because they deviate from the default rule under the TRIPS Agreement that 
trademarks must be regulated based on their individual features. The text and context of Article 
20 confirm this basic approach under the TRIPS Agreement. Trademark rights, in terms of 
trademark acquisition, registration, maintenance and enforcement, are acquired on individual 
basis. This is precisely why the term "a trademark " is used in its singular form in Article 20 as well 
as most other provisions of the Agreement. The plain packaging trademark restrictions are not of a 
limited nature, addressing only the specific feature of the allegedly problematic tobac co-related 
trademark, or a narrow group of these trademarks. The plain packaging measures constitute an 
indiscriminate restriction on all trademarks on tobacco products and packaging, regardless of 
whether these trademarks undermine Australia 's public heal th objective. Australia itself expressly 
acknowledged that it does not have any concerns about the specific trademarks that are prevented 
from being used by the plain packaging measures thus confirming the "unjustifiable " nature of the 
measures.  
30. Moreov er, by prohibiting the use of all tobacco -related trademarks, other than those 
prescribed by the TPP Act , the plain packaging measures eviscerate the substance of the 
trademark protection stipulated in the TRIPS Agreement. In other words, these measures de feat 
the fundamental principle of the TRIPS Agreement that, in normal circumstances, trademarks must 
be used in the course of trade so as to enable them to fulfil their core function to distinguish 
products of different undertakings. Such measures are mani festly "unreasonable ", constitute an 
abusive exercise of a Member 's right in a way that disregards Members ' obligation to provide 
effective and adequate protection of intellectual property rights and, therefore, amount to an WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 encumbrance that is "unjustifia ble" by its very nature and inconsistent with Article 20 of the 
TRIPS  Agreement. For these reasons, the plain packaging trademark restrictions encumber the use 
of trademarks in the course of trade. They are by their very nature unjustifiable and, 
consequen tly, inconsistent with Article 20 of the TRIPS Agreement.  
31. In the alternative , should the Panel disagree with Honduras ' view that the plain packaging 
trademark restrictions are unjustifiable by their very nature , Australia failed to satisfy its burden o f 
demonstrating that its measures are justifiable under Article 20 of the TRIPS Agreement. Article 20 
is a provision that consists of both "prohibitive " and "exception/qualification " elements. It fulfils a 
dual function of disciplining "special requirement s", while, at the same time, providing Members 
with the ability to "justify " measures that are necessary for achieving their legitimate objectives, 
and consistent with the text, context and object and purpose of the TRIPS Agreement. The text, 
context, as w ell as the negotiating history of Article 20 confirm that the normal situation is that of 
unencumbered use.  
32. In considering whether Australia 's plain packaging trademark restrictions are justifiable, the 
Panel should strike an appropriate balance betwee n the interests of effective and adequate 
protection of trademarks and Australia 's right to regulate public health, which are both recognised 
by the TRIPS Agreement. In Honduras ' view, this balance should be achieved by determining 
whether the measures: (i ) make a material contribution to the achievement of their public policy 
objective; and (ii) constitute the least -restrictive, least trademark encumbering means to achieve 
this objective in the light of other options that are reasonably available. In varyi ng permutations, 
these two criteria have been applied for decades – from the GATT 1947 to current WTO law – to 
delimit the scope of the regulatory autonomy of the GATT/WTO Member in each particular case.  
33. Honduras ' test of "unjustifiably " is supported b y the ordinary meaning of this term, which 
denotes measures that are "necessary ", "proportionate " and "supported by evidence ". In 
Honduras ' view, a measure that does not contribute to achieving its objective, however legitimate 
the objective is, cannot be properly characterised as "necessary " or "supported by evidence ". 
Similarly, if the legitimate objective of the measure can be achieved by a less -restrictive measure 
that makes the same, or even higher, degree of contribution to the objective, and is reaso nably 
available, the challenged measure cannot properly be characterised as "proportionate ". Honduras ' 
interpretation of the term "unjustifiably " is also supported by the context of Article 20, and the 
object and purpose of the TRIPS Agreement, expressed, inter alia , in the preamble and Articles 7 
and 8.1. These instruments call for a "balanced " approach to regulating the use of trademarks, 
taking into account the interests of trademark protection, even when adopting measures necessary 
to protect public hea lth. As explained below, the evidence confirms that the plain packaging 
measures fail to contribute to the public health objective of reducing smoking prevalence and are 
for that reason as well "unjustifiable ".  Less trademark -restrictive alternative measu res are 
reasonably available to Australia and should have been preferred.  
2. Australia 's response to Honduras ' claim is based on its erroneous interpretation of 
Article 20 of the TRIPS Agreement and must be rejected  
34. Australia responded to Honduras ' arguments by advancing several unreasonable 
interpretations of the legal standard under Article 20 of the TRIPS Agreement, which deprive this 
provision of any substance. Australia argued that: (i) Article 20 disciplines only use -related 
"requirements " but not  use-related "prohibitions "; (ii) the only "relevant use " of a trademark 
protected under Article 20 is the use of a trademark to distinguish the goods of different 
undertakings, which is sufficient to identify the commercial source of the product at issue;  and (iii) 
as long as a special requirement encumbering the use of trademarks has a "rational connection " to a 
Member 's legitimate objective, it must be considered as "justifiable ". In addition, Australia asserted 
that the plain packaging measures are not related to the use of a trademark "in the course of trade " 
because, inter alia , the practical effect of Australian States ' retail display ban is that consumers have 
no opportunity to see tobacco packages or products at the point of sale and thus "in the co urse of 
trade ". All these arguments are untenable, flawed and based on the erroneous interpretation of 
Article 20. They must, therefore, be rejected.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 (a) Special requirements on use include prohibitions  
35. Australia suggests that a Member enjoys an absol ute freedom to prohibit the use of a 
trademark in the course of trade. Under Australia 's logic, Article 20 covers limited restrictions 
(encumbering requirements), but not complete restrictions (prohibitions). Such a proposition does 
not make any sense. Aus tralia's lack of textual support for its approach is clear from its avoidance 
of any interpretation based on the ordinary meaning of the terms of Article 20. Australia attempts 
to distinguish between "requirements " and "prohibitions " so that limited restri ctions are covered, 
but that the ultimate encumbrance would be excluded. This interpretation is not consistent with 
the ordinary meaning of the term "requirements ", which includes limitations as well as 
prohibitions. Honduras also notes that the plain pack aging measures fall under two of the three 
examples of "special requirements " mentioned explicitly in Article 20, which confirms that the 
measures at issue can be properly characterised as "special requirements " that encumber the use 
of a trademark within the meaning of Article 20. Many third parties agree with Honduras ' reading 
of Article 20, in particular the term "special requirement ", and do not support Australia 's 
categorical view that a prohibition on use cannot be deemed to be a "special requirement ". 
36. Australia also raised alleged "systemic implications " of a contrary interpretation of Article  20, 
by asserting that, if Article 20 encompasses also measures that prohibit the use of a trademark, 
this could lead to the conclusion, for example, that pr ohibitions on advertising in print or broadcast 
media fall within the scope of Article 20. This argument is without merit. A general regulatory 
measure, such as an advertising ban, is not a "special requirement " on the use of a trademark, as 
it does not ad dress distinctive elements of a trademark, and its application is not limited to a 
particular aspect of trademarks. The term "special " highlights that Article 20 is concerned with 
trademark requirements that "specifically " impact the conditions for the use  of the trademark, by 
imposing requirements on the commercial use of the trademark. Requirements that incidentally 
affect the use of a trademark but are unrelated to the mark, such as general advertising bans, are 
not "special requirements " for the purpose  of Article 20. Nor would this general measure fall under 
any of the examples of special requirements set out in Article 20.  
(b) The TRIPS Agreement does not distinguish between the source -identification and other 
functions that trademarks may fulfil in th e market  
37. Australia further argues that the only "relevant use " of a tr ademark protected under Article  
20 is the use of a trademark to distinguish the goods of different undertakings, which is "sufficient 
to identify " the commercial source of the produ ct at issue. In this context, Australia suggests that 
the only trademarks that are necessary  to distinguish products are clearly presented word -marks – 
other trademarks fulfils the alleged "advertising function ", which is not protected by Article 20. 
Hondu ras questions the legal basis on which Australia attempts to bifurcate a trademark to argue 
that it is only a word -mark, but not a figurative element (design or image mark), that merits 
protection under Article 20. First, the TRIPS Agreement provides prote ction for trademarks writ 
large. It does not draw a distinction between first -class trademarks and second -class trademarks. 
Trademarks are defined in Article 15.1 of the TRIPS Agreement as any sign, or any combination of 
signs, capable of distinguishing th e goods of one undertaking from those of other undertakings. 
These signs include figurative elements, which must be eligible for registration as a trademark, 
and once registered, deserve to be protected under the TRIPS Agreement. Second, Australia errs 
in trying to distinguish between word -marks and figurative elements in terms of their "neutrally 
distinguishing function ". There is no basis in the TRIPS Agreement or in international intellectual 
property law generally for asserting that word -marks distingui sh products in a neutral manner 
whereas figurative elements do not, such that non -word marks do not merit the same protection 
as long as there are other (word) marks that can be used to distinguish products. For example, the 
TRIPS Agreement does not permit  the unauthorised use of certain trademarks such as figurative 
marks or elements in a manner inconsistent with Article 16.1, simply because the trademark 
owner may still be able to use other trademarks such as word -marks that are sufficient to 
distinguish his products. It is not clear why such an artificial distinction would be valid under 
Article 20. All trademarks merit the same protection and that protection does not depend on 
whether the trademark is "necessary " to distinguish a product or not. Third, H onduras disagrees 
with Australia that Article 20 would always require a complainant to demonstrate that a challenged 
measure encumbers by special requirements the use of a trademark to distinguish the goods . The 
text of Article 20 makes it clear that, as l ong as a measure is a "special requirement " that 
unjustifiably encumbers the use of a trademark in the course of trade, such as a requirement to 
use the mark together with another mark, it is inconsistent with this provision. Whether a WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
- B-11 - 
 consumer can still d istinguish the product does not save such a special requirement. Finally, 
Honduras notes that Australia 's argument is in clear contradiction with its recognition that the 
different functions that trademarks may fufill in the market cannot be separated in p ractice. This 
means logically that a measure cannot encumber, for example, the alleged "advertising function " 
of a trademark without also encumbering the "source identification " function of the trademark. 
Australia 's distinction based on the alleged functi ons of trademarks is not supported by the text of 
the TRIPS Agreement and does not make logical or practical sense.  
(c) "Unjustifiably " requires more than a mere "rational connection ", otherwise Article 20 would 
not set forth a meaningful discipline  
38. Australia initially argued that special requirements that are covered by Article 20 can 
nonetheless be "justifiable " encumbrances if there is a "rational connection " between those 
measures and the pursuit of a Member 's public policy objective. Australia trie d to rely on WTO case 
law interpreting the term "unjustifiable discrimination " in the chapeau of Article XX of the 
GATT  1994 to argue that there is no reason why the term "unjustifiably " would have a significantly 
different meaning in the context of Articl e 20 of the TRIPS Agreement than it does in the context of 
the chapeau of Article XX of the GATT 1994.  
39. Australia 's reliance on WTO case law interpreting the terms in the chapeau of Article XX of the 
GATT 1994 is misplaced. In particular, Honduras consi ders that: (i) the chapeau of Article XX of the 
GATT 1994 is an entirely different context, where the term "unjustifiable " is used in combination 
with terms that are not present in Article 20, such as the terms "arbitrary or unjustifiable 
discrimination be tween countries where the same conditions prevail "; (ii) the chapeau of Article XX 
is part and parcel of a larger two -tiered holistic test, whereas the test of "unjustifiably " under 
Article  20 is the only tool to "weigh and balance " Members ' rights and obl igations under the TRIPS 
Agreement; (iii) Article XX of the GATT 1994 sets out "General Exceptions ", whereas Article 20 of 
the TRIPS Agreement contains a mixture of an affirmative obligation and permissive elements. In 
any event, Australia is incorrect in suggesting that, under the chapeau of Article XX of the 
GATT  1994, discrimination may be justifiable merely because there is a "rational connection " with 
the policy objective in question. In WTO jurisprudence, the Appellate Body has considered the factor 
of a "rational connection " as merely one element in a "cumulative " assessment of "unjustifiable 
discrimination ", which involved the analysis of many other factors that Australia failed to address.  
40. It is telling that most third parties, even those genera lly supportive of Australia 's 
tobacco -control measures, disagree with Australia and agree with Honduras ' interpretation of the 
term "unjustifiably ". Probably in the light of this lack of support for its untenable argument, Australia 
has amended its argumen t in the course of the proceedings. Australia now agrees that the 
assessment of the contribution of the measure to the stated objective is an important element of 
this test, although it still disputes that less restrictive reasonably available alternative measures 
must also be considered within this test.  
(d) The plain packaging trademark restrictions encumber the use of a trademark "in the course 
of trade "  
41. Australia adopts an overly narrow reading of the term "in the course of trade " in Article 20, 
and argues that the plain packaging measures do not encumber the use of a trademark in the 
"course of trade " because in most Australian States the retail display ban in combination with the 
general advertising ban prevents a consumer from seeing the trademar k until after the point of 
sale. Australia states, inter alia , that the "course of trade " culminates at the point of sale and that 
insofar as a measure might affect the presentation and use of a trademark after the point of sale, 
this effect would fall out side the scope of Article 20. In Honduras ' view, the term "in the course of 
trade " in Article 20, but also in Articles 16.1 and 10 bis, is simply included to distinguish 
commercial use of trademarks from non -commercial use of trademarks. For example, tradem arks 
are not used "in the course of trade " when trademarks are mentioned in Honduras ' submissions. 
However, use of a trademark in wholesale or retail trade, is undoubtedly "commercial use " of a 
trademark or use "in the course of trade ". This view is based on the ordinary meaning of the terms 
"course of trade " and "commerce "; it is shared by many third parties, as well as by commentators 
on the TRIPS Agreement including Australia 's own expert. Furthermore, as a matter of fact, 
Australia errs when it over -states the effects of the retail display ban on the use of trademarks in 
the "course of trade ". In fact, Australia acknowledges that the display ban is not implemented 
nation -wide without exceptions, as specialist tobacconist shops in the Australian States of  Victoria WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 and Western Australia are not subject to the ban. Australia also accepts that even where a display 
ban is in place, customers can still view the tobacco packaging and products before the purchase is 
completed.  
3. Conclusion  
42. In light of the fo regoing, Australia failed to rebut Honduras ' legal arguments that the plain 
packaging trademark restrictions are special requirements that unjustifiably encumber the use of a 
wide array of trademark elements on tobacco products and retail packaging in the course of trade, 
in a manner inconsistent with Article 20 of the TRIPS Agreement.  
F. AUSTRALIA 'S PLAIN PACKAGING ME ASURES ARE INCONSIST ENT WITH 
ARTI CLE 10BIS OF THE PARIS  CONVENTION  AS INCORPORATED INTO  THE 
TRIPS  AGREEMENT BY ARTICLE  2.1 OF THE TRIPS AGR EEMENT  
43. Australia 's plain packaging measures are inconsistent with Articles 10 bis(1) and 10 bis(3)(iii) 
of the Paris Convention because they require the kind of anti -competitive and misleading actions 
that Australia is under a legal obligation to prevent. Article 10 bis(1) requires Members to provide 
"effective protection against unfair competition " resulting from the use of marks on products. 
Article 10 bis(1) does not specify the means by which WTO Members can provide this "effective 
protection ". This discr etion notwithstanding, the key requirement is that when "unfair competition " 
exists, some form of "effective protection " must be provided. This key requirement is violated 
when a Member enacts a domestic law that encourages or requires private economic ope rators to 
act in a manner amounting to "unfair competition ". This is because, by definition, where a Member 
encourages or requires acts of unfair competition, that Member cannot be said to be "assur[ing] … 
effective protection " against such acts. Nothing i n the wording of Article 10 bis excludes private 
economic operators acting pursuant to government regulation from the relevant disciplines. 
Indeed, the panel decision in Mexico – Telecommunications  supports Honduras ' position. Honduras 
considers that the pl ain packaging measures violate Article 10 bis(1) by requiring private economic 
operators to adopt a uniform trade dress. In this manner, both the trademark restrictions and 
formatting restrictions of the plain packaging measures oblige manufacturers of toba cco products 
to compete in the Australian market in a manner that eliminates the possibility of achieving or 
maintaining product differentiation. This inability to achieve or maintain product differentiation 
systematically affects premium products and thei r producers more than lower quality products and 
producers. This behaviour, referred to as "downtrading ", ex ante  and deliberately, skews 
conditions of competition to the advantage of producers providing low -price products and to the 
disadvantage of produc ers providing high -price products. This direct, and profoundly 
asymmetrical, impact of Australia 's plain packaging measures on the competitive dynamics in the 
market constitutes "unfair competition " in the Australian market.  
44. Honduras ' second claim is u nder Article 10 bis(3)(iii). This provision is a more specific 
manifestation of the requirement under Article 10 bis(1) to ensure effective protection against 
unfair competition. Article 10 bis(3)(iii) provides a specific example of conditions of unfair 
compe tition that Members are required to provide protection against. Under Article 10 bis(3)(iii), 
Members are to provide protection against unfair competition that consists in "indications or 
allegations the use of which in the course of trade is liable to misl ead the public " as to, inter alia , 
the nature and characteristics of the goods. Australia 's plain packaging measures amount to 
"indications or allegations " through both affirmative indications (the uniformity of the required 
packaging) and omissions (the m andated absence of distinguishing features). Honduras notes that 
Australia has not disputed the argument that the packaging adopted by market participants, in 
response to Australia 's legislation, amount to such indications and allegations. These indication s or 
allegations are that all tobacco products are the same, of the same or similar quality, and of the 
same physical properties. Moreover, these misleading indications or allegations are being used in 
the "course of trade ". Contrary to Australia 's allegat ions, the "course of trade " does not culminate 
at the point of sale. Any intended post -sale use of the product by the consumer – such as smoking 
or the mere display – can influence and affect a subsequent purchase of the product by the 
consumer or by anoth er person. Consumers are liable to be misled because they have come to 
understand over time that differently packed and differently branded (tobacco) products have 
different objective physical characteristics. Through experience, consumers also come to ass ociate 
particular trademarks and imagery with particular quality of the product. Therefore, the removal of 
the brand imagery, as well as the imposition of uniform packaging design and stick requirements 
will induce in the minds of consumers the erroneous b elief that all tobacco products are essentially WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 the same and that there are no quality differences between them. This belief is factually incorrect 
because not all products are of the same or similar quality. As a result of the required indications, 
as wel l as equally relevant "omissions ", consumers are being "misled " in violation of 
Article  10bis(3)(iii).  
G. AUSTRALIA 'S PLAIN PACKAGING ME ASURES ARE INCONSIST ENT WITH 
ARTICLE  22.2(B) OF THE TRIPS  AGREEMENT  
45. Australia 's plain packaging measures are inconsi stent wi th Article 22.2(b) of the 
TRIPS  Agreement because Australia fails to provide the legal means, in respect of GIs, for 
interested parties to prevent "use which constitutes an act of unfair competition ". Article 22.2(b) 
applies the disciplines of Arti cle 10 bis of the Paris Convention "[i]n respect of geographical 
indications ". The use of the term "[i]n respect of " GIs is broader than use "of" GIs. Under Article 
22.2(b), any circumstance relating to the use "[i]n respect of " GIs that has a bearing on 
competition and results in unfair competition within the meaning of Article 10 bis must be subject 
to legal remedies that an interested party can pursue in a WTO Member 's system. These severe 
limitations on the use of GIs prevent GI owners from communicating,  through their GIs, 
differences in quality, taste and other physical characteristics to their consumers and to the 
broader public. Therefore, consumers of tobacco products will gain the erroneous impression that 
all tobacco products from all geographical o rigins are the same and have the same characteristics. 
This perception, and its resulting impact on competition, is not "fair" because it causes detriment 
to owners of existing GIs who have invested time and resources into establishing their GIs as well 
as of future owners of potential GIs, because they will be unable to develop and establish GIs in 
the Australian market. This unfair competitive outcome is the outcome exactly intended by the 
Australian legislator; it is therefore not merely an incidental ef fect of legitimate regulation, but 
rather the very legislative purpose of the measure.  
H. AUSTRALIA 'S PLAIN PACKAGING ME ASURES ARE INCONSIST ENT WITH  
ARTICLE  24.3 OF THE TRIPS AG REEMENT  
46. Australia 's plain packaging measures are inconsistent with Article 24.3, because Australia 
has diminished the level of protection of GIs that existed in Australia prior to 1995. The term 
"geographical indication " includes anything that identifies a good as originating in a particular 
territory, region or locality, even if  the indication is not a topographical term. Consumer perception 
is critically important to allow a GI to enjoy effective protection. Article 24.3 requires that Members 
do not diminish a particular level of protection as a whole , rather than specific GIs, because the 
term "that existed " in the French and Spanish versions grammatically refers only to the "level of 
protection ", rather than the "geographical indications ". The argument to the contrary is incorrect 
from both a legal and policy perspective.  
47. Australia 's plain packaging measures have reduced the protection afforded to GIs that 
existed in Australia immediately prior to 1 January 1995. Prior to that date, Australian law 
permitted owners of GIs to use and maintain already established GIs on their p roducts; to use a 
word or non -word indication so as to develop GIs by placing these indications on the product; to 
avail themselves of legal remedies against misleading use; and to obtain a so -called certification 
mark. Australia has diminished the protect ion resulting from the above factors because, first, the 
plain packaging measures make it impossible to use, develop and maintain a word -based GI other 
than the name of a country. Second, as a result of the plain packaging measures, it is no longer 
possibl e to use, develop and maintain a non -word GI. This is because the plain packaging 
measures do not permit any design elements on the part of the pack not reserved for the GHWs.  
48. Australia 's argument that the protection of GIs refers only to negative rig hts (rights to 
prevent third parties ' illegal use of GIs) is incorrect and, in any event, irrelevant. To the extent 
that Australian law prior to 1995 included the possibility of GI owners to use the GI – regardless of 
whether that possibility is labelled a  "right to use " (which Australia argues did not exist prior to 
1995) or "ability to use " (which Australia accepts existed prior to 1995) – that possibility must be 
preserved and may not be rolled -back, by virtue of Article 24.3. Hence, Australia 's distinct ion 
between the "right to use " and the "ability to use " is irrelevant. Furthermore, Australia is wrong in 
arguing that the words "[i]n implementing this Section " in Article 24.3 limit the application of 
Article 24.3 only to measures enacted for the sole an d explicit purpose of implementation of 
Section 3 of the TRIPS Agreement. Australia 's formalistic argument not only has no legal basis, but 
would also open up easy means of circumventing the GI -disciplines of the TRIPS Agreement.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 III. AUSTRALIA 'S PLAIN PAC KAGING MEASURES VIOL ATE THE TBT AGREEMEN T 
A. THE PLAIN PACKAGING MEASURES ARE INCONSI STENT WITH ARTICLE 2 .2 OF 
THE TBT AGREEMENT  
1. The plain packaging measures constitute technical regulations within the meaning of 
Annex 1.1 of the TBT Agreement  
49. The p lain packaging measures as a whole, i.e. the trademark restrictions and the format 
restrictions, constitute technical regulations, since they satisfy all three elements of the definition 
of "technical regulations " of Annex 1.1 of the TBT Agreement identifi ed by the Appellate Body: (i) 
the measures apply to an identifiable product or group of products; (ii) the measures lays down 
product characteristics; and (iii) compliance with the product characteristics is mandatory.  
50. Australia argues that the tradema rk restrictions of the plain packaging measures fall outside 
the scope of Article 2.2 of the TBT Agreement because this provision does not apply to the 
"exploitation of intellectual property rights ". Australia 's contention must be rejected as it lacks any 
basis in the TBT Agreement. Nothing in the definition of "technical regulation " of Annex 1.1 of the 
TBT Agreement indicates that a measure, otherwise qualifying as a technical regulation, would fall 
outside the scope of the TBT Agreement because it also af fects the use of intellectual property 
rights. Honduras notes that Articles 1.4 and 1.5 of the TBT Agreement set out express exceptions 
to the scope of this Agreement, none of which relate to the protection of intellectual property 
rights.  
2. The objective  pursued by Australia through the plain packaging measures is to 
reduce smoking prevalence  
51. The determination of the objective pursued by Australia through the plain packaging 
measures is a critical element in the Panel 's assessment of Honduras ' claims.  Section 3.1 of the 
TPP Act  provides that the objective pursued by Australia through the plain packaging measures is 
to improve public health by reducing smoking prevalence in Australia. Section 3.1(a) of the 
TPP Act stipulates that the objects of the legi slation are to "improve public health by " changing 
smoking behavior related to smoking initiation, cessation, and relapse. The stated aim of the 
measures is to contribute to reducing smoking prevalence to 10% by 2018 and to halve the 
smoking rate among Tor res Strait Islanders and aboriginals. Section 3.2 of the TPP Act  determines 
the mechanisms to achieve this objective: (i) reduce the appeal of tobacco products; (ii) increase 
the effectiveness of health warnings on the retail packaging; and (iii) reduce th e ability of the 
retail packaging to mislead consumers about the harmful effects of tobacco products. Australia has 
confirmed that the "objective " of the measures is to be found in Section 3.1, and not in Section 3.2 
of the TPP Act . These mechanisms are th us not legally relevant for purposes of examining the 
legitimacy of the objective, the measures ' degree of contribution to the fulfilment of the objective, 
or the identification of alternative measures that provide an equivalent contribution to the smoking  
reduction objective of the TPP Act . The relevant evidence to be considered concerns the effect of 
the measures on smoking behaviour and the degree to which the plain packaging measures 
contribute to reducing smoking as intended. Honduras supports the adop tion of tobacco -control 
measures to improve public health by reducing smoking prevalence, as reflected by the fact that 
Honduras itself has adopted a series of these measures. In this context, Honduras does not 
dispute the legitimacy of Australia 's public health objective.  
3. The plain packaging measures are more trade restrictive than necessary to fulfil a 
legitimate objective, taking account of the risks of non -fulfilment  
(a) The plain packaging measures are trade -restrictive  
52. The Appellate Body has fo und that, under Article 2.2 of the TBT Agreement, a measure is 
trade restrictive if it has a "limiting effect on trade ". The concept of trade -restrictiveness does not 
require the demonstration of actual trade effects, as the focus is on the competitive opp ortunities 
available to the imported product. In Honduras ' view, the measures ' design, structure and 
architecture confirm the trade restrictive nature of the plain packaging measures. In so far as 
necessary, evidence of downtrading resulting from the intro duction of the plain packaging 
measures confirms the distortion of the conditions of competition imposed by the plain packaging WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 measures. The plain packaging measures are trade restrictive by nature because they affect the 
competitive opportunities of impo rted tobacco products in various ways.  
53. First, the plain packaging measures severely limit brand differentiation, that is, the 
producers ' ability to rely on brand packaging to distinguish their products from those of their 
competitors. This, in turn, af fects competitive opportunities of tobacco producers because they are 
no longer able to communicate to consumers the quality and reputation of their products. Given 
that trademarks are essential to fair competition and are important instruments of competit ion, it 
is clear that prohibiting trademarks from fulfilling this competition enhancing role distorts the 
conditions of competition in the market. In order to confirm this point, Honduras submitted 
empirical evidence demonstrating that a downward substitut ion effect has taken place in the 
Australian market after the entry into force of the plain packaging measures. This situation, also 
known as downtrading, is the logical consequence of a market with reduced brand differentiation.  
54. Second, the plain pack aging measures are trade -restrictive because they entail significant 
compliance costs. The entry into force of the plain packaging measures logically meant that foreign 
producers wishing to continue supplying the Australian market needed to adapt their 
manufacturing processes applicable to packaging of tobacco products and of tobacco products 
themselves. This, in turn, compelled those foreign producers to bear certain adaptation costs. 
Australia 's own authorities recognised that plain packaging "will involv e some upfront costs to 
adjust manufacturing processes for the Australian market ". In Australia 's own Post -
Implementation Review, the costs for producers were estimated to be about AUD 69 million. These 
compliance costs are significant under any metric. Th ese compliance costs are prohibitive for small 
producers in developing countries seeking to enter an already dark market with no expectation of 
high profitability as a result of the competition -distorting nature of the plain packaging measures 
and absent a ny possibility of communication of the brand logos.  
55. Third, the plain packaging measures are also trade -restrictive because they restrict access 
to the Australian market and distort conditions of competition. As explained in the expert reports 
of Profes sor Damien Neven, the measures produce certain communication and price effects that 
make access to the Australian tobacco market almost impossible. By imposing these barriers on 
market access, the plain packaging measures affect competitive opportunities o f tobacco products, 
have a limiting effect on trade, create a disincentive to import into Australia, and have identifiable 
negative consequences on the importation of tobacco products, all of which are circumstances that 
qualify as trade restrictions accor ding to previous panels and the Appellate Body.  
(b) The plain packaging measures make no contribution to Australia 's objective  
56. As indicated below, the available evidence demonstrates that the plain packaging measures 
have failed, now more than two and a half years after their introduction, to change actual smoking 
behaviour. Similarly, there is no evidence that plain packaging is apt to product any effect on 
smoking behaviour at some point in the future. The plain packaging measures, therefore, fail to 
make any contribution to Australia 's objective. In Honduras ' opinion, the issues of trade 
restrictiveness and contribution are two different considerations that must be examined separately 
when conducting a weighing and balancing exercise under Article 2.2  of the TBT Agreement. 
Contrary to Australia 's rebuttal argument that any measure that is effective in reducing 
consumption will be trade restrictive and vice versa , Honduras considers that Australia unduly 
seeks to collapse these two different factors of the weighing and balancing test. The issue of trade 
restrictiveness must be assessed in terms of whether the challenged measures affect competitive 
opportunities, involve compliance costs or act as a disincentive to export to Australia. The focus is 
on the  nature, architecture and design of the measures. In contrast, the question of contribution is 
examined by looking at the evidence of the actual contribution to the specific objective. A measure 
can be effective in reducing consumption without imposing WTO -inconsistent barriers to trade.  
(c) The risks of non -fulfilment of the plain packaging measures does not change the analysis  
57. Article 2.2 of the TBT Agreement requires that the risks of non -fulfilment be included in the 
analysis of whether the measures  are more trade restrictive than necessary. The analysis of the 
risks of non -fulfilment consists of examining two aspects: (i) the nature of the risks at issue; and 
(ii) the gravity of the consequences that would arise from non -fulfilment of the objective pursued 
by the Member through the challenged measure. On the first element, Honduras recognises that WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 the risks at issue, health risks that arise from tobacco smoking, are of great importance to any 
society. On the second element, Honduras argues that it is  clear that Australia was in a position to 
achieve its desired reduction of tobacco prevalence without the introduction of the plain packaging 
measures given the pre -existing and continued decline in smoking prevalence. In addition, as the 
evidence showed that the measures are not effective in reducing smoking, including the "risks of 
non-fulfilment " does not affect the outcome of the weighing and balancing exercise. Australia 's 
smoking rates have been declining consistently for years as a result of Austral ia's numerous 
tobacco -control measures. In this connection, Australia 's Cancer Council Victoria noted in 2009 
that even without plain packaging Australia could reduce its smoking rate to 10 percent by 2020.  
B. HONDURAS PROVIDES SE VERAL REASONABLY AVA ILABLE  ALTERNATIVE 
MEASURES THAT ARE WT O-CONSISTENT AND PROVI DE AN AT LEAST 
EQUIVALENT DEGREE OF  CONTRIBUTION TO THE OBJECTIVE OF REDUCIN G 
SMOKING WHILE BEING LESS TRADE RESTRICTI VE 
58. Honduras presents four reasonably available alternative measures which produ ce an at least 
"equivalent  contribution " to the objective of reducing smoking and which are less trade restrictive 
and/or entirely WTO consistent.  
59. First, Honduras proposes an increase in the minimum legal purchasing age ( "MLPA ") from 18 
to 21. This mea sure has the effect of removing cigarettes from the social network of secondary 
school students, given that, unlike adults, adolescents frequently  obtain cigarettes from friends of 
their same age. In addition, smoking during adolescence substantially eleva tes the risk for regular 
adult smoking, and thus intervening at this age is key to preventing adult smoking. In many 
jurisdictions, raising the MLPA for cigarettes from 16 to 18, and in one case (i.e. the town of 
Needham in Massachusetts) from 18 to 21, le d to substantial decreases in smoking rates. Raising 
the MLPA to 21 is also supported by the expert of Honduras and the Dominican Republic, Professor 
Steinberg. Following a request from the US Food and Drug Administration, a committee of the US 
Institute o f Medicine ( "IOM") published a report on the public health implications of raising the MLPA 
for tobacco products in the United States to 21 and 25 years. Honduras ' expert, Professor Steinberg 
presented to the committee in April 2014 on adolescent and young  adult cognitive and psychosocial 
development and decision -making, and was also selected to provide an independent review of the 
committee 's draft report. In its final version of the report, made public on 12 March 2015, the IOM 
agreed with Professor Stein berg's recommendation that raising the MLPA for tobacco products would 
help prevent initiation of tobacco use among adolescents. Raising the MLPA is not a technical 
regulation and does not distort competitive opportunities for foreign producers in any way given that 
it does not affect product differentiation and does not impose any compliance costs. It also respects   
intellectual property rights. It is thus a WTO -consistent and less trade -restrictive alternative that 
provides at least an equivalent contrib ution.  
60. Second, Honduras proposes the increase of tobacco taxes. The effectiveness of tax 
measures in reducing smoking rates, including among young people, is recognised by the WHO 
and scholars which consider  it to be "the single most effective tobacco control instrument ". 
Australia itself acknowledges the effectiveness of these measures, as it has already implemented 
tobacco excise increases, albeit insufficiently. Australia fails to rebut the fact highlighted in 
Honduras ' submissions that its tobacco t axes are below the WHO recommendation of 70% of the 
retail price of the products. Australia argues that it has attempted to increase taxation toward that 
level but blames industry pricing policies for its failure to reach that goal. This, of course, is no 
defence: Australia cannot blame its own regulatory failure on the industry when the industry is 
merely implementing common and well -understood pricing policies. Further, regulatory practice in 
other Members belies Australia 's contentions as fifty -four othe r FCTC Parties reached the 70% goal 
by 2015. Furthermore, an additional twenty -five Parties have a higher overall tax level than 
Australia 's 56.76%, even if they have not reached the 70% goal. Thus, Australia ranks 80th out of 
180 FCTC Parties in respect o f the single most effective tobacco -control instrument. It is thus 
disingenuous for Australia to argue that it cannot do better or that tobacco tax increases are not 
an available and effective alternative measure. A non -discriminatory tax increase is a 
WTO-consistent and less trade -restrictive measure. It is not a technical regulation and does not 
impose any compliance costs. In addition, this measure does not affect competitive opportunities 
of imported tobacco products, nor does it restrict the ability of  tobacco producers to compete in 
the Australian market by using brand packaging to signal quality and reputation to consumers. It 
also respects intellectual property rights. The important advantage of tax increases is that they 
would not only encourage ces sation and prevent relapse, but would also reduce smoking initiation, WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 which is an important action to prevent young persons from becoming adult chronic smokers. 
Finally, the proposed tax increase is also reasonably available to Australia and would actually  raise 
additional revenue for the Australian Government. It does not involve substantial technical 
difficulties or prohibitive costs.  
61. Third, Honduras proposes a mechanism to vet tobacco product packaging prior to marketing 
and commercialisation  of toba cco products. This pre -vetting mechanism, developed in the expert 
report of Mr. Shavin Q.C., is a less -restrictive alternative measure in the event the Panel finds that 
the alternatives in question must operate though the same causal pathway as plain packa ging and 
affect the same "mechanisms " set out in Section 3.2 of the TPP Act.  In combination with the 
Australian Consumer Law 's protection against misleading  or deceptive aspects of tobacco 
packaging as enforced by the Australian Consumer and Competition Co mmission, this mechanism 
would provide an equivalent contribution as plain packaging. The pre -vetting mechanism would be 
designed to prohibit, even before they are placed on the market, any problematic packaging or 
product feature based on a compulsory pre -notification process. Such a pre -vetting mechanism 
would by definition be less trade restrictive because it would require an individualised  assessment 
of the signs and design features of each trademark before  the trademark is allowed on the 
Australian mar ket. Similar pre -vetting mechanisms already exist in Australia and Honduras is 
proposing a user -pay system which will not entail an undue burden for the Australian Government.  
62. Fourth, Honduras proposes improved social marketing campaigns to reach youth  with 
anti-smoking messages and information in formats that would be familiar to them. This alternative 
is supported by the expert report of Professor  Keller who explains that Australia 's recent anti -
smoking campaigns, ongoing since 2011, have been found t o be ineffective in a series of reviews 
by the Australian Government. Professor Keller proposes concrete improvements to Australia 's 
campaigns that would increase their effectiveness. Honduras considers that this alternative 
measure is a WTO -consistent and  less trade -restrictive alternative that does not impose any costs 
on producers and that does not distort competitive opportunities for foreign producers while 
making an equivalent contribution to Australia 's objective as any contribution that plain packag ing 
may make. It also respects intellectual property rights and it is clearly an alternative that is 
reasonably available to Australia.  
63. Honduras has rebutted Australia 's various arguments aimed at undermining the validity of 
the alternative measures pr oposed by Honduras. Australia contends that, in order for an 
alternative measure to be valid, it is not sufficient for the measure to achieve Australia 's objective 
of reducing smoking prevalence, it must also employ the same mechanisms used by the plain 
packaging measures, namely to reduce the appeal of tobacco products, increase the effectiveness 
of GHWs, and eliminate producers ' ability to mislead consumers through packaging. Honduras 
disagrees with Australia 's approach. In US – COOL (Article 21.5 – Canad a and Mexico) , the 
Appellate Body addressed the very argument advanced by Australia in these proceedings. It noted 
that "a proposed alternative measure may achieve an equivalent degree of contribution in ways 
different from the technical regulation at issue". In light of this precedent, Honduras contends that 
the proposed alternative measures are valid for purposes of Article 2.2 because, even if they do 
not incorporate the same mechanisms as the plain packaging measures, they are more effective at 
reducing  smoking prevalence.  
64. Australia also invokes the Appellate Body 's findings in Brazil – Retreaded Tyres  as support 
for its argument that, because the plain packaging measures are part of a comprehensive suite of 
measures, they cannot be replaced with alt ernative measures. Honduras has explained that 
Australia 's arguments are without merit. Unlike the facts addressed by the Appellate Body in Brazil 
– Retreaded Tyres , the plain packaging  measures are neither a key element nor a pillar in 
Australia 's tobacco  strategy. Given that plain packaging does not work in a synergistic manner 
with Australia 's other tobacco -control measures, its removal would not undermine the functioning 
of Australia 's other measures.  
C. AUSTRALIA 'S LEGAL REBUTTAL ARG UMENTS ARE WITHOUT MERIT AND AIM AT 
AVOIDING PROPER SCRU TINY OF THE LACK OF CONTRIBUTION OF THE PLAIN 
PACKAGING MEASURES  
65. To respond to the claims under the TBT Agreement, Australia 's defence has been to try to 
avoid any scrutiny of whether the plain packaging measures ac tually make a contribution to the 
health objective of reducing smoking. Australia develops the untenable position that the WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 TRIPS  Agreement is lex specialis  for trademarks and that the plain packaging measures ' 
prohibition on the use of trademarks is thus n ot covered by the disciplines of the TBT Agreement, 
but only by those of the TRIPS Agreement. However, at the same time, under Australia 's reading 
of the TRIPS Agreement, measures prohibiting or restricting the use of trademarks are not subject 
to any of t he disciplines of the TRIPS Agreement. In effect, therefore, Australia is arguing that 
there is actually no WTO discipline that applies to its plain packaging measures. This argument is 
not credible in light of the obvious applicability of the TBT Agreemen t to technical regulations 
(such as Australia 's plain packaging measures) that involve packaging and labelling and the well -
established fact in WTO jurisprudence that there may be overlapping disciplines in different WTO 
agreements that apply to the same m easure. In addition, Australia develops three sets of 
arguments with a view to trying to avoid a review of its plain packaging measures and their lack of 
contribution to achieving Australia 's objective of smoking reduction.  
66. First, Australia argues that  the complainants failed to demonstrate that the stringent set of 
requirements imposed by the plain packaging measures are trade restrictive, hoping that the Panel 
would examine trade restrictiveness as a threshold question rather than examining this conce pt as 
part of its weighing and balancing exercise under Article 2.2 of the TBT Agreement as the 
Appellate Body has explained is required. Australia argues that the plain packaging measures are 
not trade restrictive because Honduras and the other complainan ts have not demonstrated that 
overall trade in tobacco products has declined following the imposition of the measures. Australia 's 
argument, which is based on the oft -rejected notion that "actual trade " effects must be used to 
arrive at a determination of trade restrictiveness, is wrong. Actual trade effects are not required to 
be demonstrated. Trade restrictiveness is not a threshold question – it is part and parcel of the 
weighing and balancing test. In any case, the "limiting condition " to sell into the Australian market 
that the plain packaging measures impose is difficult to deny. The plain packaging measures 
adversely affect the conditions of competition for tobacco products. Furthermore, a measure can 
be trade restrictive even just for a distinct segm ent of the category of products covered by the 
technical regulation, such as for premium tobacco products. It is not necessary to demonstrate 
that "overall ", for the entire product category, and for every single product, trade has been 
reduced, or is likel y to be adversely affected. Nothing in the TBT Agreement supports the notion 
that restrictiveness exists only if a measure affects all segments of a product and all WTO 
Members that export that product. Such interpretation would severely undermine the valu e of 
WTO rules. A country specialising in one particular segment of a product must be able to challenge 
a restrictive technical regulation under Article 2.2 even if the measure does not affect other 
product segments or other countries. Actually, according to WTO case law, a country may 
challenge a restrictive measure even if it does not actually produce the product in question.  
67. Second, Australia tries to move the goal posts by focusing on the mechanisms of the 
measures, such as reducing the appeal of th e product etc., instead of the effectiveness of the 
measures on achieving its objective of reducing smoking and by further suggesting that the Panel 
can only examine the effects over time, i.e. in the next generation. Australia seeks to convince the 
Panel that speculative studies about the plain packaging measures ' possible effects on perceptions 
and intentions, coupled with abstract theories on human behaviour are as informative, or even 
more informative, than data showing that, after three years of actual  operation of the measures, 
smoking behaviour has not changed. Australia 's measures may have been enacted with the best of 
intentions, but the reality is that they have failed to produce any effect on decreasing smoking, 
and are not likely to do so today, in the near future, in the next generation, or in generations to 
come. The speculative studies and theories were simply wrong. Moreover, the Appellate Body has 
clarified that it is not so that a measure which is only intended to produce effects "over time " 
escapes scrutiny and does not need to be supported by positive evidence. Established WTO 
jurisprudence holds that even technical regulations intended to produce effects in the future must 
be shown to be "apt" to make a material contribution. This demonstr ation could consist of 
"quantitative projections in the future, or qualitative reasoning based on a set of hypotheses that 
are tested and supported by sufficient evidence ". Conjecture or mere speculation is therefore 
clearly insufficient.  
68. Third, Austra lia seeks refuge in the "safe haven " that Article 2.5 of the TBT Agreement 
potentially offers technical regulations adopted in accordance with international standards. 
Honduras notes that, in the four years that preceded Australia 's first written submissio n in this 
dispute, Australia never argued that the FCTC Guidelines constituted an international standard that 
must be used as the basis for Members ' technical regulations on tobacco products. In 2011, 
Australia notified its plain packaging measures under A rticle 2.9.2 of the TBT Agreement, the same WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 way that other WTO Members notified similar plain packaging measures. In so doing, Australia 
itself recognised that no relevant international standard exists in connection with plain packaging 
since Article 2.9.2  of the TBT Agreement is a type of notification made only whenever a relevant 
international standard does not exist. This shows that Australia and the other notifying Members 
are of the view that no relevant international standard exists for tobacco plain packaging. It is odd 
that Australia is now arguing that its plain packaging measures are ostensibly being applied in 
accordance with an "international standard ". 
69. Australia argues  that the Guidelines adopted by the FCTC 's Conference of the Parties ( "FCTC 
COP") are an "international standard " and that measures taken in accordance with this standard 
are thus deemed to be WTO -consistent. Honduras considers that the plain packaging measures do 
not satisfy the requirements of Article 2.5 of the TBT Agreement and, therefore, they do not 
benefit from the rebuttable presumption offered by this provision. First, the provisions of the FCTC 
Guidelines cited by Australia do not meet the definition of "standard " provided in Annex 1.2 of the 
TBT Agreement, which refers  to a document "for common and repeated use ". The FCTC Guidelines 
lack the necessary precision to be susceptible of common and repeated use. Each country wishing 
to implement these FCTC Guidelines must decide individually how to implement the various 
sugge stions concerning plain packaging. The lack of prescriptiveness of the FCTC Guidelines 
becomes clear when contrasted against standards issued by recognised standardizing bodies, such 
as ISO, an example of which is ISO standard 3394. Second, the FCTC Guidel ines are not 
"international " standards because the body that approved them, the FCTC COP, is not an 
international standardising body. More specifically, the FCTC COP is not an international 
standardising body since it lacks recognised standardisation activ ities. Article 23.5 of the FCTC 
indicates that the functions of the FCTC COP relate generally to promoting and facilitating the 
implementation of the FCTC, as well as other coordination activities. Nothing in Article 23.5 
indicates that the FCTC is respons ible for preparing and adopting international standards in 
connection with tobacco packaging.  
70. In sum, the FCTC Guidelines are not a "standard ", and the body that prepared the FCTC 
Guidelines – the FCTC COP – lacks recognised activities in standardisati on. According to the 
Appellate Body, an instrument that does not satisfy these two key requirements does not 
constitute a "relevant international standard ". The FCTC COP 's mandate does not include the 
development of new standards, as compared to other esta blished international standard -setting 
bodies like the CODEX or the ISO. In fact, the differences between these different entities ' 
objectives, role and functioning are so significant that it is almost impossible to compare them with 
the FCTC. Nothing in A rticles 23, 24 and 25 of the FCTC concerning the COP and the FCTC 
Secretariat suggests that a body was set up by the FCTC with the capacity to act as a 
standardising body for tobacco -control measures. Indeed, nowhere in the FCTC do the drafters 
contemplate  the development of tobacco product standards. Thus, by the terms of the FCTC, the 
COP does not engage in activities in standardisation.  Also in the context of Indonesia 's claim 
under Article 2.9 of the TBT Agreement relating to the United States ' ban on clove cigarettes, 
which was based on the COP Partial Guidelines to Article 9 and 10, the panel found that "the first 
condition set out in Article 2.9 of the TBT Agreement for the application of the obligations therein 
[i.e. the absence of a relevant intern ational standard] is fulfilled ". 
IV. POSITIVE EVIDENCE PR ESENTED BY HONDURAS CONFIRMS THAT THE PL AIN 
PACKAGING MEASURES H AVE NOT MADE A CONTR IBUTION TO REDUCING 
SMOKING AND ARE NOT CAPABLE OF MAKING AN Y CONTRIBUTION IN TH E 
FUTURE  
71. As the Appellate Body stated in Brazil – Retreated Tyres , a demonstration of a measure 's 
contribution can be made by resorting to evidence or data, pertaining to the past or the present, 
that establish that the measure at issue makes a material contribution to the protection of  public 
health. Australia has failed to present such evidence. In contrast, the evidence presented by 
Honduras and the other complainants demonstrates the lack of contribution of the measures to 
changing smoking behaviour. Certainly, the Appellate Body has  also said that this is not the only 
type of demonstration that could establish such a contribution, suggesting that certain 
(environmental) measures may take time to produce their effects. Accordingly, a panel might also 
conclude that a measure is "necess ary" on the basis of a demonstration that the measure is "apt" 
to produce a material contribution to the achievement of its objective. According to the Appellate 
Body, this demonstration could consist of "quantitative projections in the future, or qualitat ive WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 reasoning based on a set of hypotheses that are tested and supported by sufficient evidence ". 
Speculation does not suffice.  
72. Honduras presents both quantitative and qualitative analyses based on scientifically sound 
methodologies in the form of: (i)  post-implementation market and sales data as well as survey 
evidence; (ii) medical science; (iii) social science; (iv) a critique of the plain packaging literature 
relied on by Australia; (v) a critique of the lack of cigar evidence; and (vi) data on illi cit trade.  
73. As discussed below, Professor Klick conducted a unique longitudinal study of smoking 
behaviour before and after the introduction of plain packaging in Australia of a representative 
sample of Australian consumers and a counterfactual group of  consumers in New Zealand. In 
addition, at the request of Honduras, Professor Klick analysed tracking surveys organised by 
Australia and certain State agencies, including the National Tobacco Plain Packaging Tracking 
Survey ( "NTPPTS ") conducted by the Canc er Council Victoria with the support of the Australian 
Government. He also examined the results of the tobacco tracking survey conducted by Cancer 
Council New South Wales which tracks the effects of tobacco control measures in New South 
Wales, the most pop ulous State of Australia. Professor Klick examined wholesale and retail sales 
data from before and after the implementation of the plain packaging measures. All of the data 
point in the same direction that Australia 's plain packaging measures failed to cha nge smoking 
behaviour and did not lead to a reduction in smoking as intended. In addition, Honduras and the 
other complainants present a qualitative analysis of the scientific and medical evidence that shows 
that trademarks (and packaging) are not among th e drivers of smoking behaviour, and that 
prohibiting or restricting them will thus not contribute to Australia 's objective of reducing smoking 
prevalence. Quantitative analysis of the competition -distorting effects of Australia 's plain 
packaging measures f urther supports the conclusion that the measures are not apt to contribute to 
the reduction of smoking.  
A. TRACKING SURVEY ANAL YSES AS CORROBORATED  BY WHOLESALE AND RET AIL 
SALES DATA CONFIRM T HE LACK OF CONTRIBUT ION OF THE PLAIN PAC KAGING 
MEASURES  
74. Honduras considers  that the best available evidence of whether the plain packaging 
measures are contributing to their stated objective to reduce smoking prevalence to 10% by 2018 
consists of real world data following implementation of the measures in 2012. Pro fessor Klick finds, 
through his analyses, that the data  from across multiple varied sources provide consistent 
evidence that plain  packaging has not achieved Australia 's objective of reducing smoking.  
1. Longitudinal Survey/Market analysis comparing Austra lia and New Zealand before 
and after plain packaging was introduced shows no effect on smoking behaviour  
75. Professor Klick conducted a unique longitudinal study of the smoking behaviour before and 
after the introduction of plain packaging in Australia of  a representative sample of Australian 
consumers and a counterfactual group of consumers in New Zealand. The study was based on 
survey data collected by Roy Morgan Research, a consulting firm that also conducts survey work 
for the Australian Government, an d involved a large representative sample of consumers in 
Australia and New Zealand which were followed over 6 waves. The results of the survey are 
discussed in Professor Klick 's Survey/Market Report. The study showed that during the first 16 
months of thei r application, the plain packaging measures did not have any impact on consumers ' 
smoking behaviour. The study is the only longitudinal dataset available that has tested the actual 
impact of Australia 's plain packaging measures by comparing smoking behavio ur in Australia to 
smoking behaviour in a relevant comparator – New Zealand – over a period immediately preceding 
and immediately following the implementation of plain packaging in Australia. New Zealand 
provides the optimal control group because of the gr eat similarity with Australia in respect of 
smoking metrics, regulatory environment, and seasonality. The study by Professor Klick confirms 
that plain packaging has not contributed to the reduction of smoking in Australia. Professor Klick 's 
findings based on the survey responses is supported by his analysis of industry wholesale 
shipment data (technically referred to as Exchange of Sales ( "EOS") data) and retail sales data 
collected by well established companies like Nielsen and Aztec in Australia and New Z ealand. The 
survey data, wholesale data and retail sales data all tell the same story: there is no indication that 
smoking declined as a result of plain packaging in Australia given that the same or higher declines 
in smoking are found in New Zealand. Base d on these survey data and observed sales data, there 
is no evidence that plain packaging reduces smoking.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 76. In his Rebuttal Report and his Supplemental Rebuttal Report, Professor Klick disproves 
Australia 's critique of his unique longitudinal study. In particular, he shows that the results of the 
Survey/Market Report were not vitiated by a lack of a proper pre -period for the comparison, and 
that New Zealand is a proper counterfactual jurisdiction to Australia. Professor Klick shows through 
various contro ls and alternative modelling choices that the early roll -out of plain packaging in 
October -November 2012 did not affect his pre -period. In addition, he confirms that New Zealand 
consumers provide a proper comparison group because of the great similarity be tween New 
Zealand and Australia and, in particular, because the smoking rates in the two countries are highly 
correlated. Professor Klick controls for any changes in taxation in both jurisdictions by controlling 
for price. After all, if taxes have an effec t on consumption, it will be through their price effects. By 
controlling for price developments in both countries, Professor Klick eliminates the risk that the 
results are affected by changes in taxes in New Zealand introduced soon after plain packaging wa s 
implemented in Australia. Professor Klick also applies the Instrumental Variable technique to 
ensure that his analysis of the wholesale and retail market data is not undermined by the issue of 
endogeneity of price. He thus addresses all of the criticisms  lodged against his Survey/Market 
analysis by Australia and its experts. Professor Klick updates his analysis of the retail sales data 
and EOS data up to September 2015 and concludes that his findings stand. Professor Klick 
concludes that, even controlling  for the points raised by Australia 's experts, the analysis of the 
updated sales data confirms the conclusions in his original report: "Updated wholesale sales data 
and retail sales data point in the same direction and confirm, once again, the findings fro m the Roy 
Morgan longitudinal survey data presented in my Original Report, namely that plain packaging has 
failed to advance the public health goals that motivated its adoption … The facts are clear. It is not 
correct that fewer people are smoking or that people are smoking less as a result of the plain 
packaging measures ". 
2. Australia 's own National Tobacco Plain Packaging Tracking Survey shows the lack of 
effect of the measures on reducing smoking  
77. In his Supplemental Rebuttal Report Professor Klick a lso examines data from Australia 's 
national tracking survey, the NTPPTS. With funding by the Australian Department of Health, the 
NTPPTS was conducted by the Centre for Behavioral Research in Cancer at the request of the 
Cancer Council Victoria ( "CCV") to assess the effects of plain packaging in Australia. The survey 
entailed a continuous cross -sectional baseline survey of about 100 interviews per week conducted 
from 9 April 2012 to 30 March 2014. A follow -up survey of baseline participants then took place 
approximately four weeks after the initial survey, with the follow -up surveys conducted from 
7 May 2012 to 4 May 2014. The NTPPTS is not longitudinal in nature. That is, the survey does not 
follow the same group of people over a period of time. The NTPPTS "cross-sectional " approach 
interviews different people in a series of surveys conducted over time. First, considering smoking 
status, Professor Klick 's analyses find no statistically significant impact of plain packaging to 
reduce smoking status, and these  findings hold when Professor Klick varies his model in a number 
of ways. Second, considering smoking consumption, Professor Klick finds that plain packaging had 
no effect on reducing the number of cigarettes smoked per day when considering similar variabl es 
and analyses as mentioned for smoking status. Plain packaging did not reduce the number of 
cigarettes smoked per day by daily smokers or all smokers, or even when allowing for 
quitting/relapse (by including the responses of those stating that they curre ntly smoke 0 cigarettes 
per day). He thus finds that "there is no statistically significant reduction in any smoking 
indicator ". Australia 's own NTPPTS dataset confirms his previous conclusions about plain 
packaging, namely that the measures have had no im pact on reducing smoking or changing 
smoking behaviour as Australia intended.  
78. The NTPPTS data covered only current smokers and is thus incomplete. Therefore, Professor 
Klick analysed prevalence data from the New South Wales ( "NSW") Population Health Su rvey 
reflecting prevalence data until 2014 in Australia 's most populous State. Professor Klick analyses 
this dataset because Australia itself had referred to it as the relevant dataset to assess changes in 
smoking prevalence in New South Wales. The same co nclusion is drawn based on this dataset, 
namely that plain packaging has not been effective in reducing smoking.  
79. Professor Klick, in this Supplemental Rebuttal Report, also demonstrates that any claims 
based on the NTPPTS data relating to Australia 's three non -behavioural "specific mechanisms " that 
plain packaging is producing  its intended effects are unsubstantiated. Professor Klick reviews the 
relevant studies published in the special edition of the journal "Tobacco Control " dedicated to the 
NTPPTS re sults and shows that the favourable results are largely found through the authors ' WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
- B-22 - 
 
 "cherry -picking " the questions and data that suit  their goals. Professor Klick 's analysis of the data 
set related to these "mechanisms " shows that  the data do not support th e affirmative conclusions 
even regarding the impact of plain packaging  on the "mechanisms ". To illustrate that the authors 
have cherry -picked their favoured  results, Professor Klick points to other, closely related questions 
for each of Australia 's three  mechanisms to show that these survey data point in multiple 
directions and do not provide a clear  basis for the study 's authors to draw their unequivocal 
conclusions that the plain packaging measures are working.  Professor Klick finds that "the data 
and ind icators point in multiple directions but that they do not support any affirmative conclusion 
that plain packaging is systematically contributing to any meaningful change in the perceptions or 
intentions of smokers or recent quitters ". It is noteworthy that  Professor Klick 's conclusions – that 
there are no changes in the behavioural metrics – are also confirmed by Scollo et al., one of the 
Australian post -implementation studies based on the NTPPTS data. That study is the only study 
that even discusses data o n actual consumption. Interestingly – and revealingly – Australia never 
cites this study in its first written submission. The authors of that paper conclude the following 
regarding the impact of plain packaging in Australia: "Among daily cigarette smokers,  there was 
no change in consumption between pre -PP and the transition phase or PP year 1 period … Nor was 
any change detected when mean daily consumption was analysed among regular smokers … Mean 
daily consumption also did not change from the pre -PP to sub sequent two phases among current 
smokers … Furthermore consumption did not change from pre -PP to the subsequent two phases 
among current smokers of brands of any market segment ". Thus, the study  by Scollo et al. 
confirms that plain packaging did not affect  actual consumption of tobacco.  
3. The tobacco tracking survey conducted in Australia 's most populous State confirms 
that plain packaging did not lead to a reduction in smoking and failed to change 
smoking behaviour  
80. The New South Wales ' Cancer Institut e has conducted a continuous, cross -sectional tobacco 
tracking survey – the Cancer Institute Tobacco Tracking Survey ( "CITTS ") – of a representative 
sample of the population in the most populous State in Australia since 2006. This survey collects 
relevant data on actual smoking behaviours as well as other, less relevant data on indicators 
related to intentions and perceptions. Professor Klick 's Second Supplemental Rebuttal Report 
provides an analysis of the CITTS data. Professor Klick 's conclusions are the same as he drew from 
his analysis of the Australia -wide NTPPTS: the data does not show that smoking has decreased or 
quitting has increased since the introduction of plain packaging. With respect to direct data on 
actual smoking behaviour, Professor Klick analysed the smoking status and consumption levels of 
the survey participants. His analyses, when controlling for the relevant variables and considering 
either an October 2012 or a December 2012 implementation date, show that the data do not 
support the co nclusion that plain packaging has led to a decline in actual smoking. In addition, 
Professor Klick found that the non -behavioural indicators on intentions and perceptions point in 
multiple directions. Professor Klick finds that "[a] neutral and objective a nalysis is forced to 
acknowledge that there are a number of these soft metrics that go in either direction, and none of 
them provides credible evidence of a reduction in actual smoking behaviour in any event ". 
4. Australia 's criticism of the smoking -relate d conclusions drawn by Professor Klick are 
without merit  
81. Professor Klick responds to criticisms by Australia 's experts to various aspects of his 
analyses, including his analyses of the prevalence data from the NSW Population Health Survey 
and the data from the NTPPTS and the CITTS. Professor Klick shows that Australia 's criticisms are 
entirely unwarranted and unfounded as a matter of econometric practice and judgment, and that 
they are often at odds with points the Australian experts have made in the pr oceeding. For 
example, Australia asserts that his analysis of the survey data including Australia 's own NTPPTS 
and the CITTS do not permit conclusions to be drawn about smoking prevalence because these 
datasets do not reflect data of young smokers below th e age of 18. Professor Klick is of course well 
aware of this limitation. That is why he also analyses the NSW Population Health Survey which 
does reflect, as per Australia 's own acknowledgement, prevalence data covering also young 
smokers. In addition, the  actual sales data that Professor Klick examined to corroborate his 
conclusions also make no distinction based on the age of the consumer and can thus be assumed 
to accurately reflect the effects of the measures on initiation and quitting. Professor Klick also finds 
support for his conclusions in another dataset relied on by both Australia and the complainants, 
the Roy Morgan Single Source Survey ( "RMSS ") which provides individual survey data about 
smoking status (smoker v non -smoker) from January 2000 to J une 2015. Professor Klick finds that WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 the conclusion based upon the RMSS data is consistent with the conclusions drawn from all of the 
other available datasets, including the NSW Population Health Survey. Namely, there is no 
evidence that plain packaging le d to a systematic improvement in smoking outcomes.  
82. Finally, as Professor Klick points out, it is disconcerting to see that Australia is actually trying 
to minimise the clear behavioural results of the NTPPTS that it had itself developed simply because 
the results do not suit the argument. In addition, Australia has conducted a similar plain packaging 
tracking survey for youth, known as the "School -Based Surveys " but has refused to provide the 
results of those surveys for purposes of analysis by the Pane l and the complainants in this dispute. 
Australia 's complaint that the complainants have not provided evidence on the effect of the plain 
packaging measures on initiation and prevalence is therefore not only incorrect, as explained 
above, but it is also di singenuous and self -serving as Australia refused to make that evidence 
available for analysis which only it had in possession. That is telling of the weakness of Australia 's 
case. 
83. The analyses in all of Professor Klick 's reports is clear, namely that t here is no evidence that 
plain packaging has improved any actual smoking outcomes. Australia ignores the fact that this 
conclusion is amazingly robust across a wide variety of data sources, and it is robust to various 
modelling assumptions. Survey data as well as updated wholesale and retail sales data running 
until October 2015 corroborate that there is no evidence that plain packaging has led to a decline 
in smoking.  
5. Conclusion  
84. In conclusion, after three years, the plain packaging measures have not  had any positive 
effect on changing smoking behaviours and reducing smoking. Professor Klick 's analyses withstand 
all of the critique levelled at them, and the conclusion based on his unique longitudinal survey 
data, as well as on survey data collected by  Australia and certain of its States, which are also 
corroborated by retail and wholesale market data, remains robust to various modelling choices. 
Professor Klick concludes as follows: "[M]y analyses of all of the available data, confirm that actual 
smoki ng behavior in Australia has not declined following the introduction of plain packaging. This 
conclusion is the same regardless of whether these metrics are derived from self -reported smoking 
status in surveys, the NSW prevalence data, or market data. Furt her, the survey data from the 
NTPPTS regarding smoker perceptions and intentions do not indicate a systematic improvement, 
from a public health policy perspective , after plain packaging came into effect. Therefore, as 
shown by all of my earlier reports, da ta from across multiple varied sources provide consistent 
evidence that plain packaging has not achieved  Australia 's objective of reducing smoking and 
changing behaviors ". 
B. EXPERT ANALYSES BASE D ON THE KNOWN DRIVE RS OF SMOKING CONFIR M THAT 
PLAIN PACKAGIN G IS NOT APT TO CONT RIBUTE TO THE REDUCT ION OF 
SMOKING SINCE PACKAG ING AND TRADEMARKS A RE NOT DRIVING SMOKI NG 
BEHAVIOUR  
85. In addition to the facts relating to the first three years of application of the plain packaging 
measures, as discussed in the repor ts of Professor Klick, Honduras also presents expert analyses 
of the medical science regarding smoking initiation, cessation and relapse which confirm that 
trademarks and packaging are not the drivers of smoking. This qualitative evidence about the 
drivers  of smoking demonstrates that the plain packaging measures, which deal with trademarks 
and packaging, are not capable of contributing to reducing smoking in any meaningful manner 
because they do not address these drivers.  
86. With respect to initiation, Pr ofessor Steinberg addresses the science relating to adolescent 
behaviour and applies it to the plain packaging measures. He reviews the key factors that drive 
smoking initiation by youth – a form of risk -taking behaviour. He notes that these factors, which  
are different from those driving adult decision -making processes, include psychological 
characteristics, interpersonal influences and community context (including price and availability of 
tobacco products). In Professor Steinberg 's opinion, plain packagi ng cannot have any impact on 
the important causes leading to smoking initiation for youth and, therefore, cannot have any 
impact on the goal of reducing smoking by youth. Australia and its experts do not dispute the 
complex nature of the drivers of initiat ion. But Australia attempts to shoehorn product packaging WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
- B-24 - 
 
 into this list by referring vaguely to "comprehensive " models of the drivers of initiation. This is 
unwarranted and inconsistent with the well -established list of drivers of smoking behaviour, which  
does not include trademarks or packaging. In this context, Honduras notes that the risks and 
harmful effects of tobacco consumption are well -known in Australia by adults and youths alike. 
Australia seems to agree with this fact. Professor Steinberg notes that youth are well aware of the 
risks of smoking and that measures to raise awareness or knowledge are unnecessary and thus 
ineffective because there is no information deficit to overcome . 
87. With respect to cessation and relapse behaviours, Dr. Satel pr ovides her views on the 
complex drivers including "pharmacological, psychological, social, and environmental factors ", 
which Australia also does not contest. Dr. Satel finds that cessation and avoidance of relapse are 
promoted by motivation and commitment,  a supportive social environment and self -efficacy, but 
she finds no credible evidence that branding, logos or packaging impact smoking behaviours. 
Further, she shows that a cigarette or cigarette pack itself is a conditioned cue and can drive 
cravings to smoke whether sold in branded or plain packaging. These views are also supported by 
Professor Fischer in her expert report. In particular, Professor Fischer explains that "[a] tangled 
web of factors interact in a dynamic fashion to either promote or underm ine quitting or smoking 
cessation at any point in time … Branded tobacco  packaging, hypothesised  as a smoking -related 
cue that impedes quit attempts, promotes relapse,  and undermines cessation, has never been 
implicated in smoking -behaviour research as ass ociated  with any of these outcomes ". Plain 
packaging is not apt to increase cessation or to prevent relapse.  
88. This inaptitude of the plain packaging measures is confirmed by marketing experts such as 
Professor Steenkamp and Professor Winer. Both experts  conclude that packaging, as an aspect of 
the "P" of "product " in the Marketing Mix, in a mature, declining market does not drive or increase 
aggregate demand for the product. Dedicated advertising instruments are largely ineffective in 
increasing sales fo r primary or secondary demand. The necessary corollary is that, if the demand -
stimulating power of dedicated advertising media is already so small, the effect of a non -dedicated 
instrument, such as brand packaging, should be even smaller. The sales and sur vey data discussed 
above confirm the views of these marketing experts that, in the highly regulated Australian market 
where advertising is already prohibited, packaging and trademarks does not affect aggregate 
demand.  
C. AN ANALYSIS OF THE B EHAVIOURAL SCIE NCE RELIED ON BY AUS TRALIA AND 
ITS EXPERTS CONFIRMS  THAT THESE INTENTION -BASED THEORIES ARE O F 
LIMITED RELEVANCE, H AVE BEEN CONTRADICTE D BY THE FACTS, AND HAVE NOT 
BEEN PROPERLY TESTED  IN ANY OF THE STUDIE S DONE TO DATE  
89. Faced with the overwhelming evid ence that the plain packaging measures are having no 
positive effect whatsoever, Australia has taken the position that plain packaging will operate 
through a causal pathway that will have its effect "over time ", i.e. over a generation or more. Its 
behaviou ral theory is that the measures will, first, reduce the appeal of tobacco products, increase 
the noticeability of GHWs and the perceptions about the harm of smoking which in turn, second, 
will lead to a behavioural change of reducing smoking. Honduras cont ests Australia 's reliance on 
behavioural theories to justify its measures in the light of the facts on the record which show that 
three years after the measures were implemented, they have failed to change smoking behaviour 
as intended. It does not make se nse to speculate about the effects of a measure based on theories 
about how consumers will react, when actual data exist. It certainly makes no sense to refer to a 
theory for justifying measures when the facts actually prove the theory wrong or reveal that  the 
theory has been misapplied or misinterpreted. However, that is exactly what Australia is doing. 
Moreover, Honduras points out that also analyses by the U.S. Surgeon General confirm that it is 
inappropriate to rely on behavioural intentions at the expe nse of empirical and behavioural data. 
This demonstrates that intentional theories themselves are not sufficient to form the basis for 
policy decisions.  
90. In any case, Australia inappropriately relies on intentions - and appeal -based metrics to 
conjure a strained argument that plain packaging will one distant day have an effect on smoking 
behaviour, even though such behaviour is entirely absent today. Honduras, along with the 
Dominican Republic and Indonesia, consulted Professor Ajzen who is a leading beha vioural 
scientist that developed the Theory of Planned Behaviour ( "TPD"), which grew out of his earlier 
theory, the Theory of Reasoned Action ( "TRA"). Importantly, it is in large part based on this TRA 
and related theories that Australia has unsuccessfully  tried to justify its plain packaging measures.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
- B-25 - 
 91. Professor Ajzen concludes that Australia and its experts ' understanding of the role and 
relevance of behavioural science theories is flawed. He also finds that the tobacco -control 
researchers appear to mi sunderstand important aspects of the theories that invalidate their 
predictions of the effectiveness on the plain packaging measures to reduce smoking consumption 
and prevalence. Professor Ajzen notes that Australia posits a causal chain whereby its 
implem entation of plain packaging is designed to impact on three non -behavioural mechanisms 
which in turn are supposed to impact smoking behaviour. Thus, instead of conducting or relying on 
research that shows that plain packaging changes behaviour, Australia ar gues that the research 
shows plain packaging will impact the non -behavioural mechanisms and then attempts to rely on 
behavioural theories to "bridge  the evidentiary gap " between the mechanisms and the behaviour 
at issue. Australia points to the TRA and the  Affect Heuristic. However, as Professor Ajzen 
explains, this attempt is illegitimate and fails to meet the scientific standards of those theories.  
92. The fundamental  flaw with Australia 's presentation of the behavioural theories is that it 
relies on the theories to prove the link between the non -behavioural intentions, beliefs and 
attitudes, and the ultimate behaviour. This reliance is misplaced because only well -conducted 
empirical research can prove or disprove such a link. While the theories may genera te hypotheses, 
these hypotheses must be rigorously and empirically tested to determine their legitimacy. Further, 
given that smoking behaviour is an addictive behaviour, the research shows that in this context, 
even more than in other contexts, intentions cannot predict smoking behaviour effectively. 
Professor Ajzen notes that "no behaviour theory, including the Theories of Reasoned Action and 
Planned Behaviour, can establish or prove that non -behavioural mechanisms are causally linked to, 
as well as being good predictors of, any particular future behaviour. These propositions can only 
be confirmed by empirical research ". 
93. Professor Ajzen develops the same critique of Australia 's view of the attitude -behaviour 
relation. That is, Australia 's expert Profess or Fong simply states that there is "extensive " research 
connecting attitudes to behaviour, but he does not discuss any of it and fails to verify that any 
potential relation between the two concepts remains valid with respect to smoking behaviour. 
Professo r Ajzen states  that Professor Fong 's assertion "is belied by research on the attitude 
behaviour relation that goes back at least 80 years. Contrary to Professor Fong 's assertion, this 
longstanding body of research suggests that people 's attitudes toward a non-behavioural target 
(i.e. tobacco products) do not reliably predict their behaviour (i.e. smoking) with respect to the 
target. Consequently, the attitude -behaviour research would lead us to hypothesize that a change 
in tobacco packaging, even if it affe cts the appeal of tobacco products, is unlikely to change 
smoking  behaviour ". 
D. AN OBJECTIVE REVIEW OF THE SPECULATIVE S TUDIES TESTING PEOPL E'S 
RESPONSE TO PLAIN PA CKAGING SHOWS THAT T HESE STUDIES FAIL TO  
ADDRESS THE RELEVANT  BEHAVIOUR AND ARE ME THODOLOGI CALLY FLAWED  
94. Australia has consistently relied on a number of studies that were published prior to the 
adoption of the plain packaging measures to test people 's reaction to a possible plain packaging 
environment. The relevance of these studies, if any,  has been overtaken by subsequent data on 
the actual response by consumers to plain packaging in Australia that reveal an entirely different 
picture. In any case, already at the time the studies were published, some of the tobacco -control 
researchers thems elves acknowledged that the conclusions drawn in these studies about the 
positive contribution of plain packaging to changing smoking behaviour were "speculative " at best. 
Despite the limited relevance of these speculative studies to the dispute, Honduras presents expert 
evidence to show that these studies generally undertaken by the same set of tobacco -control 
researchers fail to provide a sound basis for Australia 's measures.  
95. In this respect, Honduras notes that the Panel 's task is to make an objectiv e assessment of 
the matter, including an assessment of the quantitative, qualitative and scientific evidence put 
before the Panel by the parties. The jurisprudence does not support the notion that as soon as a 
measure is based on a number of peer -reviewed studies not involving data from the actual 
operation of the measure, it can be considered as being based on scientific evidence. In this case, 
the real world data from three years of application of the measures demonstrate that the 
measures have not been e ffective and are not likely to ever be effective. In addition, Honduras 
considers that the Appellate Body found that "respectable scientific evidence " must have the 
"necessary scientific and methodological rigour to be considered reputable science ". The st andard 
set by the Appellate Body is a substantive one: does the evidence have the "necessary scientific WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
- B-26 - 
 
 and methodological rigour " to be considered reputable science and does the science warrant the 
particular measure? This test is not met simply by referr ing to the fact that studies speculating 
about the effect of a measure are peer -reviewed and published in a journal. That would in effect 
prevent any review by a panel of the "scientific " nature of certain evidence as it would simply have 
to accept any stu dy's conclusions as soon as it gets past peer -review and is published. With that 
substantive standard in mind, Honduras consulted a number of experts to examine the studies 
relied on by Australia.  
96. First, Professor Inman and his colleagues conducted an independent "peer review " of the 
studies that were previously published in dedicated health and tobacco control journals. The Peer 
Review Project was designed to emulate a peer -review process in a high -quality social science 
journal, examining whether the plain packaging studies relied on by Australia were of sufficient 
quality to be included in a such a journal. The original Peer Review Project report concluded that 
none of the plain packaging studies would be published in a high -quality journal because th ey 
would fail a rigorous peer review process. Based on their comprehensive review process, Professor 
Inman 's research concludes that "the plain packaging literature as a whole falls short of providing 
compelling evidence on the effect of plain packaging on  the demand for tobacco products ". Even 
though Australia 's experts themselves, such as Professor Fong, rely on research from the field of 
consumer behaviour to argue that plain packaging will be effective, Australia nevertheless criticises 
the Peer Review Project for applying criteria from research into consumer behaviour. In his 
rebuttal of the criticisms made by Australia 's experts, Professor Inman concludes that "Australia 's 
experts have largely failed to engage with the substance of the arguments put fo rward " and 
focused on minor issues.  
97. Second, Professor Kleijnen conducted a systematic analysis of the quality of this literature 
across four key aspects of validity in social science research (construct validity, internal validity, 
external validity, a nd conclusion validity). His research concludes that "there is not a single study 
outcome that has a 'low risk of bias ' on all four aspects of validity ". Australia 's experts failed to 
identify a single error in the systematic review 's assessment of the pla in packaging studies. 
Australia 's experts have not engaged in a methodical discussion of the results of the systematic 
review and the piecemeal responses that were given do not change the assessment that the 
evidence base regarding the potential impact of plain packaging on reducing smoking prevalence 
or tobacco consumption is unreliable and lacks credibility. It is noteworthy that in Australia 's own 
Post-Implementation Review, Australia did not discuss these "experimental " studies in the context 
of its ass essment of the impact of the plain packaging measures on public health but considered 
them merely in the introductory background section relating to the adoption of the measures. This 
confirms the lack of relevance of these pre -implementation studies.  
E. AN ANALYSIS OF THE PR OBLEM OF ILLICIT TOB ACCO TRADE IN AUSTRA LIA 
CONFIRMS THE LIKELIH OOD THAT PLAIN PACKA GING WILL FURTHER ST IMULATE 
ILLICIT TRADE IN AUS TRALIA  
98. Honduras points to the problem of illicit trade in tobacco products as a result of plain 
packaging. Honduras ' experts Professors Chaudhry, Murray and Zimmerman, as well as analysis 
by KPMG, reveal that illicit trade has become more of a problem in the plain packaging 
environment of Australia. As with the other post -implementation data, updated dat a on illicit trade 
from KPMG confirms that illicit trade has continued to worsen during the time that plain packaging 
has been in place.  
F. AUSTRALIA HAS FAILED  TO PRESENT ANY EVIDE NCE OF THE EFFECT OF  PLAIN 
PACKAGING ON CIGAR C ONSUMPTION  
99. Australia ado pted the plain packaging measures with practically no evidence on cigars. While 
Australia relied on certain studies concerning the supposed effectiveness of plain packs, these 
studies examined the effects on cigarette packaging, not cigar packaging. Unfort unately, the 
complete lack of evidence on cigars did not stop Australia from adopting the TPP Act  for all tobacco 
products. A few months after the adoption of the plain packaging measures, the Australian 
Government attempted to produce some evidence on cig ars. This attempt failed. As documented in 
the Peer Review Project, the GfK Bluemoon study, which consisted of interviews with eight cigar 
smokers, is beset by multiple methodological failings that render it entirely unreliable. In 2015, 
years after the ad option of the plain packaging measures, Australia made another attempt at 
generating ex post  evidence concerning the effects of plain packaging on cigar consumption. WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
- B-27 - 
 Australia 's efforts resulted in one additional study, conducted by Miller et al. (2015). T his ex-post 
evidence on cigars suffered from serious methodological flaws and limited sample sizes. For 
example, the study interview is based on a sample of only 10 regular premium smokers, and the 
two focus groups with occasional premium cigar and premium  cigarillo smokers have a sample of 
14 participants.  
100. As a cigar -producing country, Honduras is astonished that, in 2011, Australia adopted a 
highly -restrictive measure affecting cigars despite the absence of any evidentiary support for its 
application  to cigars. Australia 's efforts to obtain ex post  evidence are, as a matter of principle and 
in fact, inadequate. No country should be allowed to first adopt a trade -restrictive measure and 
then seek evidence to support it. In any event, both of Australia 's ex post  studies suffer from 
various flaws that deprive them of any evidentiary value. Consequently, Honduras reiterates that 
Australia has not demonstrated that plain packaging can make any contribution to the reduction of 
the prevalence of cigar smoking . 
G. AUSTRALIA IS UNABLE TO REBUT THE EMPIRIC AL AND THEORETICAL E VIDENCE 
PRESENTED BY HONDURA S AND THE OTHER COMP LAINANTS  
101. Faced with the empirical evidence that fails to show any impact of Australia 's measures on 
actual smoking behaviours, Australia a rgues that this evidence is not relevant because the 
measures are expected to produce results only "over time " and in combination with other 
measures. However, this argument is self -serving and not supported by any evidence. The 
speculative studies relied on by Australia purport to demonstrate an immediate positive 
contribution of plain packaging mainly in terms of perceptions, attitudes and intentions related to 
smoking behaviour. The "effects " of plain packaging presented in these studies took only the sh ort 
time of the survey to become apparent. Similarly, the study of calls to the Australian Quitline 
following the measures ' implementation, which is relied on by Australia, also suggested that there 
was an immediate effect of the measures, with those resea rchers concluding that Australia 's 
measures were "now supported by evidence of an immediate impact of this legislation ". The 
tobacco -control experts consulted by Professor Pechey in her study also predicted a decline of 1 -
3% in smoking rates in the first t wo years of the measure. Even though there were these 
purported immediate impacts, Australia now argues that the measures will only produce effects 
"over time " and that they will take a generation for the measures to have an effect. In addition to 
the fact  that this contradicts its objective of reducing smoking to 10% by 2018 (and thus not "over 
time" for the next generation), Australia does not support this speculation with any qualitative or 
quantitative evidence, as required.  
102. Indeed, in Brazil – Retreaded Tyres , the Appellate Body noted that it may prove difficult in 
the short term "to isolate the contribution to public health or environmental objectives of one 
specific measure from those attributable to the other measures that are part of the same 
comprehensive policy " and that "results obtained from certain actions – for instance, measures 
adopted in order to attenuate global warming and climate change or certain preventive actions to 
reduce the incidence of diseases that may manifest themselves onl y after a certain period of time 
– can only be evaluated with the benefit of time ". In this respect, however, it is important to recall 
that the Appellate Body in Brazil – Retreaded Tyres  found that the panel sought to verify a number 
of hypotheses on the basis of the evidence adduced by the parties and found them to be logically 
sound and supported by sufficient evidence. The above time -related considerations of the 
Appellate Body therefore were made to justify the panel 's mainly "qualitative " approach to 
examining the contribution of the measure, not to absolve the parties from providing evidence or 
allowing parties to disregard the actual empirical evidence of the impact of a measure by pointing 
to abstract general theories. As noted before, the last sent ence of this oft -quoted paragraph 
makes clear that a demonstration of a likely future contribution must still be based on  
"quantitative projections in the future, or qualitative reasoning based on a set of hypotheses that 
are tested and supported by suffic ient evidence ". 
103. The actual operation of the measures and its actual impact are still the preferred evidence to 
consider if such evidence exists and if the measures have been in place for a reasonable period of 
time. In fact, in its Technical Report ac companying the NTPPTS, which covered a period until May 
2014, Australia referred to this two -year period that passed as a "medium term " impact. The 
nature, quantity and quality of evidence existing at the time that the analysis is made determine 
what evide nce the Panel must rely on. In this case, reliable and probative empirical evidence of WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 the lack of actual impact of the measures three years after their introduction is available and must 
be given primacy in the analysis.  
104. Furthermore,it is widely acce pted in the tobacco -control context that what is known about 
"shock communications " is that they sometimes have an immediate, short -term effect which is 
difficult to sustain in the long term. In fact, researchers, tobacco -control experts and the FCTC 
itself all agree that health communications such as GHWs are subject to "wear out " after repeated 
exposures and have their largest impact in the early days of their release in a jurisdiction. 
Australia 's plain packaging measures have now been in place for three  years, and if they were 
going to have some relevant effect, this change in behaviour would have been visible by now. 
However, there is no evidence of such an effect. Indeed there is already evidence of an expected 
wear-out effect of plain packaging in Aus tralia, which entirely undermines Australia 's claim that the 
measures will have a long -term impact. Similarly, the evidence that Australia cites regarding 
increased calls to the Australian Quitline following the implementation of plain packaging shows 
that the effect was only temporary and that the number of calls returned to the level prior to the 
introduction of plain packaging within six months. Accordingly, there is no basis for believing that 
these measures, which have not had even a short -term effect on smoking behaviours, would have 
a long -term effect.  
105. Finally, the fact that the plain packaging measures do not deal with the drivers of smoking 
further demonstrates that there is no credible basis for expecting that the measures will be able to 
have any long -term effect. As explained by Honduras by reference to academic articles and reports 
as well as the expert reports of, among others, Professor Stein berg, Professor Fischer and 
Dr. Satel, the multi -causal model that is understood to drive smoking b ehaviour does not include 
trademarks or packaging as a reason why people start smoking, continue to smoke or relapse 
after a failed quit attempt. As trademarks and packaging are not even factors, let alone genuine 
and substantial factors, of smoking initia tion and continued consumption of tobacco products, 
there is no basis to assume that Australia 's plain packaging measures will reduce smoking in either 
the short or the long term.  
106. In sum, Australia has not presented any "quantitative projections " and has not developed 
any "qualitative reasoning based on a set of hypotheses that are tested and supported by 
sufficient evidence produced " in support of its assertion that the plain packaging measures will 
produce effects over time. Australia simply urges th e Panel to accept the speculative assertion that 
"over time " smoking will go down as a result of the measures. However, the Panel 's conclusion 
should not be based on speculation and conjecture but on positive evidence that is objectively 
assessed. Australi a is right that over time smoking is expected to go down, as it has been going 
down for the last 40 years. That is the trend that even Australia and its experts have 
acknowledged exists. For example, Gartner et al., in research funded by the Australian Nat ional 
Health and Medical Research Council and published in the Tobacco Control journal, forecast that 
under a status quo  scenario where no new tobacco -control measures were implemented and in 
which smoking initiation and cessation rates remained at 2007 le vels (which the authors thought 
for smoking initiation rates may be overly pessimistic), smoking prevalence would decline to 
18.3% in 2010 and 14.1% in 2020. A failure to account for this pre -existing trend will falsely bias 
any estimation of the effects o f new tobacco -control measures on smoking metrics. Therefore, the 
fact that smoking prevalence has gone down does not say anything about the relationship between 
the reduction in smoking prevalence and plain packaging. The relevant question is whether this  
trade -restrictive measure actually contributes, or is apt to contribute, to the further reduction of 
smoking, or rather is an unnecessary element of the suite of measures and thus an unjustifiable 
encumbrance or an unnecessary obstacle to trade.  
107. On the basis of the evidence before the Panel, it is clear that there is no such contributing 
relationship as the trend of the decline in smoking trend is simply continuing without any 
additional contribution from the plain packaging measures.  
H. AUSTRALIA 'S POST-IMPLEMENTATION REVIE W FAILS TO PRESENT E VIDENCE OF 
THE EFFECTIVENESS OF  THE PLAIN PACKAGING MEASURES  
108. More than three years after it implemented the plain packaging measures, and after having 
failed to conduct the required pre -implementation impact  assessment, Australia released its 
Post-Implementation Review ( "PIR") of the plain packaging measures on 26 February 2016.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 109. The PIR fails to objectively examine the many data sources that Australia had at its disposal 
for assessing whether plain packa ging contributed to the objective of reducing smoking. The PIR 
uncritically summarises post -implementation studies that were published back in March  2015. The 
PIR does not objectively examine these studies ' findings in light of Australia 's objective to red uce 
smoking. The PIR ignores the relevant information on the effects of plain packaging on smoking 
behaviour that were revealed, among others, through the NTPPTS that it helped to organise.  
110. The only piece of "new" evidence relating to the impact of th e measures on health, consists 
of an expert report by Dr. Chipty, the same economic consultant that supported Australia in the 
context of this WTO dispute. It is not credible that the same economic consultant hired to support 
the Australian Government 's litigation objectives can provide an objective analysis of the 
effectiveness of the measures to Australia 's Department of Health. In addition, Dr. Chipty 's expert 
report for the PIR is simply a compilation of the RMSS -related sections of her WTO reports. 
Although the Australian Government is very well aware of the many different ways in which the 
RMSS data has been interpreted by the complainants ' experts and of  their critical comments of 
Dr. Chipty 's approach, the PIR acts as if this debate never took place.  The Department of Health is 
part of the Australian Government and could have been expected to critically review the expert 
report of Dr. Chipty taking some of these alternative readings into consideration. It did not do so. 
Nor did it seek to put the clai ms of Dr. Chipty based on this one dataset in the context of other 
datasets supporting contrary conclusions.  
111. In sum, Honduras considers that the this long -awaited PIR only serves to highlights the 
weakness of Australia 's evidence base for tobacco plai n packaging as it uses the same avoidance 
tactics relied upon by Australia in the context of this WTO dispute. The PIR focuses on whether 
plain packaging achieves the "mechanisms " rather than on whether plain packaging achieves the 
acknowledged objective o f reducing smoking. Unfortunately, the PIR does not attempt to conduct 
a critical analysis of the information available so as to assess objectively the effectiveness of plain 
packaging. The PIR was intended to assess "the effectiveness and efficiency of th e tobacco plain 
packaging measures to meet its objective [i.e., of improving public health, by ultimately reducing 
smoking] in order to determine if it is an appropriate regulatory mechanism ". Unfortunately, the 
PIR does not provide a robust assessment of this important question. Instead, it avoids addressing 
this issue head -on. Where it does attempt to address the issue, its conclusions are equivocal. It 
rightly notes that the declines in national smoking prevalence cannot be "entirely attributable to 
plain packaging given the range of tobacco control measures in place in Australia ". And even the 
"new" expert analysis by Dr. Chipty on which Australia relies is not actually specific to plain 
packaging as it allegedly "shows that the 2012 packaging changes (p lain packaging combined with 
GHWs) have contributed to declines in smoking prevalence, even at this early time after 
implementation ". Honduras questions the accuracy of the decline found to exist by Dr. Chipty due 
to methodological concerns about the analy sis, which is similar to the analysis presented by 
Dr. Chipty and rebutted by Honduras and the other complainants in the WTO dispute. 
Nevertheless, even assuming this figure is correct ( quod non ), the conclusion is that the decline is 
attributable to the "packaging changes " as a combination of plain packaging and the GHWs. The 
PIR does not answer the relevant question about what is the contribution of plain packaging alone 
to the decline in smoking prevalence.  
I. CONCLUSION  
112. Reliable and probative data of three years of application of the Australian tobacco plain 
packaging measures exists . It shows that the measures have not been effective. Analysis of the 
actual sales and consumption data and the tracking survey data confirm this lack of contribution of  
the plain packaging measures. These are the facts that Australia would like the Panel to ignore. 
Honduras considers that there is no basis in law or in the facts of this case to justify Australia 's 
suggestion to disregard this evidence in favour of specul ative theories. Australia does not present  
any empirical data of its own to show that the plain packaging measures are contributing to 
reducing smoking prevalence or changing smoking behaviour. It has failed to rebut the probative 
evidence presented by Hon duras and the complainants that demonstrated clearly that the 
measures have failed.  
113. Honduras ' evidence demonstrates that the plain packaging measures do not make a 
contribution to Australia 's objective. Honduras ' evidence approach is in line with esta blished WTO 
jurisprudence and does not jeopardise a Member 's freedom to regulate to protect health. Faced 
with this overwhelming evidence, Australia has resorted to the argument that more time is needed WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 to see an impact. However, this is an inadequate resp onse. Studies that Australia  has relied upon 
in these proceedings suggest that plain packaging would have an immediate shock effect. That 
shock effect was supposed to lead to more quit attempts and less smoking initiation. Clearly this 
has not occurred. In  the light of this lack of an immediate effect, Australia is now arguing that the 
effect of the plain packaging measures will only be manifested in the long -term. This argument not 
only has no factual basis, it also flies in the face of common sense. A mor e likely outcome, which is 
consistent with what experts have claimed in respect of other tobacco -control policies, is that plain 
packaging would be most effective (if effective at all) immediately after its introduction. It is to be 
expected that any impac t that a policy intervention like plain packaging might have would 
wear-out over time as a result of consumers ' repeated exposure to the new pack. Indeed, as noted 
above, researchers are already observing this expected wear -out effect of the plain packagin g 
measures in Australia. Accordingly, in light of the evidence on the lack of impact of plain packaging 
reducing actual tobacco consumption to date and of this wear -out effect, Australia 's assertion that 
plain packaging will have effects on smoking behavio ur at some uncertain point in the future when 
it has not had any effect in the first three years that it has been in place is entirely speculative and 
untenable.  
114. For all of the above reasons, Honduras requests the Panel to find that Australia 's plain 
packaging measures are inconsistent with the following provisions of the TRIPS Agreement:  
Article 20 of the TRIPS Agreement because the plain packaging measures are special 
requirements that unjustifiably encumber the use of tobacco -related trademarks in  the 
course of trade;  
Article 16.1 of the TRIPS Agreement because these measures prevent the owner of a 
registered tobacco -related trademark from enjoying the exclusive rights conferred by 
the trademark – namely the right to enjoin unauthorised use of th e trademark by third 
parties – and are not justified under Article 17 of the TRIPS Agreement;  
Articles 15.4 of the TRIPS Agreement because the nature of the goods to which a 
trademark is to be applied – i.e., tobacco products – forms an obstacle to the 
registration of inherently non -distinctive trademarks in Australia;  
Article 2.1 of the TRIPS Agreement, which incorporates provisions of the Paris 
Convention, in particular Article 6 quinquies  of the Paris Convention, because a 
trademark duly registered in  the country of origin outside Australia is not protected "as 
is" – i.e., in its original format; and Article 10 bis of the Paris Convention, because: (a) 
the plain packaging measures give rise to a situation of "unfair competition " by ex ante  
and systemati cally skewing the conditions of competition to the detriment of high -end 
products and producers and to the advantage of lower -end products and producers; 
and (b) the plain packaging measures require producers to make "indications or 
allegations the use of which in the course of trade is liable to mislead the public as to 
the nature, the manufacturing process, the characteristics, the suitability for their 
purpose, or the quantity, of the goods "; 
Article 24.3 of the TRIPS Agreement because the plain packag ing measures diminish 
the protection afforded to GIs that existed in Australia immediately prior to 1 January 
1995; and  
Article 22.2(b) of the TRIPS Agreement because Australia fails to provide the legal 
means for interested parties to prevent use, with respect to GIs, constituting an act of 
unfair competition under Article 10 bis(3)(iii) of the Paris Convention.  
115. Australia 's plain packaging measures are also inconsistent with Article 2.2 of the TBT 
Agreement as they are more trade -restrictive than nec essary to fulfil Australia 's legitimate 
objective of reducing smoking prevalence, taking account of the risks of non -fulfilment.  
116. Honduras requests the Panel to recommend, in accordance with Article 19.1 of the DSU, that 
the DSB request Australia to br ing the measures at issue into conformity with the 
TRIPS  Agreement and the TBT Agreement.WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 ANNEX B -2 
INTEGRATED EXECUTIVE  SUMMARY OF THE ARGUM ENTS OF THE DOMINICAN REPUBLIC  
I. INTRODUCTION  
1. More than 3 years ago, on 1 December 2012, Australia implemented sweeping measures 
to eliminate differentiation among tobacco products by banning all design features (including those 
of trademarks and geographical indications ( "GIs")) on tobacco retail packaging and the tobacco 
products themselves.  Australia claimed th at these features induce people to smoke, and that by 
banning them, smoking would reduce in Australia.  
2. Over the course of these proceedings, the Dominican Republic (the "DR") and its experts 
have shown that this premise is fundamentally flawed. The tot ality of evidence, ranging from post -
implementation to predictive evidence, shows that these plain packaging ( "PP") measures do not, 
and will not, contribute to their objective of reducing smoking in Australia. The measures serve 
only to deny competitive o pportunities owed to Australia 's trading partners and undermine the 
system of international trade that Australia has pledged to uphold because of its 
WTO membership.  
3. Many developing countries resisted – but ultimately accepted – the legal protections f or 
intellectual property ( "IP") that developed nations insisted upon in the Uruguay Round 
negotiations, skeptical of the benefits that IP rights could bring to their economies.   Nonetheless, 
now that the DR has transformed itself from an exporter of unproc essed tobacco leaf into the 
world 's leading producer and exporter of premium branded cigars, the protection of trademarks 
and GIs has taken on considerable importance to its exports. Yet, through the PP measures, 
Australia effectively abandons the rules th at it and other developed nations insisted upon. The PP 
measures seek, by legislative design, to denude trademarks of their basic functions and to 
eliminate tobacco -related GIs, rendering meaningless the trademark and GI protections contained 
in the TRIPS Agreement , without public health benefit.  
4. The DR fully supports a WTO Member 's right to take effective public health measures.   In 
the present proceedings, the DR has shown that Australia could replace the ineffective 
PP measures by tobacco control mea sures that are both effective and consistent with Australia 's 
obligations under the TRIPS Agreement  and the TBT Agreement .  
II. THE LEGAL CLAIMS AND  ARGUMENTS  
A. Legal Claims under the TRIPS Agreement   
1. The PP measures are inconsistent with Article 15.41 
5. Article 15.4 of the TRIPS Agreement  provides that "[t]he nature of the goods or services to 
which a trademark is to be applied shall in no case form an obstacle to registration of the 
trademark ".  Thus, to the extent that a WTO Member imposes obstacles  or impediments to 
registration of a trademark due to the essential quality or constitution of the good or service with 
which a sign is linked, it violates Article 15.4.    
6. Under the PP measures, the use of all signs on tobacco products is prohibited or  greatly 
restricted.  In this situation, there is no opportunity for a non -inherently distinctive sign for 
tobacco products to gain distinctiveness through use and, consequently, no possibility of 
registering such a sign as a trademark for tobacco products .  The impediment to registering such 
signs as trademarks in Australia is due to the nature of the products with which the sign is linked, 
i.e., tobacco products.  This violates Article 15.4.  
7. Australia errs when it asserts that non -inherently distincti ve signs are not "trademarks ", 
and therefore that such signs are not covered by the scope of Article 15.4.  In fact, Article 15.1 
                                                
1 See DR's FWS, Section VI.E; DR 's SWS, Section III.A; DR 's response to PQs 172, 195; DR 's comments 
on AUS ' response to PQ 172.  WT/DS435/R/Add.1 • WT/DS441/R/ Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 defines a "trademark " as a sign that must be "capable  of distinguishing the goods or services of 
one undertaking from those of  other undertakings ",2 and Australia 's argument impermissibly reads 
the term "capable " out of that definition.  Article 6 quinquies (B) of the Paris Convention  provides 
relevant context, clarifying that the term "trademark " encompasses signs that are not inh erently 
distinctive and that have not acquired distinctiveness through use.  
8. Australia argues that, if accepted, the DR 's interpretation of Article 15.4 would require that 
Members guarantee the right to sell and advertise products in their territory, reg ardless of the 
nature of those products.   This is incorrect.  The DR has explained that restrictions on the 
availability of, or trade in, a good or service are disciplined by, inter alia , the GATT 1994 or the 
GATS, not the trademark provisions of the TRIPS Agreement .  
2. The PP measures are inconsistent with Article 16.13 
9. Article 16.1 of the TRIPS Agreement  requires that WTO Members provide registered 
trademark owners: (i) the exclusive right to prevent all (ii) unauthorized use (iii) in the course of 
trade of (iv) identical or similar signs, (v) for goods or services that are identical or similar to those 
in respect of which the trademark is registered, (vi) where such use would result in a likelihood of 
confusion.    
10. By prohibiting or restricting t he use of trademarks for tobacco products, the PP measures 
diminish or eliminate, depending on the circumstances, the distinctiveness and recognition of such 
trademarks.  This breaks the connection for consumers between the trademark and the product for 
which it was registered, rendering it practically impossible for a trademark owner to demonstrate 
that unauthorized use of an identical or similar mark on similar goods causes a likelihood of 
confusion.  Consequently, the trademark owner 's ability to exercis e the exclusive rights 
guaranteed under Article 16.1 is diminished, or even eliminated, as a result of the PP measures.   
11. Australia responds by mischaracterizing the DR 's argument as asserting that Article 16.1 
requires Members to guarantee a "right to  use" trademarks.4  More generally, Australia 's standard 
response to the DR 's claims under the TRIPS Agreement  is that such claims are based on the 
proposition that the TRIPS Agreement  affords a "right to use " trademarks (and GIs).  Australia 
thereby creat es a "straw man " that it proceeds to knock down.  The DR has never asserted that 
the TRIPS Agreement  grants a "right" of use.  Rather, the DR, like most third parties, understands 
that "use" permeates the TRIPS Agreement  provisions relating to trademark an d GI protection.  It 
is uncontested that the basic function of a trademark is to distinguish goods and services in the 
course of trade.  Fulfillment of this basic function creates competitive opportunities for goods and 
services, and is the very purpose of  international trademark protection.  Unless a trademark is 
used on the goods and services in the course of trade, it simply cannot fulfill its basic function.  
12. In focusing wrongly on a "right to use " argument, Australia fails to engage substantively 
with the DR 's actual argument, which is concerned with the inability to enforce  the trademark 
rights protected by Article 16.1.  
3. The PP measures are inconsistent with Article 16.35   
13. In its capacity as a third party in DS458 and DS467, the DR has expla ined that to acquire 
and maintain the status of a mark as "well-known ", and therefore to enjoy the additional 
protections of Article 16.3 of the TRIPS Agreement , consumers must know and recognize the 
mark.   
14. The PP measures violate Article 16.3, becaus e (i) they remove the "negative rights " that 
were previously accorded to marks that achieved well -known status ( i.e., rights that go above and 
beyond those accorded under Article 16.1) prior to the imposition of PP; and (ii) they render it 
impossible for a ny other registered trademarks on tobacco products to acquire that status going 
                                                
2 Emphasis added.  
3 See DR's FWS, Section VI.F; DR 's SWS, Section III.B; DR 's SCS, para. 21; DR 's response to PQs 29, 
30, 32, 94, 95, 96, 172; DR 's comments on AUS ' response to PQs 172 and 185.  
4 See AUS' FWS, para. 315.  
5 See DR's FWS, section VI.G, DR 's SWS, Section III.C; D R's SCS, para. 21; DR 's response to PQ 31; 
DR's comments on AUS ' response to PQ 172.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
- B-33 - 
 forward, and to thereby exercise the rights accorded by Article  16.3.  Thus, because of the 
PP measures, trademarks cannot acquire and maintain the level of knowledge critical to 
"well-known " status.   
4. The PP measures are inconsistent with Article 10 bis of the Paris Convention6  
15. The obligations in Article 10 bis of the Paris Convention  are incorporated into the 
TRIPS  Agreement  through Article 2.1.  Article 10 bis(1) establi shes a general obligation to ensure 
effective protection against unfair competition.  In turn, Article 10 bis(3) requires Members to 
prohibit three particular types of private acts of unfair competition, in particular, under 
Article  10bis(3)(3), "indication s or allegations the use of which in the course of trade is liable to 
mislead the public as to the nature, the manufacturing process, the characteristics, the suitability 
for their purpose, or the quantity, of the goods ".  
16. The PP measures require compe titors to present their tobacco products in a uniform 
manner that prevents differentiation, and is intentionally meant to give the  misleading impression 
that all brands are the same, and that each is "the least appealing " and the "lowest quality ".  In 
reality, there are significant variations in the quality and characteristics of tobacco used in different 
cigar and cigarette brands, and, for cigars in particular, between hand - and factory -made 
products.   Indeed, the DR 's successful development of a premium  cigar industry is premised on 
the existence of such differences in quality, as recognized by both consumers and experts.    
17. Thus, the PP measures compel private acts that are liable to mislead consumers as to the 
nature, the manufacturing process, and  the characteristics of tobacco products, in violation of 
Article 10 bis(3)(3).  Thus, rather than preventing unfair competition, Australia is mandating it,.  
The DR has further shown that no other Australian measure can be used to cure the acts of unfair 
competition compelled by the PP Act .   
18. In response to Australia 's arguments, the DR has clarified that it does not contend that the 
PP measures are themselves  "acts" of unfair competition.  Rather, the DR has explained how, as a 
result of  the PP measure s, Australia mandates private acts  of unfair competition in the 
presentation  of tobacco products to consumers and, thereby, fails to assure effective protection 
against such unfair competition.  Moreover, the DR has explained that, under Article 10 bis(1) and 
(3), the intention of the commercial actor is not relevant to whether its act involves unfair 
competition, and Australia 's contention to the contrary is erroneous.   
19. With particular respect to Article 10 bis(3)(3), and in response to Australia 's erro neously 
narrow interpretation of the phrase "in the course of trade ", the DR has demonstrated that this 
phrase refers to commercial activities generally, rather than to a period of time that culminates at 
the point of sale of an individual product to the c onsumer.  
5. The PP measures are inconsistent with Article 22.2(b)7  
20. Article 22.2(b) of the TRIPS Agreement  disciplines acts of unfair competition, within the 
meaning of Article 10 bis of the Paris Convention , with respect to GIs, and establishes an obli gation 
to provide legal means for interested parties to prevent such acts.  Acts of unfair competition 
include acts that di minish consumers' understanding  of the qualities, reputation, or other 
characteristics expected from a good with a particular origin.   Article 22.2(b) covers uses of any 
types of indications, designations, or presentations.  
21. As a result of the PP measures, producers are unable to signal the geographical origin of 
the product in a way that links the origin with the qualities of the pr oduct, thereby limiting 
consumer information.  Moreover, the compulsory presentation of cigars without GIs serves to 
mislead consumers.  Consumers generally will be led to believe erroneously that the geographical 
origin of the product makes no difference to the quality or characteristics of the products.   
                                                
6 See DR's FWS, Section VI.I; DR 's SWS, Section III.E; DR 's SCS, para. 22; DR response to PQs 15, 16, 
17, 18, 19, 20, 22, 177; DR 's comments on AUS ' response to PQ 185.   
7 See DR's FWS, Section VI.J; DR 's SWS, Section III.F; DR 's response to PQ 44, 45, 47, 49, 50, 54, 87, 
174, 177, 178; DR 's comments on AUS ' response to PQ 175.  WT/DS435/R/Add.1 • WT/DS441/R/ Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 22. Under the PP measures, premium Dominican and Cuban cigar makers who meet their local 
requirements concerning use of the "Cigarro Dominicano " or "Habanos " GIs are limited in Australia 
to simply identi fying their products as having been manufactured in the DR or Cuba.  This is the 
same manner in which every  cigar manufactured in the DR or Cuba is identified as a product of 
that country, regardless of quality or other characteristics .  Thus, by requiring  all cigar producers 
to identify their products with respect only to the country of manufacture, and not the additional 
elements associated with GIs, the PP measures mandate the use of indications that are, inter alia , 
liable to mislead as to the different  characteristics of different products coming from the same 
country.  
23. In sum, through the mandatory use of plain packaging and the prohibition on use of GIs, 
competitors are compelled to use "indications or allegations ... which in the course of trade [are] 
liable to mislead the public as to the nature ... [or] characteristics " of the tobacco products, within 
the meaning of Article 10 bis(3)(3) of the Paris Convention .  As such, in violation of Article 22.2(b) 
of the TRIPS Agreement , Australia fails to "provide the legal means for interested parties " to 
prevent uses of designations or presentations on packaging that constitute such an act of unfair 
competition.   
6. The PP measures are inconsistent with Article 24.38  
24. Article 24.3 of the TRIPS Agreeme nt provides that "[i]n implementing this Section, a 
Member shall not diminish the protection of geographical indications that existed in that Member 
immediately prior to the date of entry into force of the WTO Agreement ", i.e., 1 January 1995 for 
Australia .  A Member 's obligations under Article 24.3 apply to the actions it takes to give effect to 
Articles 22 to 24 of the TRIPS Agreement , as well as any acts or omissions by which a Member 
fails to do so, wholly or partially.  
25. Article 24.3 is a standstill  provision with respect to the system of protection of GIs that 
existed at the relevant time, as confirmed by the Spanish and French versions.  Footnote 3 of the 
TRIPS Agreement  provides context clarifying that the word "protection " includes "matters affec ting 
the acquisition, scope, maintenance and enforcement of intellectual property rights ".  Thus, the 
relevant system of "protection " includes, where applicable in a given Member prior to 1995, the 
ability of indications to become GIs (i.e., acquisition), and to maintain and enforce their GI status.  
26. For these reasons, Australia 's contention that Article 24.3 grandfathers only individual GIs , 
rather than a system of GI protection, is inconsistent with the text of the provision and the 
relevant context.  Moreover, Australia 's interpretation would have the absurd effect of benefitting 
GIs from developed countries, to the disadvantage of developing country GIs.  That is because, in 
1995, developed countries made greater use of GIs than developing countries.   Establishing such 
discrimination against GIs from developing countries cannot have been the intent of the drafters.  
27. By allowing use of GIs, within the meaning of Article 22.1, on tobacco products prior to 
1995, Australia provided a level of protectio n that allowed for indications to acquire, maintain and 
ultimately enforce, their status as a GI.  However, through the PP measures, Australia severely 
diminished such protection, since interested parties are no longer able to acquire, maintain, or 
enforce  their status as GIs as they were before.  Thus, the PP measures violate Article 24.3.  
7. The PP measures are inconsistent with Article 209  
28. Article 20 of the  TRIPS Agreement  protects "[t]he use of a trademark in the course of 
trade " against "unjustifi able" encumbrances by "special requirements ".  In disciplining government 
action that encumbers trademark use, Article 20 recognizes "use" as essential to a trademark 's 
ability to fulfill its basic function of distinguishing goods and services in commerce  in terms of their 
quality, characteristics, and reputation, and ensures the treaty 's object and purpose of protecting 
trademarks.  
                                                
8 See DR's FWS, Section VI.K; DR 's SWS, Section III.G; DR 's response to PQs 43, 44, 48, 51, 113,  179, 
180, 181.  
9 See DR's FWS, Section VI.H; DR 's SWS, Section III.D; DR 's responses to PQs 38, 39, 99, 167, 169; 
DR's comments on AUS ' responses to PQs 166, 170; DR 's FOS, paras. 9-11; DR's SOS, paras. 6-11. WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 a. The use of trademarks is "encumbered by special requirements " imposed under 
the PP measures10  
29. Article 20 applies to me asures that "encumber[] by special requirements ".  A "special 
requirement " is a condition mandated by a government (the "requirement ") that is "unusual " or 
"out of the ordinary " ("special "), either because:  it prescribes "use" of a trademark in a manner 
that departs from the usual treatment of a trademark; or it applies to trademarks used in 
connection with a particular good or service;  or both.11  "Special requirements " directly regulate 
the use of a trademark itself, and are to be distinguished from requ irements that incidentally  affect 
the use of trademarks, through, for instance, the regulation of a good or a service bearing a 
trademark.12 
30. The verb "encumber " means "hamper ... burden ", to "act as a ... restraint ", or to 
"obstruct ",13 and refers to t he effect  a "special requirement " has on "[t]he use of a trademark ".   
Encumbrances must therefore have the effect of hampering or obstructing the ability to use a 
trademark as registered (or, if not registered, as the owner would otherwise use it).  If a "special 
requirement " has the effect of "encumber[ing] " trademark use, it must be justifiable.   
31. Although the parties agree on the meaning of these words, disagreement remains on 
whether Article 20 covers (i) only certain encumbrances on trademark use and (ii) "prohibitions " 
on use.  
32. First, Australia submits that Article 20 applies only to certain encumbrances on the use of 
trademarks, namely, those that prevent the commercial source of a good or service from being 
distinguished.  For Australia, sinc e only word marks are "necessary "14 to distinguish commercial 
source, the use of trademark design features as part of figurative and composite marks is 
effectively excluded from Article 20.  Australia contends that the use of trademark design features 
is not needed to distinguish the commercial source.  Contrary to Australia 's position, it is well 
established, including in Australia law, that trademarks may differentiate the commercial source of 
goods and services in terms of quality, characteristics, and r eputation.  Trademark design features 
are expressly included as part of the definition of a trademark under Article 15.1, and are, hence, 
regarded as literally integral to the differentiating function of trademarks.  Under Article 20, if 
special requiremen ts encumber – that is, hamper, impede, restrain, and obstruct – the use of any 
feature of any trademark, the encumbrance must be justifiable.  There is no basis to consider that 
Article 20 does not to apply to measures that interfere with the use of tradem ark design features.    
33. Second , Australia submits that a measure is subject to Article 20 solely if it encumbers 
"how a trademark is used ... not whether  it is used ".15  Thus, on Australia 's view, Article 20 does 
not apply to prohibitions on trademark use.  Australia 's interpretation is not supported by 
Article  20, which, again, asks only  whether "[t]he use  of a trademark [is being ] encumbered ".  A 
prohibition plainly encumbers the use a trademark.  Further, each of the examples in Article 20 
describes an encumbrance that undermines a trademark 's "capability to distinguish " goods and 
services in commerce:  a prohibition is the most extreme example of interference with this 
function.  
34. Applying the proper legal interpretation, the PP measures severely "encumber " three 
distinct groups of trademarks on tobacco packaging and products.  In particular: (i) word marks  
must appear in standardized format, and in the case of cigarette sticks, are banned entirely; (ii)  
the word components of composite marks  must appear in standardized format, and the figurative 
                                                
10 See DR's FWS, paras. 347 -367; DR 's SWS, par as. 96-127; DR 's response to PQs 104, 108, 172; DR 's 
comments on AUS ' response to PQ 170; DR 's FOS, paras. 13 -17; DR 's SOS, paras. 12 -20. 
11 OED Online, "requirement, n"., Exhibit DR -81; OED Online, "special adj", Exhibit DR -82, "[o]f such a 
kind as to exc eed or excel in some way that which is usual or common; exceptional in character, quality, or 
degree ". 
12 See Panel Report, Indonesia – Autos, paras. 14.273 and 14.278.   
13 See AUS'FWS, para. 347; Cuba 's FWS, para. 310; DR 's FWS, para. 349; Honduras ' FWS, para. 283; 
Indonesia 's FWS, para. 272 and Ukraine 's FWS, para. 329.  See also OED Online, "encumber, v.", 
Exhibit  DR-83.   
14 AUS' SWS, paras. 129 and 130.  
15 AUS' response to PQ 100, para. 48 (emphasis original).  WT/DS435/R/Add.1 • WT/DS441/R/ Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 components of composite marks are banned entirely; and (iii) figurative marks  are banned 
entirely.16   
b. The PP measures encumber the use of trademarks "in the course of trade "17 
35. As discussed above, th e "course of trade " includes trademark use as part of the 
commercial sale of goods, and includes trademark use on retail packaging, and on the good itself.  
36. Australia seeks to limit the scope of Article 20 by arguing that, if a trademark is not seen 
until after a sale, it is not "used" in the "course of trade ".  For Australia, the point -of-sale bans in 
Australia remove the PP measures from the scope of Article 20.  Australia 's argument is unduly 
restrictive.  Retail packaging for consumer goods need not be seen on the store shelf for the use of 
a trademark on packaging to be part of the course of trade.  This would imply that remote 
purchases, where goods are not seen before purchase, are not part of the course of trade.  
Trademarks are applied to retail packaging and goods as an integral part of a commercial sale, and 
the use of a trademark on packaging is a routine part of the course of trade.   
37. Even if the Panel accepted Australia 's flawed interpretation, it should still conclude that the 
PP measure s encumber use "in the course of trade " because (i) under an exception to the point -of-
sale display ban, specialist tobacconist shops in the states of Victoria and Western Australia are 
not subject to the display ban; and (ii) even where such bans are in o peration in Australia, the 
consumer is still able to see and inspect the product, and its packaging,  before  the transaction is 
complete.  
c. The word "unjustifiably " imposes a multi -factored standard18  
38. According to the dictionary meaning, an encumbran ce is "unjustifiabl[e] " if it is not 
rational, reasonable, proper, defensible or warranted.19  Read in light of its context, and the object 
and purpose of Article 20, the "justifiability " of an encumbrance must be assessed on the basis of 
five factors:  (1) the nature a nd extent of the encumbrance; (2) the importance of the objective 
pursued; (3) the features of particular trademarks that are considered to mislead or otherwise 
cause people to smoke; and (4) the connection between the objective and the encumb rance, 
including (i) the extent to which the measure contributes to its objective, and (ii) whether an 
alternative measure would make the same contribution to the objective with a lesser degree of 
encumbrance.    
39. In reaching this position, the DR has t aken into account the interests that Article 20 seeks 
to protect  and its  objective .20  The particular interest protected  under Article 20 is "[t]he use of 
trademarks ", and the objective of the provision in protecting  that interest is safeguarding, to the 
greatest extent possible, the ability of a trademark to fulfill its basic function of distinguishing 
goods or services,  without prejudicing the ability of a Member to achieve other legitimate 
objectives .  This interpretation reflects the  importance ascribed  by the drafters to protecting the 
use of a trademark, allowing it to fulfill its basic function of distinguishing goods based on their 
qualities, reputation and characteristics.  
i. The nature and extent of the encumbrance on use21 
40. Reflecting the expre ss discipline on trademark "use", a panel must determine the nature 
and extent of the interference with use, and the consequence for the trademark 's ability to fulfill 
its basic function.  The nature and extent of the encumbrance defines the prejudice to t he 
                                                
16 A word mark consists simply of a parti cular word with no design features forming par t of the 
registered trademark; a composite  – or combination – mark is a combination of both word and figurative 
marks.  Composite marks include unaccompanied stylized word marks ( e.g., a brand name in a particu lar 
typeface), as well as stylized word marks that include other design features; a figurative  mark is comprised 
exclusively of image constituents, including colours, designs and figurative elements.   
17 See DR's SWS, paras. 128-141;  DR 's response to PQ 87; DR 's FOS, paras. 18-20. 
18 See DR's FWS, Section VI.H; DR 's SWS, paras. 142 -153; DR 's response to PQ 108.  
19 See DR's FWS, para. 379.  
20 EU's response to PQ 17 to third parties, para. 102. 
21 See DR's FWS, paras. 418 -419; DR 's SWS, paras. 181-204;  DR's response to PQs 64 and 108; DR 's 
SOS, paras. 21 -26.   WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 protected treaty interest ( i.e., "[t]he use of a trademark ") that must be justifiable under Article 20.  
For example, as discussed below, the nature of the encumbrance may require individual 
assessment of the specific features of a trademark that motiva te the Member 's decision to 
interfere with use.  As another example, a minimal encumbrance on use would be more easily 
justified than a severe encumbrance.  
41. As explained in paragraph 34 above, the PP measures impose severe  encumbrances on 
three distinct  categories of trademarks.  The contribution made by the PP measures to reducing 
smoking must therefore be commensurate with the extent of the severe encumbrances, in terms 
of both the likelihood of a contribution materializing, and the extent of the contr ibution.  
ii. The objective pursued22 
42. With respect to the second factor, the parties agree that an encumbrance must pursue a 
legitimate objective  to be justifiable.  Section 3(1)(a) of the PP Act  establishes that the objective of 
the PP measures is to r educe the number of people that smoke, by reducing initiation, increasing 
cessation, and reducing relapse, and to reduce exposure to tobacco smoke.  Section 3(2) of the 
PP Act sets out the means  to achieve the objective, namely: (i) reducing the appeal of tobacco 
products; (ii) increasing the effectiveness of graphic health warnings ( "GHWs "); and (iii) reducing 
the ability of retail packaging to mislead consumers about the harmful effects of tobacco.  
43. Section 3(1)(b) of the PP Act  adds a second objectiv e, namely, to give effect to certain of 
Australia 's "obligations " as a party to the Framework Convention on Tobacco Control ( "FCTC").  
However, the FCTC does not "oblige " members to adopt plain packaging.  Also, it is not 
"legitimate " for a Member to invok e an obligation under a separate international agreement to 
justify the imposition of WTO -inconsistent restrictions.   
iii. The individualized nature of trademarks and trademark protection23 
44. The third factor reflects the individual nature of trademarks  and trademark protection  – 
under both the TRIPS Agreement  and the Paris Convention .  All aspects of trademark regulation – 
registration,24 protection,25 invalidation26 – proceed on the basis of individualized processes that 
consider the specific  features of a trademark.   In his authoritative guide to the Paris Convention , 
Bodenhausen explains that, in assessing registration and invalidation, each trademark must be 
considered "on its individual merits ".27 Likewise, where a Member interferes with the use of a 
trademark to address allegedly harmful effects of the features of that trademark – in this case, 
causing people to smoke – it must review  the trademark "on its individual merits ".28  The design 
features of each trademark are unique, and the encumbrances imposed by Australia relate to 
considerations that vary from individual trademark to individual trademark – some design features 
of some trademarks may give rise to Australia 's regulatory concerns, while others do not.   
45. A Member cannot be allowed to e xploit a decision on the use of a trademark, in order to 
circumvent the usual requirements of individual consideration that apply to decisions on the 
invalidation of that mark.  If a Member currently maintains the registration of a trademark – and 
has not,  based "on its individual merits ", invalidated the trademark on the grounds that it is 
misleading or is otherwise contrary to morality – the Member cannot, under Article 20, deny use of 
the trademark because of its features, unless it also considers the tr ademark "on its individual 
merits ". 
46. Australia also concedes that it never attempted to identify which design features of which 
trademarks are problematic.  Australia therefore accepts that it adopted a measure that was, by 
design, a regulatory "sledgeh ammer ".  Australia justifies its actions on the grounds that:  (i) the 
                                                
22 See DR's FWS, paras. 420 -425; DR 's SWS, paras. 271-288; DR's response to PQ 108; DR 's FOS, 
paras. 38 -43.   
23 See DR's FWS, paras. 394 -415; DR 's SWS, paras. 205 -267;  DR's response to PQs 93, 108; DR's 
comments on AUS ' responses to DR 's Question 1; DR 's FOS, paras. 27 -36. 
24 TRIPS Agreement , Article 15.   
25 TRIPS Agreement , Article 16.   
26 See e.g.  Article 6 quinquies B of the  Paris Convention . 
27 See Bodenhausen (1969), Exhibit DR -79, pp. 115 -118.    
28 See also  Bodenhausen (1969), Exhibit DR -79, pp. 115 -118.    WT/DS435/R/Add.1 • WT/DS441/R/ Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 affected trademarks have in common that they are all applied to tobacco products; 29 and  (ii) 
there is a possibility  that their features might be appealing or misleading.30  But neithe r of these 
arguments excuses Australia 's failure to conduct an individual assessment.  The first argument 
conflates the features of a harmful product with those of the trademark.  The mere fact that a 
trademark is applied to a harmful product does not mean  that the trademark 's features are 
harmful or misleading.  As regards the second argument, as Australia readily admits, not all design 
features of all trademarks for tobacco products serve to make tobacco products more appealing to 
consumers.  Reliance on the abstract possibility  that the features of some trademarks might give 
rise to concerns is not "justifiable " conduct on the part of the regulator.  
47. Finally, Australia argues that the panel in EC – GIs (US) rejected the need for 
"individualized assessm ent" under Article 17 of the TRIPS Agreement .  Although that panel found 
that a case -by-case assessment is not always  required under Article 17, it did not find that a 
case-by-case assessment is never  required.  To the contrary, in addressing the pertinent  facts 
under Article 17, the panel relied on the fact that an individual assessment had been conducted by 
the regulating Member, and hence the legitimate interests of the trademark owner had been 
respected.31 
iv. The "nexus " or connection between the encum brance and objective32 
48. All of the parties – including Australia – accept that there must be a "nexus " or connection 
between the encumbrance and the objective.  The disagreement between the parties relates to the 
nature and extent of the required connec tion.  For Australia, an encumbrance is "unjustifiable " 
only if there is "no rational connection " between the encumbrance and the objective.  However, 
that proposed standard does not exhaust the circumstances in which an encumbrance is 
unjustifiable.  Rath er, the determination of whether a "sufficient " nexus exists must follow an 
assessment of: (a) the extent of the encumbrance 's contribution to the objective; and, if there is a 
contribution, (b) whether there are alternative measures available that would m ake an equivalent 
(or greater) contribution to the objective while imposing a lesser encumbrance on trademark use.   
49. The inclusion of both factors in considering whether a "nexus " is present is supported by a 
proper reading of Article 20.  First, to wa rrant prejudicing the basic function of a trademark, an 
encumbrance on use must contribute  positively to the achievement of the legitimate objective at 
stake.  Otherwise, there is no valid basis to interfere with trademark use in a manner that 
undermines o r defeats the trademark 's basic treaty function.33 Second, Article 20 requires that a 
Member give effect to the treaty interest it has agreed to protect ( i.e., use of a trademark), as far 
as possible, without  prejudicing the ability of a Member to contribu te to the achievement of other 
objectives, such as public health.  Thus, if an alternative is available  that would allow both the use 
of the trademark to a greater extent and make an equivalent contribution to the achievement of 
the other objective, the Me mber must opt for that alternative.  This means that the expressly 
protected interest of trademark use and the achievement of another legitimate objective are 
reconciled in a justifiable, defensible and rational manner.  The trademark can be used as far as  
possible, while still accommodating the Member 's imperative of contributing to another legitimate 
objective to the same extent.  Put differently, interfering with trademark use is not justifiable if an 
alternative measure can achieve the desired objective  with lesser or no harm to trademark use.   
50. Australia dismisses consideration of both contribution and alternative measures, because 
these factors are part of a "necessity " analysis.  For Australia, the standard of "justifiable " must be 
interpreted in "contradistinction " to the standard of "necessity ".  Australia concedes that "[i]n most 
cases, there will be an array of possible measures " that could be deployed.  However, for 
Australia, it is justifiable (rational, reasonable, proper, defensible or warr anted) for a Member to 
adopt a measure that does most violence to the ability of a trademark to fulfill its basic treaty 
function without even considering alternatives.  
                                                
29 See e.g.  AUS' FWS, para. 414. 
30 See e.g.  AUS' FWS, para. 411. 
31 See e.g.  Panel Report, EC – GIs (US) , para. 7.673 ff.  
32 See DR's FWS, paras.425 -427; DR 's SWS, paras. 289-294; DR 's resp onse to PQ 108; DR 's FOS, 
paras. 44-56. 
33 Canada 's TP submission, para. 87; Singapore 's TP statement, paras. 16 -17; EU 's response to PQ 19 
to third parties, para. 89; Nicaragua 's response to PQ 19 to third parties; Singapore 's response to PQ 19 to 
third p arties, first bullet; Taiwan 's response to PQ 17 to third parties; Uruguay 's response to PQ 19 to third 
parties.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
- B-39 - 
 51. The DR disagrees.  The treaty interpreter cannot begin with a contextual argument t hat 
relies on an assumption that the word "unjustifiably " must be interpreted in opposition  
("contradistinction ") to the word "unnecessary " and, for that reason, arbitrarily exclude some 
elements of a necessity test.  The interpretive exercise begins with the meaning of the word 
actually used – here, "unjustifiably ".  With its focus on creating contextual opposition to a 
necessity test, Australia fails to give the word "unjustifiably " its ordinary meaning and fails to 
explain why the word "unjustifiably " excludes consideration of the contribution and alternatives.  
Australia and the DR agree that the word "unjustifiably " must be understood in light of the context 
of the chapeau of Article XX of the GATT 1994, which refers to "unjustifiable and arbitrary " 
discrimination.  In EC – Seal Products , the Appellate Body found that the word "unjustifiable " 
under the chapeau allows for consideration of a broad range of factors.34  In other cases, the 
standard included consideration of alternative measures .35  Citing to  the earlier case law in US - 
Gasoline ,36 US – Shrimp ,37 the panel in China – Rare Earths  found that "discrimination may ... be 
arbitrary or unjustifiable in cases where it is avoidable and foreseeable, [that is] where alternative 
measures exist which woul d have avoided or at least diminished the discriminatory treatment ".38  
In the chapeau, the term "unjustifiable and arbitrary " plays a small part in the overall justification 
of a GATT -inconsistent measure; whereas, under Article 20 of the TRIPS  Agreement , 
"unjustifiably " is the entire basis upon which a panel must assess the justification of an 
encumbering measure.39  In these circumstances, the word "justifiable " in Article  20 cannot involve 
a lesser standard than the same word in the chapeau of Article X X. 
(1) The PP measures fail to contribute to reducing smoking behaviour  
52. The DR turns now to the application of the legal standard of contribution.  The evidence in 
this dispute shows a lack of contribution  and ranges from pre -implementation predictions  about  
how the PP measures would work to post -implementation evidence showing how it has actually 
operated.  The totality of the evidence shows that the PP measures do not, and will not, contribute 
to their objective of reducing smoking in Australia.  Befo re summarizing the evidence, the 
DR outlines the principles to be applied when assessing this evidence.  
(a) Approach to the evidence40  
53. There is substantial common ground between the parties about how the Panel should 
approach its assessment of the  evidence .  In particular, there seems agreement about four 
principles.  First, tobacco control measures must be evaluated rigorously , including 
post-implementation evidence, ideally using different types of data, analytical techniques, and in 
light of accepte d behavioural theories.  This principle is formulated in the WHO IARC Handbook on 
Methods for Evaluating Tobacco Control Policies, which recognizes that a policy might not work 
"when implemented under real -world conditions ".41  Second , this evaluation must  be based on the 
totality of evidence , covering pre - and post -implementation evidence.  This principle pleads against 
any "cherry picking " among – and certainly within – the available datasets.  Third, when pre - and 
post-implementation evidence point in di fferent directions, evidence of what actually happened is 
more important than predictions about what might happen.  Australia agrees that it would be 
"appropriate to disregard  evidence of predicted behaviour if the evidence of actual behaviour was 
clearly inconsistent  with those predictions ".42 Australia and the complainants, therefore, rely on 
post-implementation evidence as a "consistency check " to confirm or reject predictions.  Fourth , in 
its responses to the Panel 's second set of questions, Australia a ccepts that sufficient time has 
passed to assess whether the PP measures have changed smoking behaviour.   
                                                
34 Appellate Body Report, EC – Seal Products , para. 5.306.  
35 DR's response to PQ 108, paras. 166 -167, referring to Appellate Body Report, US – Gasoline , 
pp. 26-28; Appellate Body Report, US – Shrimp , para. 171 and Panel Report, China – Rare Earths , para. 7.354 
and footnote 549.  
36 Appellate Body Report, US – Gasoline , p. 25.  
37 Appellate Body Report, US – Shrimp , para. 172.  
38 Panel Report, China – Rare Earths , para. 7.354 (emphasis original; emphasis added), referring to 
Appellate Body Report, US – Gasoline , pp. 28 -29.   
39 See DR's FOS, para. 50.  See also China 's TP submission, para. 52.  
40 See DR's comments on Australia 's response to PQ 196, paras. 337 - 376. 
41 WHO-IARC Handbook (2008), Exhibit DOM -368, p. 9.  
42 AUS' response to PQ 205, para. 403 (emphasis added).  WT/DS435/R/Add.1 • WT/DS441/R/ Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 54. Despite this common ground, an important area of disagreement remains – how the Panel 
should scrutinize the probative value of scientific evidenc e.  For Australia, if the formal source  of 
evidence is acceptable, the substantive content of this evidence is beyond criticism and must be 
accepted as probative by a panel.  The DR disagrees.  In addition to the credibility of the source, 
panels must asse ss whether scientific evidence has "the necessary scientific and methodological 
rigour ".43 Evidence from a respected source may lack the necessary scientific and methodological 
rigour, for instance, if its findings are contradicted by the underlying data.   
(b) Consideration of the evidence  
(i) Post-implementation evidence  
55. An objective assessment of the totality of post -implementation evidence yields an 
unambiguous and consistent conclusion: the PP measures have failed to change either the 
antecedents o f smoking behaviour or smoking behaviour itself.  The only behavioural effect that 
has consistently emerged is downtrading by consumers from higher -priced to low -priced 
cigarettes.  
1) Antecedents44 
56. Australia and its experts predicted that the PP measu res would set in motion a causal chain 
of effects leading,  via the three mechanisms  specified in the PP Act  (appeal of tobacco products, 
GHW effectiveness, and deception), to changes in downstream antecedents  of smoking 
(e.g., beliefs, attitudes, and inten tions towards smoking) and, ultimately, changes in these 
antecedents would change smoking behaviour .  In its first submission, Australia urged the Panel to 
evaluate the PP measures in light of its impact on the antecedents, and claimed that the measures 
had led to important changes in these antecedents.  
57. To test Australia 's assertions, the Panel asked Australia  and the Australian tobacco control 
entities that had gathered the data to provide the underlying data.  Some of the data was 
provided, and some w as not.  Six datasets have been made available, in whole or in part: the 
National Plain Packaging Tracking Survey ( "NPPTS "), the ITC survey, the New South Wales 
Tracking Survey ( "CITTS "), Personal Pack Display ( "PPD"), calls to the Quitline, and cigar data .  
The datasets were all developed by Australia 's tobacco control community and show the real -world 
effects of the PP measures on multiple variables related to the mechanisms, downstream 
antecedents, and actual smoking.  Despite the Panel 's request, Cancer  Council Victoria ( "CCV") 
and Cancer Council Queensland refused to provide an anonymized version of the results of a 
survey of the impact of the PP measures on young Australians , the so -called Schools -based Survey 
("SBS").   
58. Applying a rigourous and tr ansparent analytical approach, the DR 's experts, Professors 
Icek Ajzen, Ali Hortaçsu, John A. List, and Azeem M. Shaikh (Ajzen et al.), and Honduras ' expert, 
Professor John Klick, have found consistent results across the six datasets.  These results show 
that the PP measures, even combined with larger GHWs, have failed to change the posited 
antecedents of smoking behaviour, and have failed to change smoking behaviour.     
59. NPPTS dataset .  To assess the real -world impact of the PP measures, Australia 
comm issioned a large -scale survey of the Australian population.  The NPPTS results were assessed 
by several papers published, in April 2015, by the same group of CCV authors, in a special issue of 
the journal Tobacco Control . With pre -publication access to the se papers, Australia relied 
extensively on them in its first submission in March 2015 to claim that the PP measures are 
working as intended.  Australia, again, relied heavily on these papers in its domestic 
Post-Implementation Review ( "PIR"), published on 26 February 2016.45      
                                                
43 Appellate Body Report, US – Continued Suspension , para. 591.  
44 See DR comments on AUS ' response to PQ 196, paras. 388 -435.  See also (First) Data Expert Report, 
Exhibit DOM/IDN -2; Second Data Expert Report, DOM/IDN -4; (First) Data Expert Rebuttal Report, Exhibit 
DOM/IDN -6; Second Data Expert Rebuttal Report, Exhibit DOM/IDN -8; Ajzen Response to Panel Questions 146, 
202, and 203, E xhibit DOM/HND/IDN -6; Third Ajzen Report, Exhibit DOM/IDN -5.   
45 Australian Government Department of Health, "Post-Implementation Review – Tobacco Plain 
Packaging 2016 " ("PIR"), Exhibit AUS -624. WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
- B-41 - 
 60. After examining the full NPPTS dataset in the WTO proceedings, using the computer code 
provided by the authors of the published papers, Ajzen et al. reached a very different conclusion 
from that of the authors.  First, Ajzen et  al. found that the papers in Tobacco Control  "painted an 
inaccurate and misleading picture  of the [NPPTS] results ".46 For instance, the papers greatly 
underreported the data, omitting to report results for 28 out of 50 variables, with 89% of the 
unreporte d results showing no PP effects .  Further, although the same authors prepared different 
papers on the NPPTS dataset, they used different analytical techniques, without explanation.  The 
choice of different techniques in each paper gives an inflated impress ion of the number of 
statistically significant results showing a PP effect.  To give one example, Ajzen et al. found that 
each of the pro -PP results reported in Durkin et al. (2015) disappeared  when the analytical 
approach applied in Wakefield et al. (2015 ) was used instead.  Ajzen et al. also showed that the 
techniques used in Durkin et al. (2015) suffered from fundamental shortcomings and that when 
any one of these shortcomings was corrected, all the pro -PP results likewise disappeared.  
61. Second,  analyz ing the totality of NPPTS data, Ajzen et al. "found a pattern of poor  results, 
showing that the policy has failed to set in motion Australia 's hypothesized chain of effects to 
change smoking behavior ".47 Even with respect to the impact on the mechanisms, t he results were 
disappointing.  The pack changes produced mixed effects on the appeal variables: although they 
reduced the appeal of the pack, the effects weakened and then disappeared as one moves to the 
appeal of the product  and the brand , and then to th e appeal of smoking .  Regarding the impact on 
GHWs, although people noticed the enlarged GHW more, they had no greater knowledge of the 
diseases caused by smoking, and did not attribute more motivation to quit to the GHWs.  Finally, 
the pack changes failed  to generate any sustained effects in terms of reducing deception.  
62. Further, the obvious changes in pack appeal and the noticeability of a much enlarged 
GHW, failed to produce any sustained changes in downstream antecedents, including enjoyment of 
smok ing, concerns about the health effects of smoking, perceptions of the health risks from 
smoking, smoking intentions and other quit -related variables (thoughts about quitting, firm date to 
quit, stubbing out, foregoing cigarettes, limiting cigarettes, quitt ing importance, quit attempts, 
aids for quitting).  Quit attempts even declined in a statistically significant manner.  Given these 
results, there was, unsurprisingly, no impact on smoking behaviours (consumption, cessation, or 
relapse).  
63. Confronted wit h these findings, Australia 's assessment of the relevance of the NPPTS 
changed dramatically, at least in the WTO proceedings.  Australia stopped citing  these papers; 
never defended  them against the serial shortcomings identified by Ajzen et al.; and never 
challenged  the analytical techniques applied, or the results obtained by, Ajzen et al.  Instead, 
Ausralia 's sole response was to denigrate  the quality of its own NPPTS, claiming that the NPPTS, 
which cost Australian taxpayers more than A$3 million, is not suitable for measuring most of the 
variables it was designed to measure.  Notably, this alleged shortcoming was not mentioned in the 
Technical Report accompanying the NPPTS; it was not mentioned by the authors of the published 
papers examining the NPPTS re sults; it was not mentioned by Australia in relying on the NPPTS 
results presented in those papers earlier in these proceedings.  Even in the PIR, in which Australia 
once again relied on the NPPTS results presented in the published papers, Australia did not even 
mention its newfound criticisms in the NPPTS.  Ajzen et al. have explained why Australia 's latest 
efforts to denigrate the quality of its own NPPTS dataset are misplaced and unfounded.  
64. ITC dataset .  Australia relied on a published paper, Yong e t al. (2015), that uses the ITC 
dataset to assess the impact of the PP measures.  Although the authors (who include Professor 
Geoffrey Fong, one of Australia 's experts) were unwilling to provide the Panel with the full dataset 
that they analyzed, they prov ided the parts on which they had chosen to report.  In their an alysis 
of that partial dataset, using the same analytical approach as the authors and their computer 
code, Ajzen et al. reached a similar conclusion to the one they reached using the full NPPTS  
dataset.  The PP measures failed to set in motion the predicted chain of effects in the antecedents 
of smoking, even leading to a small decline in quit intentions and quit interest.  Further, even the 
partial dataset shared by the authors reveals that the  paper by Yong et al. (2015) misrepresents 
the ITC data, and suffers from underreporting of results that are not favourable to the 
PP measures.     
                                                
46 First Data Expert Rebuttal Report, Exhibit DOM/IDN -6, par a. 3 (emphasis added).     
47 First Data Expert Rebuttal Report, Exhibit DOM/IDN -6, para. 2.  WT/DS435/R/Add.1 • WT/DS441/R/ Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 65. Australia 's response parallels its response to Ajzen et al. 's NPPTS analysis.  Although 
Professor Fong c o-authored Yong et al. (2015), neither he nor Australia have defended Yong et al. 
(2015) against the serious criticisms made, nor have they contested the results obtained by Ajzen 
et al..  Instead, Australia 's response was, again, to stop citing this paper  and to denigrate the ITC 
dataset itself, claiming that it provides a "biased " sample.  Ajzen et al. have shown that this 
criticism is incorrect and contradicted by the data.  Surprisingly, in its PIR, Australia again relies on 
the ITC results presented in  Yong et al. (2015), without mentioning the alleged "bias" in the data 
or any of the shortcomings in the paper identified by Ajzen et al.   
66. CITTS dataset .  At the start of the proceedings, Australia relied on Dunlop et al. (2014), 
which examined the Ne w South Wales CITTS dataset.  However, the DR 's request for full access to 
this dataset was declined, and the Cancer Institute New South Wales ( "CINSW ") provided selective 
information.  In particular, CINSW declined to provide the raw data for the entire s urvey, and it 
provided a redacted version of its questionnaire; upon further request, it refused to provide the full 
questionnaire.  Honduras and its experts have shown, first, that Dunlop et al. (2014) 
"cherry -picked " the CITTS data to assess and, second,  that the CITTS dataset does not show that 
the PP measures have increased the effectiveness of GHWs, or have changed quitting intentions.48  
In response, as it did with the NPPTS and ITC datasets, Australia again opted to denigrate the 
quality and relevanc e of the dataset, claiming that alleged limitations in the CITTS data were so 
serious that they "rais[ed] questions about conclusions drawn from analyses that employ these 
data".49 However, in its PIR, Australia again relies on Dunlop et al. (2014) – witho ut denigrating 
the CITTS dataset.  
67. Calls to the Quitline and Personal Pack Display .  Australia has placed reliance on 
published papers that use the data on actual calls to the Quitline (Young et al. (2014)) and on 
Personal Pack Display (PPD) (Zacher et al. (2015)).  By reference to Young et al. (2014), Australia 
has claimed that the PP measures led to a sustained increase in calls to the Quitline and, by 
reference to Zacher et al. (2015), it has claimed sustained pack avoidant behaviour ( i.e., people 
taking steps to avoid seeing the gruesome GHWs).  However, Australia consistently misstates the 
results of these papers and ignores the wear -out of the PP effects.  
68. Young et al. (2014) found that calls to the Quitline initially spiked following the 
introdu ction of the PP measures, with calls then rapidly dropping to pre -implementation levels.  
Ajzen et al. confirmed these results.  Likewise, Zacher et al. (2015) found that there was an initial 
increase in pack avoidant behaviours but that these effects also  wore out, which the authors said 
was expected.  Again, Ajzen et al. confirmed these findings.  The only effect still observed one 
year after implementation was a small decline in outdoor smoking in selected venues in two cities.  
However, Zacher et al. (2 015) correctly explained that this decline could not be generalized to the 
population, and could not be linked to the PP measures because it could have been caused by a 
host of unrelated factors for which the analysis did not control.   
69. Cigar -based dat aset.   A single study by Miller et al. (2015) in the special issue of 
Tobacco Control assessed the effects of the PP measures on cigar smoking.  With access to the full 
dataset, Ajzen et al. found that this study suffers from serious methodological shortco mings.  
Ajzen et al. also explained that the dataset shows, if anything, that the PP measures did not set in 
motion the chain of effects expected to lead to a change in cigar smoking.  Australia and its 
experts have chosen not to contest any of these argum ents, and simply ignore these findings.  
70. SBS survey.   To evaluate the impact of the PP measures on young people, Australia 
commissioned the SBS survey.  The SBS dataset forms the basis for two papers published in the 
special issue of Tobacco Control :  White, Williams, and Wakefield (2015) and White et al. (2015).  
As Australia had relied on these papers, the Panel sought the underlying data in an anonymized 
format.  However, the authors, the entities commissioned by Australia to conduct the survey, and 
Australia itself, refused to provide any of the data, even though it would be protected by special 
confidentiality procedures.  No valid basis has been offered to justify this refusal.  Similar datasets 
on youth smoking are publicly  available in the EU and the United States.50 Australia has not 
responded to these arguments.  
                                                
48 Klick Second Supplemental Rebuttal Report, Exhibit HND -165, para. 57.  
49 Supplementary expert report of F. Chaloupka, Exhibit AUS -590, para. 24.  
50 DR's respons e to PQ 134 and footnote 10.   WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 71. Without access to the data, it is impossible to make an objective assessment of the 
findings in the two papers.  To illustrate the need for access to the underlying data, the DR recal ls 
that, with access to the NPPTS and ITC datasets, Ajzen et al. have shown that the published 
analyses of these datasets give an "inaccurate and misleading picture " of the datasets.  In its PIR, 
Australia also acknowledges the critical importance of havin g access to underlying datasets in 
order to verify conclusions asserted based on that data.51 With respect to the SBS data, even 
without the ability to assess the underlying dataset in full, as summarized in paragraph 92 -93 
below, the selection of results that the authors have chosen to publish shows disappointing results 
and supports the complainants ' position.  
2) Smoking behaviour – prevalence, consumption, and 
downtrading52  
72. The complainants and their experts have analyzed the rich empirical record regarding the 
operation of plain packaging in the three years following its implementation.  They found that the 
PP measures are not effective in reducing smoking, but have caused downtrading from 
higher -priced to low -priced cigarettes.   
73. To conduct th ese analyses, the complainants have relied on several experts: 
 Professor  John List; Professors David Afshartous, Marcus Hagedorn, Ashok Kaul and Michael Wolf 
(collectively "IPE"); and Professor John Klick.  Applying complementary methodological approaches  
to multiple datasets, the complainants ' experts have assessed the effects of the PP measures on a 
variety of important metrics: smoking prevalence; tobacco sales (as a proxy for consumption); 
smoking incidence (the proportion of smokers who stopped smokin g during a survey period); and 
downward substitution or "downtrading " (switching from higher -priced to low -priced tobacco 
products).     
74.  In undertaking their assessments, the experts have adhered to fundamental principles of 
scientific inquiry.  To en sure that their findings are not artifacts of any particular data or model, 
the experts have developed a total of seven distinct types of empirical methods and used seven 
datasets, reporting results across a wide range of specifications and applying an arr ay of 
robustness checks Table 1, below, summarises the complainants ' approach to post -implementation 
empirics relating to smoking behaviour (prevalence, consumption, downtrading).  As Table 1 
shows, the complainants have arrived at their results by: (i) ut ilizing all available datasets that 
report relevant behavioural metrics;53 (ii) covering different tobacco products; (iii) covering 
relevant population subgroups; and (iv) applying a multitude of complementary and 
well-established empirical methods.  In ad dition, the complainants assessed alternative starting 
dates for plain packaging.  Finally, consistent with the principles of scientific inquiry, the experts 
have remained receptive to constructive criticism by peers.  In an effort to improve the quality o f 
the analysis, they have responded to criticism offered by Australia 's experts with principled 
adjustments to their approaches.   
                                                
51 Australia dismisses certain assertions made in the PIR consultations because the underlying data "was 
not provided and is not publicly available ".  Hence, it said, "the Department is unable to verify the claims made 
in relation to this dataset ".  Australia 's PIR, Exhibit AUS -624, paras. 136 and 138.  
52 See DR Comments on AUS ' response to PQ 196, paras. 436 -539.  See also IPE Report, DR -100; 
Updated IPE Report, Exhibit DOM -303; Second Updated IPE Report, Exhibit DOM -361; Thi rd Updated IPE 
Report, Exhibit DOM -375; List Supplemental Report, Exhibit DOM/IDN -3; Presentation by Professor List at the 
FOH, Appendix 2 to the DR 's FOS; Presentation by Professor List at the SOH, Appendix 2 to the DR 's SOS.   
53 The complainants analyse d the best available datasets, including long -term cross -sectional surveys on 
smoking prevalence and incidence (RMSS and Professor Klick 's Roy Morgan Research survey); wholesale data 
covering the entire Australian market (IMS) as a proxy for smoking consum ption; and retail databases tracking 
actual sales by end -customers (Nielsen and Aztec) as another proxy for smoking consumption; wholesale data 
covering the entire market in New Zealand (EOS) as a proxy for smoking consumption; and on retail databases 
tracking actual sales by end -customers (Nielsen) as another proxy for smoking consumption.  WT/DS435/R/Add.1 • WT/DS441/R/ Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 Table 1:  The complainants ' approach to post -implementation evidence on smoking 
behaviour  
 
Topic  Dataset  Metric  Subgroup  Analysis  Finding  
Prevalence  RMSS  Prevalence  All Statistical trend analysis  No PP effect  
Time -series regression  No PP effect  
ARIMA  No PP effect  
One-stage micro -econometric probit  No PP effect  
Two -stage micro -econometric probit  No PP effect  
RMSS  Prevalence  Minors  Statistical trend analysis  No PP effect  
Two -stage micro -econometric probit  No PP effect  
RMSS  Prevalence  Young adults  Statistical trend analysis  No PP effect  
Two -stage micro -econometric probit  No PP effect  
RMSS  Prevalence  Minors and 
young adults  Two -stage micro -econometric probit  No PP effect  
RMSS  Cigar 
prevalence  All Time -series regression  No PP effect  
ARIMA  No PP effect  
Smoking 
incidence  Roy 
Morgan  Prevalence  All Difference -in-difference estimation  No PP effect  
Sales  IMS Consumption  All Time -series regression  No PP effect  
ARIMA  No PP effect  
Event analysis  No PP effect  
Aztec  Consumption  All Time -series regression  No PP effect  
ARIMA  No PP effect  
Event analysis  No PP effect  
Nielsen  Consumption  All Time -series regression  No PP effect  
ARIMA  No PP effect  
Difference -in-difference estimation  No PP effect  
EOS Consumption  All Difference -in-difference estimation  No PP effect  
Downtrading  IMS Consumption  All Time -series regression  Down -trading effect  
ARIMA  Down -trading effect  
Event study  Down -trading effect  
RMSS  Prevalence  All One-stage micro -econometric probit  Down -trading effect  
Aztec  Consumption  All Time -series regression  Down -trading effect  
ARIMA  Down -trading effect  
Event analysis  Down -trading effect  
 
75. Until the second hearing, Australia and its experts had insisted that not enough time had 
elapsed to detect an effect on smoking behaviour.  However, confronted with the disappointing 
results on the antecedents, Australia and its experts abruptly changed cours e, claiming, based on 
Dr. Chipty 's analysis, to have found a statistically significant effect of plain packaging on smoking 
behaviour.  Australia, therefore, urged the Panel to evaluate plain packaging in light of its impact 
on actual smoking behaviour, "regardless " of the evidence on the antecedents.54  This is a 
remarkable U -turn by any standard within a mere period of four months.  
76. Further, Dr. Chipty 's few favourable results are compromised by at least four critical 
methodological errors.  Correcting  for them, one at a time or all at once, reverses  Dr. Chipty 's 
results.  First, although Australia 's other expert, Professor Scharfstein, considered this approach 
incorrect, Dr. Chipty applies a single, uninterrupted linear trend over the entire 2001 -2015 period.  
In so doing, she introduces a fundamental model mis -specification by failing to control for breaks 
in the secular trend of smoking over time.  Second , although Dr Chipty agrees with the need for a 
"nationally representative sample ", she refuses to  control for important instances of sample 
reweighting, undertaken by Roy Morgan Research itself, to ensure that the sample remains 
representative of the Australian population.  Third, Dr. Chipty insists on the use of tax dummies as 
a control variable for tobacco costliness, and rejects superior control variables, such as actual 
prices or tax levels, despite the fact that these variables track the increased costliness of smoking 
much more closely.  Dr. Chipty 's approach accounts for only 60 percent of the t otal excise tax 
increases, and even less of total price increases.  Fourth , when calculating standard errors, 
Dr. Chipty 's approach does not comply with the scientifically appropriate standards implemented 
by the complainants ' experts.  Dr. Chipty 's approa ch results in "false positives " (i.e., reporting a 
                                                
54 Australia 's response to Panel Question 196, para. 238.   WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 PP effect, when in reality there is none) almost four times more often than the approach used by 
the complainants ' experts.  
77. Throughout these proceedings, Dr. Chipty has been inconsistent in her modelin g choices.  
For example, her finding of a PP effect when applying a modification of Professor List 's two -stage 
model requires, inter alia , an abridged observation period ( 2006-2015) and the use of prices  as a 
control variable for tobacco costliness.  Howev er, in modifying IPE 's models, Dr. Chipty applies an 
extended observation period ( 2001-2015) and explicitly rejects prices as a control variable in 
favour of tax dummies .  Hence, the sole consistency in Dr. Chipty 's approach is her application of 
whatever combination of modeling choices enables her to find a PP effect.  
78. Dr. Chipty has consistently argued that econometric models of smoking behaviour are 
flawed if they fail to find that excise tax increases cause a statistically significant reduction  in 
prevalence and consumption.  Dr. Chipty repeatedly described as "nonsensical " any model output 
suggesting that a tax increase leads to an increase  in prevalence or consumption.55 Yet, in her 
final two reports in these proceedings, Dr. Chipty produced – but d id not report – just such a 
"nonsensical " outcome herself:  a statistically significant positive coefficient for the 2013 excise tax 
increase.  The DR has shown that this "nonsensical " result is critical to her conclusion that the 
PP measures reduced consu mption.  
79. Finally, the DR notes that Australia commissioned Dr. Chipty to prepare a new report for 
its PIR, using the RMSS dataset familiar to the Panel.  Dr. Chipty 's PIR Report provides a flawed 
and misleading assessment based on a narrow and self -serving selection of datasets, behavioural 
metrics, and methodologies presented in the WTO proceedings.  Conveniently, Australia fails to 
mention in the PIR that Dr. Chipty 's PIR analysis – largely recycled from the WTO proceedings with 
a few novel tweaks – has been subject to detailed criticisms by the complainants ' experts, such as 
her failure to control for breaks in the secular smoking trend, or reweighting.  Dr. Chipty 's PIR 
Report ignores these criticisms altogether.  In the WTO, the DR has shown that cor recting for 
these flaws reverses Dr. Chipty 's findings of PP effects.  Furthermore, the DR identified important 
inconsistencies between Dr. Chipty 's WTO work and her PIR report, which she has left 
unexplained.  
3) Australia 's PIR 
80. On 26 February 2016, A ustralia submitted its PIR of the PP measures to assess the 
effectiveness of the PP measures.56  Australia 's PIR Guidelines state that the evidence used in a 
PIR should be "gathered rigorously  and presented in a balanced fashion ".57   
81. However, Australi a fails to respect the guidelines, providing a one -sided and misleading 
impression of the evidence.  Australia recycles its own initial argument and evidence to the Panel, 
without addressing the serious flaws identified in that argument and evidence.  In f act, Australia 's 
description of the evidence in the PIR often cannot be reconciled with – and sometimes even 
contradicts – the later positions that Australia took in the WTO.  For example, whereas Australia 
has denigrated the NPPTS and ITC datasets in the WTO, it relied on them once again in the PIR.   
82. In response, Australia said that the evidence addressed in the PIR is more limited than 
that addressed in the WTO.58  This cannot explain why Australia assessed evidence one way in the 
WTO and a different  way in the PIR.  In any event, the PIR addresses virtually all of the datasets 
under consideration by the Panel.59  With its own access to this data, Australia could have 
conducted a "rigorous " and "balanced " review (e.g., rather than perpetuate the error s in the 
Tobacco Control  papers, Australia could have analyzed the full NPPTS dataset using techniques 
free from flaws and inconsistencies).  Remarkably, Australia even urges the Panel to disregard its 
                                                
55 Supplementary expert report of T. Chipty, Exhibit AUS -535, para. 39; Supplementary expert report of 
T. Chi pty, Exhibit AUS -586, para. 33a; Supplementary Expert Report of T. Ch ipty, Exhibit AUS -605, 
footnote  45.   
56 PIR, Exhibit AUS -624. 
57 PIR Guidelines, p. 5 (emphasis added).  
58 See Letter from Australia to the Panel (22 March 2016).   
59 Australia has prev iously said that the "evidence available for consideration in the post -implementation 
review is necessarily more limited  than the evidence available to the Panel in this dispute […] ".  See Australia 's 
response to Panel Question 149, para. 34 (emphasis adde d). WT/DS435/R/Add.1 • WT/DS441/R/ Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 PIR in favor of its WTO argument and evidence.  Howeve r, the Panel must assess all of the 
evidence before it, including the PIR.  
(ii) Evidence predicting the effects of the PP measures  
1) Pre-implementation PP research60 
83. Australia relies on a body of papers that sought to predict the impact of plain pack aging 
using hypothetical plai n packs in a research setting. These studies suggested that the PP  measures 
would have an almost immediate impact on factors such as knowledge of health risks, smoking 
intentions, and smoking behaviour.  None of this actually o ccurred in a real -world setting.   
84. To assess the scientific rigour of these papers, the DR and Honduras commissioned two 
independent reviews.  First, in the Peer Review Project, each paper was submitted to peer review 
by two independent reviewers, repl icating the real -world peer review process for leading journals 
in the field of consumer behaviour.61  Second , applying an existing assessment tool, a separate 
group of experts in social science research methodology conducted a systematic review.62  Both 
groups reached a consistent conclusion: the PP literature contains serious and pervasive flaws such 
that it does not provide a reliable research basis for public policy.  For both reviews, the detailed 
assessment of each PP paper was made available to Austr alia. 
85. Australia provided a limited response to both sets of reviews.  For the handful of flaws on 
which Professor Fong did initially comment, he never addressed the responses given by the 
Systematic Review and Peer Review teams, which highlighted that Professor Fong 's responses 
were selective, incorrect, and misleading.  For the large majority of PP studies, Australia and its 
experts simply ignored the criticisms.  At the same time, they continued to rely on the studies, 
including in the PIR, as if they  were unaware that serious concerns had been raised about their 
scientific reliability.  
86. Instead of contesting the criticisms, Australia and Professor Fong argued that the papers 
must be assessed against lower scientific standards and even that they sho uld be immune from 
criticism because they were "peer reviewed ".  Both arguments are unconvincing.  First, Professor 
Fong has entirely failed to explain why tobacco control research should be held to lower scientific 
standards than any other area in social science; and, if so, which  of the basic scientific standards 
he thinks may be violated in tobacco control research.  Second , the fallibility of the peer review 
process is well -recognized both within and outside the scientific world.  The facts before the P anel 
confirm this.  Ajzen et al. have, for instance, demonstrated that, despite peer review, the 
NPPTS -based papers in Tobacco Control  are not reliable.   
87. In a final attempt to divert attention from the flaws in the papers, Australia and its experts 
insist that the overall direction of the PP literature should be trusted, regardless of the pervasive 
and systematic flaws.  Australia 's approach violates the generally accepted principle that any 
proper literature review starts with an assessment of the qua lity of the relevant studies.  As the 
DR's experts have said, this approach is critical because, "if the building blocks are defective, the 
house does not stand ".63  Indeed, convergence may be the result of flaws in the underlying 
studies, including system atic flaws of the type identified in the PP studies that bias the results in 
one direction.   
                                                
60 See DR Comments on AUS ' response to PQ 196, paras. 540 -581.  See also the following expert 
reports:  Peer Review Project, Exhibit DR/HON -3; Peer Review Rebuttal Report, Exhibit DOM/HND -17; Peer 
Review Second Rebuttal Report, Exhibit DOM/HND -17; Syst ematic Review, Exhibit DOM/HON -4  Systematic 
Review Rebuttal Report, Exhibit DOM/HND -13; Systematic Review Second R ebuttal Report, Exhibit 
DOM/HND -18.   
61 Professor Jeff Inman (University of Pittsburgh) served in the role of editor and his team of six 
reviewers consisted of: Professor Marc Fischer (Mannheim University), Professor Rik Pieters (Tilburg 
University), Professor Debra Ringold (Willamette University), Professor Alan Sawyer (University of Florida), 
Professor Luk Warlop (KU Leuven), and Professor K laus Wertenbroch (INSEAD).  
62 The Systematic Review was led by Professor Jos Kleijnen, Director of Kleijnen Systematic Reviews, 
who was supported by Professor Alan Bryman (University of Leicester) and Professor Michael Bosnjak 
(University of Mannheim).   
63 Systematic Review Second Rebuttal Report, Exhibit DOM/HND -18, para. 4.   WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
- B-47 - 
 88. The stark divergence between the predicted and real -word impact of plain packaging 
confirms that the pre -PP "building blocks " upon which the policy was based are, indeed, 
"defective ".  The papers vastly overestimated the effect of plain packaging on the three 
mechanisms, on downstream antecedents, as well as on smoking behaviour.  Significantly, none of 
the PP papers correctly predicted that plain packaging wou ld have no effect on critical antecedents 
of smoking and on actual smoking behaviour in Australia.   
2) Initiation64 
89. To understand youth smoking behaviour, the DR consulted Professor Laurence Steinberg, a 
leading authority on adolescent risk -taking beh aviour.  He has explained that, as a result of brain 
development, adolescents are particularly sensitive to (short -term) rewards ( e.g., social status) 
and give less importance to (long -term) costs ( e.g., health risks).  Therefore, although they are 
well aw are of the risks, adolescents are attracted to risky behaviours (such as smoking) associated 
with adulthood because of the social rewards from peers of engaging in the behaviour itself, and 
not because of any packaging  features.   
90. Australia 's experts ( Professors Slovic and Biglan) have expressed agreement with many of 
Professor Steinberg 's views on the factors influencing youth initiation, including that young people 
have a higher propensity to engage in risk -taking behaviours (such as smoking); that "it is highly 
improbable that an adolescent who is interested in smoking will decline a cigarette from a friend 
because of the packaging ";65 and that "young people do not pay attention to risk information ".66   
91. Despite this agreement, Australia and its e xperts maintain that the PP measures will 
reduce smoking initiation among adolescents by eliminating the  appeal  (so-called "positive 
perceptions and associations "67 or "strong positive affect "68) created by pack design elements, and 
by increasing knowledge  about the health risks of smoking.  However, as Professor Steinberg and 
Professor Ajzen have explained, the published results of Australia 's SBS contradict both 
arguments, a contradiction Australia 's experts have not addressed.  
92. First, White, Williams,  and Wakefield (2015) showed that, pre -PP, branded packaging (with 
a 30% GHW) did not create any of the supposed positive perceptions.  To the contrary, prior to PP , 
branded packs in Australia, including the most popular brands among adolescents, were view ed as 
unappealing with negative associations ( "ugly", "daggy (uncool) ", "gross ", and "disgusting ").  
Thus, pre -PP branded  packaging already created precisely the negative associations for which 
Australia deemed it necessary to introduce plain packaging.  T he published SBS results show that, 
since the pack changes, the already -negative appeal ratings have become only slightly  more 
negative.   
93. Second , the pack changes have not increased the already high level of awareness of the 
health risks of smoking, n or have they induced adolescents to read or think more about warnings, 
to forgo cigarettes more, or to think more about quitting (White et al. (2015)).   
94. When confronted with these results, Australia criticized the DR 's experts for focusing 
unduly on t he published results from the SBS data, even though this is the only dataset 
commissioned by Australia to evaluate the impact of the PP measures on adolescents.69 
                                                
64 See DR Comments on AUS ' response to PQ 196, paras. 582 -610.  See also Steinberg Initiation 
Report, Exhibit DR/HON -6; Steinberg Rebuttal Report, Exhibit DR/HON -10; Third Steinberg  Report, Exhibit 
DOM/HND -15; (Steinberg) Response to Panel Question 159, Exhibit DOM/HND -20.   
65 Expert Report of P. Slovic, Exhibit AUS -12, para. 111.   
66 Expert Report of P. Slovic, Exhibit AUS -12, para. 110.  
67 AUS' FWS, paras. 8, 157, 158.   
68 Exper t Report of P. Slovic, Exhibit AUS -12, paras. 13 and 83 (strong positive affect), 14, 104, and 
111 (cachet); Second Expert Report of P. Slovic, Exhibit AUS -532, paras. 3 (strong positive affect), 4, 85, and 
87 (cachet, designed to be popular).   
69 AUS' response to PQ 196, para. 268, (b), (c).   WT/DS435/R/Add.1 • WT/DS441/R/ Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 3) Cessation and relapse70 
95. To understand cessation and relapse behaviours, the DR consult ed Professor Gabriele 
Fischer, psychiatrist and medical director of the addiction clinic at the Medical University of Vienna.  
She has explained that the drivers of cessation and relapse behaviours are well documented and 
do not include the design of retai l packaging.  Cessation is mainly driven by factors such as health 
concerns, self -efficacy, motivation to quit, and low tobacco dependence.  Relapse is often 
associated with negative emotions, background stress, and tobacco dependence.   
96. Australia 's expert, Dr. Brandon, disagrees because, in his view, plain packs are weaker  
smoking cues  than branded packs.  He acknowledges that his argument lacks empirical support, 
but believes  that plain packs are less salient  to smokers and might have lower contingenc y with 
smoking compared to branded packs.  
97. Professor Fischer explains why this argument lacks merit.  Dr. Brandon 's own research 
finds that unbranded and unappealing objects (like unbranded cigarettes, ashtrays, matches, and 
even environmental tobacco) are highly  salient  and highly contingent  with nicotine delivery.  
Dr. Brandon has explained that largely unbranded  cigarettes are the strongest  cue.  Further, cue 
reactivity research confirms that making cues more "personal " (for instance, through branding ) 
does not increase cue strength.  Despite numerous opportunities, Dr. Brandon chose never to 
respond to these arguments.  
98. As Professor Fischer explains, all packs, whatever their appearance, are subject to the 
same conditioning process among smokers, a nd have the same close connection to smoking.  After 
a short period of adaptation by smokers, newly designed packs simply acquire the same cue status 
as old packs.  The post -implementation evidence is consistent with Dr. Fischer 's predictions, and it 
contradicts those of Dr. Brandon.  Australia 's new packs have had no impact on antecedents of 
smoking or actual quitting and relapse.  There was an initial spike in calls to the Quitline.  
However, consistent with Professor Fischer 's position, when smokers had become familiar with the 
pack changes, that initial effect quickly vanished.  
4) Marketing71 
99. The DR 's marketing expert – Professor Jan -Benedict Steenkamp – predicted that the 
PP measures would have no impact on tobacco prevalence and consumption:  inste ad, the removal 
of branding would reduce product differentiation in the marketplace, which would reduce consumer 
brand loyalty, leading to a likelihood of increased brand -switching to cheaper products.   
100. Australia and its experts – Professors Tavassol i and Dubé – disagree.  They argue that the 
PP measures will have a strong effect on prevalence and consumption.  Professor Tavassoli 
predicted there would be no brand switching effects, though Professor Dubé refused to make any 
predictions.   Their predic tion that primary demand will inevitably fall rests on an analogy between 
traditional mass media advertising and Australia 's plain packaging.   
101. Professor Steenkamp outlined the reasons why retail packaging, in particular Australia 's 
packaging, that is  dominated by large and repulsive GHWs, cannot be equated with traditional 
advertising.72  Australia 's marketing expert, Professor Dubé, seems to agree.  He explained that 
traditional advertising and packaging are distinct, used in a "different context ", and that he is "not 
aware of any evidence " that the consumption effects of advertising "provide an appropriate 
analogy for the likely effects of tobacco plain packaging ".73 
102. Assessments of the effects of plain packaging by the tobacco control community – 
including the U.S. Surgeon General reports – confirm that the effects of traditional advertising and 
                                                
70 See DR comments on AUS ' response to PQ 196, paras. 611 -628.  See also Fischer Cessation and 
Relapse Report, Exhibit DR/HON -7; Fischer Rebuttal Report, Exhibit DR/HON -11, Third Fischer Report, Exhibit 
DOM/HON -18.   
71 See DR Comments on Australia 's response to PQ 196, paras. 629 -641.  See also the following expert 
reports: Steenkamp Branding Report, Exhibit DR/HON -5; Steenkamp Rebuttal Report, Exhibit DOM/HND -14; 
Steenkamp Second Rebuttal Report, Exhibit DOM/HND -19.   
72 Steenkamp Rebuttal Report, Exhibit DOM/HND -14, Section 3.3.2.  
73 Expert Report of Jean -Pierre Dubé, AUS -11, para. 11.   WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 packaging on consumer demand cannot be simply equated.  Rather than drawing conclusions 
based on the effects of advertising, leading tobacco control scho lars rely on evidence drawn from 
plain-packaging -specific  research.  They have also emphasized the need for post -implementation 
research into the actual effects of plain packaging to examine whether the predictions actually hold 
in the real world.  
103. Evidence from Australia confirms that Australia 's simple analogy is misplaced: pre -PP 
branded packaging, even with smaller health warnings, had negative  appeal.  Thus, partially 
branded packaging, with GHWs, did not have the same effects  as traditional advert ising, which 
conveys strongly positive  messages.  
104. Significantly, Australia and its experts failed to provide a single convincing example 
illustrating the alleged causal link between pack appeal and smoking.  At the first meeting, 
Australia offered exa mples of packaging such as Fantasia, Sobranie, and Vibes – which Australia 
considers to be highly appealing .  However, the DR showed that virtually no one in Australia 
smokes  these highly appealing brands.  Australia also referred to Longbeach and Peter Ja ckson, 
but, according to its own research, these two brands have among the least appealing packaging, 
and yet they are amongst the most smoked  in Australia, including among youth.  
105. Australia appears to recognize that its analogy with traditional advert ising is even less 
credible when packaging is dominated by large and repulsive GHWs.  Throughout the proceedings, 
Australia and its experts displayed numerous images of branded packaging and even tobacco 
advertising.  Significantly, not a single  image disp layed a package with the dominant GHWs 
required in Australia.   
106. The post -implementation evidence described above also confirms  Professor Steenkamp 's 
predictions, and contradicts those of Australia 's experts: the PP measures have resulted in a 
marked i ncrease in downtrading, with no change in smoking prevalence or consumption.   
5) Behavioural Theory74 
107. Australia and its experts started the proceedings relying on a "causal chain model " that 
sought to link the appeal  of tobacco packaging to smoking b ehaviour , using behavioural theories.  
They argued that behavioural theories reliably predict that when the  appeal of tobacco products is 
changed, the antecedents of smoking behaviour, and then smoking behaviour itself, will also 
change.  In other words, A ustralia used behavioural theories to bridge the gap between evidence 
of a change in pack appeal and evidence of a change in smoking behaviour.  
108. In terms of specific behavioural theories, Professor Fong relied on attitude -behaviour 
literature , stating  that "[s]ocial psychological theories, notably the 'Theory of Reasoned Action ' 
(Fishbein & Ajzen, 1975), and research arising from such theories, have demonstrated clearly that 
attitudes are indeed related to behaviour ".75  He alleged that it is, therefor e, "straightforward  to 
conclude that, if plain packaging lowers the appeal  of tobacco products, this would lead to a 
reduced likelihood of behaviours  such as starting to smoke and continuing smoking ".76  Professor 
Slovic, in turn, relied on his Affect Heur istic theory to claim that, by reducing "positive affect ", the 
PP measures would increase the perceived risks of smoking and lower its perceived benefits, 
which, ultimately, would decrease smoking behaviour, in particular among youth.  
109. To review these arguments, the DR sought the advice of Professor Icek Ajzen, who has 
been identified as the number 1 ranked psychologist in the field of behavioural theory, and who 
developed the Theory of Reasoned Action  and its successor, the Theory of Planned Behavior .  
Professor Ajzen explained that Australia 's arguments rest on fundamental misconceptions 
regarding behavioural theories, including – but not limited to – his own theories.  He emphasized 
                                                
74 See DR Comments on AUS ' response to PQ 196, paras. 642 -669.  See also Ajzen Behavioral Report, 
Exhibit DOM/HON/IND -3; Presenta tion by Professor Ajzen of "Examination of Australia 's Reliance on Behavioral 
Theories to Support its Tobacco Plain Packaging Legislation ", Exhibit DR/HON/IND -3; Ajzen Supplemental 
Report, Exhibit DR/HON/IND -4; Ajzen Response, Exhibit DOM/HND/IDN -5; Ajzen,  Response to Questions 146, 
202, and 203 by the Panel, Exhibit DOM/HND/IDN -6; Presentation given by Professor Ajzen at the SOH, 
Appendix 1 to the DR 's SOS.    
75 Export Report of G. Fong, para. 252 (emphasis added).   
76 Expert Report of G. Fong, Exhibit A US-14, para. 32 (emphasis and underlining added).   WT/DS435/R/Add.1 • WT/DS441/R/ Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 that behavioural theories cannot prove  a link between the appeal of p ackaging and behaviour.  
Rather, when properly applied, theories can generate useful hypotheses  that must be confirmed or 
rejected empirically.   
110. Professor Ajzen explained why a correct understanding of behavioural theories leads to the 
prediction tha t the PP measures are unlikely to be effective.  The long -standing attitude -behaviour 
research suggests that people 's attitudes toward a non -behavioural target (packaging) do not 
reliably predict their behaviour with respect to the target (smoking).  For p lain packaging to 
change smoking behaviour, it would have to set in motion a chain of effects, leading from pack 
changes, through to attitudes toward the pack, brands and products, to perceptions and beliefs 
about the health risks of smoking, on to attitud es and intentions with respect to smoking, and 
ultimately to actual smoking behaviour.  Professor Ajzen considered it unlikely that Australia 's pack 
changes would carry all the way through across this causal chain, but emphasized that this was 
ultimately a n empirical question.   
111. Together with Professors Hortaçsu, List and Shaikh, Professor Ajzen subsequently 
examined his predictions – and those of Australia 's experts – in light of the post -implementation 
evidence.  As summarized above, Australia 's pred ictions based on behavioural theories are 
incorrect: although the pack changes reduced pack appeal  to some extent and people noticed  the 
much -enlarged GHWs more, neither the downstream antecedents to behaviour nor smoking 
behaviours changed.  The outcome t hat Professor Fong thought it "straightforward "77 to assume – 
namely, if pack appeal changes, the antecedents of behaviour and behaviour will change – has not  
materialized in the real world.  Equally, contrary to Professor Slovic 's assessment, the pre-PP 
packs did not have "strong positive affect ", and the plain packs have not increased perceived risks 
or lowered perceived benefits of smoking.  
112. A major reason for the failure of the PP measures can be seen in Australia 's own NPPTS 
data: the assumed rela tionship (correlation) between the appeal  of tobacco products  on one hand, 
and multiple downstream antecedents and smoking behaviours  on the other, is lacking.  Using the 
NPPTS dataset, Ajzen et al. examined 130 possible correlations between the appeal of tobacco 
products and downstream antecedents of smoking behaviour or smoking behaviour itself.  Out of 
the 130 possible relationships examined, not one showed a significant correlation in the expected 
direction .   
113. In response, Australia downplayed the role of behavioural theories.  Australia and its 
experts stopped mentioning Professor Ajzen 's behavioural theories, except to say they had never 
really relied on them.  The conceptual framework underlying plain packaging was no longer 
founded in behavioura l theory but in the PP Act itself.  Finally, Professors Fong and Slovic never 
attempted to explain the inconsistency between their theory -based predictions and the 
post-implementation evidence.   
(iii)  Australia 's assertions of a future contribution are n ot supported by 
sufficient evidence78  
114. Although Australia argues that the effects of the PP measures will be most significant in 
the longer term, it has provided surprisingly few details on the hypotheses that underlie this 
argument, and it has provid ed even less evidentiary support.  As the Appellate Body has insisted, 
the pathway to alleged future effects must be "based on a set of hypotheses  that are tested  and 
supported  by sufficient evidence ".79   
115. Australia has proposed different hypotheses, one to expla in the delayed effect of the 
PP measures on initiation and quitting (a hypothesis based on a "delayed contribution " to reducing 
initiation and increasing quitting) and another to explain the delayed ability of econometric 
techniques to detect t hese changes in population -level prevalence and consumption data 
(a "delayed detection " hypothesis).  These hypotheses are either not tested or, when they are, 
contradicted by the evidence.  Thus, the alleged pathway to long -term effects is not supported b y 
any, let alone sufficient, evidence.  
                                                
77 Expert Report of G. Fong, Exhibit AUS -14, para. 32.   
78 See DR's Comments on AUS ' response to PQ 200.  
79 Appellate Body Report, Brazil – Retreaded Tyres , para. 149 (emphasis added).  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
- B-51 - 
 116. Before addressing the hypotheses, it bears noting that Australia 's long term effects 
argument assumes that the effects of the PP measures will strengthen  over time.  However, it is 
well-documented that a person 's reaction to a novel package is strongest on first exposure, and 
weakens as he or she becomes more familiar with the new pack.  This "wear-off" phenomenon is 
well-documented by tobacco control scholars, including with regard to tobacco packaging (in 
relation to both GHWs and plain packaging) and is confirmed by the post -implementation data.  
That data shows that, before smoking behaviour ever changed, the few initial reactions in 
downstream antecedents ( e.g., calls to the Quitline, pack concealment) wore ou t.  As Professor 
Ajzen explained, if people have already adapted to the new packaging, and their negative 
reactions have worn out without behavioural change occurring, there is no reason to expect that 
behaviour will change in the future.   
117. Relying on  Professor Slovic, Australia rejected the possibility of "wear out ", arguing that, 
because there was no branding on the pack, "there is simply nothing to wear out ".80 Professor 
Ajzen explained that this "mystifying argument " was based on a fundamental misu nderstanding of 
wear-out.  Australia then stopped relying on this argument and, instead, accepted that the NPPTS 
data shows that some effects have indeed worn out.   
118. "Delayed contribution " hypothesis .  Australia 's first set of hypotheses is that the 
largest impact on reducing initiation and quitting will be delayed until the long term.  With regard 
to initiation, without much, if any, explanation or evidence, Australia hypothesizes that the effect 
of the PP measures will be most pronounced in the long -term because "it will take time for the 
cohort of children who have not been exposed to fully -branded tobacco packaging to reach 
adolescence ".81  There is a fundamental problem with this proposition.  Australia expressly 
assumes that the pre -PP branded pac kaging created strong positive associations with smoking for 
the current generation, and that it will take until the next generation for these positive 
associations to disappear.  However, the SBS data show that Australia 's pre-PP packs with GHWs 
already l ed young people to form strongly negative  associations with smoking.  Further, although 
Australia argues that the alleged positive associations stem from the lingering effects of traditional 
advertising, the current generation has never been exposed to tra ditional advertising, because it 
was banned almost 25 years ago.  
119. With regard to the delayed impact on quitting, Australia 's explanation has amounted to 
little more than the following: "multiple  quit attempts " are often necessary before a smoker is 
successfully able to quit.82  Hence, the effects on quitting will take time to arise.  Again, Australia 's 
proposition is contradicted by the evidence.  Australia 's NPPTS dataset shows that none of the 
dozen quit -related variables, including quit attempts, cha nged in the direction envisaged by the PP 
measures.  In fact, instead of leading to an increase  in quit attempts, the pack changes led to 
fewer  quit attempts.   
120. "Delayed detection " hypothesis .  Australia 's alternative hypothesis is that econometric 
techniques are not capable of detecting the initial contribution of the PP measures to reducing 
smoking behaviour, because the impact on initiation and cessation is too small to detect, but will 
grow.  Professor List 's results contradict Australia 's hypothes is: the RMSS prevalence data do not 
reveal any statistically significant PP effect on smoking prevalence amongst youth.  Dr. Chipty has 
not countered these findings with any empirical work of her own.  Further, by the end of the 
proceedings, Australia no l onger asserted that insufficient time had passed to detect changes in 
prevalence and consumption.  Instead, Dr. Chipty explained that the "discussion of power [to 
detect] is no longer crucial ".83     
(iv) Conclusion 84 
121. At the outset of the proceedings , the DR 's experts explained, through the prism of their 
respective expertise, why the PP measures would be an ineffective tobacco control instrument, and 
were not founded on a credible scientific basis.  As a wealth of post -implementation evidence has 
become available, the initial predictions made by the DR 's experts have, one by one, been 
                                                
80 AUS' SWS, para.  503. 
81 AUS' SWS, para. 496. 
82 AUS' FWS', para. 670 and Annex E, para. 12.   
83 Supplementary Expert Report of T. Chipty, Exhibit AUS -591, para. 2.f.   
84 See DR Comments on AUS response to PQ 196, paras. 670 -684. WT/DS435/R/Add.1 • WT/DS441/R/ Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
- B-52 - 
 
 confirmed by what has happened in the real world.  Furthermore, the many diverse pieces of 
evidence before the Panel fit together in a coherent and consistent way with t he DR 's argument 
and evidence.   
122. In contrast, the different pieces of evidence cannot be fit together in a coherent and 
consistent way with Australia 's arguments.  The picture that emerges from those arguments is 
muddled and incoherent, across the boa rd.  The expert predictions do not fit either with the 
evidence on the antecedents or with the evidence on smoking behaviour; and the evidence on the 
antecedents and smoking behaviour do not fit with Australia 's arguments.  In an effort to force all 
of the  pieces to fit together, Australia has been compelled to change its arguments, making the 
later arguments inconsistent with the earlier ones.  Behavioural theories no longer provide the 
answer; antecedents, like intentions, are no longer the best way to as sess the PP measures; the 
NPPTS and ITC datasets are no longer reliable; the published Tobacco Control  papers no longer 
provide a comprehensive evaluation of the PP measures; and, instead, the evidence on actual 
smoking behaviour now does matter – at least  on Dr. Chipty 's selective and erroneous assessment 
– whereas before it did not.  
123. The consistency and coherence between the totality of the evidence and the complainants ' 
arguments, coupled with the inconsistency and incoherence between the totality o f the evidence 
and Australia 's arguments, speaks volumes.  The conclusion to be drawn from the evidence is 
clear: the PP measures do not and will not change smoking behaviour in Australia.   
(2) Less restrictive alternative measures  
(a) The proposed alter natives  
124. Should the Panel find that the PP measures do make a contribution, the DR proposes four 
alternatives.  Through these alternatives, the DR shows its commitment to ensuring that Australia 
can take effective tobacco control measures.  The alterna tives are: (1) an increase in the minimum 
legal purchase age ( "MLPA ") from 18 to 21 years; (2) an increase in the rate of excise taxation; 
(3) enhanced social marketing campaigns; and (4) a pre -vetting mechanism to review the 
trademark and form features on  the packaging of tobacco products and the products themselves.   
Whether considered alone or in combination, these alternatives: (1) are less encumbering of the 
use of trademarks than the PP measures (that is, they are less trademark restrictive); (2) mak e an 
equivalent or greater contribution to the reduction of smoking prevalence and consumption than 
the PP measures; and (3) are reasonably available to Australia as alternative measures.  For the 
PP measures, the evidence supports nothing more than a conc lusion that a contribution would be, 
at best, negligible  in size, with a very low likelihood  of materializing, and at an indeterminate time 
in the long-term; on the other hand, the alternatives have a much higher likelihood  of making a 
significant contribu tion to Australia 's objective, both immediately and in the future  over the long 
term.    
125. Importantly, Australia does not contest that the proposed alternatives would contribute to 
reducing smoking, especially among the target group – youth.  For insta nce, as regards an 
increase in taxation , Australia accepts that taxation is "the single most effective policy for reducing 
tobacco use ".85  In his own words, Australia 's expert, Professor Chaloupka, has found that research 
"consistently demonstrate[s] the effectiveness of higher tobacco taxes in discouraging initiation  
and uptake of tobacco use among young people, promoting cessation  among adult tobacco uses, 
and reducing consumption  among continuing users, with relatively larger effects on tobacco use 
amon g the young and the poor ".86  An increase in taxation has an almost immediate effect that 
carries over to the long -term, with the long -term elasticity higher than the short -term elasticity.87   
126. Australia has also not contested the DR 's evidence that a n increase in the minimum legal 
purchasing age  from 18 to 21 would secure a "large" reduction (25 percent) in smoking among 15 -
17 year -olds; and a "medium " reduction (15 percent) in smoking among those less than 15 years 
                                                
85 AUS' FWS, para. 719.  
86 Supplementary  expert report of F. Chaloupka, Exhibit AUS -582, para. 29 (emphasis added).  
87 See Gallet and List (2003), Exhibit DR -120, p. 824; Bardsley and Olek alns (1999), Exhibit DR -122, 
p. 237, Figure 5;  H. Ross and F. J. Chaloupka, "Economic Policies for tobacco control in developing Countries ", 
Salud Publica Mexico 2006;48 suppl 1: S116 -S117, Exhibit DR -118; Chaloupka and Hu (2000), Exhibit DR -121, 
p. 251.   WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
- B-53 - 
 old and among 18 -20 year -olds.88 Translating these figures into prevalence rates, an increase in 
the MLPA from 18 to 21 would result in a 12 percent decrease in long -term overall prevalence 
rates.89  Thus, raising the MLPA to 21 would make a contribution to reducing smoking that is much 
greater than any contribution that the PP measures might one day make, and it is certain to have 
an effect on youth smoking in the short term that necessarily entails long -term impacts.  
127. Australia has not addressed the alternative measures proposed by the  DR under Article 20, 
because it incorrectly assumes that the provision does not require the consideration of 
alternatives.  It nonetheless makes arguments about the alternatives in its arguments under 
Article 2.2 of the TBT Agreement , which the DR address es here.  
(b) Australia 's interpretative arguments are unfounded  
128. Australia objects to the proposed alternatives on two interpretative grounds:  first, a 
strengthened version of an existing measure "is not a valid 'alternative '";90 and, second, even if an 
existing measure could be an alternative, an alternative must employ a mechanism that is the 
same as that employed by the challenged measure.91 
129. As regards the first argument, Australia mischaracterizes findings of the panel and 
Appellate Body in Brazil – Retreaded Tyres , when it states that they found that "a proposed 
alternative measure that has already been implemented, in whole or in part , or is in the process of 
being implemented ", is not a "valid" alternative.92 In fact, the words  "in whole or in part " do not 
feature in any of the panel and Appellate Body findings.  In that dispute, as an alternative to a ban 
on the import of retreaded tyres, the European Union proposed measures that were not new and 
had been, or were being, fully implemented by  Brazil.  The proposed alternative measures were 
not strengthened  versions of existing measures, as the alternatives proposed in this dispute are.  
Finally, Australia 's argument that strengthened versions of existing measures cannot serve as 
alternatives i s directly contradicted by findings of the panel in China – Rare Earths .93  
130. Australia 's second argument – that an alternative cannot make an equivalent contribution 
if it works through a mechanism different from that employed by the challenged measure  – is 
squarely contradicted by the Appellate Body in US – COOL (Article 21.5) , which found that an 
alternative measure need not make its contribution through the same means  or mechanism  as the 
challenged measure.94 
(c) Australia 's factual arguments on the alternatives are unfounded 95 
131. While Australia does not contest that the proposed alternatives would contribute to 
reducing smoking, it argues, as a factual matter, that the alternatives do not make an equivalent 
contribution.  In particular, Australia  submits, in not more than a few lines repeated throughout its 
submissions, that replacing the PP measures with an increase in the MLPA, an increase in excise 
tax, or improved social marketing (i) "would result in a more limited set of mechanisms at work "; 
(ii) would, thereby, reduce "the ability of Australia to influence the broadest range of consumers 
and potential consumers "; and (iii) would reduce synergies with other tobacco control measures.96  
All three arguments fail.  
132. As to Australia 's first ar gument  – that the alternatives would reduce the set of mechanisms 
at work – Australia suggests that the PP measures involve new policy mechanisms , whereas the 
alternatives involve a strengthening of existing mechanisms, implying that, without the 
PP measur es, fewer policy mechanisms would be at work.  The DR disagrees.  
                                                
88 IOM Report, Exhibit DR -232, p. 7-11. 
89 IOM Report, Exhibit DR -232, p. S -6.   
90 AUS' response to PQ 14 8, para. 21.  
91 AUS' response to PQ 148, paras. 22 and 23.  
92 AUS' response to PQ 148, para. 21.  
93 Panel Report, China – Rare Earths , para. 7.186.  
94 Appellate Body Report, US – COOL (Article 21.5) , para. 5.215.   
95 See DR's Comments on AUS ' response to PQ 148, paras. 72 -115. 
96 Australia 's response to Panel Question 148, para. 27 (emphasis added).   WT/DS435/R/Add.1 • WT/DS441/R/ Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 133. First, Australia misconceives the issue: the issue is not the number of mechanisms at 
work, but the degree of the contribution that results from the operation of the measures.  Second , 
Australia 's suggestion that the PP measures entail new policy mechanisms is inconsistent with its 
own characterization of the PP measures throughout these proceedings.  Australia has argued that 
the PP measures involve an extension of an existing policy mec hanism , that is, its prohibitions on 
the advertising, marketing, and promotion, which are also designed to reduce the appeal of 
tobacco products.  Likewise, the other two mechanisms through which the PP measures were 
expected to operate (GHW effectiveness and reducing deception) are extensions of existing policy 
mechanisms (e.g., GHWs, social marketing, and the general prohibition on deceptive conduct).  It 
is, therefore, simply not correct that the PP measures involve the addition of any new policy 
mechani sms to its comprehensive tobacco control strategy.  The proposed alternatives are, 
therefore, equivalent to the PP measures in this respect: they all represent an extension of 
existing policy mechanisms.  Therefore, replacing the PP measures with the alter natives would not 
reduce "the set of policy mechanisms at work ". 
134. Australia 's second argument  is that the alternatives would reduce the  ability of Australia to 
influence the broadest range of consumers and potential consumers .  However, this argument i s 
explicitly premised on Australia 's first argument that the PP measures involve new policy 
mechanisms that would be eliminated from its tobacco control strategy if the PP measures were 
replaced by the alternatives.  However, as just outlined, this is not accurate: the three policy 
mechanisms allegedly operating under the PP measures would continue to operate through other 
tobacco control measures.  
135. The evidence also shows that the PP measures have led to little or no incremental change 
in the operatio n of the mechanisms:  product appeal was already negative, and has not much 
changed; people were already well informed about the health risks of smoking, and this has not 
changed; people do not seem, therefore, to have been deceived about these health risk s, and 
deception levels have also not changed.  Unsurprisingly, these disappointing changes in the policy 
mechanisms have not led to any change in antecedents closer to smoking behaviour 
(e.g.,  intentions), nor in actual smoking.    
136. In contrast, for t he proposed alternatives, there is strong evidence that the existing policy 
mechanisms could be strengthened further, with favourable results.  For instance, the MLPA relies 
on extending an access -based policy mechanism that is much more effective than pla in packaging, 
because banning  young people from smoking is preferable to allowing them to smoke from packs 
that are less visually appealing.  Likewise, an increase in taxation works through a policy 
mechanism that is regarded, including by the tobacco cont rol community itself, as the single most 
effective tobacco control measure, including to reduce youth smoking.  In sum, the proposed 
alternatives are a much more effective means of influencing the broadest possible range of people 
than the PP measures.  As  a result, replacing the PP measures by the alternatives would 
strengthen – rather than weaken – the ability of Australia to influence the broadest range of 
consumers.  
137. Finally, Australia 's third argument  is that, if the PP measures were replaced by th e 
proposed alternatives, synergies with other tobacco control measures would be lost.97 The essence 
of this argument seems to be that the PP measures contribute indirectly to reducing smoking by 
making taxation and social marketing campaigns more effective .  To support its argument, 
Australia has mentioned only one study, which is not about plain packaging but about point -of-sale 
advertising and its synergies with price measures.  Australia has not explained how these findings 
can be extrapolated to plain p ackaging.  Of course, the alleged synergies, if any, between 
Australia 's point -of-sale advertising bans and other tobacco control measures would not be 
diminished by the replacement of the PP measures.  Further, the PP -specific evidence directly 
contradict s Australia 's position, showing that, post implementation, taxation has not become more 
effective.  Finally, Australia fails to take into account that the proposed alternative measures would 
themselves lead to enhanced synergies.   
                                                
97 AUS' response to PQ 148, para. 26.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 B. Legal Claims under th e TBT Agreement   
1. The TBT Agreement  applies to the PP measures, as a whole98  
138. The Appellate Body has established a three -part test for determining the threshold 
question of whether a measure, as "an integrated whole "99, is a "technical regulation " under Annex 
1.1 of the TBT Agreement . The PP measures satisfy all three elements of the test:  First,  they 
apply to an "identifiable group of products ", i.e., tobacco products;100 second , they "lay down " 
product characteristics – in both a permissive and p rohibitive manner – for tobacco products and 
their packaging relating to whether and/or how trademarks may appear on cigars and cigarettes; 
independently, they qualify as packaging, marking, and labelling requirements ;  third, compliance 
with the requireme nts under the PP measures is strictly mandatory.101 
139. Australia seeks to exclude the PP measures ' "trademark requirements "102 from the Panel 's 
consideration under the TBT Agreement  on the ground that the TRIPS Agreement  governs the 
"trademark requiremen ts".  However, WTO obligations in different covered agreements apply 
cumulatively, unless the contrary is expressed or there is a conflict.  Since neither exists, both 
Article 2.2 of the TBT Agreement  and Article 20 of the TRIPS Agreement  apply to the PP m easures.   
2. The PP measures are not in accordance with international standards103  
140. Australia invokes Article 2.5 of the TBT Agreement  to argue that the PP measures are "in 
accordance with relevant international standards " and therefore "shall be reb uttably presumed not 
to create an unnecessary obstacle to international trade ".  By "international standards ", Australia 
refers to two guidelines for the implementation of Articles 11 and 13 of the Framework Convention 
on Tobacco Control ( "FCTC Guidelines "), adopted by the FCTC Conference of the Parties 
("FCTC COP").  Both Guidelines recommend that FCTC Parties "consider " the adoption of plain 
packaging.  
141. Australia 's own actions call into question whether even Australia considers that it meets 
the Artic le 2.5 conditions.  For instance, on notifying its PP measures to the TBT Committee, 
Australia104 ticked the box indicating that "a relevant international standard does not exist or the 
technical content of a proposed technical regulation is not in accorda nce with the technical content 
of relevant international standards ".   
142. Although the parties agree that successful invocation of Article 2.5 establishes a rebuttable 
presumption of compliance with Article 2.2, the DR contests Australia 's assertion that  the 
conditions that give rise to the presumption under Article 2.5 have been satisfied; and, moreover, 
the nature of the presumption that would arise if they have been.  
143. First, although the FCTC Guidelines pursue a worthy objective, they were not prep ared by 
a relevant "international standardizing body " under the TBT Agreement ,105 and therefore do not 
constitute an "international standard ".  Bearing in mind the role "international standards " play in 
furthering the objective of the TBT Agreement to faci litate international trade,106  a body like the 
                                                
98 See DR's FWS, paras. 934 -949; DR 's SWS, paras. 815 -841; DR 's responses to PQs 62, 89, 115; DR 's 
comments on AUS ' responses to PQ 145; DR 's FOS, paras. 57 -58. 
99 Appellate Body Report EC – Seal Products , para. 5.28 -5.29.  See also  Appellate Body Report, EC – 
Asbestos , para. 64.  See also  Appellate Body Report, US – COOL (Article 21.5) , paras. 5.239 and 5.241  
100 DR's FWS , paras. 939 -940. 
101 DR's FWS, paras. 948 -949. 
102 In contrast to the "form requirements " which regulate the form of products and packaging, 
"trademark requirements " regulate whether and how trademarks are displayed on tobacco products and 
packaging.  
103 See DR's SWS, paras. 814 -920;  DR's responses to PQs 66, 67,68,69,70, 130, 131, 136, 150, 163; 
DR's comments on AUS ' responses to PQs 147, 150, 162, 163; DR 's SOS, paras. 27 -33.   
104 See G/TBT/N/AUS/67 (8 April 2011).  
105 See Appellate Body Report, US – Tuna II (Mexico) , para. 359.  
106 Appellate Body Report, EC – Sardines , paras. 214 -215; see Second Triennial Review of the 
Agreement on International Standards, Contribution by Australia:  document G/TBT/W/139, para. 8.  WT/DS435/R/Add.1 • WT/DS441/R/ Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 FCTC COP, whose very purpose is to end international trade in tobacco products, does not qualify 
as an international standardizing body.107  
144. Equally, the FCTC COP does not comply with at least three of t he six principles applicable 
to international standardizing bodies set out in the TBT Committee Decision.108   The FCTC COP is 
not "open",109 nor is it "impartial "110 because, to implement the treaty, parties to the FCTC must 
follow preordained policy choi ces that privilege  particular interests and perspectives.111   
145. Nor does the FCTC COP meet the requirements of the principle of "effectiveness and 
relevance ",112  which requires that international standards be underpinned by a proper scientific 
base.  When first requested by the DR to provide the "scientific basis " for the FCTC Guidelines, the 
FCTC Secretariat refused.113 When the Panel requested this same information, the FCTC 
Secretariat cited only one piece of scientific research on plain packaging , comprising a 
methodologically flawed single -page study which reached mixed conclusions  about the merits of 
the policy.114  The activities of the FCTC COP contrast greatly with those of bodies that are widely -
accepted as international standardizing bodies, like the International Organization for 
Standardization and the Codex Alimentarius Commission, which are open, and impartial, and 
adhere to science -driven agendas.  To further underscore the lack of status of the FCTC COP as an 
international standardizing body, the WHO and FCTC Secretariat emphasized in their joint 
Communication to the Panel the standardizing activities of the WHO – the FCTC COP 's umbrella 
organization – even though that organization conducts no standardizing activities in relation to 
tobac co.115 
146. Second , the FCTC Guidelines are not "standards " under Article 1.2 of the TBT Agreement  
because they are not amenable to "common and repeated use ".  To perform their role of 
harmonizing and facilitating trade, international standards must be suf ficiently precise to ensure 
that domestic measures can simply adopt them without variation.  Failing the required precision, 
the content of national regulation inevitably varies, undermining the objective of harmonizing the 
terms of international trade.   
147. The FCTC Guidelines lack the necessary precision to be an international standard.  For 
instance, the packaging requirements  do not specify standardized terms in respect of:  the type 
face, the font colour, and the font size for the brand and variant n ame; the background colour of 
the packaging; the location of the brand and variant name on the packaging; the size or shape of 
the packaging; the type of opening mechanism; and the materials to be used (e.g., hard or soft 
pack).  For individual cigars , the Guidelines lack specificity in terms of: the type face, the font 
colour, and the font size for the brand, variant and country name; and the background colour of 
the cigar band.  Finally, in the absence of any FCTC Guidelines recommending the prohibition o n 
the use of  brand and variant names on cigarette sticks , Australia has nonetheless prohibited their 
use. 
148. Third, even if the FCTC Guidelines were international standards, the PP measures are not 
"in accordance with " them because the required high deg ree of correspondence between a 
Member 's technical regulation and an international standard is missing.116  A technical regulation is 
"in accordance with " an international standard if it "embod[ies]  the international standard 
completely  and, for practical purposes, convert[s]  it into a municipal standard ".117  The text of 
                                                
107 See e.g. FCTC, Exhibit JE -19, Arti cles 3, 7, 23, 22.1(b)(iii) and 26.3, Part III.  
108 Decisions  and Recommendations  adopted by the WTO Committee on Technical  Barriers to Trade  since 
1 January  1995, G/TBT/1/Rev.12 (21 January 2015)  
109 See TBT Committee Decision , p. 47.  
110 See TBT Committe e Decision , p. 48.  
111 Appellate Body Report, US – Tuna II (Mexico) , para. 376.  For example, to participate in the FCTC 
COP, a tobacco -growing country, like the DR, must accept, on accession, efforts to shift agricultural production 
to other crops that ma y not be as economically fruitful.   
112 See TBT Committee Decision , p. 48.   
113 Letter from the Dominican Republic to the Head of the FCTC Secretar iat (25 April 2014), Exhibit  
 DR-46. 
114 See Expert Report of G. Fong, Exhibit AUS -14, paras. 333 -334.   
115 See WHO/FCTC Communication.  
116 See Appellate Body Report, EC – Hormones , para. 163.   
117 See DR's response to PQ 66, paras. 310 -311, referring to Appellate Body Report, EC – Hormones , 
paras. 170 -171 (emphases added).   WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 Article 2.5 of the TBT Agreement  requires that a "technical regulation ", and not some sub -element 
of it, be "in accordance with " an international standard.   Therefore, contrary to Austral ia's 
argument, it is not appropriate to atomize a technical regulation into elements that are in 
accordance with an international standard and elements that are not.  
149. As explained above, the FCTC Guidelines leave a high degree of discretion to domestic  
regulators in implementing them domestically.  Further, the PP measures ban the use of brand 
names on cigarettes, which is not part of the Guidelines.  As a result, the PP measures are not in 
accordance with the FCTC Guidelines.  
150. Therefore, because A ustralia has not demonstrated that the FCTC Guidelines are 
"international standards " or that the PP measures are "in accordance with " them, it cannot benefit 
from a rebuttable presumption of compliance under Article 2.2.   
151. Even if the Panel were to di sagree, the presumption accorded under Article 2.5 has been 
rebutted by the DR.  Contrary to Australia 's argument, the presumption relates to the factors that 
must be considered under an Article 2.2 analysis, including the challenged measure 's trade -
restrictiveness, its contribution, the risk non -fulfilment would create, and the existence of 
alternatives that are reasonably available.  However, the precise nature and content of the 
presumption arising in a particular case depends on whether and how a partic ular international 
standard addresses the Article 2.2 factors.  In this dispute, at most, the FCTC Guidelines address 
whether the PP measures "contribute " to the achievement of its objectives.118 However, as regards 
the contribution, the Panel record confi rms that the FCTC COP lacked a sufficient evidentiary basis 
to support the conclusion that plain packaging would likely reduce smoking: as already noted, at 
the time the FCTC Guidelines were adopted, the scientific basis for the Guidelines comprised a 
single study on plain packaging, comprising a single page, with mixed results.119  Moreover, any 
predictive evidence relied on in formulating those Guidelines has since been overtaken by the 
more probative post -implementation evidence provided by the complaina nts in this dispute.  As 
regards the reasonable availability of alternatives, the FCTC Guidelines do not consider or weigh at 
all the relative merits of the PP measures and proposed alternative measures.  Indeed, it would be 
anathema to the objectives of t he FCTC to identify the measure(s) that will have the least 
restrictive effects on trade in tobacco products, because the FCTC seeks to end trade in tobacco 
products by maximizing  the restrictive effects on trade.  
3. The PP measures are inconsistent with A rticle 2.2120  
152. Article 2.2 requires a holistic  weighing and balancing of the following factors under a 
"necessity " analysis: (a) the trade restrictiveness of the challenged measure; (b) the contribution 
the measure makes to the legitimate objective; ( c) the risks non -fulfilment would create; and (d) 
the reasonably available alternative measures.121  Since many of these factors have been 
discussed in the analysis of the Article 20 TRIPS claims, the DR focuses here on the distinct 
aspects of the Article 2.2 analysis.  
a. The PP measures are highly trade restrictive122 
153. Under Article 2.2, "trade -restrictiveness " refers to a limitation on competitive opportunities 
on internationally -traded goods.  The assessment must take into account the opportunities r elative 
to "the situation prior to the enactment of " the challenged measures.  WTO obligations do not 
protect existing trade flows, but opportunities to engage in international trade, including future 
opportunities to develop and expand exports.123 Thus, t o succeed in demonstrating "trade 
restrictiveness ", a complainant is not required to prove the actual trade effects of a measure, but 
                                                
118 See below paras. 152 -163.   
119 DR's SWS, para. 544.  See also Expert Report of G. Fong, Exhibit AUS -14, paras. 333 -334.   
120 See DR's FWS, paras. 952 -954; DR 's SWS, paras. 922 -923; DR 's responses to PQs 117, 118, 121, 
165; DR 's comments on AUS ' responses to PQs, 151, 152.  
121 See Appellate Body Reports, US – Tuna II (Mexico) , paras. 318, 320, 322; US – COOL , paras. 374, 
376. 
122 See DR's FWS, paras. 957-963; DR 's SWS, paras. 924 -961;  DR's responses to PQs 152, 153; DR 's 
comments on AUS ' responses to PQs 152, 154, 165; DR 's FOS, par as. 59-62;  DR's SOS, paras. 34-36. 
123 Appellate Body Report, Korea – Alcohol , para. 112 ff.   WT/DS435/R/Add.1 • WT/DS441/R/ Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 rather a limitation on competitive opportunities.   A measure 's effect on competitive opportunities 
is to be determined by  reference to its design, architecture, structure and operation.  
154. For Australia, a limitation on competitive opportunities requires that there be an overall  
decrease in actual volumes of imports of tobacco products as whole .  Australia illustrates its 
argument through a reference to a technical regulation affecting different car segments.124   Under 
that example, a technical regulation that entirely eliminates  competitive opportunities in the most 
valuable  market segment does not restrict trade, because  "offsetting " sales of cheaper cars means 
that overall trade volumes do not fall.   
155. The DR disagrees.  Article 2.2 obliges a Member to ensure that none of the goods subject 
to a technical regulation is subject to an unnecessary trade restriction.  Thu s, if a Member imposes 
an unnecessary trade restriction on some of the goods subject to a technical regulation, it cannot 
"offset " that improper treatment by imposing no unnecessary restrictions on trade in other goods 
subject to that regulation, or by cre ating competitive opportunities in respect of those other goods.  
A note prepared by the WTO TBT Committee supports the interpretation that an effect on trade 
may be measured by reference to a measure 's effect on "a specific product, group of products or 
products in general ".125 
156. Australia also argues that, although trade restrictions affecting particular market segments 
are not disciplined under Article 2.2, they are disciplined if they involve discrimination on grounds 
of origin under Article 2.1 of t he TBT Agreement .126 However, whether a measure restricts trade in 
goods in the overall market or in particular segments, the restriction may be prohibited under 
WTO law both as discriminatory under Article 2.1 or as unnecessary under Article 2.2.  There i s no 
basis to conclude that the drafters intended to prohibit restrictions on trade in goods sold in 
particular market segments when the restrictions were discriminatory, but to permit such 
restrictions when they were unnecessary.  
157. Applying the correct  legal standard, the PP measures are trade -restrictive because they 
limit competitive opportunities for all tobacco products, in particular the opportunity for producers 
to differentiate competing offerings in the marketplace, which has an impact on consum er loyalty 
and willingness to pay a premium for a differentiated product.  
158. Although unnecessary, the DR has also presented uncontested empirical evidence showing 
the adverse trade effects entailed by this loss of competitive opportunities.  In particu lar, the PP 
measures have led consumers to switch from more expensive to cheaper tobacco products 
(i.e., downtrading).  A measure that limits the ability to trade in more expensive tobacco products 
is a value -based restriction on international trade in tho se goods.  Countries seek to maximize 
export revenues, and a measure that induces consumers to switch to cheaper products suppresses 
export revenues.  Thus, even if a showing of trade effects were required, the DR has established 
that the PP measures have had such effects.  
b. The alternatives proposed by the DR are less trade restrictive than the PP 
measures127 
159. Under Article 2.2, a complainant  must show that a proposed alternative is "less trade 
restrictive " than the challenged measure (as opposed to less "trade mark" restrictive under 
Article  20).  Were the Panel to reach consideration of alternatives, it would have disagreed with 
the complainants that the PP measures do not contribute to reducing smoking behaviour.  On that 
assumption, the loss of com petitive opportunities entailed by the PP measures leads to two distinct 
types of trade -restrictive effects: (1) a reduction in overall sales of tobacco products due to an 
assumed impact on consumers that either quit smoking or do not start; and (2) a redu ction in 
sales of more expensive tobacco products in favour of cheaper ones (i.e., value -based 
downtrading), which arises due to an impact on consumers that continue to smoke but smoke 
cheaper cigarettes.  
                                                
124 See AUS' SWS, paras. 385 -396. 
125 See e.g.  G/TBT/W/2/Rev.1  (21 June 1995), p. 7 and G/TBT/M/2 (4 October 1995).  
126 DR's response to PQ 154, para. 57 ff.   
127 See DR's FWS, paras. 972 -978; DR 's SWS, paras. 966 -990; DR 's response to PQs 63, 151, 152, 153, 
157, 165; DR 's comments on AUS ' responses to PQ 151, 152, 154, 158.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
- B-59 - 
 160. Each of the alternatives is less trade restric tive than the PP measures.   With respect to the 
volume effects , the PP measures and the alternatives would reduce tobacco sales to an equivalent  
extent or, as necessary, the alternatives could be calibrated to do so.128  In terms of value effects  
(or down trading), the alternatives would be less trade -restrictive: the MLPA does not lead 
continuing smokers to swap more expensive tobacco products for cheaper ones; an increase in 
taxation has a lesser effect on downtrading, and Australia has failed to demonstr ate otherwise; 
social marketing does not lead to downtrading; and pre -vetting would lead to less downtrading, 
because fewer distinguishing elements would be removed from the packaging.  Finally, in terms of 
their treatment under the covered agreement , wher eas the PP measures are disciplined as a 
technical regulation that restricts international trade and they "encumber the use of trademarks ", 
increased taxation, MLPA and social marketing are not trade/IP restrictive under any of the 
disciplines in the cover ed agreements.  
c. The PP measures are more trade restrictive than necessary "taking into account 
the risks non -fulfillment would create "129 
161. Article 2.2 requires that a panel take account of the "risks non -fulfilment would create ", 
which requires consi deration of:  first, the nature of the risks at issue; and second, the gravity of 
the consequences that would arise from non -fulfilment of the legitimate objective.130  By its terms, 
the nature of the risks enquires into (i) the possibility or likelihood o f (ii) a negative event 
occurring – i.e., the failure to achieve, in whole or in part, the desired objective.  The gravity of 
the risks relates to the seriousness of the consequences that flow from the negative event 
materializing.  
162. As regards the nature of the risks  under the PP measures, the economic data shows that 
the PP measures have not reduced smoking and have not, therefore, fulfilled their objective; the 
evidence from the NPPTS also suggests that the PP measures are not even having the intended  
effects on the mechanisms by which the PP measures are ultimately supposed to reduce smoking.  
Thus, the best -case scenario still involves a considerable risk of non -fulfilment  of the objective of 
reducing smoking because of the uncertainties over whether  the PP measures will ever reduce 
smoking.  By contrast, the alternative measures  proposed by the DR collectively involve no risk of 
non-fulfilment, but rather involve the certainty  that they would reduce smoking behaviour in the 
population in general, and  among young people in particular, both in the short - and the long -term.  
163. As to the  gravity of the risks  of non -fulfilment, Australia does not contest that the gravity 
of the risks as between the PP measures and the alternatives is identical.  
III.  REQUESTS FOR FINDINGS   
164. To conclude, the DR respectfully requests the Panel to find that Australia 's PP measures 
violate Article 2.2 of the TBT Agreement  and the following provisions of the TRIPS Agreement : 
Articles 15.4, 16.1, 20, 2.1 (and Article 10 bis of the Paris Convention ), Article 22.2(b) and 
Article  24.3.  The DR requests that, pursuant to Article 19.1 of the DSU, the Panel recommend to 
the Dispute Settlement Body that it request Australia to bring its PP measures into conformity with 
its obligat ions under the TRIPS Agreement  (including the substantive provisions of the 
Paris Convention , as incorporated into the TRIPS Agreement ) and the TBT Agreement . 
 
                                                
128 See above paras. 153 -158 for discussion by the DR on the trade -restrictiveness of the PP measures.   
129 See DR's FWS, paras. 1025 -1031; DR 's SWS, paras. 991-1011; DR 's response to PQ 65.  
130 Appellate Body Report, US – Tuna II , para. 321.  See also Appellate Body Report, US – COOL 
(Article  21.5) , para. 5.215.   WT/DS435/R/Add.1 • WT/DS441/R/ Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 ANNEX B -3 
INTEGRATED EXECUTIVE  SUMMARY OF THE ARGUM ENTS OF CUBA* 
I. INTRODUCTION AND IMPORTANCE  OF THE PRESENT DISPUTE FOR CUBA  
1. This dispute settlement proceeding is the first that Cuba has initiated against another 
WTO Member. The decision to bring this complaint against Australia follows thorough reflection 
and analysis by the Cuban authorities . 
 
2. The Cuban Government attaches great importance to public health and fully accepts that 
tobacco consumption has serious consequences for public health. Cuba does not wish to interfere 
unduly with the ability of WTO Members to undertake effective actio ns in the field of tobacco 
control , since it considers that every country has the sovereign right and overriding duty to 
implement measures geared to safeguarding the health of its population.  
 
3. At the same time, however, every WTO Member must respect th e commitments it has 
undertaken multilaterally and, in addition, adequately take into account the socio -economic 
implications they will have for small and vulnerable developing economies before implementing 
them. Cuba is not seeking to challenge Australia' s right to protect the health of its population, but 
to demonstrate that plain packaging (PP) constitutes an unjustified and unnecessary restriction on 
trade which infringes the brand protection recognized in international intellectual property 
agreements,  inasmuch as it hinders the identification and characterization of products by 
consumers and prohibits the use of distinctive signs, warranty seals and appellations of origin.  
 
4. Cuba opposes the plain packaging ("PP") established by Australia on 1  Decemb er 2012 
(the PP measures) because it considers that there is no convincing evidence that it has generated, 
or will generate, tangible public health benefits in Australia; because it is disproportionate; and 
because it will have a significant detrimental ef fect on Cuba's cigar industry as well as on the 
intellectual property that Cuba has built up over generations.  
 
5. By standardizing the appearance of packaging, the application of these measures represents 
the total dilution of the distinctive characterist ics of the identifying marks of tobacco industry 
products. This hinders the differentiation and characterization of products by consumers on the 
basis of brand preference, by eliminating trademark functions such as "distinguishing one product 
or service fr om another", "indication of origin" and "identification of quality".  
 
6. It is for this reason that Cuba initiated this dispute. Cuba bases its action to defend large 
hand-made (hereinafter LHM) cigars on the social, historical, cultural and economic impac t 
involved for the country. Cuban premium cigars embody a wealth of traditional knowledge, 
culture, history and Cuban characteristics such that the sector in and of itself is a bulwark of the 
country's identity associated with a history stretching back ove r more than five centuries. A large 
number of women, elderly people, rural workers etc. are linked with the sector, and other family 
members depend economically upon them, so that it is the essential economic pillar for various 
regions of Cuba such as the province of Pinar del Río. Account has also been taken of the 
singularity of this product, identified through the distinctive signs of Industrial Property as an 
emblematic Cuban product, such as the Habanos geographical mark and appellation of origin, the 
Cuban Government Warranty Seal and the tobacco manufacturers' marks, some of which date 
back over a century and are also protected as works of art historically associated with this same 
geographical origin.  
 
7. Ever since its cultivation began in Cuba even  prior to colonization, twist tobacco has been 
part of our historical and cultural traditions. It is the only custom of the indigenous population of 
the island to have been documented by the first Spaniards when they arrived in 1492. The twist 
tobacco harv esters were probably the first workers' association to acquire social representation in 
Cuba and organized the first protests and uprisings against the Spanish colonial regime as early as 
the 17th century. The tobacco strippers and twisters spearheaded imp ortant struggles in the 
history of the Cuban workers' and union movement. Twist tobacco cultivation is rooted in Cuba's 
                                                
* Original Spanish.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 cultural life and has attracted priority attention from social anthropologists. The greatest of these, 
Fernando Ortiz, who is known as t he third discoverer of Cuba owing to his invaluable contributions 
to the study of Afro -Cuban traditions, wrote his classic essay, "Cuban Counterpoint: Tobacco and 
Sugar", in the first half of the 20th century. In this study the author describes and analyse s the 
social and cultural factors associated with these two Cuban products.  
 
8. In 2009, Cuban LHM cigars were presented to UNESCO as the intangible heritage of the 
Cuban nation, and the tobacco factory collective readings (Lecturas de Tabaqueria) are part  of the 
cultural heritage of the Cuban nation as "an illustration of the permanent cultural dialogue 
between tobacco workers and the surrounding society, and recognized as an important expression 
of the nation's intangible cultural heritage".  
 
9. Cuban cor porations hold 50 separate trademarks which are regi stered in Australia under 
Class 34 of the International Classification (the Class relating to tobacco products) (the Cuban 
Class 34 trademarks). A full list of the 50 registered trademarks is set out in A nnex 1 to Cuba's 
first written submission. Many of these trademarks have been in use since the mid -19th century 
and are as sociated with considerable good will. Indeed, several have been recognized as 
"well-known marks" by courts and jurisdictions as varied as the Dominican Republic, France, 
Spain, Mexico and the United States.  
 
10. Cuba has also developed a geographical indication for its LHM cigar products. The 
"Denominación de Origen Protegida (DOP) Habanos"  (the Habanos GI) is a coloured composite 
mark co nsisting of the word "Habanos", the suffix "DOP" and an image of chevrons forming a leaf. 
The Habanos GI is protected in major export markets. The current composite mark has been in 
use since 1994 but the term Habanos has been used and protected for a much  longer period. 
A more detailed account of the development of this geographical indication is set out in Annex 1 to 
Cuba's first written submission. The Habanos GI is used to designate cigars that: (1) have been 
produced in Cuba according to stringent and comprehensive quality standards; and (2) contain 
certain varieties of Cuban black tobacco grown in specific regions of Cuba.  
 
11. The applicable quality standards, and the use of the Habanos GI, are currently regulated by 
the "Consejo Regulador de la Denom inación de Origen Protegida Habanos" (Regulatory Board of 
the Cuban Tobacco Appellation of Origin). The Consejo Regulador acts pursuant to Resolution 
No. 201/2009, promulgated by the Agriculture Ministry of the Republic of Cuba. The stringent 
requirements imposed by the Consejo Regulador are meant to ensure that the authentic and 
special quality claimed for Cuban hand -made cigars is present in every product that bears the 
Habanos GI. Like many geographical indications, the Habanos GI is used to designate a product 
which reflects the cultural heritage of the place where it is produced and which is made from 
natural materials according to traditional methods.  
 
12. Cuba also requires that an official seal be affixed on all tobacco products exported from 
Cuba (t he Cuban Government Warranty Seal). The Cuban Government Warranty Seal was first 
used in 1889 pursuant to a Spanish Royal Decree. The current design can be traced back to 
legislation promulgated by the Republic of Cuba in 1912. It provides an assurance of authenticity 
to consumers and also allows for tracking and tracing by Cuban exporters. Like the Cuban Class 34 
trademarks and the Habanos GI, the Cuban Government Warranty Seal is protected under 
trademark and unfair competition laws in export markets.  
 
13. The Warranty Seal and Habanos GI are reproduced below in an easy -to-view format:  
 
 
 
Habanos GI  Warranty Seal  
 WT/DS435/R/Add.1 • WT/DS441/R/ Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 14. Cuban LHM cigars have an unsurpassed reputation for quality. They typically command a 
significant price premium over competing tobacco p roducts and are regularly ranked by critics 
among the best cigars in the world.  
 
15. That reputation is a product of the collective investment by the Cuban people over 
generations; it arises from a combination of the natural environment in Cuba and the kno w-how 
and techniques used by Cuban tobacco growers and cigar makers. Cuba has made every effort to 
preserve a method of production in which the LHM cigars are made entirely by hand by highly 
skilled workers. The economic implications of following these tra ditional methods of production are 
significant: in broad terms, a machine -made cigar factory employing 100 people could 
produce  670,000 cigars a day, while an equivalent Cuban hand -made c igar factory would only 
produce  9,000 cigars in the same time frame.  
 
16. Consumers all over the world are willing to pay a premium for Cuba's long experience in 
producing its LHM cigars, and this makes the use of these traditional methods of manufacture 
worthwhile. However, with the distortion caused to Cuban intellectual property (in particular, the 
Cuban Class 34 trademarks, the Habanos GI and the Cuban Government Warranty Seal), 
Australia's measures will affect the Cuban industry's ability to charge that premium, to maintain 
customer loyalty and to sustain its commitment  to these methods of manufacture.  
 
17. If Australia's plain packaging measures are replicated across major export markets, such as 
the European Union, Cuban exporters will no longer be able to compete on the basis of quality, 
which will have a significant adverse impact on its tobacco industry. At the same time, any adverse 
effect on its tobacco industry will have significant negative effects on the Cuban economy as a 
whole, since:  
 
a. Tobacco products consistently account for more than 5 % of Cuba's total e xports 
(by value). As a small and vulnerable economy with limited export opportunities, Cuba 
would be significantly affected by the loss of these exports. Tobacco is one of the few 
agricultural crops which can be cultivated profitably in Cuba. This is beca use of the 
value addition created locally and the significant value that inheres in the Cuban 
intellectual property associated with these products.  
 
b. Cuba has 465 tobacco production units and employs more than 200,000 people in the 
tobacco sector. In per centage terms, the tobacco sector accounts for 4 % of the 
economically active population in Cuba. To put that figure in context, a similar 
proportion of the economically active population in Switzerland is engaged in the 
banking sector.1 
 
c. Production empl oyees in hand -made cigar factories have dedicated years of effort to 
acquiring specialized skills. These employees will not be able to transfer their skills to 
other sectors if, as a result of plain packaging and in a situation where Cuban tobacco 
products  are perceived to be indistinguishable from non -Cuban tobacco products, 
consumers abroad are unwilling to pay a premium for Cuban exports.  
 
d. The population within certain regions such as that of San Luis in Pinar del Río province 
and the Florencia region  in Ciego de Ávila province are heavily dependent on the 
tobacco sector. Tobacco has been grown in those regions for  hundreds of years.  
 
e. The profits earned from tobacco exports also generate tax and dividend revenues for 
the Cuban Government. Those reve nues allow the Cuban Government to meet the 
needs of the Cuban population as a whole.  
 
f. Cuba is currently unable to  abandon the twist tobacco industry, which for the time 
being is one of its most important  exportable products, particularly in the context  of 
an economic, trade and financial blockade applied by the United States, which  
prevents access to markets for goods, services and credit to boost the country's 
economic  development.  
 
                                                
1 Swiss Bankers Association – The Economic Significance of the Swiss Financial Centre, Exhibit CUB -14, 
First Written Submission of Cuba.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
- B-63 - 
 18. Australia's response to these concerns about intellectual property  protection appears to be 
that it continues to protect Cuban trademarks because: (1) they can be placed on the Australian 
trademarks register in their original form; and (2) Cuban trademark holders have the ability to 
prevent third parties from using Cuban  trademarks on tobacco products. But that response does 
not go anywhere near to addressing the real issue. Third parties cannot use Cuban trademarks in 
their original form on tobacco packaging because that would amount to a breach of Australian 
plain packa ging laws. It follows that Australia grants a right to Cuban trademark holders which is 
entirely illusory because Cuban trademark owners cannot take advantage of those trademarks by 
using them in their original and recognizable form. Australia's regime has  been created solely for 
the purpose of maintaining the appearance that Australia continues to protect trademarks of 
tobacco products, but it actually provides no genuine protection for such trademarks.  
 
II. EFFECTIVENESS OF PLAIN PACKAGING  
 
19. Cuba quest ions the esoteric theories invoked by Australia with regard to the impact PP may 
have on consumer behaviour, culminating in the "affect heuristic theory"  and the "conditioned cue 
reactivity " to tobacco trademarks. It is not appropriate for the Panel to rel y on these theories, 
particularly in a context where the data show that PP did not contribute to a decline in the 
prevalence of the smoking habit. Moreover, Cuba considers that a behavioural theory can be 
developed to justify any conclusion (including conc lusions that clearly contradict each other). 
Therefore, the Panel should be extremely cautious when evaluating such theories. The simple 
question facing the Panel is whether Australia's public health objective is less likely to be achieved 
by the packaging  shown bel ow in Photograph 1 (a pack of LH M cigars with a health warning, but 
without the effect of other aspects of the PP measures) than by the p ackaging in Photograph 2 
(a pack of LHM cigars with a health warning and with the effect of the PP measures).  The question 
is whether the difference between the two is sufficiently great to justify the PP measures.  
 
Figure 1 : 
 
 
 WT/DS435/R/Add.1 • WT/DS441/R/ Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
- B-64 - 
 
 Figure 2 : 
 
 
 
 
20. The reply is obviously "no". Cuba maintains that the dominant and unattractive graphic 
health warnings (which must c ompulsorily be placed on all tobacco packaging) would  effectively 
eliminate the aesthetic appeal of packaging. It therefore follows that any additional standardization 
of the appearance of tobacco packs (in the residual portion which occupies, for example,  25% of 
the front face and 10 % of the back face of cigarette packs) cannot have a dissuasive effect on the 
decision to take up a behaviour that is both risky and the object of widespread social disapproval 
in Australia.  
 
21. The Panel could only agree with  Australia if it were overwhelmingly and clearly supported by 
the data and evidence. That is undoubtedly not the case. The post -implementation data on 
prevalence and consumption in the Australian market show that PP has not reduced rates of 
smoking since i ts introduction in December  2012.  
 
22. Different types of analysis on various sources of information indicate that PP has failed in 
reducing the smoking an d tobacco consumption rate. The only effect that PP has had is to 
accelerate the current trend toward s down -trading (i.e. consumer migration towards lower -priced 
products or brands) in certain segments of the Australian tobacco market. This is an unforeseen 
consequence of the PP measures which, far from reducing smoking and tobacco consumption 
rates, carr ies a genuine risk of generating adverse consequences for public health. 
The acceleration of down -trading is consistent with Cuba's concerns in relation to the future effect 
of PP.  
 
23. Moreover, the studies relied upon by Australia provide no solid basis for concluding that 
PP measures will reduce tobacco use. None of these studies measures actual consumption of 
tobacco by individuals; instead, they use substitute variables. This shortcoming is explicitly 
recognized in the so -called Chantler Report. In add ition, these studies used research models which 
give rise to considerable doubt about the reliability of any conclusion reached. The great majority 
of these studies do not evaluate the impact of PP in the real world.  
 
24. Consequently, PP measures cannot " justify" the total "encumbrance" imposed on Cuban 
trademarks for the purposes of Article 20 of the TRIPS Agreement. By the same token, the 
PP measures are much more restrictive than necessary to fulfil Australia's objective of reducing the 
prevalence of th e smoking habit, and therefore violate Article 2.2 of the TBT Agreement.  
 WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
- B-65 - 
 25. In its second written submission, Australia continues suggesting that the use of trademarks 
and geographical indications for LHM cigars made in Cuba makes them more attractive to  children 
and adolescents. In this connection, Cuba wishes to emphasize that the Australian authorities are 
entitled to prohibit alcoholic beverages that are especially attractive to minors. However, no 
Australian authority has at any time suggested that t rademarks and geographical indications can 
no longer be shown on premium alcoholic beverages, for example on bottles of the brand of 
champagne illustrated below:  
 
Figure 3 : 
 
 
 
 
III. PLAIN PACKAGING MEASURES AND THEIR IMPACT ON CUBAN LHM CIGARS  
 
26. Cuba w ishes to draw the Panel's attention to the recent phenomenon of so -called parallel 
imports of Cuban LHM cigars into Australia. This was made possible by the compulsory withdrawal 
of the Cuban Government Warranty Seal which must be carried by all LHM cigars  exported from 
Cuba. Prior to the PP measures, consumers who purchased LHM cigars only acquired products with 
an authentic and intact warranty seal. Normally, consumers would never purchase Cuban LHM 
cigars without the warranty seal because Cuban L HM cigar s are luxury premium products which 
carry a high unit price. However, the PP measures have made it impossible to market the product 
with the warranty seal, thus enabling para llel traders to purchase Cuban LHM cigars outside 
Australia and to repackage them in PP-compliant packs, albeit without the warranty seal. Prior to 
the introduction of the PP measures, parallel imports did not occur on a major scale, since they 
always require repackaging of the cigars and, hence, the breaking of the warranty seal withou t the 
possibility of affixing a new one. While consumers wou ld not normally purchase Cuban LHM cigars 
without an intact warranty seal, all Cuban LHM cigars currently marketed in Australia have no 
warranty seal, and this has created an opportunity for paral lel imports.  
 
27. There is a major risk that the handling of the product by third parties not subject to any 
control by the Cuban industry or the latter's strict standards of quality will affect the quality of the 
cigars, and this will definitely affect th e presentation of the product within the package. Moreover, 
this practice will entail a reduction in consumer prices (since the ability to offer lower prices to 
consumers is the raison d'être of parallel trade).  
 
IV. THE PLAIN PACKAGING MEASURES VIOLATE AR TICLE 20 OF THE TRIPS 
AGREEMENT  
 
28. The PP measures adopted by Australia violate Article 20 of the TRIPS Agreement because 
they unjustifiably encumber the use of tobacco product trademarks in the course of trade through 
the establishment of special requir ements. That provision places limits on the ability of 
WTO Members to restrict the use of trademarks by commercial actors in the course of trade.  WT/DS435/R/Add.1 • WT/DS441/R/ Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
- B-66 - 
 
 A. THE PLAIN PACKAGING MEASURES ARE A SPECI AL REQUIREMENT  
 
29. The PP measures impose a set of conditions that  must be complied with by commercial 
actors involved in the manufacture and distribution of tobacco products in Australia. Australia's 
measures, therefore, impose "requirements".  
 
30. The requirements arising from the PP measures are "special", since they affect only 
trademarks used on tobacco products. Equivalent requirements are not applied to trademarks in 
general or to trademarks used in connection with other types of products.  
 
B. THE PLAIN PACKAGING MEASURES ENCUMBER TH E USE OF A TOBACCO -RELATED 
TRADE MARK IN THE ORDINARY  COURSE OF TRADE  
 
31. The relevant ordinary meaning of the term "encumber" is "to hamper, impede, act as a 
check or restraint". Encumbrances have the effect of restricting the display of a trademark and 
limiting its ability to distingui sh goods from competing goods.  
 
32. That is precisely the effect of the restrictions imposed by Australia on the display of 
trademarks. These restrictions involve "impediments", "checks" and "restraints" on the use and 
display of trademarks by trademark ow ners and they limit the capacity of trademarks to 
distinguish specific tobacco products from other tobacco products.  
 
33. The PP measures prohibit the use of trademarks at the point of sale. To the extent that the 
use of specific trademarks is permitted (e .g. mark and variety names), the PP measures require 
the use of such marks in a specific form and typeset. These are " special requirements " for the use 
of a trademark " in a manner detrimental to its capability to distinguish the goods or services of 
one un dertaking from those of other undertakings ". This implies the imposition of an encumbrance 
on the use of trademarks " in the course of trade ". 
 
34. Australia submits that the PP measures do not affect the use of trademarks " in the course of 
trade " because A ustralia is a "dark market" and, therefore, the packaging is not visible before the 
conclusion of the operation. This interpretation is unacceptably limited and out of line with the 
ordinary meaning of the term (as used in other articles; e.g.  Article 16.1  of the TRIPS Agreement 
and subparagraph 3 of Article 10bis of the Paris Convention). Rather, the term " in the course of 
trade " refers more broadly to any use "in trade" or any "commercial use" of the mark.  
 
35. The correct interpretation of Article 20 req uires that, once it is established that a measure 
imposes special requirements constraining trademark use, the burden of justifying those special 
requirements shifts to the implementing WTO Member. This is so because: (i) the imposition of 
encumbrances on trademark use should only be permitted in exceptional circumstances; and (ii) it 
is inappropriate to require a complainant to identify and refute a justification of which it may be 
unaware or which may not be particularized.  
 
C. THE PLAIN PACKAGING MEASURE S ARE UNJUSTIFIABLE  
 
1. The PP measures make no contribution to Australia's objective of reducing tobacco 
consumption levels  
 
36. Cuba maintains that the special requirements imposed by Australia on the use of tobacco 
trademarks are ineffective because the y fail to achieve the legitimate aim of causing a reduction in 
smoking prevalence. Cuba bases this submission primarily on the post -implementation data from 
the Australian market, which demonstrate that Australia's measures have not had the desired 
effect.  Moreover, Cuba goes further and shows that Australia's measure is not based on a cogent 
and robust rationale.  
 
37. As Cuba explained in detail in section IV.A of its first written submission, the 
post-implementation evidence establishes that the PP measur es, including the trademark 
restrictions, have not caused any discernible reduction in prevalence rates (or tobacco 
consumption levels) in Australia. In particular, they have not led to material changes in prevalence 
or consumption relative to the rates ob served in New Zealand, and they have not altered smoking 
prevalence rates for minors or young adults. Moreover, sales of LHM cigars, as evidenced in the WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
- B-67 - 
 Pacific Cigar Co. Ltd. (PCC) data, have remained steady and rates of cigar smoking, as measured 
in the Roy Morgan survey data, have not been altered by the implementation of the PP measures.  
 
38. The evidence shows that the "special requirements" established by the PP measures have 
been ineffective in connection with tobacco use in general. Moreover, even i f such evidence were 
available, it is unlikely that the prohibition on the use of Cuban -owned trademarks, such as Cohíba 
and Habanos on LHM cigars would have an impact on the prevalence of smoking in Australia.2 
 
39.  In addition, Cuba argues that Australi a's justification for the trademark restrictions suffers 
from material flaws.  
 
40. To begin with, the body of literature offered in support of Australi a's measures consists of 
studie s which suffer from a number of horizontal limitations.  
 
41. Australia's c laim that PP will reduce the appeal of packaging and thereby alter smoking 
decisions suffers from a number of shortcomings. Australia's claim that PP will increase the 
effectiveness of Graphic Health Warnings (GHWs) and thereby reduce smoking rates is also  flawed. 
Finally, the claim that plain packaging reduces the ability of packaging to mislead consumers about 
the harmful effects of smoking cannot justify Australia's PP measures. For all of these reasons, 
Cuba submits that the trademark restrictions are i neffective as they are not supported by a 
defensible rationale. Consequently, for this reason as well, they are unjustifiable.  
 
42. Lastly, Cuba wishes to mention that, on 26  February  2016, Australia notified the Panel of the 
results of its post -implementa tion review. The review concludes that the PP measures are meeting 
its objective of improving public health in Australia. On 21  March  2016, Cuba informed the Panel 
that it endorsed the comments submitted by Honduras in relation to Australia's 
post-implemen tation review. Those comments, in essence, indicate that the conclusion put forward 
in the post -implementation review is based on certain evidence which has been shown to lack 
validity by the complainants in this dispute.  
 
2. Alternative less restrictive m easures that would have enabled it to achieve its 
objective were available to Australia  
 
43. If the Panel concludes, contrary to Cuba's position, that the trademark restrictions have 
been effective in reducing prevalence rates and per capita consumption le vels in Australia, such 
changes can be obtained through alternative measures less encumbering on trademark use.  
 
44. The alternative measures in question are the following:  
 
a. An increase in the level of excise tax on tobacco products. This would suffice to bring 
down prevalence rates and per capita consumption levels by the modest amounts that 
the PP measures might possibly achieve. It is obvious that specific excise tax 
increases do not affect the ability of tobacco trademark owners to use their rights.  
 
b. Pre-vetting of packaging design features. This would suffice to replicate any benefits 
of PP. There is no evidence that all of the design features of tobacco product 
packaging and trademarks cause changes in smoking behaviour, and it would 
therefore be  enough, by means of a pre -vetting regime, to identify and eliminate only 
those specific packaging features that may affect smoking behaviour (without severely 
curtailing the ability of manufacturers to distinguish their products from other 
products from d ifferent sources by means of trademarks).  
 
c. An increase in the age at which tobacco products can be purchased legally would 
make at least an equivalent contribution to reducing prevalence rates and, by 
removing tobacco products from adolescents' social n etworks, would be particularly 
effective in reducing prevalence among the young.  
 
d. Improved social campaigns for tobacco control. To this end, it  would be necessary to 
remedy the flaws present in Australia's current social marketing campaigns and there 
would be no impact on the intellectual property rights of tobacco trademark owners.  
                                                
2 Habanos is both a trademark and a geographical indication.  WT/DS435/R/Add.1 • WT/DS441/R/ Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
- B-68 - 
 
  
D. AUSTRALIA HAS FAILED TO REBUT CUBA'S PRIMA FACIE CASE IN RELATION TO 
ARTICLE 20 OF THE TRIPS AGREEMENT  
 
45. Australia argues that "the scope of the 'special requirements ' at issue [in Article XX] does 
not include the respects in which the tobacco plain packaging measure prohibits the use of certain 
trademarks on tobacco retail packaging and products". According to Australia, Article 20 prevents 
only measures that impose p ositive obligations upon the trademark owner, but does not prevent 
measures in the form of prohibitions on use.  
 
46. Australia's argument is erroneous. The term "requirement" is broader than the term 
"prohibition", but unquestionably also includes prohibit ions. "To prohibit" is nothing other than 
"to require, negatively" that something be done or not done. Furthermore, the PP measure 
imposes both negative and positive requirements through the prohibition on use of all trademarks, 
on the one hand, and by req uiring, for example, the use of trade names in a specific format and 
typeface. Accordingly, the PP measure establishes a series of positive and negative requirements 
on trademark use.  
 
47. Australia also argues erroneously that the role of trademarks is li mited to the identification 
of the manufacturer. While one of the main functions of a trademark is to guarantee the origin of 
goods and services, this is not its only purpose. The body of international jurisprudence on 
trademarks clearly indicates that tra demarks have a set of important functions that go far beyond 
merely indicating the origin of the product (such as distinguishing the goods of the trademark 
owner from those of other traders). This is specifically applicable to luxury premium brands, such 
as the Cuban LHM cigars marketed in Australia.  
 
48. Trademarks have important quality, communication and investment functions, in addition to 
their function of indicating origin. In the case of Cuban cigars, their prestige is communicated by 
the mark and by  its association with Cuba. Lastly, trademarks have an investment function. 
The investment function consists in the use of the trademark to acquire or preserve a reputation 
which maintains customer loyalty over a prolonged period of time.  
 
49. Australia's arguments overlook these essential and broader functions of trademarks. 
Instead, they focus and limit the role of trademarks to their narrow historical function as a 
mere factor in differentiating the trademark owner from other produc ers in terms of a diff erence 
of origin.  
 
50. Australia attempts to argue that its PP measures are "justifiable" by making a distinction 
between what it calls the " essential source identification function " of a trademark and what it calls 
the " advertising function " of trademarks . According to Australia, the PP measures respect the 
"essential source identification " because they permit the use of the trademark name (in a 
standardized source and without graphic elements) and simply prohibit " unacceptable advertising ". 
 
51. Cuba tota lly disagrees with Australia when it argues that the use on product packaging of 
trademarks including figurative elements and colours is not protected by Article 20 of the 
TRIPS  Agreement. Both types of trademark (i.e. those which only contain text and tho se which 
contain figurative elements) are independently protected by the TRIPS Agreement (Articles 15.1, 
22 and 23 of the TRIPS Agreement). It is also obvious that a trademark that cannot be used is 
incapable of fulfilling its essential source identificati on function ; thus, the PP measures impede the 
primary function of a trademark. Many WTO Members regulate or prohibit advertising of products 
such as alcoholic beverages, health products and tobacco. However, no WTO Member other than 
Australia has implement ed a prohibition on the use of trademarks in product packaging.  
 
52. In addition, the graphic elements play a fundamental role in source identification. By way of 
example, the complete version of the Cohíba trademark refers to the indigenous people of Cuba , 
the Taínos Indians smoking the "cuaba" which was an ancestral ceremony prior to the arrival of 
Christopher Columbus. The graphic element of the trademark, which alludes to the cultural 
inheritance in which the product has its roots, is at least as import ant for the function of source 
identification, if not more so, than the name itself.  
 WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
- B-69 - 
 53. It is not reasonable to assume that the presence of this figurative element on a box of cigars 
with 75 % or 90 % health warnings will negatively affect Australia's publ ic health objective (and 
certainly not in a context where the evidence shows that the PP measures have not increased the 
effectiveness of health warnings and have not had any impact on actual smoking behaviour).  
 
54. In addition, the use of a complete trad emark (i.e. one with figurative elements) on a box of 
cigars with 75 % and 90 % graphic health warnings can never be considered as inadequate or 
subject to "justified encumbrances" in a WTO context. Trade can only take place if a minimum 
level of communicati on is possible whereby the seller can inform the buyer of the qualities and 
origin of his product, as well as the differences with other products. In a "dark market", the display 
of the trademark on the package is the only way of communicating this informa tion to the 
consumer. Australia describes this as " promotion " instead of communication, but this ignores what 
really happens when a Cuban cigar is placed on the market with a trademark on the packaging, 
especially in the context of the existing regulations  in Australia, which restrict the display of 
trademarks to a very small space on the packages. In these circumstances, the seller seeks 
primarily to communicate to the buyer the quality, origin, tradition and characteristics of the 
product, as well as the differences with other similar products. This is the real reason why 
trademarks and geographical indications have been created and are protected by WTO rules. 
However, and as explained by Australia itself, the effect and the objective of the PP measures is  
precisely to do away with any variability between the packaging of different tobacco products and 
to "eliminate " the opportunity for a manufacturer to differentiate his products by means of the 
tobacco packaging. In doing so, Australia invalidates the ess ential function of protection of the 
trademark in the context of international trade. What the display of trademarks in the limited 
space remaining on the tobacco package does not do is to incite smoking.  
 
E. TRADEMARKS ARE OF ESSENTIAL IMPORTANCE FOR THE CREATION OF BRAND 
IMAGE AND FOR DIFFERENTIATING PREMIUM TOBACCO PRODUCTS  
 
55. Cuban LHM cigars are not "standardized" low quality tobacco products. LHM cigars are 
luxury products and, as with other luxury products, the creation of brand image through the u se of 
trademarks is fundamental for commercial prestige and for economic value.  
 
56. As Cuba has explained, the incomparable reputation and prestigious brand status of Cuban 
LHM cigars are derived from a collective investment by the Cuban people over many generations. 
They result from a combination of Cuba's natural environment and the know –how and techniques 
used by Cuban tobacco producers, as well as highly skilled cigar manufacturers, who produce them 
entirely by hand.  
 
57. Strict regulations and standar ds are scrupulously applied to maintain the quality of Cuban 
LHM cigars. For this reason, consumers throughout the world correctly regard Cuban cigars as a 
product of the highest quality, a status which the Cuban cigar manufacturers have sought to 
protect by investing substantially in the creation of the brand image of LHM cigars, over a 
prolonged period and with specific trademarks that have been used for more than a century 
(e.g. Partagás – 1845; Hoyo de Monterrey – 1865; Romeo Y Julieta – 1875; Bolívar – 1902).  
 
58. In this connection, Cuba considers it useful to picture the devastating impact that similar 
measures, even without health warnings, would have on other high –end products, such as 
champagne. Figure  4 below shows a label with a trademark and a g eographical indication. 
Figure  5 shows how the label would look under the PP measures.  WT/DS435/R/Add.1 • WT/DS441/R/ Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
- B-70 - 
 
 
 
 
Figure 4: Bollinger Special Cuvée 
champagne label.  
On this label, the trademark is "Bollinger 
Special Cuvée" and the geographical 
indication is "Champagne".  Figure 5: The label that Bollinger Special Cuvée 
champagne would have if it were subject to the 
PP measure (without the health warning).  
 
 
59. Any WTO Member which sought to introduce such PP measures would face strong opposition 
from a series of developed W TO Members, particularly from the European Union, but also from 
Australia and the United States. They would argue that it is unthinkable that such a measure is in 
any way compliant with the TRIPS Agreement since it would jeopardize the essential aim that t he 
TRIPS Agreement seeks to achieve. Cuba agrees with this and stresses firmly that the conclusion 
should be the same under the scenario which concerns us. That conclusion cannot be different 
simply because the products affected by this case are high –end L HM cigars, instead of high –end 
alcoholic beverages, and because the country with a leading market position is a small developing 
country like Cuba.  
 
60. Australia itself has recognized the high value segment occupied by Cuban LHM cigars and 
commented in it s first written submission that cigars are "increasingly associated with an upscale 
status, luxury, affluence, sophistication and style". It is not by chance that consumers have come 
to view Cuban cigars as an upscale, luxury product; the perceived value a nd quality of these cigars 
derive from the years of investment made in trademarks and the considerable goodwill and utility 
associated with such trademarks.  
 
61. In this context, it is totally erroneous and also incoherent for Australia to argue that 
trade marks do not distinguish products in terms of their "quality, characteristics, and reputation". 
On the contrary, the essential purpose of these trademarks is to communicate the traditions, 
culture and investment that contribute to the quality of the world –renowned Cuban cigars. 
Consumers do not pay a significantly higher price in recognition of a producer's identity; 
consumers pay the higher price because they subscribe to the brand offer communicated by a 
trademark.  
 
62. This far –reaching "encumbrance" is unjustified because it is not necessary, reasonable or 
rational, in the light of Australia's public health objective, to reduce smoking prevalence. The 
PP measures are ineffective, alternative measures exist that would be more effective and would 
entail no  encumbrance on trademarks, such as: an increase in excise tax, pre –vetting of packaging 
design features or increasing the minimum legal purchase age.  Bollinger  
Special Cuvée  
Made in France  Bollinger  
Special Cuvée  
France  Bollinger  
Special Cuvée  
Made in Fr ance 
75cl 12% Vol  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
- B-71 - 
 V. THE PLAIN PACKAGING MEASURES VIOLATE ART ICLE 24.3 OF THE 
TRIPS  AGREEMENT  
 
63. Cuba submits that the PP  measures violate Article 24.3 of the TRIPS Agreement because 
they have the effect of diminishing the level of protection afforded to Cuban geographical 
indications compared with the level of protection that existed in Australia prior to 1  January  1995. 
Specifically, Cuba emphasizes that the use of the Habanos geographical indication on the retail 
packaging of Cuban LHM cigars was permitted under Australian domestic law prior to 
1 January  1995, whereas the use of that specific geographical indication on the  retail packaging is 
currently prohibited.  
 
64. Contrary to Australia's allegations, Cuba has shown that the Habanos geographical indication 
has since 1968 gained a reputation in Australia which is covered by protection against fraudulent 
imitation (passin g off) under the ordinary law on injury, and Australia has admitted that this could 
imply protection for geographical indications for the purposes of Art icle 24.3 of the 
TRIPS  Agree ment.3 
 
65. Cuba points out that Article 24.3 imposes an obligation on Aust ralia and other Members not 
to diminish the level of protection afforded to specific geographical indications, compared with the 
level of protection that existed prior to the conclusion of the TRIPS Agreement. Given this 
obligation, Cuba maintains that ins ofar as the pre -existing protection in a Member includes the 
right to use geographical indications, the Member cannot subsequently diminish that protection 
through a prohibition on the use of geographical indications.  
 
VI. THE PLAIN PACKAGING MEASURES ARE INCONSISTENT WITH AR TICLE 10 BIS OF 
THE PARIS CONVENTION  READ IN CONJUNCTION WITH ARTICLE 2.1 OF THE 
TRIPS  AGREEMENT  
 
66. Cuba has made a prima facie  case that the PP measures violate Article 10 bis of the 
Paris Convention incorporated into the TRIPS Agreeme nt by its Article 2.1. Article 10 bis (1) 
requires Members to provide "effective protection against unfair competition" resulting from 
trademark use on products.  
 
67. Specifically, under Article 10 bis (3) (i) Members must prohibit "all acts of such a nature  as to 
create confusion by any means whatever with the establishment, the goods or the industrial or 
commercial activities, of a competitor"; and under Article 10 bis (3) (iii) prohibit indications or 
allegations "the use of which in the course of trade is liable to mislead the public" as to the nature 
and characteristics of the goods. Australia's plain packaging measure eliminates all the distinctive 
elements of tobacco packaging with the exception of the brand and variant name, which may only 
be printed in  the prescribed typeface and size. Consequently, the Australian PP measure requires 
companies to follow the anti -competitive practices that Australia is obliged to prevent under 
Article  10bis of the Paris Convention. PP deliberately creates confusion and l iability to mislead the 
public, aspects which Members have an obligation to prevent.  
 
68. The PP measures also violate Article 10 bis because they require traders to mislead 
consumers into believing that different products are similar. Owing to the major si milarities in the 
appearance of packaging and products, consumers will have difficulty in identifying premium 
tobacco products and will probably reach the mistaken conclusion that all cigars (whether made 
industrially or by hand) and all cigarettes are int erchangeable. The resulting situation is harmful to 
the producers of premium products because, despite having made considerable investments in 
quality, it is highly unlikely that they will be rewarded by consumers for having made such 
investments. This is particularly unjust in the case of beneficiaries of geographical indications, such 
as the Cuban producers of LHM cigars, since the social, economic and cultural investments made 
over many years will go unrewarded.  
 
69. The PP measures create unfair competi tion because they jeopardize the capacity of Cuban 
producers to protect themselves against trade in counterfeit goods. To guarantee the authenticity 
of its exports, Cuba requires that every box of cigars: (1) has a label affixed to it with the Habanos 
geographical indication; (2) carries an ink seal indicating the factory, as well as the month and the 
year of production; and (3) is sealed with the Cuban Government Warranty Seal. By preventing 
                                                
3 Australia's second written submission, paras. 70 and 71.  WT/DS435/R/Add.1 • WT/DS441/R/ Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
- B-72 - 
 
 the use of these forms of protection, the PP measures make it eas ier for counterfeiters to 
repackage fake Cuban cigars or non -Cuban cigars as authentic Cuban cigars, and in this way to 
divert goods to the detriment of Cuba.  
 
70. As mentioned above, the Cuban Government Warranty Seal is a distinctive characteristic of 
Cuban cigars with a history dating back to 1889. Apart from playing a unique and irreplaceable 
role in guaranteeing the authenticity of Cuban LHM cigars, the Cuban Government Warranty Seal 
is also a geographical indication within the meaning of Article 22.1 of the TRIPS Agreement, since 
its function is to guarantee Cuban origin. Consequently, all the arguments put forward by Cuba in 
relation to geographical indications in this proceeding are also applicable to the Cuban Government 
Warranty Seal.  
 
71. Cuba's p osition in this matter is further supported by the Panel Report in Mexico  – Telecoms . 
In that case, the Panel examined a WTO Member's obligation to put in place "appropriate 
measures" aimed at preventing "anti -competitive practices".  
 
VII. THE PLAIN PACKAG ING MEASURES VIOLATE  ARTICLE 2.2 OF THE T BT AGREEMENT  
 
72. The PP measures are inconsistent with Article 2.2 of the TBT Agreement given that they 
constitute a technical regulation more trade -restrictive than necessary to fulfil a legitimate 
objective.  
 
A. THE PLAIN PACKAGING MEASURES ARE TRADE -RESTRICTIVE IN THE L IGHT OF 
THEIR DESIGN, STRUCT URE AND OPERATION  
 
73. The trade restrictiveness of the PP measures is evidenced by the design, structure and 
operation of the measures themselves. As has been explained , Cuban cigars are luxury products 
for which the trademarks and their association with Cuba through the geographical indication are 
essential. Australia explains in its second written submission that the PP measures seek to 
eliminate the opportunity for ma nufacturers to use the tobacco packaging in order to promote their 
products, and to remove all variability between tobacco packages. The inevitable consequence is 
that consumers will change from luxury premium products to standardized products of 
lower  quality. 
 
74. Australia appears to argue that this significant restrictive effect on competitive opportunities 
for Cuban cigars is not important (and that it is not trade -restrictive) if demand shifts to other 
imported products. Obviously, however, it is impo rtant and the trade -restrictive effect for our 
country is quite clear. Cuba is unaware of any principle under WTO rules which allows a de facto  
restriction on trade with a country to be justified by an increase in imports from another country. 
This is not surprising because such a principle would run counter to the most -favoured -nation 
principle. Thus, Cuba's interpretation leaves totally unchanged the distinction between 
subparagraph 1 of Article 2.1 and subparagraph 2 of Article 2. Cuba's position in this  respect is 
also supported by the TBT Committee's recommendations approved on 4  October  1995.  
 
75. Cuba submits that Australia is mistaken in stating that, in order to be trade -restrictive, its PP 
measures must have a "limiting effect on overall trade" in tobacco products. The key issue in 
gauging trade restrictiveness is whether the measure has had an adverse effect on competitive 
opportunities for imported products, by discouraging exports to Australia and creating 
uncertainties for exporters. As Professo r Damien Neven establishes, the PP measures have a 
negative impact on this variable.  
 
76. Moreover, in order to be able to have access to the Australian market, the PP measures 
require exporters to adapt their production processes to specific and detailed requirements; this 
implies some significant adjustment and compliance costs, which inherently entails a restriction on 
trade. This is also supported by the TBT Committee in its recommendations on the concept of 
significant effect on trade.  
 
77. One particu larly significant change in the production process required by the PP measures is 
that the Cuban Government Warranty Seal can no longer be affixed on boxes of Cuban LHM cigars 
marketed in Australia. As has been explained by Cuba, compliance with the PP mea sures requires 
that the original sealed box produced in Cuba be opened so that the cigars can be repackaged in 
boxes that comply with the PP measures, after the cigars have been handled in order to substitute WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 the cigar bands as well. Naturally, this also i mplies that it is no longer possible to guarantee that 
the product has not been handled between the moment it left the factory in Cuba and the moment 
the consumer opens the box.  
 
78. In addition, the Panel should take into account the design, structure and  operation of the 
PP measures when gauging the trade -restrictive nature of those measures. Australia itself has 
explained that the PP measures are designed to eliminate the opportunity for a manufacturer to 
use tobacco products in order to promote its prod ucts and to remove all variability between 
tobacco packages. The measure is inherently trade -restrictive. In the case of luxury products, such 
as Cuban LHM cigars, this measure will have disastrous consequences, since trademarks and 
geographical indication s are essential for highlighting the association of the products with Cuba 
and with its history as a country that manufactures and exports cigars, as well as in order to 
differentiate these products from the rest. This is especially important in the contex t of a 
"dark  market", such as occurs in the case of tobacco products in Australia.  
 
79. In this connection, we must emphasize that it is no coincidence that Article 23 of the 
TRIPS  Agreement introduces additional protection for geographical indications of wines and 
alcoholic beverages. Such protection is particularly important for wines and alcoholic beverages 
because they belong to a product category for which consumers value product differentiation in 
terms of geographical origin, quality and tradition mu ch more than for other products. Cuban LHM 
cigars fall within this same category, and a measure that is specifically designed to remove all 
variability in tobacco packaging and to eliminate the last opportunity for communicating tradition 
and quality is in herently trade restrictive for Cuba.  
 
80. Finally, we must emphasize that Australia itself acknowledged  that the PP measures are 
trade -restrictive (and that they are not based on any relevant international standard) when it 
notified them under Article 2.9. 2 of the TBT Agreement.  
 
B. THE PP MEASURES ARE MORE TRADE -RESTRICTIVE THAN NEC ESSARY GIVEN THAT 
ALTERNATIVE MEASURES  WERE AVAILABLE TO AUSTRALIA  
 
81. Cuba's argument is that the PP measures are ineffective since they are incapable of reducing 
tobacco cons umption levels in Australia. Cuba includes in this section its previous arguments 
outlined in the context of Article 20 of the TRIPS Agreement in relation to the reasons why the 
PP measures will not contribute to Australia's objective.  
 
82. Even if the Pan el were to conclude that the PP measures do make some contribution to 
Australia's objective, Cuba maintains that various alternative measures were available to Australia 
which would achieve the same degree of contribution. The alternative measures are the same as 
were explained previously in Cuba's claim under Article 20 of the TRIPS Agreement. Pro memoria , 
those alternative measures are: (i) an increase in excise duties on tobacco products; 
(ii) pre-vetting of the packaging design features; (iii) an increa se in the minimum age for legally 
purchasing tobacco products; and (iv) improved social marketing campaigns for tobacco control.  
 
83. Cuba wishes to point out that the Australian Office of Best Practice Regulation (OBPR) found 
no justification for the PP m easures. In fact, on 23  April 2009, in a letter to the Australian 
Department of Health and Ageing (DHA), the OBPR not only informed the DHA that the Regulation 
Impact Statement did not comply with the principles established by Australia's Best Practice 
Regulation Handbook, but also stated that it was " having trouble determining what the problem is 
and how significant it is. It is mentioned in the second paragraph that there has been a decline in 
tobacco consumption over the past 15 years among young people and over the past 30 years for 
the population as a whole. It appears then that current programmes are achieving their objectives 
and that there are no clear reasons for other initiatives .4 
 
                                                
4 Austr alian Government, Office of Best Practice Regulation, Draft RIS for the Tobacco Control Act 
(23 April 2009), Annex HON -12, p.3.  WT/DS435/R/Add.1 • WT/DS441/R/ Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 C. THE PLAIN PACKAGING MEASURES WERE NOT AD OPTED IN ACCORDANCE WITH 
THE RELEVANT INTERNA TIONAL STANDARDS  
 
84. Australia seeks to rely on Article 2.5 of the TBT Agreement, which provides that, when an 
approved technical standard exists, with a legitimate aim, in accordance with the relevant 
international standards, there will be a rebuttable presumption that the obstacle to international 
trade is not unnecessary. However, the FCTC Guidelines are not a relevant international standard, 
first because they do not meet the definition of a "standard", and secondly because the Co nference 
of the Parties (COP) of the FCTC is not a recognized international standardizing body.  
 
1. The FCTC Guidelines are not standards  
 
85. In order for the Guidelines to be equivalent to a standard, they must meet the definition 
established in Annex 1. 2 to the TBT Agreement, which indicates that standards must provide 
"guidelines or characteristics for products or related processes and production methods " for 
"common and repeated use ". Obviously, this refers to " common and repeated use " by producers 
and the fact that they are not binding on producers. An excellent example of the above is provided 
by the ISO standards, which are appropriate for " common and repeated use " by producers and 
which are not binding, but which enable a producer to achieve a certa in level of quality, safety or 
technical compatibility in a "standardized manner". An illustrative example is standard ISO 3394 
on dimensions of rigid rectangular packages, previously cited by Honduras.  
 
86. Unlike those standards, the FCTC Guidelines are completely different and seek to encourage 
the authorities to impose binding technical standards on producers. The FCTC Guidelines are not, 
and have never been claimed to be, binding technical standards to be observed directly by a 
producer. It is for that  reason that the FCTC Guidelines are also neither precise nor prescriptive: 
they are policy recommendations for regulators and legislators, not detailed technical guides for 
producers.  
 
2. The FCTC COP has no recognized activities in standardization  
 
87. Cuba and Australia agree that there are two requirements that must be satisfied in order for 
a body to be classified as one with " recognized activities in standardization ". First, standardization 
must be one of the functions of the body in question (Austral ia refers to this as the " normative 
dimension "). Secondly, WTO Members must be aware or have reason to expect that the 
international body in question is engaged in standardization activities (Australia refers to this as 
the "factual dimension "). 
 
88. The F CTC COP is not a standardizing body in the normative sense because the documentary 
framework on which it is based says nothing about it being a standardizing body. Moreover, it 
cannot be asserted that WTO Members are aware or have reason to expect that the  FCTC COP is 
engaged in standardizing activities. The text of the FCTC makes it clear that it is a "framework 
convention" concerning which even sceptical States agree in their understanding that it does not 
oblige them to take any specific action.  
 
89. For these reasons, Australia's invocation of the rebuttable presumption contained in 
Article  2.5 of the TBT Agreement is inappropriate.  
 
VIII.  THE PLAIN PACKAGING MEASURES ARE INCONSI STENT WITH ARTICLE I X:4 OF 
THE GATT 1994  
 
90. Cuba maintains that the PP mea sures are inconsistent with Article IX:4 of the GATT 1994 
because, by preventing Cuban LHM cigars from displaying the "Habanos" geographical indication, 
the value of those products is materially reduced.  
 
91. The material reduction in value results from th e fact that the "Habanos" geographical 
indication is part of the information that helps to give consumers certainty as to the authenticity of 
the product; in other words, it assures consumers that the product is genuine and not of illicit 
origin. Australia 's measures prevent certain information from being displayed, which creates 
consumer uncertainty as to whether the product they are acquiring is genuine. This is a 
well-known benefit of the "Habanos" geographic al indication.  
 WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
- B-75 - 
 92. In addition, the material  reduction in value is also due to the fact that, by preventing Cuban 
LHM cigars from displaying the "Habanos" geographical indication, Australia's measures limit the 
ability of Cuban exporters to maintain the price premium in respect of these products.  
 
93. Cuba duly substantiated these factual assertions by means of various exhibits, including 
Exhibits CUB -10, CUB -31, CUB -34, CUB -36 and JE -24(50).  
 
94. Australia is mistaken in alleging that Article IX:4 of the GATT 1994 requires a particular 
burden of proo f. As Cuba has made clear throughout this dispute, the establishment of a 
prima  facie case of violation under Article IX:4 is subject to the same general rules established by 
the Appellate Body, to the effect that "[a] prima facie  case must be based on 'ev idence and legal 
argument' put forward by the complaining party".5 
 
95. It should be mentioned that, in Cuba's opinion, the "value" of a product may be reduced 
either quantitatively or qualitatively. Cuba has already established the reasons why the value o f 
the product is reduced in quantitative terms. With regard to the reduction of value in qualitative 
terms, Cuba observes that the ordinary meaning of the term "value" is "degree of utility or ability 
of things to satisfy needs or procure well -being or enj oyment".6 In line with this meaning, the 
value of the "Habanos" geographic al indication may also be measured in qualitative terms owing to 
its important utility for satisfying a specific need, i.e., its usefulness as an important tool for 
determining the a uthenticity of the product. Affecting this "value" of the "Habanos" geographical 
indication in qualitative terms would also substantiate Cuba's claim under Article IX:4 that the 
PP measures materially reduce the value of Cuban LHM cigars.  
 
96. The "Habanos " geographical indication is one of the main elements of the reputation of 
Cuban LHM cigars as high -quality products with a long tradition. As Cuba established in its opening 
oral statement at the Panel's second meeting, Cuba considers that the impact of a  prohibition on 
the use of the "Habanos" geographical indication is similar to a prohibition of the use of the term 
"champagne" for wine from the Champagne region. Nobody would question that such a prohibition 
on the term "champagne" would have a material and considerable impact on the higher prices that 
champagne wines command compared with other sparkling wines. Even though the impact on 
prices might not be immediate, it would inevitably occur with the passage of time. The specific 
intention of the geogra phical indications used to demonstrate the quality and tradition of luxury 
products is to differentiate such products from other "standard" products.  
 
97. The replacement of the Habanos geographical indication with the words "Made in Cuba", 
"Hand -made" and  "Pacific Cigar Company", which is the text that currently appears on the PP of 
Cuban cigars in Australia is clearly insufficient to communicate the association with Cuban origin 
and with the long tradition of tobacco growing and cigar manufacturing that i s transmitted by the 
use of the Habanos geographical indication.  
 
98. Moreover, not all Cuban cigars meet the requirements for the use of the Habanos 
geographical indication - this indication is reserved exclusively for the best Cuban cigars which 
satisfy strict quality standards. On the contrary, the exp ressions "Made in Cuba", "Hand -made" 
and "Pacific Cigar Company" that currently appear on the PP of Cuban cigars in Australia cover a 
much broader category of cigars than those which meet the requirements f or inclusion in the 
Habanos geographical indication. Consequently, these terms are incapable of communicating the 
same information about origin, tradition and quality as the Habanos geographical indication.  
 
IX. OTHER LEGAL CLAIMS  
 
99. Cuba has also endors ed the following claims submitted by the other co -complainants:  
 
a. Article 15.4 of the TRIPS Agreement, which states  that the nature of the goods or 
services to which a trademark is to be applied shall in no case form an obstacle to 
registration of the tr ademark;  
 
                                                
5 Appellate Body Report, US – Gambling , para. 140 (citing Appellate Body Report, US – Wool Shirts and 
Blouses , p. 16).  
6 Diccion ario de la Real Academia Española, available at: http://dle.rae.es/?id=bJeLxWG . WT/DS435/R/Add.1 • WT/DS441/R/ Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 b. Article 16.1 of the TRIPS Agreement, which provides that the owner of a registered 
trademark shall have the exclusive right to prevent all third parties not having the 
owner's authorization from using in the course of trade identical or simila r signs for 
goods or services which are identical or similar;  
 
c. Article 16.3 of the TRIPS Agreement, which establishes increased protection for 
well-known trademarks in respect of which the trademark owner has the right to 
prevent unauthorized use, even when the trademark is used on goods that are not 
similar;  
 
d. Article 22.2(b) of the TRIPS Agreement, which provides that, in respect of 
geographical indications, WTO Members shall provide the legal means for interested 
parties to prevent any use which con stitutes an act of unfair competition within the 
meaning of Article  10bis of the Paris  Convention  (1967).  
 
e. Article  6quinquies  of the Paris  Convention (in relation to Article  2 of the 
TRIPS  Agreement), which states that every trademark registered in the country of 
origin shall be accepted for filing and protected as is in the other countries of the 
Union.  
 
X. DEFENCE UNDER ARTICL E XX OF THE GATT 199 4 
 
100. Australia cannot invoke a defence under Article  XX of the GATT  1994, since the PP measures 
cannot be  defined as "necessary" to the achievement of Australia's public health objective of 
reducing smoking prevalence. In accordance with the established jurisprudence of the WTO, 
in order for a measure to be "necessary" a series of factors must be met, includi ng (i)  the 
"contribution of the measure to the realization of the ends pursued"; and (ii)  the availability of 
alternative WTO -consistent measures which could reasonably be expected to be applied by 
Australia. With regard to the first factor, the evidence s hows that the PP measures have not 
contributed to reducing smoking during the first three years following implementation. As regards 
the second factor, alternative measures exist, as was observed in paragraph  44, which could be 
effective in achieving Austr alia's objective.  
 
XI. CONCLUSION  
 
101. For the reasons set out above, Cuba reiterates its request that the Panel find that:  
 
a. The PP measures violate Article 20 of the TRIPS Agreement.  
 
b. The PP measures violate Article 24.3 of the TRIPS Agreement.  
 
c. The PP measures violate Article 10 bis of the Paris Convention (read in conjunction 
with Article 2.1 of the TRIPS Agreement).  
 
d. The PP measures violate Article 2.2 of the TBT Agreement.  
 
e. The PP measures violate Article IX:4 of the GATT 1994.  
 
f. The P P measures violate Articles 15.4, 16.1, 16.3 and 22.2(b) of the TRIPS  Agreement 
and Article  6quinquies  of the Paris Convention (read in conjunction with Article  2.1 of 
the TRIPS  Agreement).  
 
102. Cuba requests the Panel to recommend, in accordance with Art icle 19.1 of the Dispute 
Settlement Understanding, that the Dispute Settlement Body request Australia to bring the 
measures at issue into conformity with the TRIPS  Agreement, the TBT  Agreement and the 
GATT  1994 within a reasonable period of time.  
 
 
 WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 ANNEX  B-4 
INTEGRATED EXECUTIVE  SUMMARY OF THE ARGUM ENTS OF INDONESIA  
I. INTRODUCTION  
 
1. On 1 December 2012 Australia banned or in some cases severely restricted the use of all 
trademarks, geographical indications ( "GIs"), distinctive colors, and other design f eatures on 
tobacco products and packaging. It also required that (i) those parts of tobacco packaging not 
already covered by large graphic health warnings ( "GHWs ") be covered in a uniform, matt finish 
and a drab, dark brown color; and (ii) the brand (e.g. "Marlboro ") and variant (e.g. menthol) 
names appear in a uniform typeface, size, color, and placement on the package. These so -called 
"plain packaging " ("PP") requirements are radical and without precedent. No other Member of the 
World Trade Organization ( "WTO") has ever required a maker of a legal product to remove its 
trademarks, GIs, trade dress, logos, and other branding from products prior to sale at the retail 
level.  
 
2. Indonesia has a very strong interest in this case. Indonesia initiated this proce eding because 
PP threatens the export opportunities for its cigarette industry, in particular its clove cigarette 
industry. That industry accounts for approximately 1.66 percent of Indonesia 's total gross 
domestic product. Clove cigarettes are integral to the Indonesian economy. It is Indonesia 's 
second largest industry and employs over 6 million people. More than half of Indonesia 's citizens 
live in rural areas where agriculture and the clove cigarette industry are the main sources of 
income. Indonesia exp orts its cigarettes all over the world, including to Australia, and exported 
approximately $700 million in tobacco products in 2013. Indonesia brings this dispute to protect its 
interests in these exports.  
 
3. The WTO provides wide latitude to Members to pursue legitimate public policy objectives 
such as smoking prevention. As a result, none of the complainants in these disputes challenge 
Australia 's right to restrict tobacco products advertising, labeling requirements, point -of-sale 
restrictions, mandator y health warnings, and the numerous other measures taken by Australia to 
reduce the consumption1 of tobacco products and lower smoking prevalence2 rates within its 
borders. In particular, Indonesia is not challenging requirements regarding GHW. In fact, 
Indonesia recently adopted its own set of rules requiring GHWs on tobacco products.3 
 
4. The issue before the Panel is not whether tobacco is harmful or should be regulated. Rather, 
the issue is whether changes to the image and appearance of tobacco packagin g (i.e. the small 
portion of cigarette packages not already covered by GHWs in Australia) and individual cigars and 
cigarettes are consistent with Australia 's WTO obligations.  
 
II. FACTUAL BACKGROUND  
 
A. Regulation Of Tobacco Products And Packaging I n Aust ralia Prior To 
1 December  2012  
 
5. It is important to view PP in light of the existing regulatory environment in which the 
measures were adopted and the array of tobacco marketing restrictions that were already in place 
at the time PP was implemented. None  of these other tobacco control policies are at issue in this 
dispute.  
 
6. Australia is a "dark market ", which means that it prohibits all forms of tobacco advertising 
and promotion.4 In 1973 the Australian government began to phase out radio and TV adver tising 
of tobacco products, and a full ban came into effect on 1 September 1976. In December 1990 a 
ban on print advertising (newspapers and magazines) became effective as part of the Tobacco 
                                                
1 Tobacco "consumption " represents the total amount of tobacco consumed, usually expressed in terms 
of the number of "sticks " sold. 
2 Tobacco "prevalence " measures the number of people who smoke within a given population. It is 
usually expressed as a percentage.  
3 See Australian Broadcasting Commission News, "Indonesia pushes for graphic health warnings on 
cigarettes ", (25 June 2014) . 
4 Indonesia 's first written submission, para. 54.  WT/DS435/R/Add.1 • WT/DS441/R/ Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 Products Advertisements (Prohibition) Act . The 1992 Tobacco Adve rtising Prohibition ( "TAP") Act 
stipulated additional restrictions, including bans on advertisements in the form of films, outdoor 
advertisements and sponsorships.  
 
7. Australia has required health warnings on tobacco packages since 1973.5 In 1985 additio nal 
health warnings were introduced and became more prominent on the packages. The Trade 
Practices (Consumer Product Information Standards) (Tobacco) Regulations 2004 required that 
packages for most tobacco products (except, for example, individually wrapp ed cigars) carry GHWs 
and a series of rotating messages regarding the health risks of smoking.6  
 
8. As of 1 March 2006 all packages were required to have pictorial health warnings covering 30 
percent of the front of the pack and 90 percent of the back of the pack. Concurrent with its move 
to PP, Australia substantially increased the size of its GHWs under the Competition and Consumer 
(Tobacco) Information Standard 2011 (the "Information Standard "). For cigarette packs, the 
required size of the warning stat ement and  graphic increased from 30 percent to 75  percent of the 
front surface.7 For cigar tubes, warning statements must occupy 95 percent of the total length of 
the outer surface and extend to at least 60 percent of the circumference of the outer surface .8  
 
9. At the state and local levels, Australia has also implemented bans on the consumption of 
tobacco products in certain areas and under certain circumstances ( "smoking bans "), normally in 
public places. The Australian states and territories where smok ing bans are in effect cover more 
than 99 percent of Australia 's total population in terms of residency.9  
 
10. Tobacco products are heavily taxed in Australia. From 1999 until March 2010, the excise tax 
was increased twice per year in line with overall in flation – from 0.18872 cents per stick to 
0.26220 cents per stick. On 1 August 2013 Australia further announced additional increases in 
tobacco taxation over the coming years. Four additional excise taxes of 12.5 percent each were 
announced for 1 December 2013, 1 September 2014, 1 September 2015 and 1 September 2016.10  
 
11. Anti-smoking mass media campaigns are also prevalent in Australia.11 Among these are 
social marketing campaigns, which consist of public service messages targeted at specific 
segments o f the population that are communicated through a range of media channels 
(e.g. television, radio, print, health and social networks, and digital media).  
 
12. In attempting to build a case that regulation of tobacco packaging was needed, Australia has 
repeated concerns  with tobacco packaging that are decades old.12 The Post Implementation 
Review ( "PIR") repeats these claims in Section1.3, citing tobacco company documents and 
practices dating back more than 20 years.13 What the PIR fails to mention is that a s a result of 
many of the policies described above, many of these problems were no longer relevant when PP 
was adopted.  
 
B. Overview Of PP In Australia  
1. The T/PP Act  and accompanying regulations  
13. The Tobacco Plain Packaging  Act 2011  ("T/PP Act ") pas sed both Houses of Parliament on 
21 November 2011 and received Royal Assent on 1 December 2011.14 The Tobacco Plain 
Packaging Regulations 2011  ("T/PP Regulations ") were promulgated on 7 December 2011.15 Under 
the terms of the PP measures, all tobacco packa ges had to be manufactured in compliance with the 
                                                
5 Indonesia 's first written submission, para. 57.  
6 Indonesia 's first written submission, para. 57.  
7 Indonesia 's first written submission, para. 58.  
8 Indonesia 's first written submission, para. 58.  
9 Indonesia 's first written submission, para. 62.  
10 Indonesia 's first written submission, para. 67.  
11 Indonesia 's first written submission, para. 69.  
12 Indonesia 's comments on the PIR, para. 8.  
13 Australian Department of Health and Ageing, "Post – Implemen tation Review: Tobacco Plain 
Packaging 2016, " ("PIR") (March 2016), Exhibit AUS -624, paras. 20 -22. 
14 Indonesia 's first written submission, para. 73.  
15 Indonesia 's first written submission, para. 73.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
- B-79 - 
 PP requirements as of 1 October 2012.16 Retail outlets were given an additional two months to 
exhaust their inventories of non -compliant  packages, but, as of 1 December 2012, all tobacco 
products sold at r etail outlets had to comply with the PP measures.17  
 
a. Trademark and mark -related requirements  
14. Section 20 of the T/PP Act  prohibits the use of any mark or trademark on the retail 
packaging of tobacco products, other than as expressly permitted. The a ppearance of brand, 
business, company, or variant names is strictly regulated, with detailed conditions regarding 
position and appearance.18 The T/PP Regulations  provide that the following may appear on retail 
packaging: origin marks, calibration marks, a measurement mark and trade description, a bar 
code, a fire risk statement, a locally made product statement, and a name and address.19  
 
15. Section 26 of the T/PP Act  prohibits the use of trademarks and marks anywhere on a 
tobacco product, other than as p ermitted by the Regulations . Section 3.1.2 of the T/PP Regulations  
permits a cigarette to be marked only with an alphanumeric code. Division 3.2 of the 
T/PP Regulations  imposes similar requirements on cigars and bidis.  
 
b. Format/appearance requirements  
16. Section 18 of the T/PP Act  imposes uniform requirements for the physical shape or features 
of tobacco product retail packaging. Packaging must have no "decorative ridges, embossing, 
bulges or other irregularities of shape or texture, or any other embelli shments, other than as 
permitted by the regulations ".20 Cigarette packs and cartons may be made only from cardboard 
and must be rigid and perfectly rectangular without any distinctive features.21 The manner in 
which packs and cartons are opened is also reg ulated, eliminating alternative designs for product 
opening.22 The T/PP Regulations  also set out ranges of dimensions with which cigarette packs must 
comply.23 For cigars, tubes  must be cylindrical and rigid with both ends tapered or rounded.24  
 
17. Section 19 of the T/PP Act  imposes  strict limitations on the color and finish of retail 
packaging of tobacco products. The T/PP Regulations  also standardize the appearance of tobacco 
products. Under sections 3.1.1(1), all cigarettes, regardless of brand, must l ook alike.25  
 
2. Trade Mark Amendment Act  
18. Along with the passage of the T/PP Act , the Australian parliament passed the Trade Marks 
Amendment (Tobacco Plain Packaging) Act 2011  ("TM Amendment Act "). The TM Amendment Act  
gives broad power to the regulat or under the T/PP Act  to modify Australian trademark law and 
allows for regulations to override specific trademark protections in relation to tobacco products, 
where such protections are otherwise of general application to any trademarks for all other, 
non-tobacco products.  
 
3. The objective of plain packaging  
19. According to Australia, PP 's overall objective is to contribute to "reducing the smoking rate 
{prevalence} among the Australian population to 10 per cent by 2018, and halving the smoking 
rate amon g Aboriginal and Torres Strait Islander people ".26 Thus, PP 's objective is to protect health 
by reducing smoking prevalence. Australia believes PP will contribute to fulfilling these objectives 
in the following manner:  
                                                
16 See T/PP Act , Section 2; T/PP Regulations , Section 1 .1.2. 
17 T/PP Act , Section 2.  
18 T/PP Act , Section 21.  
19 T/PP Regulations , Division 2.3.  
20 T/PP Act , Section 18(1); see also T/PP Regulations , Section 2.1.6.  
21 T/PP Act , Section 18(2)(a) -(c). T/PP Regulations , Section 2.1.2.  
22 In respect of cigarette p acks, their only opening can be a flip -top lid, hinged at the back of the pack. 
T/PP Regulations , Section 2.1.2.  
23 See T/PP Regulations , Section 2.1.1(1) and T/PP Act , Section 18(3)(b) -(d). 
24 T/PP Regulations , Section 2.1.4.  
25 T/PP Regulations , Section 3.1.3. Section 3.1.3 of the T/PP Regulations  similarly requires that any filter 
tip must be white.  
26 Consultation Paper on the plain packaging Bill Exposure Draft, p. 1.  WT/DS435/R/Add.1 • WT/DS441/R/ Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 It is the intention of the Parliament  to contribute to achieving the objects in 
subsection (1) by regulating the retail packaging and appearance of tobacco products 
in order to : 
 (a) reduce the appeal of tobacco products to consumers; and  
 (b) increase the effectiveness of health warnings on the retail packaging of tobacco 
products; and  
(c) reduce the ability of the retail packaging of tobacco products to mislead consumers 
about the harmful effects of smoking or using tobacco products.27 
 
20. After taking conflicting positions on the question,  Australia confirmed that these 
"mechanisms " are not themselves objectives of the T/PP Act .28  
 
21. Australia also has indicated that an additional objective of PP is to fulfil certain alleged 
"requirements " of the Framework Convention on Tobacco Control, most recently in the PIR.29 The 
FCTC does not require parties to adopt PP measures and certainly not PP measures that prohibit all 
trademarks, GIs, trade dress, logos, and other branding on tobacco products themselves, in 
addition to their packaging. Rathe r, Article 11 permits packaging that promotes a tobacco product 
as long as it is not "false, misleading, deceptive or likely to create an erroneous impression ". 
Article 13 requires Parties to comprehensively ban all tobacco advertising, promotion and 
spons orship.  
 
22. The guidelines for Articles 11 and 13 recommend that parties to the Convention merely 
"consider adopting " PP but do not require them to do so. The non -binding nature of these 
recommendations is highlighted by the fact that PP is not integral to the WHO 's evaluation of 
countries ' compliance with the FCTC.30 Indeed, the WHO gave Australia a perfect 10 out of 10 
score for compliance with direct and indirect bans on advertising, sponsorship and promotion in 
2011 before  Australia had implemented PP .31 Thus, adopting PP does not advance Australia 's 
compliance with its FCTC obligations.  
 
C. Requirements On 1 December 2012  
23. Smoking prevalence for daily smokers in Australia aged 14 years and over fell by almost 10 
percentage points from 24.3 percent in 1991 to 15.1 percent in 2010.32 Observed smoking 
prevalence declined steadily from 2006 onward at an annual rate of about 0.59 percentage points. 
Cancer Council Victoria determined that a combination of tax increases and increased spending on 
social med ia campaigns and other tobacco control measures would reduce smoking prevalence to 
just under 10 percent by 2020 even without  implementing PP.33  
 
24. Had Australia not been in such a hurry to adopt PP, prevalence rates were on a clear trend 
to accomplish the same prevalence target as that set for PP within the same period of time. In 
fact, given the well -documented effect of tax increases on tobacco prevalence rates, and given the 
four additional tax increases beginning 1 December 2013, Australia might wel l have exceeded its 
objectives without PP.  
 
                                                
27 T/PP Act , Section 3(2) (emphasis added).  
28 Australia 's response to Question No. 1  from the Dominican Republic.  
29 Indonesia 's comments on PIR, paras.10 -13 . 
30 Compliance with the FCTC is included in the WHO 's Tobacco Control Country Profiles. World Health 
Organization, "FCTC Surveillance and Monitoring ", Exhibit IND -34. These country profiles include an evaluation 
of several measures included in the FCTC, including health warnings on tobacco products and bans on 
advertising, sponsorship and promotion.  
31 World Health Organization, "Report on the Global Tobacco Epidemic, 2011: Country P rofile - 
Australia ", (2011), Exhibit IND -35. 
32 See Indonesia 's first written submission, para. 109 and Table VI.1: Tobacco Key Facts and Figures.   
33 Indonesia 's first written submission, para. 111.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 D. Tobacco Prevalence In Australia Since Plain Packaging Requirements Were 
Implemented On 1 December 2012  
25. At the time of its passage, PP was hailed by its supporters as a "crucial step " in Australia 's 
anti-smoking effort.34 Australians and the international trading community were told that PP would 
"slash smoking rates . . . make significant inroads into reducing rates of smoking initiation and 
consumption . . . [and have] enormous potential to cut smoking ra tes."35 
 
26. More than three years have elapsed since the PP measures took effect. This is a significant 
period within which it is reasonable to expect that, if PP were going to cut prevalence rates, those 
effects would be discernible by now.   
 
27. Since  implementation, there have been numerous quantitative studies examining PP 's 
impact on smoking prevalence and consumption. These studies: (1)  were undertaken by 
independent teams of researchers; (2)  adopt several standard econometric techniques; and 
(3) are based on the different long -term, large -scale datasets covering pre - and 
post-implementation prevalence, consumption and sales data, respectively.   
 
28. None of the studies comparing prevalence data before and after the implementation of PP 
has found th at PP has made a material contribution  toward a reduction in smoking prevalence. Not 
only has PP failed to account  for any sustained decrease in prevalence, some state -level surveys 
have indicated that smoking prevalence in those states has increased . By every analytical 
assessment, PP has not made any measurable contribution toward reducing smoking prevalence in 
Australia. What it is contributing to is a shift in consumption from branded, more expensive 
tobacco products, to cheaper products and illicit pro ducts.  
 
29. Australia commissioned the National Plain Packaging Tracking Survey ( "NPPTS ") for the 
express purpose of evaluating the effectiveness of Australia 's PP measures.36 The NPPTS was a 
"national, monthly tracking survey of smokers and recent quitter s undertaken by the Centre for 
Behavioral Research in Cancer, Cancer Council Victoria ( "CCV"), and funded by the DHA.37 The 
Australian Government called the NPPTS the "key survey " for the PIR.38  
 
30. In April 2015, Professor Wakefield and her CCV team of five co -authors published a series of 
papers in Tobacco Control  presenting the NPPTS  results. These papers make favourable findings 
and conclusions on the impact that the PP measures have had on the posited antecedents of 
smoking behaviour.39  
 
31. During the course of this dispute, complainants ' experts were given full access to the NPPTS 
dataset, and the authors ' computer code. Complainants experts identified several serious flaws in 
the analysis performed by the co -authors of the published papers, includ ing "a pattern of poor 
results ," which Professor Wakefield and her co -authors simply chose not to report in their papers.40 
The overwhelming majority of the unreported results showed the PP measures had little to no 
lasting effect on the variables being me asured. Quit attempts even show a small but statistically 
significant decline . These flaws lead to the conclusion that the published papers "painted an 
inaccurate and misleading picture  of the [NPPTS] results ", suffering from severe underreporting.41   
 
32. In response to these findings, Australia took the surprising approach of indicting its own 
NPPTS survey, claiming that it was ill -suited for assessing the impact of the PP measures – a view 
previously unreported by Australia, the entities collecting the data, or the authors relying on the 
datasets in peer -reviewed publications.42 Conveniently, Australia still views the NPPTS dataset as 
well-suited – and even a "powerful  tool" – for evaluating the impact of the PP measures on the 
                                                
34 Explanatory Memorandum to the Tobacco Plain Packagin g Bill 2011 . 
35 D. Hill, "Tobacco Industry has much to Fear: Plain Packaging will Slash Smoking Rates – and 
Cigarette Makers Know It, " The Sydney Morning Herald  (8 April 2011).  
36 NPPTS Technical Report, Exhibit DOM -307, p. 6; PIR, para. 69.  
37 PIR, para. 69. 
38 Commonwealth of Australia, Proof Committee Hansard, Finance Administration Legislation Committee, 
Estimates (26 May 2015 and 2 June 2015), Exhibit DOM -371, p. 85.   
39 Indonesia 's comments on the PIR, para. 14.  
40 Indonesia 's comments on the PIR, pa ra. 15.  
41 First Data Expert Rebuttal Report, Exhibit DOM/IDN -6, para. 3 (emphasis added).   
42 Indonesia 's comments on the PIR, para. 17.  WT/DS435/R/Add.1 • WT/DS441/R/ Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 very few variables that do show an impact from PP.43  However, the survey is now regarded as 
suitable for evaluating the impact on the vast majority of NPPTS variables, virtually all of which 
happen to be unaffected by the pack changes.  44 As the Dominican Republic so aptly explain ed, 
apparently "Australia paid A$3 million for a survey that was allegedly not suited to measuring the 
vast majority of the variables it was designed to measure.45   
  
33. Despite Australia 's own misgivings about the suitability of the NPPTS for evaluating  the 
effectiveness of PP, the PIR relies extensively on its questionable findings, as well as those of other 
studies that the complainants have substantively  refuted throughout this dispute.46 Indonesia 
notes there is nothing new  in the study findings repo rted in the PIR. Australia continues to contort 
the survey data by whatever means necessary in order to create support for its foregone 
conclusion that PP is working.  
 
III. LEGAL CLAIMS  
  
A. Australia 's PP Measures Violate The TRIPS Agreement   
 
34. Austra lia's PP measures are inconsistent with several of Australia 's obligations under the 
TRIPS Agreement. Of particular importance in discerning the protections provided by the 
TRIPS  Agreement is how trademarks function and the centrality of use to trademark p rotection.  
 
1. Trademarks and TRIPS  
35. Article 15.1 of the TRIPS Agreement defines "trademark " as "{a}ny sign, or combination of 
signs, capable of distinguishing the goods or services of one undertaking from those of other 
undertakings, shall be capable of constituting a trademark ". Words, letters, names, logos, images, 
colors, numbers, the shape of goods or packaging, sounds, and any combination thereof, can all 
serve as trademarks.47 Indeed, one product may carry several of these signs and each one can be 
individually registered as a trademark.  
 
36. For purposes of Indonesia 's TRIPS claims , we refer to two categories of trademarks. The first 
category contains word marks, which includes letters or characters making up the name of a 
brand. The second categ ory encompasses non -word marks, which includes device, figurative or 
stylized marks like logos and combined marks containing stylized letters, shape marks, and color 
marks.  
 
37. The function of trademarks is understood as distinguishing goods and services  of one 
undertaking from another  in the course of trade. Every trademark owner has a legitimate interest 
in preserving the distinctiveness, or capacity to distinguish, of its trademark so that it can perform 
that function.48 
 
38. The panel in EC – Trademar ks and GIs  ("EC – GIs") highlights the connection between a 
trademark owner 's use of "its own trademark in connection with the relevant goods and services of 
its own and authorized undertakings " and the legitimate interest of the trademark owner to 
"preser ve the distinctiveness or capacity to distinguish " the trademark "so that it can perform " its 
function.49 Put differently, a trademark that cannot  be used can no longer serve its function of 
"distinguishing goods and services of undertakings in the course of trade ".50 This is exactly what 
Australia 's PP measures do – by severely limiting the use of trademarks, PP guts the function of 
trademarks and consequently denies the protections guaranteed by the TRIPS Agreement.  
 
                                                
43 Australia 's response to Panel Question No. 198, para. 291.  
44 Australia 's response to Panel questions 196, paras. 224-225. See also, First Data Expert Rebuttal 
Report, Exhibit DOM/IDN -6, paras. 8 -9 and 36 -38.   
45 Indonesia 's comments on the PIR, para. 17.  
46 PIR, paras. 69 -98. 
47 Indonesia 's first written submission, para.128.  
48 Panel Report, EC—Trademarks and GIs ( Australia ), para. 7.664 (emphasis added).  
49 Panel Report, EC─Trademarks and GIs, (Australia), para. 7.664.  
50 Panel Report, EC─Trademarks and GIs, (Australia), para. 7.664.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 a. Trademarks function to differentia te products and promote 
competition  
39. As Article 15.1 of the TRIPS Agreement reflects, the principal function of a trademark is to 
differentiate the goods and services of one company from that of another. Put simply, the 
distinguishing function  of a trad emark is to communicate quality and other qualitative product 
characteristics. Australia asserts that word marks alone are capable of distinguishing the goods to 
which they apply.51 However, word marks are seldom, if ever, used in the plain format in which  
they are registered. They are invariably used in conjunction with typeface, color, size, placement, 
and design elements that contribute to the distinctiveness of the product. Contrary to arguments 
made by Australia, the distinguishing function is protecte d with respect to all trademarks – 
including purely figurative marks.  
 
40. The EC – GIs panel also acknowledged that the ability to distinguish is important for both 
trademark owners and consumers. The panel observed that "{c}onsumers have a legitimate 
interest in being able to distinguish  the goods and services of one undertaking from those of 
another, and to avoid confusion ".52  
 
41. Australia argues that there is an alternate, subversive function of trademarks – that is, 
advertising and promotion .53 Australia argues that because trademarks are used in advertising and 
promotion, and because Members may restrict product advertising and promotion that may harm 
consumers, Australia may also restrict the use of trademarks on the products themselves .54 
 
42. However, Australia improperly conflates the use of trademarks on packaging with 
advertising or promotion. Indeed, "it is not the received wisdom in marketing to regard brand 
packaging as a dedicated advertising medium, and for good reason ".55 Branded packagi ng "falls 
short on key dimensions of function, reach, versatility, size and interactivity when pitted against 
advertising instruments ".56 It is for these reasons that branded packaging is seen by marketing 
professionals as part of the product itself, rathe r than advertising and promotion.57  
 
b. Centrality of use to trademarks  
43. A trademark owner 's ability to use its trademark underlies the ability of a trademark to 
perform its distinguishing function. Therefore, use is a cornerstone of trademark protecti on. In this 
respect, trademarks are unique among intellectual property rights. A patent, for example, is 
valuable to its owner even it sits on a shelf unused. Owners of patents can stop infringement 
without any need to show that they have used it. In contr ast, use is central to trademarks and "a 
trademark owner…registers a mark primarily to be able to use it ".58 Without use, a trademark has 
no social or economic value and over time will lose its distinctiveness and can no longer be 
protected.  
 
44. Although  registration of a trademark confers certain protections, the raison d 'etre of 
trademarks is their ability to distinguish goods, which is attained through use.59 The importance of 
use is reflected in its central role in trademark registration and protectio n. Some countries like the 
United States have use -based registration system in which use of a mark is required before it can 
be registered. Other countries like Australia have a registration -based system in which prior use is 
not required before registrati on. However, even in registration -based systems, use plays an 
important role in trademark law. This is true of Australia 's trademark law.60 Under Section 17 of 
the Australian Trade Marks Act 1995 , the definition of a trademark is "a sign used, or intended to 
be used to distinguish goods or services dealt with or provided in the course of trade by a person 
                                                
51 Indonesia 's second written submission, para. 100.  
52 Panel Report, EC – Tradema rks and Geographical Indications (Australia) , para. 7.675 (emphasis 
supplied).  
53 Indonesia 's second written submission, para. 24, fn. 31.  
54 Australia 's first written submission, paras. 210 -11. 
55 Indonesia 's second written submission, para. 27.  
56 Indone sia's second written submission, para. 27.  
57 Indonesia 's second written submission, para. 27.  
58 Indonesia 's first written submission, para. 137.  
59 Indonesia 's first written submission, para.138.  
60 Indonesia 's first written submission, para. 141.  WT/DS435/R/Add.1 • WT/DS441/R/ Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 from goods or services so dealt with or provided by any other person ".61 Accordingly, an applicant 
for trademark registration must be using or intend to u se the trademark. Non -use of a trademark 
is grounds for cancelation of a registration in Australia.62 Australia recognized the importance of 
use in its system and included a provision in the T/PP Act  that circumvents its own registration 
requirements and a llows for registration of tobacco trademarks despite the inability to use them.63  
 
45. Use also plays an important role in the scope of protection and enforcement of trademarks. 
Australian courts have repeatedly noted the importance of use in infringement  actions.64 When 
determining whether a mark is infringing upon a registered mark, Australian courts take note of 
the manner in which both marks are actually used in the marketplace and how those marks are 
perceived by consumers. Thus the ability to use a t rademark increases its owner 's ability to 
enforce the right of exclusive use against others that use their marks without authorization.  
 
46. For these reasons, Indonesia argues that the TRIPS Agreement contemplates a minimum  
opportunity to use a trademark  in the course of trade.65 This minimum opportunity of use is based 
on the text of the TRIPS Agreement and is supported by the text, context, and the object and 
purpose of the treaty and is not unlimited. However, without a minimum opportunity of use, the 
provisions of the TRIPS Agreement relating to trademarks would be utterly meaningless. As 
Indonesia will discuss in the context of Articles 16.1 and 16.3 below, use is essential for the 
enforcement of the private rights WTO Members are required to provide to trademark owners 
under the TRIPS Agreement. This is true even in jurisdictions, such as Australia, in which there is 
no statutory "right to use " a trademark.66 
 
47. The fact that the TRIPS Agreement does not offer mark holders an absolute "right to use " 
does not diminish the importance that use plays in protecting intellectual property rights. A 
registered trademark, without any opportunity of use in the marketplace, has no value.67 The 
object and purpose of the TRIPS Agreement, as expressed in its Pream ble, is to provide "adequate 
standards and principles concerning the availability, scope, and use of trade -related intellectual 
property rights ".68 An interpretation of the rights conferred upon owners of registered trademarks 
that does not include any opp ortunity to use the trademark in connection with the goods and 
services that it is meant to distinguish completely contradicts the object and purpose of the treaty.  
 
c. "In the course of trade " includes a broad range of uses  
48. The phrase "in the course o f trade " is relevant to several of Indonesia 's claims as it appears 
in Article 10 bis(3) of the Paris Convention, as well as Articles 16.1 and 20 of the 
TRIPS  Agreement.69 Australia has argued that "in the course of trade " is narrow and ends at the 
point of  sale."70 Australia 's interpretation of this phrase is based on a fictional divide between "pre-
sale" and "post-sale" use of a trademark that is fundamentally inconsistent with the text, context, 
and the object and purpose of the TRIPS Agreement.71 
 
49. "In the course of trade " refers to activities conducted in a commercial context as opposed to 
private use. It does not end at the point of sale. The use of a registered trademark on a billboard, 
in a television commercial, or on promotional correspondence wo uld constitute use of a trademark 
"in the course of trade " even though there is no immediate sales transaction involved in these 
commercial activities. In this regard, Indonesia agrees with the European Union 's statement in its 
third party submission.72 
 
                                                
61 Trade Marks Act 1995: An Act relating to trade marks , No. 119 of 1995, as amended, ( "Trademarks 
Act 1995 "). 
62 Trademarks Act 1995 , Sections 27(1), 92(4).  
63 T/PP Act , Section 28.  
64 See Indonesia 's second written submission, para. 16 and Section II.D.  
65 Indonesia 's second written submission, para. 13.  
66 Indonesia 's second written submission, para. 71.  
67 As counsel for Indonesia noted during the First Substantive Meeting, trademarks derive their value 
from use in the marketplace. This is in contrast to pate nts, which retain their value even if they are locked 
away in a cabinet and not used by their owners.  
68 Emphasis supplied.  
69 Indonesia 's second written submission, paras. 28 -29. 
70 Australia 's first written submission, para. 311.  
71 Indonesia 's first wri tten submission, para. 270.  
72 EU's third party submission, para. 23.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
- B-85 - 
 50. Even if Australia were correct that use of a trademark "in the course of trade " ceases at the 
point of sale, Australia has failed  to account for the fact that trademarks are "used" on packaging 
from the point of manufacture  and Australia 's PP measures a pply restrictions on the use of 
trademarks on tobacco products and their packaging at every stage of the value chain, including 
"selling or supplying ", "purchasing ", "packaging ", and "manufacturing ".73  
 
2. The TRIPS Agreement does not include a general ex ception for public 
health measures  
51. Australia repeatedly overstates the level of deference accorded to public health measures by 
the TRIPS Agreement. In so doing, Australia glosses over the mandate that public health measures 
must be balanced with the o bligations of the TRIPS Agreement and the interests of owners of 
intellectual property.  
 
a. TRIPS Article 8.1  
52. Australia argued that Members have a "sovereign right to regulate the use of trademarks in 
furtherance of public policy objectives (as ackno wledged in the principle set forth in Article  8.1)".74 
This is simply incorrect. The plain text of Article 8.1 requires that public health measures must be 
both necessary and consistent with the provisions of the TRIPS Agreement. Australia invoked 
Article 8.1 and thus bears the burden of proving that PP is "necessary " to protect public health. 
While Australia has alleged that its PP measures will contribute to its health objective of reducing 
smoking, Australia has not put forward sufficient argument an d evidence to prove that the 
PP measures meet the criteria to be considered "necessary " to protect public health. Thus, it is not 
clear to Indonesia that Article 8.1 should be assumed to apply in this case at all. Even if it does 
apply, Australia has mischarac terized the meaning that the Panel should ascribe to this provision. 
Under the TRIPS Agreement a Member 's right to regulate public health must be balanced with the 
obligation to protect intellectual property rights, such as trademarks and geographical indi cations.  
 
b. TRIPS Article 19.1  
53. Australia has stated that Article 19 allows it to regulate, and even prohibit, the use of 
trademarks.75 Contrary to Australia 's interpretation, Article 19.1 is intended to protect trademarks 
from being invalidated. Trad emarks can only be invalidated if they are unused for at least three 
years, and then only if non -use is not due to measures regulating the underlying product. The oft -
cited example of the type of measure contemplated by Article 19 is the pharmaceutical pro duct 
that has not yet been approved for sale.76 The agreement does not  contemplate a scenario in 
which a Member opts to regulate trademarks as a blatant substitute  for restricting the sale of a 
potentially dangerous consumer product.77 Thus, Australia 's reliance of Article 19.1 as a defense 
for its prohibition on the use of certain trademarks is misguided.  
 
c. The Doha Declaration  
54. In Australia 's view, "the [Doha] Declaration states that the TRIPS Agreement 'does not and 
should not prevent members from t aking measures to protect public health ', and 'reaffirm{s} the 
right of WTO members to use, to the full, the provisions in the TRIPS Agreement, which provide 
flexibility for this purpose '".78 Indonesia notes that this statement is consistent with the langu age 
of Article 8.1 and does not expand the level of deference to be accorded to public health measures 
under the TRIPS Agreement. The Doha Declaration merely serves to underscore the fact that the 
TRIPS Agreement, as originally drafted, provides ample lati tude to Members to take measures to 
protect public health that are consistent with the obligations therein.  
 
                                                
73 See T/PP Act , Exhibit JE -1, Sections 31 -35 
74 Australia 's first written submission, para. 374.  
75 Indonesia 's second written submission, para. 44.  
76 Indonesia 's second written submis sion, para. 45.  
77 Indonesia 's response to Q.95 from the Panel, para. 23.  
78 Australia 's first written submission, para. 382.  WT/DS435/R/Add.1 • WT/DS441/R/ Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 2. Plain Packaging Violates Article 2.1 Of The TRIPS Agreement  
55. Pursuant to Article 2.1 of the TRIPS Agreement, Australia is required to comply  with 
Article  10bis of the Paris Convention for the Protection of Industrial Property (1967). Article 10 bis 
of the Paris Convention requires Australia to provide effective protection against unfair 
competition. Australia violates Article 10 bis by compellin g conduct through its PP measures that it 
is required to prohibit. Specifically, PP creates confusion between competitors ' tobacco products 
and misleads consumers about the characteristics of tobacco products.  
 
56. Article 2.1 incorporates certain provisio ns of the Paris Convention into the TRIPS  Agreement. 
WTO Members must comply with these obligations even if they are not parties to the Paris 
Convention.79 Under Article 10 bis, as incorporated by TRIPS Article 2.1, WTO Members have a 
general obligation to provide "effective protection against unfair competition ". The article describes 
unfair competition as "{a}ny act of competition contrary to honest practices in industrial or 
commercial matters ". In order to protect against unfair competition, WTO Members must at a 
minimum ensure effective protection against the three kinds of acts described in 10 bis, including 
creating confusion regarding the goods or commercial activities of a competitor; and misleading 
the public as to the nature, manufacturing process, or characteristics of goods.  
 
57. Australia does exactly the opposite. PP compels competitors to present their goods in 
identical trade dress and with limited descriptive words. In so doing, they force competitors to 
present their goods in a manner that c reates confusion. For example, there are a number of 
similar variations of word marks for tobacco products that are already registered in Australia. The 
word marks themselves are, in many cases, insufficient to differentiate one brand from another. 
Indones ia provided an illustrative list of such word marks in its first written submission.80  
 
58. The fact that word marks alone are insufficient to differentiate competing products is 
especially true under Australia 's PP measures, which require all word marks to be presented in an 
identical format. But for the use of word marks, retail packaging under the PP measures are 
stripped of all distinguishing characteristics and the word marks themselves are stripped of any 
distinguishing style features. This is partic ularly problematic in Australia 's dark market, where 
there is little opportunity for consumers to make a careful examination of tobacco packaging.81  
 
59. The confusion among brands created by PP frustrates the purpose of 10 bis to protect 
competitors, espe cially those in the mid -priced and premium segment of the market, against 
unfair competition. Denied the means to distinguish their products from competitors, 
manufacturers have no incentive to compete on quality and are driven to compete on price. This is  
because consumers have no basis other than price upon which to make purchasing decisions 
absent the "information channel "82 that trademarked and fully branded packaging provides.  
 
60. Additionally, the nearly identical appearance of competing tobacco pro ducts is liable to 
mislead consumers that all tobacco products on the market share the same quality, characteristics 
and reputation. Indeed, this was the express intent of Australia 's PP measures. Australia selected 
the specific packaging requirements of i ts PP measures precisely because they convey the 
message to consumers that all tobacco products are – in the words of the GfK Bluemoon study – 
the "lowest quality ".83  
 
61. In short, Australia 's PP measures rob tobacco product manufacturers of the ability to 
distinguish their products based on quality and "commoditize " the tobacco market. Australia 
sought to ensure that manufacturers cannot distinguish their products or compete on the basis of 
consumer perceptions of quality. Therefore, PP violates Article 2.1 by failing to provide effective 
protection against legally mandated unfair competition.  
 
                                                
79 Indonesia 's first written submission, para. 152.  
80 Indonesia 's first written submission, para. 166.  
81 Indonesia 's second writ ten submission, para. 49.  
82 Indonesia 's first written submission, para. 168.  
83 Indonesia 's first written submission, para. 174.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 3. Plain Packaging Violates Article 15.4 Of The TRIPS Agreement  
62. Article 15.4 of the TRIPS Agreement imposes an affirmative obligation on WTO Members not 
to pre vent the registration of trademarks based on the nature of the goods and services to which 
the trademark will be applied.84 This requirement is clearly understood when looked at in the 
context and scope of Article 15. 85 
 
63. In US - Section 211  the Appell ate Body stated that Article 15.1 "embodies a definition of 
what can constitute a trademark ".86 Under this provision Members must guarantee that signs that 
are "distinctive " are "eligible for registration as trademarks within their domestic legislation ". It 
also states that Members may make the registrability of non -inherently distinctive signs "depend 
on distinctiveness acquired through use ". That said, Article 15.1 does not require that any sign 
"capable of registration " actually be registered. Registrati on can be further conditioned based on 
the text of Articles 15.2, 15.3 and 15.4.87 Under Article 15.2, Members may deny registration of a 
trademark on "other grounds " (even if they are distinctive) "provided they do not derogate from 
the provisions of the Paris Convention (1967) ". Under Article 15.3, Members may also make 
registrability depend on use. However, Article 15.4 makes clear that a denial of registration based 
on "other grounds " under Article 15.2 may not be justified based on "the nature of the g oods or 
services to which a trademark is to be applied ". 
 
64. In light of this framework, Australia has failed to properly implement its obligations under 
Article 15 of the TRIPS Agreement. Australia, through its Trade Marks Act 1995 , requires the 
registra bility of non -inherently distinctive marks to depend on use.88 Under this act, the 
registration of non -inherently distinctive marks will be rejected if "the applicant has not used the 
trade mark before the filing date in respect of the application to such an extent that the trade 
mark does in fact distinguish the designated goods or services as being those of the applicant ".89 
Use with respect to goods is defined by the statute as use of the mark "upon, or in physical or 
other relation to the goods ".90 
 
65. At the same time, under the PP measures, Australia prohibits the use of non -inherently 
distinctive signs related to tobacco products. When a Member requires prior use in order to 
register non -inherently distinctive marks, as Australia has done, but at the  same time restricts the 
ability of a trademark applicant to use a sign related to a particular class of goods in order to 
acquire distinctiveness, it violates Article 15.4 of the TRIPS Agreement. Australia has created an 
"obstacle to the registration of t he trademark " related to the "nature of the good or services to 
which a trademark is to be applied ". 
 
66. Australia argued that: (i) Article 15.4 does not create a "right to use " a sign on any 
product;91 (ii) the complainants ' interpretation of Article 15. 1 and 15.4 would impair the ability of 
governments to regulate the promotion and sale of dangerous products and result in an undoing of 
almost all tobacco control measures adopted by WTO Members around the world;92 and (iii) non -
inherently distinctive sign s that have not achieved distinctiveness through use are not "trademarks 
eligible for registration " and, therefore, are not subject to the disciplines of Article 15.4.  
 
67. Indonesia agrees with Australia that Article 15.4 of the TRIPS Agreement does not create a 
"right to use " a trademark. Indonesia further notes that Article 15.4 does not impede the ability of 
Members to regulate goods  in their respective territories. However, when a Member elects to make 
registrability of trademarks depend upon use (as they are permitted to do under Article 15.1), 
they are bound by Article 15.4 to not prohibit the use of such trademarks based on the nature of 
the goods to which they are applied. This is precisely what Australia has done in its T/PP Act , 
which Australia i tself admits.93  
 
                                                
84 Indonesia 's first written submission, para. 185.  
85 Indonesia 's first written submission, para. 186.  
86 Appellate Body Repo rt, US - Section 211 Appropriations Act , para. 154.  
87 Appellate Body Report, US - Section 211 Appropriations Act , paras. 155 -64. 
88 Trade Marks Act 1995 , Exhibit JE -6, Sections 41(1) -(3). 
89 Trade Marks Act 1995 , Exhibit JE -6, Section 41(2) and 41(3).  
90 Trade Marks Act 1995 , Exhibit JE -6, Section 7(4).  
91 Australia 's first written submission, paras. 299 -300. 
92 Australia 's first written submission, para. 306 and fn. 498.  
93 Australia 's first written submission, para. 307.  WT/DS435/R/Add.1 • WT/DS441/R/ Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 68. Consequently, Australia 's PP measures violate Article 15.4 of the TRIPS Agreement.  
 
4. Plain Packaging Violates Article 16.1 Of The TRIPS Agreement  
69. TRIPS Article 16.1 provides that Members must afford protection to the owners of registered 
trademarks against the unauthorized use of those marks by third parties. Members need only 
extend protections against unauthorized use to trademark owners when (i) the owner 's trademark 
is validly registered in accordance with national law; (ii)  the third party 's mark is being used on 
identical or related goods; and (iii) the third party 's mark is being used in a manner that is likely to 
create confusion.94 The TRIPS Agreement does not provide a standard for "likelihood of confusion, " 
and therefo re it is left to each WTO Members to implement the obligation in its domestic laws.  
 
70. Under Australian jurisprudence, a likelihood of confusion is established when marks are 
deceptively similar such that a consumer is unable to recall the difference be tween two marks.95 
This "impression -based " comparison does not envision a side -by-side comparison, but rather an 
assessment of what a reasonable person would remember about a trademark. The owner of a 
trademark registered in Australia seeking to prevent un authorized third party use on the basis of 
deceptive similarity must establish that a consumer of ordinary intelligence would have difficultly 
distinguishing between the two marks, separately, based on his or her recollection.  
 
71. Australia 's PP measures  undermine the ability of a trademark owner to prevent a "likelihood 
of confusion " with nearly identical marks. In addition, PP impairs the distinctiveness of marks and, 
therefore, the ability of mark owners to prevent the use of similar or identical marks  on similar or 
identical goods. In such cases "evidence of actual confusion " based on the use of trademarks in 
the market "is given great weight ".96 Indeed, trademark owners who can show that consumers are 
actually confused by similar uses of marks have a much greater likelihood of success in exercising 
their "exclusive " rights as compared to trademark owners who are unable to offer such evidence. 
Even when such evidence is not available, the courts in Australia will draw conclusions about how 
trademarks mi ght be used in the marketplace under normal conditions. By prohibiting the use of 
trademarks on tobacco products, PP creates a very real legal bias against the owners of tobacco 
trademarks who want to exercise their "negative " rights of exclusion.  
 
72. Indonesia separately argued that Australia 's PP measures require trademarks that are 
permitted on tobacco packaging to appear in a manner that is likely to result in confusion in 
violation of Article 16.1.97 Owners of registered tobacco product trademarks fin d themselves 
legally required to present their trademarks in a manner that is deceptively similar to those of 
other tobacco brands. Australia 's PP measures increase the risk of consumer confusion that 
Article  16.1 is intended to prevent through private rig ht of action.   
 
73. Australia 's only rebuttal is that the PP measures do not require certain word marks to appear 
in a manner that is likely to result in confusion because "the Registrar has determined that these 
trademarks are in fact capable of distingu ishing the goods of the trademark applicant from the 
goods of other persons ".98 However, the fact that a trademark is registered does not preclude its 
use in a manner that might result in confusion with another registered trademark. The Trade 
Marks Act 199 5 provides the Registrar with the authority to revoke the registration of a trademark 
if "it is reasonable to revoke the registration, taking account of all the circumstances ",99 including 
"any use that has been made of the trade mark " as well as "any past , current or proposed legal 
proceedings relating to the trade mark ".100 Thus, the mere fact of registration does not preclude 
the possibility of later revocation based on confusing use of the trademark.  
 
74. Moreover, the manner and context in which tradem arks are used – including their trade 
dress – is an important element of trademark infringement actions in Australia.101 Under the 
"imperfect recollection " test, Australian courts draw conclusions about what a consumer would 
                                                
94 Indonesia 's first written subm ission, para. 205.  
95 Indonesia 's first written submission, paras. 207 -212. 
96 Indonesia 's second written submission, para. 81.  
97 Indonesia 's first written submission, paras. 214 -19. 
98 Indonesia 's first written submission, p. 66, Table V.1.  
99 Trade Mark s Act 1995 , s 84(1)(b), Exhibit JE -6, p. 83.  
100 Trade Marks Act 1995 , s 84(3)(a) -(b), Exhibit JE -6, pp. 83 -84 (emphasis supplied).  
101 Indonesia 's second written submission, para. 97.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 recall about marks and compare how marks are used or intended to be used  in the marketplace.102 
In the case of word marks, Australian courts have taken judicial notice of the fact "that as a matter 
of common experience, people often do not read words carefully and do not pronounce them 
distinctly ".103 Given the PP measures ' propensity for creating a likelihood of confusion, Australia 
violates TRIPS Article 16.1.  
 
5. Plain Packaging Violates Article 16.3 Of The TRIPS Agreement  
75. TRIPS Article 16.3 requires Members to give trademark owne rs a private right of action 
when: (i) a registered, well -known mark, (ii) is used by an unauthorized third party, (iii) on non -
similar goods or services, (iv) such use indicates a connection with the trademark owner, and (v) 
such use is likely to damage t he trademark owner 's interests. This protection includes refusing or 
canceling the registration of infringing marks and prohibiting their use.  
 
76. The purpose of Article 16.3 is to preserve the commercial value of a well -known mark in 
connection with a pa rticular good or service. This is often thought of as protection against dilution. 
Dilution of a well -known mark usually results in "depreciation of the goodwill attached to it, even 
in cases where there is no likelihood of confusion. "104 
 
77. Australia ar gued that its PP measures have not impaired the rights accorded to owners of 
well-known marks under Article 16.3 because these are "negative " rights only, and Australia is not 
obligated to refrain from taking action that would impact the well -known status of marks.105 
Australia presented no rebuttal argument to the complainants ' claim that Article 16.3 obliges 
Members to protect well -known marks from dilution,106 and it did not rebut the complainants ' 
statement of Australian jurisprudence regarding the proc ess by which marks become well -known.  
 
78. Accordingly, the Panel should find that Australia 's PP measures undermine the rights 
conferred by Article 16.3 of the TRIPS Agreement by ensuring that well -known tobacco trademarks 
lose their protected status, as defined by Australian jurisprudence, and by preventing other 
tobacco trademarks from attaining the recognition necessary to achieve the heightened level of 
protection accorded to well -known marks.  
 
6. Plain Packaging Violates Article 20 Of The TRIPS Agreem ent 
79. TRIPS Article 20 prohibits Members from adopting "special requirements " that "encumber " 
the use of a trademark "in the course of trade " without justification.  
 
a. Australia 's PP measures are "special requirements " 
80. "Special requirements " are tho se mandated requirements that: 1) apply to a limited product 
class; 2) apply only for a particular purpose; or 3) are distinct from those that apply generally or 
"usually ". Australia did not dispute that the PP measures impose "special requirements ".107 
Therefore, this element of Article 20 is satisfied.  
 
b. Australia 's PP requirements encumber the use of a trademark in 
the course of trade  
81. As discussed above, Australia 's PP requirements affect the use of trademarks in the course 
of trade by setting req uirements on their use at every phase of the value chain.108 
 
82. Australia 's PP requirements encumber use of a trademark in the course of trade by 
preventing the use of figurative marks, stylized marks, most word marks, and combined marks of 
one or more o f the above on retail packaging and tobacco products themselves. Furthermore, 
word marks permitted to appear on the packaging must appear in a particular typeface, size, 
capitalization, and color.  
                                                
102 Indonesia 's second written submission, para. 76.  
103 Indonesia 's second written submission, para. 97.  
104 Indonesia 's first written submission, para. 229.  
105 Australia 's first written submission, para. 325.  
106 Australia 's first written submission, fn. 517.  
107 Australia 's first written submission, paras. 79, 120 -121. 
108 See T/PP Act , Sections 31 -35.   WT/DS435/R/Add.1 • WT/DS441/R/ Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 83. Australia responded with a circular argument, claiming  that a prohibition on use cannot be 
covered by Article 20 because there is no use in the course of trade. On the contrary, the use of 
the term "such as " in Article 20 makes it clear that the specified examples are not a closed list and 
a wide range of spe cial requirements could be covered by Article 20, so long as they encumber use 
of a trademark in the course of trade. There is no support in the language of Article 20 for the 
view that a special requirement prohibiting  use in the course of trade is exclud ed from the scope of 
Article 20.  
 
84. Australia 's interpretation would create an untenable situation where the TRIPS Agreement 
would allow Members total freedom to impose a prohibition on the use of a trademark without any 
justification or explanation. An d yet Members would be required to provide a justification and 
explanation for far less intrusive limitations on the use of a trademark.109  
 
c. Australia 's PP requirements "unjustifiably " encumber use of 
trademarks in the course of trade  
85. Article 20 pr ohibits Members from "unjustifiably " encumbering the use of trademarks in the 
course of trade. An Article 20 analysis of "unjustifiable " requires use of a sliding scale – measures 
that impose a high degree of encumbrance also impose a higher burden on the respondent to 
justify the measure. Radical and unprecedented encumbrances, such as those imposed by PP, 
require more evidence to prove that the burden is "warranted " and "supported ", whereas a minor 
encumbrance (i.e. use with a health warning and limitatio ns on size or placement) could be 
justified with less rigorous evidence.  
 
86. Each type of special requirement and its related encumbrance must also be evaluated and 
"justified " independently. It would be inappropriate to use evidence that may support one  type of 
encumbrance (i.e. a limitation on the use of certain colors) to justify the imposition of a different 
type of encumbrance (mandating a certain typeface) or a range of encumbrances across the 
board.   
 
87. Australia has assumed that any trademark e lement located anywhere  has the effect of 
persuading people to smoke. At every turn Australia has crafted its PP requirements to impose 
some of the most extreme encumbrances, without attempting to determine whether any other 
approach, such as allowing manu facturers to use their preferred typeface and size, could satisfy 
PP's purposes. This approach is unsubstantiated and is certainly unjustified. There was no credible 
evidence that the specific marks (i.e. stylized marks in their registered typeface, larger  font size, 
etc.) used on tobacco products and their retail packaging had that effect, nor was there any 
credible evidence more generally that every trademark element does so equally.  
 
88. By every measure of post -implementation data, there is no evidence  that PP is contributing 
to a decrease in prevalence in Australia, much less at a level sufficient to justify the draconian and 
unprecedented encumbrances imposed on figurative marks, stylized marks, and word marks. 
Studies by multiple researchers using di fferent analytical approaches have failed to find any 
empirical evidence that Australia 's PP measures are reducing prevalence in the general population 
or among youth, who were predicted to be particularly affected by PP. After more than three years 
of PP there is no evidence that it is having a positive impact on consumer behavior. None of the 
predictions about the effect of PP have proven to be correct. PP has failed to bring about the 
declines in tobacco prevalence predicted by its proponents. It is not working and is not likely to 
work and, therefore, unjustifiably encumbers the use of trademarks in violation of 
TRIPS  Article  20.  
 
7. Plain Packaging Violates Articles 22.2(b) And 24.3 Of The 
TRIPS  Agreement  
 
89. Indonesia supports the arguments presented  by the Dominican Republic and the Honduras 
with respect to Australia 's violation of Articles 22.2(b) and 24.3 of the TRIPS Agreement.110  
 
                                                
109 Indonesia 's second written submission, para. 125.  
110 See Dominican Republic 's first written submission, Section VI.J and VI. K and Honduras ' first written 
submission, Section VI.   WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 B. Plain Packaging Violates Article 2.2 Of The TBT Agreement  
90. In order to establish a violation of Article 2.2 of  the TBT Agreement, panels and the 
Appellate Body have held that a complainant must prove that: (1) the objective of the challenged 
measure is not "legitimate "; or (2) the technical regulation is more trade -restrictive than is 
necessary to achieve that leg itimate objective, bearing in the mind the risks that non -fulfillment 
would create. Because the TBT Agreement only applies to technical regulations, complainants must 
also prove that the challenged measure is a "technical regulation ". Indonesia will addres s this 
question first.  
 
1. Australia 's PP measures are "technical regulations "  
91. The Appellate Body has established a three -tier test for determining whether a measure is a 
"technical regulation " under the TBT Agreement: 1) the document must apply to a n identifiable 
product or group of products; 2) the document must lay down one or  more charact eristics of the 
product, prescribed in either a positive or a negative form; and 3) compliance with the product 
characteristics must be mandatory.111 
 
92. While A ustralia conceded that the "format requirements " (which specify the physical 
appearance of tobacco packs and tobacco products themselves) are technical regulations subject 
to the disciplines of the TBT Agreement, Australia mistakenly claimed that the "trademark 
requirements " (which address the use of trademarks on tobacco products and their packaging) are 
not.112 In response, Indonesia countered that Annex 1.1 of the TBT Agreement indicates that a 
technical regulation:  
 
. . . may also include or deal exclus ively with  terminology, symbols , packaging, marking or 
labeling requirements as they apply to a product, process or production method. 
(emphasis added)  
 
In a finding that was not appealed, the WTO panel in EC – GIs clarified that a document that sets 
requirements for product labels lays down a product characteristic.113 It also is not in dispute that 
compliance with the PP requirements is mandatory. 114 Therefore, all aspects of Australia 's PP 
measures are technical regulations subject to the TBT Agreement.  
 
2. Australia 's PP measures are not in accordance with an international 
standard within the meaning of Article 2.5 of the TBT Agreement  
a. The FCTC COP is not an international standardizing body  
93. Australia has asserted, without providing evidence, that  the FCTC COP and its Guidelines 
satisfy the requirements in US – Tuna II (Mexico)  to qualify as an "international standards 
organization " and "international standards " respectively. An "international standard " exists where 
there is: (i) a standard; (ii) a dopted by an international standardizing/standards organization; and 
(iii) that is made available to the public.115  
 
94. In order to be considered an "international standardizing/standards organization ", an 
organization must have "recognized activities in  standardization ".116 In examining whether an 
international body has "recognized activities in standardization ", evidence of recognition by WTO 
Members is relevant ".117 Such recognition does not exist among WTO Members with respect to the 
FCTC. In total, 1 9 WTO Members, including 15 who have signed or ratified the FCTC, did not agree 
that the FCTC Guidelines are an international standard.118 Contrary to Australia 's argument, there 
is no "recognition " of the standardization activities at the FCTC among WTO M embers. 
Furthermore, no document published by the relevant organizations (WHO, WTO) describes the 
                                                
111 Appellate Body Report, EC – Sardines, para. 176 ( citing  Appellate Body Report, EC – Asbestos , 
paras. 66 -70). 
112 Indonesia 's second written submission, para. 211.  
113 Indonesia 's first written submission, para. 387.  
114 T/PP Act , Chapter 5, Part 2, p. 89 -100. 
115 Indonesia 's response to Q.66 from the Panel, para. 75. 
116 Appellate Body Report, US – Tuna II (Mexico) , paras. 356 -359 
117 Appellate Body Report, US – Tuna II (Mexico) , para. 363. 
118 See Indonesia 's second written submission, paras. 239 -240. WT/DS435/R/Add.1 • WT/DS441/R/ Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 FCTC COP as a standard -setting organization and while the FCTC assigned a number of specific 
functions to the COP, none was the development of product standar ds.119 
 
95. Whether the body adopting a measure adheres to the principles of transparency, openness, 
impartiality and consensus contained in the TBT Committee Decision on Principles for the 
Development of International Standards, Guides and Recommendations  with Relation to Articles 2, 
5, and Annex 3 to the Agreement (the "TBT Committee Decision ") is also relevant to the analysis 
of whether an organization is an international standardizing body.120  
 
96. The FCTC COP did not, as Australia claims, recommend P P "by consensus ".121 The COP could 
only reach consensus to recommend considering  PP, which means there was no consensus to 
recommend adopting PP as part of Members ' obligations under Articles 11 and 13.   
 
97. The FCTC Guidelines do not result in "common o r repeated use ". A Party may "consider " 
adopting PP and decide to adopt it or it may "consider " adopting PP and reject the policy. These 
are widely divergent outcomes that could not possibly be considered "common " use.  
 
98. No tobacco manufacturer has vol untarily adopted PP. The requirements of FCTC Articles 11 
and 13 with respect to packaging and advertising are mandatory for Parties to the FCTC; i.e. they 
are not "voluntary ".122 The Guidelines for Articles 11 and 13 make recommendations on how 
Parties sh ould implement the "mandatory " provisions of Articles 11 and 13. To date the only "use" 
of the Guidelines has been by Australia, which imposed PP by adopting a mandatory technical 
regulation. Indonesia is not aware of a single instance where a standard was  considered to exist, 
yet had not been used voluntarily in even a single commercial instance. In this regard the 
FCTC Guidelines contrast sharply with other international standards.  
 
99. Finally, the FCTC COP is not open or transparent.123 The Rules of Pro cedure for the COP 
establishes the criteria for obtaining observer status and provides that it is only open to "{o}ther 
international and regional nongovernmental organizations whose aims and activities are in 
conformity with the spirit, purpose and princi ples of the Convention . . . . "124 The COP 's rules for 
designating only like -minded observers means that deliberations in which observers participate are 
not open on a non -discriminatory basis.  
100. In addition, FCTC Guidelines for Article 5.3 ( "Guidelines  5.3") address interaction with 
tobacco companies. The Guidelines 5.3 are replete with admonitions to Parties to avoid any 
interaction with tobacco companies, protect policies from "commercial and other vested interests 
of the tobacco industry ", and consid er that there is a "fundamental and irreconcilable conflict 
between the tobacco industry 's interests and public health policy interests ".125 The Guidelines 
directly conflict with the TBT Committee Decision provisions regarding transparency.126 There is no 
analogous set of guidelines in existence in any other recognized standard -setting body prohibiting 
engagement with industry.127 
101. Finally, the FCTC COP bears no resemblance to other standardizing organizations, such as 
the Joint Food and Agriculture Org anization ( "FAO")/WHO Codex Alimentarius Commission 
("Codex ") or the International Standards Organization ( "ISO"). The FCTC 's far more amorphous 
guidelines for implementation of either Article 11 or 13 lack the requisite scientific or technical 
underpinnin gs, as well as a transparent and well -articulated standard -setting process (which is 
understandable given that it is not, and never was intended to be, a standard -setting organization) 
that would permit any consideration of its work product as a "relevant international standard " 
within the meaning of Article 2.5 of the TBT Agreement.  
 
                                                
119 Indonesia 's second written submi ssion, para. 244.  
120 Appellate Body Report, US – Tuna II (Mexico) , paras. 373 -378. 
121 Indonesia 's second written submission, para. 225.  
122 Indonesia 's second written submission, para. 229.  
123 Indonesia 's second written submission, paras. 230 -241. 
124 Indonesia 's second written submission, para. 231.  
125 Indonesia 's second written submission, paras. 236 -237. 
126 TBT Committee Decision, Article 2.1 (G/TBT/1/Rev.9, p. 37). (emphasis supplied)  
127 Indonesia 's second written submission, para. 248.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 b. Australia 's PP measures are not "in accordance with " the 
FCTC  Guidelines  
102. For all of the reasons described above, the Panel should find that the FCTC Guidelines for 
Articles 11 and 13 are not international standards and the Panel 's analysis of Australia 's claims 
under Article 2.5 should end here. Alternatively, if the Panel concludes that an international 
standard does exist, Indonesia argued that Australia 's PP measures  are not "in accordance with " 
that international standard because they go well beyond what is recommended in the Guidelines.  
 
103. Interpretations of SPS Article 3.2 have held that a measure must fully "conform to " or 
"comply with " all aspects of the relev ant international standard, without exceeding  the "rules, 
guidelines or characteristics " established by the standard.128 The Appellate Body has held that a 
measure that exceeds the requirements of an international standard does not conform to that 
standard  and is not entitled to any presumption of consistency .129  
 
104. Australia 's PP measures are not "in accordance with " the purported standard allegedly 
established in the Guidelines for Articles 11 and 13. First, Australia has previously informed the 
WTO t hat its PP measures are not "in accordance with " an international standard in its notification 
to the TBT Committee under Article 2.9.2.130 Furthermore, the vague language of the FCTC 
Guidelines does not provide a level of specificity sufficient for there to be the required "degree of 
correspondence  between the Member 's technical regulation and the international standard, such 
that the technical regulation 'embod{ies} the international standard completely and, for practical 
purposes, convert{s} it into a mu nicipal standard '".131  
 
105. Moreover, Australia 's PP measures go beyond the Guidelines for Article 11 and 13, which 
eliminates any presumption that might attach pursuant to TBT Article 2.5. The Guidelines for both 
Article 11 and 13 do not include require ments, such as prohibiting use of the manufacturer 's name 
on tobacco products themselves, imposing restrictions on wrappers inside of tobacco packs, or 
such details as the location and orientation of information permitted to appear on tobacco 
packaging and  the number of times certain information may appear on a pack, all of which are 
mandated by Australia 's PP measures.132 Because Australia 's PP measures exceed the 
requirements described in the Guidelines for Articles 11 and 13, they do not enjoy any 
presum ption of consistency under Article 2.5 with respect to Article 2.2 of the TBT Agreement.  
 
3. Australia 's PP requirements are more trade restrictive than necessary and 
create an unnecessary obstacle to trade in violation of TBT Article 2.2  
106. Indonesia ag rees that measures to reduce smoking prevalence have the potential to protect 
public health and is not challenging the legitimacy of the objective pursued by Australia 's PP 
measures. In US – Tuna II (Mexico)  the Appellate Body concluded that an analysis of  the 
consistency of a measure with Article 2.2 involves a "relational analysis " of: the trade -
restrictiveness of the technical regulation; the degree of contribution that it makes to the 
achievement of a legitimate objective; and the risks non -fulfillment would create.133 Indonesia 
argued that Australia 's PP measures do not make a contribution toward this legitimate objective, 
are trade restrictive, and less trade restrictive alternatives are available, all of which indicate that 
Australia 's PP measures are  more trade restrictive than necessary.  
 
a. Australia 's PP requirements are trade restrictive  
107. Australia 's PP measures prevent tobacco companies from using trademarks to distinguish 
their tobacco products from those of competitors and in many cases de mand premium pricing. By 
stripping away the most identifiable elements of branding (colors, shapes, typefaces, etc.), PP 
"commoditizes " tobacco products and price becomes the primary form of competition.  
 
                                                
128 Indone sia's second written submission, para. 255.  
129 Appellate Body Report,  US/Canada — Continued Suspension , para. 694. (emphasis added)  
130 Indonesia 's second written submission, para. 256.  
131 Indonesia 's second written submission, para. 256. 
132 T/PP Act  (JE-1), pp. 22 -27. 
133 Appellate Body Report, US – Tuna II , para. 318, Appellate Body Report US – COOL , para. 374.  WT/DS435/R/Add.1 • WT/DS441/R/ Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 108. The inability of foreign tobacco product manuf acturers to establish their brand identity in 
Australia in order to compete against domestic competitors makes it difficult to overcome the 
existing domestic brand bias. Australia 's PP measures are thus trade restrictive because they limit 
competitive oppo rtunities in the Australian market by imposing restrictions on the right to use 
trademarks and other aspects of brand identity that are necessary to compete against domestic 
brands.  
 
b. Australia 's PP measures fail to make a meaningful contribution to the 
legitimate objective of reducing smoking prevalence  
109. The Appellate Body has clarified in the context of Article XX(b) of the GATT 1994 that "a 
contribution exists when there is a genuine  relationship of ends and means between the objective 
pursued and  the measure at issue ".134 In assessing whether Australia 's PP measures have had an 
"ends and means " relationship with a reduction in smoking prevalence, it is useful to begin with an 
understanding of the trend in smoking prevalence prior to the introducti on of PP. Australia 's own 
health data show that smoking prevalence had fallen consistently from 24.3 percent in 2001 to 
15.1 percent in 2010.135 Observed smoking prevalence declined steadily from 2006 at an annual 
rate of about 0.59 percentage points.  In order for there to be an "ends and means " relationship 
between Australia 's PP measures and a reduction in smoking prevalence, PP would need to have 
reduced prevalence beyond  the rate that was already occurring – if not, it was and is 
"unnecessary ". 
 
110. Underlying PP is a belief that any design element that might appear on a pack or 
cigarette/cigar presumptively has the effect of persuading people to smoke when they otherwise 
would not. At the time PP was adopted by Australia, there was no credible evidence  that the 
specific design elements used on tobacco products and their packaging had that effect, nor was 
there any credible evidence more generally that every design element regulated by PP did so. 
Post-implementation data continues to show that PP has had  no effect on smoking prevalence 
rates in Australia, even three years after it went into effect, and is unlikely to do so in the future.  
 
c. Less restrictive alternatives are available  
111. Even if PP had made some tiny contribution to its objective, the re are less trade -restrictive 
alternatives that make an equivalent or greater contribution to reducing prevalence  than PP . These 
include excise tax increases, increased spending on social marketing campaigns, raising the 
minimum legal purchase age, and a p re-vetting mechanism.136  
 
112. Australia has claimed that the first three of these alternatives cannot be considered 
"alternatives " because they are already in use in Australia.137 However, Australia is misstating the 
circumstances in Brazil – Retreaded T yres. In that case, certain measures proposed as LRAs were 
found not to be valid "alternatives " because they were implemented as part of a comprehensive 
approach to address a risk to human, plant and animal life and health.138 However, the panel did 
not re ach this conclusion in the abstract. Brazil had put extensive factual evidence on the record in 
that case showing that if imported retreaded tires were allowed in the Brazilian market, they would 
have displaced local retreading of used tires, leading to an  increase in waste tires (unrecycled 
tires) in Brazil.139 Accordingly, the panel concluded that domestic retreading of tires in Brazil could 
have been adversely affected in the absence of the import ban on foreign retreaded tires. In the 
instant case, Aust ralia has provided no evidence (and certainly nothing comparable to the evidence 
developed by Brazil) showing that excise taxes, social marketing campaigns, or the minimum legal 
purchase age would be less effective  in the absence of the PP measures.  
 
113. Complainants are not arguing that existing tobacco control measures – like taxation, social 
marketing campaigns, or the LMPA – would serve as alternatives in their present form. In each 
instance complainants have proposed modifications of those policies s uch that they would become 
a new measure not currently in effect in Australia. For example, the fact that Australia raised its 
LMPA from 16 to 18 almost 20 years ago  has no bearing on the positive effects that a rise from 18 
                                                
134 Appellate Body Report, Brazil –Retreaded Tyres , para. 145  (emphasis added).  
135 Indonesia 's first written submission, para. 408.  
136 Indone sia's first written submission, paras. 430 -457. 
137 Australia 's first written submission, paras. 703 -717. 
138 Indonesia 's second written submission, para. 289.  
139 Panel Report, Brazil – Retreaded Tyres , para. 7.142.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
- B-95 - 
 to 21 now could generate.140 Also, implementing the structural programmatic changes to social 
marketing campaigns would result in new, more effective, programs that would make an increased 
contribution to reducing prevalence.141 
 
114. Furthermore, the LRAs proposed by complainants are l ess trade -restrictive than PP because 
they do not diminish competitive opportunities by eliminating the ability of manufacturers to 
distinguish their product from those of other suppliers.  
 
115. Based on the analysis above, the PP measures violate Article  2.2 of the TBT Agreement.  
 
IV. REQUEST FOR FINDINGS  
116. Indonesia requested the Panel find that Australia 's Trade Marks Amendment (Tobacco Plain 
Packaging) Act 2011 , Tobacco PP Act 2011 , and Tobacco Plain Packaging Regulations  2011, 
collectively and indi vidually, violate Australia 's obligations under Article 2.2 of the TBT Agreement 
and Articles 2.1, 15.4, 16.1, 16.3, 20, 22(b) and 24.3 of the TRIPS Agreement.  
 
 
                                                
140 Australia 's first written submissio n, para. 710.  
141 Indonesia 's second written submission, para. 289.  WT/DS435/R/Add.1 • WT/DS441/R/ Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 ANNEX B -5 
INTEGRATED EXECUTIVE  SUMMARY OF THE ARGUM ENTS OF AUSTRALIA  
I. INTRODUCTION  
1. For the reasons set out in Australia 's written submissions, oral statements, responses to 
questions from the Panel, and comments on the complainants ' responses, the complainants ' claims 
that the tobacco plain packaging measure is inconsistent with Australia 's obligations under the 
covered agreements are unfounded both in law and in fact.  
2. As a matter of law, the complainants ' claims either rely on clear distortions and 
misinterpretations of the relevant provisions of the TRIPS  Agreement, the TBT  Agreement, an d the 
GATT  1994, or otherwise fail to satisfy the legal requirements for establishing a claim of violation 
under those provisions.  
3. Moreover, even if the Panel were to find that the complainants have established the 
prima  facie applicability of the relev ant legal provisions, the complainants have failed to prove 
their claims of violation as a matter of evidence.  
4. Under the two principal provisions at issue in this dispute – Article  20 of the 
TRIPS  Agreement and Article  2.2 of the TBT  Agreement – the co mplainants have assumed the 
burden of proving that the tobacco plain packaging measure will make no contribution to its public 
health objectives. The qualitative and quantitative evidence before the Panel, and the 
complainants ' own contradictory arguments regarding the effects of the measure, demonstrate 
that the complainants have failed to discharge this burden.  
5. In recognition of this failure, the complainants have attempted throughout their submissions 
to shift their legal burden to Australia by sugge sting that Australia must positively demonstrate 
that the tobacco plain packaging measure has resulted in immediately observable and quantifiable 
declines in smoking prevalence and consumption in the limited period of time since the measure 's 
implementatio n. Not only does this argument fundamentally ignore the nature of the tobacco plain 
packaging measure as a long -term public health measure that forms an integral part of a 
comprehensive suite of tobacco control measures, and the nature of tobacco use as a complex 
public health problem that requires a comprehensive response, it also constitutes an additional 
error of law that infects the complainants ' arguments.  
6. In light of the complainants ' failure to prove that the tobacco plain packaging measure is 
inconsistent with Australia 's obligations under the covered agreements, the Panel should reject the 
complainants ' claims in their entirety.  
II. SUMMARY OF THE RELEV ANT CONTEXT FOR ASSE SSING AUSTRALIA 'S TOBACCO 
PLAIN PACKAGING MEAS URE 
7. This dispute concerns a Member 's right to regulate the advertising and promotion of tobacco 
– a unique, highly addictive product that kills half of its long -term users; is the world 's leading 
cause of preventable morbidity and mortality; is globally responsible for the deaths o f nearly 
6,000,000 people annually, including 600,000 non -smokers exposed to second -hand smoke; for 
which there is no safe level of use or safe level of exposure; and which harms nearly every organ 
in the body.1 
8. In Australia, tobacco use is a leading ca use of preventable disease and premature death. 
Over 15,000 Australians die each year from smoking -related diseases.2  
9. To combat the global epidemic of tobacco use,3 the FCTC requires comprehensive tobacco 
control strategies in recognition that they are  the most effective means of reducing the incidence 
                                                
1 Australia 's first written submission, Part  II.A, paras. 23 -24, 27 -30, and Part  II.B, para. 32.  
2 Australia 's first written submission, Part  II.C, para. 34; Australia 's opening statement at the first 
substantive meeting of the Panel, para. 7.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 and prevalence of smoking.4 To be effective, such comprehensive strategies must cover all aspects 
of supply and demand; apply to all tobacco products; optimize synergies between complementary 
measures; an d be continually refreshed and revised.5 
10. Australia 's comprehensive suite of tobacco control measures includes: measures that have 
progressively restricted advertising of tobacco products; graphic health warnings; increased excise 
taxes; restrictions on  youth access; retail and point -of-sale-display bans; bans on smoking in 
public places; support for cessation; and anti -smoking social marketing campaigns and public 
education campaigns.6 The tobacco plain packaging measure was introduced to prohibit one o f the 
last remaining avenues for the advertising and promotion of tobacco products to consumers and 
potential consumers in Australia: the retail packaging of tobacco products and the product itself.7  
11. The measure achieves this objective by prohibiting the display of design features on the 
retail packaging of tobacco products, including trademarks (other than brand, business or 
company name or variant name), logos, symbols, imagery, colours and promotional text; imposing 
certain restrictions on the shape  and finish of the retail packaging of tobacco products; and 
imposing certain other requirements related to the appearance of tobacco products.8 To ensure 
that tobacco companies are still able to distinguish their products from other products in the 
market place, the measure permits the use of brand, business or company name and variant 
names on retail packaging, including names that are trademarked, in a standardised form.9 These 
requirements apply to all tobacco products.10 
12. Australia 's decision to impl ement the tobacco plain packaging measure was based upon an 
extensive body of supporting scientific evidence,11 and the explicit recommendation of the 
FCTC Guidelines to adopt tobacco plain packaging as a means of implementing Parties ' obligations 
under th e FCTC.12 Numerous other countries, including Ireland, the United Kingdom, France, 
Hungary, New Zealand, Norway, Chile and Singapore, have now adopted or are considering 
adopting their own tobacco plain packaging measures, consistent with the FCTC  Guidelin es, to 
improve public health in their respective jurisdictions.13 
13. The synergies between Australia 's comprehensive and complementary tobacco control 
measures are critical.14 For example, tobacco plain packaging works together with excise tax 
increases t o address youth initiation across each of its stages, including the early stages of 
experimentation with tobacco use.15 Similarly, tobacco plain packaging enhances the effectiveness 
of Australia 's social marketing campaigns, which are otherwise undermined by tobacco product 
marketing.16 Tobacco plain packaging also increases the effectiveness of graphic health warnings, 
and the enhanced graphic health warnings reinforce the messages conveyed in anti -tobacco social 
                                                                                                                                                  
3 Australia 's first written submission, Part  II.B, para. 31; Australia 's opening statement at the second 
substantive meeting of the Panel, paras. 17 -18. 
4 Australia 's first written submission, Part  II.D, paras. 38, 46 -49; Australia 's second written submission, 
para. 250; Australia 's opening statement at the second substantive meeting of the Panel, para. 8; Australia 's 
comments on responses to Panel Question No. 6, paras. 34 -36. 
5 Australia 's first writ ten submission, Part  II.D, paras. 38 -49; Australia 's opening statement at the 
second substantive meeting of the Panel, paras. 9 -10; Australia 's comments on responses to Panel Question 
No. 6, paras. 34 -36. 
6 Australia 's first written submission, Part  II.D.2  and Part  II.D.3; Australia 's second written submission, 
para. 552; Australia 's opening statement at the second substantive meeting of the Panel, para. 9.  
7 Australia 's first written submission, Part  II.D.3.  
8 Australia 's first written submission, Part  II.G.2. 
9 Australia 's first written submission, Part  II.G.2; Australia 's second written submission, Part  II.C.5(c); 
Australia 's opening statement at the first substantive meeting of the Panel, paras. 50 -54. 
10 Australia 's first written submission, Part  II.G.2 (e). 
11 Australia 's first written submission, Part  II.E.3 and Part  II.I.3; Australia 's second written submission, 
Parts II.C.5(b) and III.D.3.  
12 Australia 's first written submission, Part  II.F; Australia 's second written submission, paras. 242 -245; 
Austra lia's opening statement at the second substantive meeting of the Panel, para. 11.  
13 Australia 's comments on responses to Panel Question No. 163, paras. 117 -118; Australia 's second 
written submission, paras. 245 -249; Australia 's opening statement at the se cond substantive meeting of the 
Panel, para. 11.  
14 Australia 's opening statement at the first substantive meeting of the Panel, paras. 16 -17; Australia 's 
opening statement at the second substantive meeting of the Panel, para. 10; Australia 's response to P anel 
Question No. 158, para. 73; Australia 's comments on responses to Panel Question No. 161, paras. 107 -111. 
15 Australia 's comments on responses to Panel Question No. 161, para. 108.  
16 Australia 's comments on responses to Panel Question No. 161, para. 1 10. WT/DS435/R/Add.1 • WT/DS441/R/ Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 marketing campaigns, and do so at a particu larly important time – namely, the point of 
consumption.17 Such measures therefore complement, rather than act as a substitute for, each 
other.18 
14. Australia 's comprehensive tobacco control strategy has resulted in a decline in the 
prevalence rates of sm oking in Australia.19 Prevalence in Australia is now the lowest it has been for 
many decades, with substantial declines occurring during the period in which tobacco plain 
packaging has been in force.20  
15. The most recent NDSHS, which covers the period 20 10-2013, showed a notable decline in 
prevalence rates. Rates of daily smoking declined from 15.9% to 13.3% among Australians aged 
18 or older and, significantly, from 15.1% to 12.8% among Australians aged 14 or older.21 This 
drop in prevalence of 2 to 3 pe rcentage points translates to 200,000 fewer daily smokers, aged 14 
or older.22 Similarly, under the Australian Bureau of Statistics 2014 -15 wave of the National Health 
Survey, daily smoking among Australians aged 18 and over was 14.5% in 2014 -15, down from  
16.1% in 2011 -12.23 These results are consistent with other evidence before the Panel showing 
significant declines in smoking prevalence following the introduction of the tobacco plain packaging 
measure.  
16. Recent data on smoking prevalence taken from t he Roy Morgan monthly survey confirms a 
substantial reduction in prevalence. While Roy Morgan uses different survey methodologies, the 
pattern of rapid decline in prevalence is significant and consistent. Overall prevalence for 
Australian smokers aged 14 a nd over declined from 18.7% in the period from January to June 
2012 (prior to the introduction of tobacco plain packaging) to 16.2% in the first six months of 
2015.24 Prevalence among Australians aged 14 -24 also declined, from 16.7% to 14.1%. This 
translat es to approximately 492,000 fewer smokers aged 14 and over, including approximately 
86,000 fewer youth and young adult smokers.25 
17. Since the complainants have assumed the burden of establishing that the tobacco plain 
packaging measure is incapable of co ntributing to Australia 's public health objectives, they must 
demonstrate that none of the significant declines in smoking prevalence and consumption that 
have occurred since the measure 's introduction can be attributed to the tobacco plain packaging 
measu re; and that the measure is incapable of making any contribution to reducing the use of, 
and exposure to, tobacco products in the future.  
18. As Australia has established in its submissions throughout these proceedings, the 
complainants have failed entire ly to discharge this burden. Because the complainants ' failure to 
discharge this burden is fatal to the complainants ' principal claims under Article  20 of the 
TRIPS  Agreement and Article  2.2 of the TBT  Agreement, Australia will summarise the relevant 
argum ents and evidence concerning the measure 's contribution to its public health objectives 
before addressing the other deficiencies in the complainants ' claims.  
                                                
17 Australia 's opening statement at the second substantive meeting of the Panel, para. 10; Australia 's 
comments on responses to Panel Question No. 161, para. 110.  
18 Australia 's opening statement at the second substantive meeting of the Panel, para. 10 ; Australia 's 
second written submission, Part  III.F; Australia 's opening statement at the second substantive meeting of the 
Panel, paras. 9 -10, 154 -155. 
19 Australia 's first written submission, Part  II.C, para. 36 and Figure 1; Part  II.D, para. 53, Figure 3; 
Australia 's opening statement at the second substantive meeting of the Panel, paras. 12 -15. 
20 Australia 's first written submission, Part  II.C, para. 36; Australia 's opening statement at the second 
substantive meeting of the Panel, paras. 12 -15. 
21 Australia's first written submission, Part  II.C, para. 36; Australia 's response to Panel Question 
No. 199, para. 310; Australia 's opening statement at the second substantive meeting, para. 12.  
22 Australia 's opening statement at the second substantive meeting of the Panel, para. 12.  
23 Australia 's response to Panel Question No. 199, para. 389.  
24 Australia 's opening statement at the second substantive meeting of the Panel, para. 14.  
25 Australia 's opening statement at the second substantive meeting of the Panel , para. 14.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 III. THE COMPLAINANTS HAV E FAILED TO DEMONSTR ATE THAT THE TOBACCO  PLAIN 
PACKAGING MEASURE IS  INCAP ABLE OF CONTRIBUTING  TO ITS OBJECTIVES  
19. Australia has witnessed an acceleration in the significant decline in smoking prevalence since 
the introduction of tobacco plain packaging as part of a comprehensive suite of tobacco control 
measures in late 2012,  as the following graph shows.26  
 
20. In the same period, the consumption of tobacco products also fell. Average per capita 
monthly sales in the twelve months to September 2015 fell by more than 15% as compared to the 
equivalent twelve months prior to th e introduction of the measure.27 
21. Nevertheless, the complainants claim that there is insufficient evidence to satisfy the Panel 
that the tobacco plain packaging measure will ever contribute to its public health objectives. While 
it is the complainants t hat bear the burden of proving this argument, Australia has demonstrated 
that, properly analysed, the weight of the qualitative and quantitative evidence before the Panel 
overwhelmingly supports the conclusion that the measure is apt to contribute to reduc ing the use 
of tobacco products, and exposure to tobacco smoke.  
A. THE COMPLAINANTS HAV E FAILED TO ESTABLIS H ON THE BASIS OF TH E QUALITATIVE 
EVIDENCE BEFORE THE PANEL THAT THE MEASU RE IS INCAPABLE OF C ONTRIBUTING TO ITS 
OBJECTIVES OR IS UNJ USTIFIABLE  
22. Throughout the course of these proceedings, Australia has submitted a large body of 
qualitative evidence that supports the conclusion that tobacco plain packaging is apt to contribute 
to reducing the use of tobacco products and exposure to tobacco smoke. A s Australia has 
explained, there are multiple hypotheses that are "tested and supported by sufficient evidence "28 
which justify the conclusion that the measure is apt to contribute to Australia 's public health 
objectives.  
23. The complainants have failed t o discredit any of this evidence. The complainants ' assertion 
that tobacco plain packaging is incapable of contributing to its objectives amounts, at most, to a 
request that the Panel take a different view of this evidence. This is insufficient as a matter  of law 
to establish that there is no credible evidentiary support for the conclusion that tobacco plain 
packaging is capable of contributing to its objectives.  
                                                
26 Australia 's response to Panel Question No. 196, para. 222.  
27 Australia 's comments on responses to Panel Question No. 146, para. 14.  
28 Appellate  Body Report, Brazil – Retreaded Tyres , para. 151.  WT/DS435/R/Add.1 • WT/DS441/R/ Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 1. The complainants have failed to sever the clear link between advertising and 
smoking -related  behaviours  
24. The evidence shows that there is a clear link between advertising and smoking -related 
behaviours and that because retail packaging represents a medium for advertising and promoting 
tobacco products, the tobacco plain packaging measure is ca pable of affecting smoking -related 
behaviours. The clear weight of scientific evidence supports this link. This evidence dates back to 
the 1980s, and includes successive, eminent reports of United States Surgeons General, the World 
Health Organization, the  United States National Cancer Institute, and the United States Institute of 
Medicine.29 These reports have consistently concluded that tobacco companies deliberately target 
their marketing and advertising to young people to "lure them into starting smokin g".30 
25. There can be no real dispute that advertising increases primary demand for tobacco 
products. While the complainants have attempted to dispute this, their evidence fails genuinely to 
contest the proposition that tobacco advertising causes people t o smoke.31 
2.  The complainants ' argument that tobacco product packaging does not constitute 
advertising or promotion is implausible  
26. Australia has placed a significant amount of qualitative evidence on the Panel record which 
demonstrates that retail to bacco packaging advertises and promotes tobacco products.32 This 
evidence includes marketing theory and practice,33 as well as evidence from the tobacco industry 
itself, which views the package as a "billboard "34 and acknowledges that "tobacco companies, l ike 
other consumer goods companies, see branded packaging as one of the tools of advertising. "35 In 
short: branded packaging functions as a form of advertising and promotion, which increase 
primary demand for tobacco products.36  
27. The complainants have disputed this proposition, relying on two key arguments. First, that 
packaging cannot be advertising because it does not fit within a textbook definition of "promotion ". 
Second, that even if packaging does generally function as advertising, it cannot serve  this function 
in the context of Australia 's dark market. Both of these arguments are without foundation.  
(a) Packaging is advertising  
28. Branded packaging plays a powerful role in consumer decision -making, a proposition 
supported by evidence from the to bacco industry and Australia and the complainants ' marketing 
experts.  
29. Extensive evidence before the Panel demonstrates that the tobacco industry has developed 
and exploited tobacco packaging for decades as "one of the tools of advertising " tobacco 
products,37 including cigars,38 to project positive images that appeal to specific demographic 
groups, especially young smokers.39 
                                                
29 Australia 's first written submission, para . 64; Australia 's second written submission, paras. 217 -236, 
citing Expert Report of F. Chaloupka, Exhibit AUS -9. 
30 Australia 's first written submission, Part  II.E, paras. 62 -63, citing Teague, Exhibit AUS -69; R.J. 
Reynolds, Exhibit AUS -70; and USA et al v. Philip Morris USA Inc., et al , Exhibit AUS -71. 
31 Australia 's first written submission, paras. 621 -626; Australia 's second written submission, 
paras.  214-226. 
32 Australia 's first written submission, Part  II.E; Australia 's opening statement at the first  substantive 
meeting of the Panel, paras. 26 -55, and accompanying Powerpoint presentation; Australia 's second written 
submission, paras. 227 -236. 
33 Australia 's first written submission, Part  II.E.2(b), citing Expert Repo rt of N. Tavassoli, Exhibit 
AUS-10; and Expert Report of J.P. Dubé, Exhibit AUS -11. 
34 Australia 's first written submission, Part  II.E.2(a) and (c); Australia 's second written submission, 
para. 231. See also, JT International SA v Commonwealth of Australia , Exhibit AUS -84. 
35 Australia 's opening statement at the second substantive meeting of the Panel, para. 32, citing 
Chantler, Exhibit AUS -81, para. 3.22.  
36 Australia 's first written submission, paras. 70 -84; Australia 's second  written submission, 
paras.  227-236. 
37 Australia 's first writte n submission, Part  II.E.2, citing Chantler, Exhibit AUS -81; Philip Morris, Exhibit 
AUS-82; R.J. Reynolds, Exhibit AUS -83; and JT International SA v Commonwealth of Australia , Exhibit AUS -84; 
Australia 's second written submission, paras. 227 -231; Australia 's opening statement at the first substantive 
meeting of the Panel, paras. 26 -55, and accompanying Powerpoint presentation.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 30. Australia has submitted expert marketing evidence, including the reports of Professors  Dubé 
and Tavassoli,40 which explains t he role packaging plays in appealing to consumers and influencing 
consumer responses, including purchase and consumption behaviour.41 The complainants ' 
contention that packaging does not function as a form of advertising is directly contradicted by the 
complainants ' own submissions42 and the expert report of Professor  Steenkamp,43 who 
acknowledges that advertising plays a powerful role in consumer decision -making.44  
(b) Tobacco packaging functions as advertising in Australia 's dark market  
31. Even if packa ging is advertising, the complainants have asserted that because Australia is a 
"dark market ",45 packaging cannot possibly perform an advertising function.  
32. This argument is contradicted by evidence from the tobacco industry itself showing that 
tobacco  packaging became an increasingly important form of advertising and promoting tobacco 
products precisely because of Australia 's dark market.46 Indeed, reviews of Australian tobacco 
industry documents47 show that the tobacco industry in Australia researched  and adopted 
packaging design changes because they generate positive imagery that appeals to its target 
markets, notwithstanding Australia 's general ban on advertising. The complainants have not even 
attempted to respond to this evidence.  
33. The importan ce of packaging in a dark market is confirmed by the expert opinions of 
Professors  Dubé and Tavassoli, who explained that Australia 's dark market likely enhances , rather 
than diminishes, the ability of tobacco packaging to serve as an effective advertising  vehicle.48 
Indeed, absent tobacco plain packaging, the surfaces, shape, size, structure, materials and texture 
of tobacco packaging49 could all serve an advertising and promotion function, including through the 
use of branding, and figurative and design e lements.50  
34. Based on the complainants ' own propositions and evidence, the tobacco plain packaging 
measure has clearly affected consumer behaviour in ways consistent with the packaging of tobacco 
products functioning as advertising. For example, the com plainants contend that the absence of 
branded packaging in Australia 's dark market has already altered consumers ' behaviour by causing 
"downtrading ".51 According to the complainants ' expert, Professor  Steenkamp, this has occurred 
because removing branding reduces consumers ' willingness to pay for tobacco products in general, 
                                                                                                                                                  
38 Australia 's first written submission, Part  II.E.2, paras. 74, 82, citing Hammar, Exhibit AUS -87, Exhibit 
AUS-98, and Exhibit AUS -99; Swedish Match, Exhibit AUS -100; Miller et al, Exhibit AUS -102; and Swedish 
Match, Exhibit AUS -103. 
39 Australia 's first written submission, paras. 66 -86; Australia 's second written submission, paras. 222 -
230 citing United States Surgeon General, Exhibit  AUS-76; and WHO, Exhibit AUS -80. 
40 Australia 's first written submission, Part  II.E.2, paras. 70 -72, citing Expert Report of N. Tavassoli, 
Exhibit AUS -10, and Expert Report of J.P. Dubé, Exhibit AUS -11. 
41 Australia 's first written submission, Part  II.E.2 , paras. 70 -84, citing Expert Report of N. Tavassoli, 
Exhibit AUS -10; Expert Report of J.P. Dubé, Exhibit AUS -11; Expert Report of P. Slovic, Exhibit AUS -12; Expert 
Report of A. Biglan, Exhibit AUS -13; Expert Report of G. Fong, Exhibit AUS -14. See also, Ce ntre for Tobacco 
Control Research Core, Exhibit AUS -90; Hammond, Exhibit AUS -91; and United States Surgeon General, 
Exhibit AUS -76. 
42 Cuba's first written submission, para. 197.  
43 Australia 's opening statement at the second substantive meeting of the Pan el, paras. 41 -42, citing 
Expert Report of J. Steenkamp, Exhibit DOM/HND -14, para. 92.  
44 Australia 's response to Panel Question No. 204, para. 390; Australia 's opening statement at the 
second substantive meeting of the Panel, paras. 37 -46; Australia 's comm ents on responses to Panel Question 
No. 197, para. 310.  
45 Australia 's first written submission, para.8, fn 3: Australia is a "dark market " because it has a highly 
restricted regulatory environment for tobacco advertising and promotion.  
46 Australia 's first written submission, Part  II.E.2, para. 83, citing Philip Morris, Exhibit AUS -96. 
47 Australia 's first written submission, paras. 83 -84, see also Expert Report of A. Biglan, Exhibit AUS -13, 
paras. 69 -75; Expert Report of P. Slovic, Exhibit AUS -12, paras. 60-83; and Expert Report of N. Tavassoli, 
Exhibit AUS -588, paras. 42 -49. 
48 Australia 's opening statement at the second substantive meeting of the Panel, paras. 38 -39, citing 
Expert Report of J.P Dubé, Exhibit AUS -583, Section VI ; and Expert Report of N. T avassoli, Exhibit AUS -588. 
49 Australia 's first written submission, paras. 125 -131. 
50 Australia 's response to Panel Question No. 204, paras. 392 -399, citing Expert Report of N. Tavassoli, 
Exhibit AUS -588, paras. 6 -8, 20-27 
51 Australia 's second written su bmission, paras. 409 -412. WT/DS435/R/Add.1 • WT/DS441/R/ Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
- B-102 - 
 
 and premium products in particular, and also reduces brand loyalty.52 Professor  Steenkamp opines 
that tobacco plain packaging "reduces the contribution of branding to the 'intangible be nefits ' for 
both premium and value brands " that may be conveyed to consumers, particularly of premium 
products.53  
35. If branded packaging (even with a dominant graphic health warning) has the effect of 
promoting the "intangible benefits " of a tobacco pro duct, increasing a consumer 's willingness to 
pay for that product, and making consumers more loyal to their brand in the context of Australia 's 
dark market, there is no serious dispute that tobacco packaging functions as advertising. 
Moreover, if, as the c omplainants contend, these "intangible benefits " can no longer be conveyed 
to consumers as a result of tobacco plain packaging, then by their own admission, Australia has 
eliminated a means of advertising tobacco products.54 
3. The complainants have failed  to refute that tobacco plain packaging is capable of 
affecting smoking -related behaviours by standardising tobacco products  
36. If the Panel is satisfied that the tobacco plain packaging measure has eliminated an avenue 
for advertising tobacco products, t he overwhelming weight of the evidence demonstrating that 
advertising increases smoking is a sufficient basis for the Panel to conclude that the measure is 
capable of contributing to Australia 's public health objectives and is not unjustifiable.  
37. Howev er, and without prejudice to the burden of proof, Australia has advanced a number of 
other bases upon which the Panel can be satisfied that the measure is apt to contribute to 
Australia 's public health objectives. Each of these core bases of scientific inq uiry – namely, 
behavioural science, marketing, and economics – provides a separate hypothesis "tested and 
supported by sufficient evidence "55 for the same conclusion: that by standardising the appearance 
of retail tobacco packaging and products,56 the toba cco plain packaging measure is capable of 
affecting smoking related -behaviours57 and will contribute to discouraging smoking initiation and 
relapse, encouraging quitting, and reducing people 's exposure to smoke from tobacco products.58  
(a) Behavioural sci ence  
38. The premise of tobacco plain packaging is that by reducing the appeal of tobacco products, 
increasing the effectiveness of graphic health warnings, and removing the ability of packaging to 
mislead, tobacco plain packaging will lead to behavioural change.59 This premise is supported by 
behavioural psychology,60 as well as by the complainants ' own evidence, which confirms that 
tobacco plain packaging has reduced the appeal of tobacco products and increased the 
effectiveness of graphic health warnings ,61 and that these effects were durable.62  
39. As Australia stated at the second substantive meeting of the Panel, these are important 
concessions on the part of the complainants. By accepting that the measure has reduced the 
appeal of tobacco products an d increased the noticeability of graphic health warnings, the 
complainants ' own experts have confirmed the findings of many of the published studies which 
were undertaken to investigate the effects of tobacco plain packaging, including experimental 
                                                
52 Australia 's opening statement at the second substantive meeting of the Panel, paras. 41 -42, citing 
Expert Report of J. Steenkamp, Exhibit DOM/HND -14, paras. 96 -97. 
53 Australia 's opening statement at the second substantive meet ing of the Panel, paras. 40 -44, citing 
Expert Report of J. Steenkamp, Exhibit DOM/HND -14, para. 93.  
54 Australia 's opening statement at the second substantive meeting of the Panel, para. 42.  
55 Appellate  Body Report, Brazil – Retreaded Tyres , para. 151.  
56 Australia 's second written submission, Part  II.C.5(a) and (c).  
57 Australia 's first written submission, Part  II.I.4; Australia 's second written submission, paras. 237 -255; 
Australia 's opening statement at the second substantive meeting of the Panel, paras . 34-46. 
58 Australia 's opening statement at the second substantive meeting of the Panel, paras. 49 -63; 
Australia 's second written submission, paras. 227 -236, 444 -459 and 476 -481. 
59 Tobacco Plain Packaging Act , Exhibit AUS -1, section 3.  
60 Australia 's first written submission, Part  II.I.3; Australia 's second written submission, Part  III.D.3; 
Australia 's opening statement at the second substantive meeting of the Panel, paras. 49 -63. 
61 Australia 's opening statement at the second substantive meeting of the P anel, para. 51; Australia 's 
response to Panel Question No. 196, paras. 228 -233, citing Expert Report of I. Ajzen et al, Exhibit DOM/IDN –2, 
Table 1A, p. 22 and Table 2A, p. 26; and Expert Report of I. Ajzen et al, Exhibit DOM/IDN –4, Table 1, p. 6.  
62 Austra lia's opening statement at the second substantive meeting of the Panel, para. 51, citing Expert 
Report of I. Ajzen et al, Exhibit DOM/IDN –2, Table 1A (final column), p. 22 and Table 2A (final column), p. 26.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 evidenc e.63 These concessions represent a remarkable evolution from the complainants ' early 
arguments that the body of literature supporting the tobacco plain packaging measure was biased, 
unpublishable and unavailing.64 The complainants ' own evidence affirms the  correctness and utility 
of at least 50 studies on the Panel record.65  
40. Australia has submitted several reports by behavioural experts (including Professor  Slovic, 
Professor  Fong, Dr  Biglan, and Dr  Brandon)66 that have established that, by reducing the  appeal of 
tobacco products, increasing the effectiveness of graphic health warnings, and reducing the ability 
of the pack to mislead, the tobacco plain packaging measure will result in behavioural change,67 
such as reduced smoking initiation68 and relapse , and increased quitting.69 This evidence is also 
consistent with the conclusions of Advocate General Kokott of the European Court of Justice in her 
recently released opinion on tobacco plain packaging,70 as well as the substantial body of evidence 
on the effects of tobacco marketing and advertising;71 and the tobacco industry 's own marketing 
strategies.72 
41. In seeking to contest that the tobacco plain packaging measure will alter smoking behaviour 
through these mechanisms, the complainants have relied pr incipally on the evidence of 
Professor  Ajzen. Professor  Ajzen, relying on his own theoretical construct of human behaviour, 
claims that there is no evidence of the measure 's effects moving from appeal through to intentions 
and then behaviour. In reaching t his conclusion, Professor  Ajzen ignores the evidence of changes 
in intentions revealed in post -implementation studies73 and changes in behaviour revealed in the 
evidence.74 Professor  Ajzen instead focuses on surveys that are not designed to pick up the eff ects 
of the measure on the cohort at which it is primarily directed – youth who have not yet initiated 
smoking.  
42. Professor  Ajzen 's view that the appeal of tobacco products is not related to smoking 
behaviour75 is contradicted by decades of research on the effects of tobacco marketing on smoking 
behaviour, the tobacco industry 's own internal research, the complainants ' own arguments on 
"downtrading ", and, in the words of the Quebec Superior Court, flies "furiously in the face of 
common sense and normal b usiness practice. "76  
                                                
63 Australia 's opening statement at the second s ubstantive meeting of the Panel, paras. 65 -68, citing, in 
particular, Thrasher et al, Exhibit AUS -229; and Wakefield et al, Exhibit AUS -149. 
64 Australia 's opening statement at the second substantive meeting of the Panel, paras. 65 -67; 
Australia 's comments  on responses to Panel Question No. 197, para. 351.  
65 Australia 's opening statement at the second substantive meeting of the Panel, paras. 65 -67. 
66 Australia 's first written submission, paras. 78 and 98, citing Expert Report of P. Slovic, Exhibit AUS -
12; Expert Report of A. Biglan, Exhibit AUS -13; Expert Report of G. Fong, Exhibit AUS -14; Expert Report of T. 
Brandon, Exhibit AUS -15; Australia 's second written submission, citing Expert Report of A. Biglan, Exhibit AUS -
533; Expert Report of G. Fong, Exhibit  AUS-531; Expert Report of P. Slovic, Exhibit AUS -532; and Expert 
Report of T. Brandon, Exhibit AUS -534; Australia 's response to Panel Question No. 196, para. 249, citing 
Expert Report of G. Fong, Exhibit AUS -585. 
67 Australia 's first written submission, P art II.I.3; Australia 's second written submission, paras. 452 -459; 
Australia 's opening statement at the second substantive meeting of the Panel, paras. 49 -63. 
68 Australia 's first written submission, paras. 92 -96, 161; Australia 's response to Panel Questio n No. 
196, para. 260, citing Expert Reports of P. Slovic, Exhibit AUS -12, paras. 26, 46 -51, 60 -67, and Exhibit AUS -
532, paras. 77 -80; Expert Reports of A. Biglan, Exhibit AUS -13, paras. 32 -51, 177 -178, and Exhibit AUS -533, 
paras. 6 -15; Expert Report of G. Fong, Exhibit AUS -14, paras. 141 -179; Expert Report of N. Tavassoli, Exhibit 
AUS-10, paras. 50 -53, 68, 78 -85; and Expert Report of J. Samet, Exhibit AUS -7, para. 125; Australia response 
to Panel Question No. 196, para. 268.  
69 Australia 's first written sub mission, paras. 97 -102, 201 -205, citing Expert Report of A. Biglan, Exhibit 
AUS-13; Australia 's opening statement at the second substantive meeting of the Panel, para. 68; Australia 's 
response to Panel Question No. 196, para. 276, citing Expert Reports of T. Brandon, Exhibit AUS -15, and 
Exhibit AUS -534. 
70 Australia 's comments on responses to Panel Question No. 159, para. 98, citing the Opinion of 
Advocate General Kokott, Exhibit AUS -608. 
71 Australia 's first written submission, paras. 87 -102; Australia 's second written submission, paras. 217 -
236. 
72 Australia 's first written submission, paras. 73 -74, 77, 80 -83, 85, 95; Australia 's second written 
submission, paras. 221 -222, 227 -233. 
73 Australia 's first written submission, para. 355, citing Young et al, Exhi bit AUS -214. 
74 Australia 's first written submission, para. 202, citing Zacher et al, Exhibit AUS -222; and Zacher et al, 
Exhibit AUS -223. See also, Expert Report of T. Chipty, Exhibit AUS -591, p.33, Table 5.  
75 Powerpoint presentation of I. Ajzen displayed  during Dominican  Republic 's opening statement at the 
second substantive meeting of the Panel, slide 10.  
76 Australia 's closing statement at the first substantive meeting of the Panel, para. 5 and fn 2.  WT/DS435/R/Add.1 • WT/DS441/R/ Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 43. Further, there are many accepted approaches to determining the effect of appeal on 
behaviour that do not rely on Professor  Ajzen 's particular theory, including those explained by 
Professor  Slovic,77 Professor  Fong78 and Dr  Biglan79 in their expert reports for Australia.  
44. The totality of the significant volume of public health literature and experimental evidence, 
and the opinions of Australia 's experts in behavioural psychology, combined with the complainants ' 
own arguments, me ans there cannot be any serious question that the tobacco plain packaging 
measure has reduced the appeal of tobacco products and increased the effectiveness of graphic 
health warnings, and thus that the mechanisms through which the measure is designed to w ork 
are in place.  
45. Accordingly, behavioural science provides credible hypotheses, tested and supported by 
sufficient evidence, that demonstrate that the measure will contribute to its public health 
objectives. The evidence submitted by the complainants on this point has not only failed to rebut 
Australia 's arguments, but has in fact confirmed that the tobacco plain packaging measure is 
working as intended.  
(b) Marketing  
46. Marketing science also confirms the link between the impact of tobacco plain pac kaging on 
product appeal and smoking behaviour.80 As outlined in paras. 28 -35, both Australia and the 
complainants ' marketing experts agree that packaging has the power to influence a consumer 's 
perception of the quality and characteristics of tobacco prod ucts. 
47. On this basis, Professor  Dubé explained that the adoption of standardised packaging would 
likely reduce the perceived quality of tobacco products and reduce consumers ' willingness to pay 
for them.81 His assessment of the likely effects of tobacco  plain packaging was confirmed by the 
findings of the Tracking Survey.82 Professor  Dubé's view is that because tobacco plain packaging 
reduces the desirability of tobacco brands, and reduces consumers ' willingness to pay across all 
price segments (proposit ions accepted by the complainants ' marketing expert, 
Professor  Steenkamp),83 there will be a reduction in total primary demand for tobacco products as 
a result of the measure.  
(c) Economics  
48. Finally, the field of economics offers a straightforward expl anation as to why reducing the 
appeal of tobacco products and increasing the effectiveness of health warnings on tobacco 
packaging will lead to changes in smoking behaviour.84 This analysis depends upon three 
propositions. All three propositions are substa ntiated by the complainants ' own experts.  
49. First, it is agreed between the economic experts that  
if one believes that plain packaging will both reduce the appeal of tobacco products 
and increase their prices, then one does not need a model to assess pl ain packaging 's 
                                                
77 Australia 's second written submission, paras. 454 -455, citing Expert Re ports of P. Slovic, Exhibit 
AUS-12 and Exhibit AUS -532. 
78 Australia 's second written submission, para. 453, citing Expert Report of G. Fong, Exhibit AUS -14. 
79 Australia 's second written submission, para. 456, citing Expert Reports of  A. Biglan, Exhibit AUS -13 
and Exhibit AUS -533. 
80 Australia 's first written submission, paras. 55, 70 -84; Australia 's opening statement at the second 
substantive meeting of the Panel, paras. 37 -46, citing Expert Reports of J.P. Dubé, Exhibit AUS -11 and Ex hibit 
AUS-583; and Expert Reports of M. Katz, Exhibit AUS -18, and Exhibit AUS -584. 
81 Australia 's opening statement at the second substantive meeting of the Panel, para. 59, citing Expert 
Report of J.P. Dubé, Exhibit AUS -11, paras 25 -37. 
82 Australia 's ope ning statement at the second substantive meeting of the Panel, para. 51, citing Expert 
Report of I. Ajzen et al, Exhibit DOM/IDN –2, Table 1A p. 22.  
83 Australia 's opening statement at the second substantive meeting of the Panel, para.60, citing Expert 
Report of J. Steenkamp, Exhibit DOM/HND -14, paras. 92 -93. 
84 Australia 's second written submission, paras. 479 -480; Australia 's opening statement at the first 
substantive meeting of the Panel, paras. 61 -63. WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 impact … the conclusion is immediate because both of these effects push consumption 
down.85 
50. Second, and as outlined above at paras. 38 -41, it is agreed that the 2012 tobacco packaging 
changes have reduced the appeal of tobacco products as intended by the measure.86  
51. Third, it is agreed that since the introduction of tobacco plain packaging, prices for tobacco 
products have increased.87 The complainants ' expert, Professor  Klick, and Australia 's expert, 
Professor  Katz, have both consid ered this phenomenon. Professor  Klick's view is that tobacco plain 
packaging appears to have caused tobacco prices to rise.88 Professor  Katz in his reports has 
provided a theoretical explanation for why this is so, as well as empirical evidence demonstrati ng 
this fact.89Thus, where the tobacco plain packaging measure has reduced the appeal of tobacco 
products, and the price of tobacco products has increased since the measure 's introduction, the 
clear prediction of economics is that demand for tobacco produc ts will fall.  
52. Indeed, a fall in demand is precisely what has been observed in the data. As described 
above at paras. 14 -16 and 19 -20, smoking prevalence and tobacco consumption have both fallen 
since the introduction of the tobacco plain packaging meas ure. Given the strength of the 
theoretical underpinning for the measure, it would be perverse to find that none of the observed 
declines in prevalence and consumption since the introduction of tobacco plain packaging are 
attributable to that measure.  
4. Conclusion  
53. The qualitative evidence strongly supports the conclusion that tobacco plain packaging has 
made and is capable of making a contribution to Australia 's public health objectives. Indeed, the 
evidence upon which Australia relies in support of the  tobacco plain packaging measure "reflects at 
least the majority view, and potentially the unanimous view " within the international scientific 
community.90 Each of the separate hypotheses outlined above leads to the same conclusion: the 
tobacco plain packa ging measure is apt to contribute to Australia 's objectives to improve public 
health by discouraging initiation of tobacco use; encouraging cessation; discouraging relapse; and 
reducing people 's exposure to tobacco smoke.  
B. THE COMPLAINANTS HAV E FAILED T O ESTABLISH ON THE B ASIS OF THE QUANTITA TIVE 
EVIDENCE BEFORE THE PANEL THAT THE MEASU RE IS INCAPABLE OF C ONTRIBUTING TO ITS 
OBJECTIVES OR IS UNJ USTIFIABLE  
54. The post -implementation quantitative evidence is consistent with the substantial body of 
qualitat ive evidence in demonstrating that tobacco plain packaging is apt to contribute to 
Australia 's public health objectives.  
55. The fact that smoking prevalence and tobacco consumption have declined to their lowest 
levels in decades since the introduction of the tobacco plain packaging measure provides 
quantitative evidence, consistent with the qualitative evidence presented above, that the tobacco 
plain packaging measure is capable of contributing to reducing smoking behaviour.  
56. In the face of this quanti tative evidence, the complainants have, in relation to datasets of 
varying quality, attempted to isolate the specific effects of Australia 's tobacco packaging changes 
from all of the other tobacco control measures that Australia has adopted. The complainan ts rely 
                                                
85 Australia 's comments on responses to Panel Questio n No. 197, paras. 297 -298, citing Expert Report 
of D. Neven, Exhibit HON -123, para. 73.  
86 See Australia 's first written submission, paras. 148 -162; Australia 's opening statement at second 
substantive meeting of the Panel, para. 65.  
87 Australia 's second w ritten submission, para. 412; Australia 's response to Panel Question No. 151, 
para. 42; Australia 's comments on response to Panel Question No. 197, paras. 294 -298. 
88 Australia 's response to Panel Question No. 151, para. 42, citing Expert Report of J. Klic k, Exhibit 
HND–122, fn 71.  
89 Australia 's comments on response to Panel Question No. 197, paras. 294 -298, citing Expert Reports 
of M. Katz, Exhibit AUS -18, and Exhibit AUS -584. 
90 Australia 's second written submission, paras. 271 -272; Australia 's response to Panel Question No. 
206; Australia 's comments on the complainants ' responses to Panel Question No. 206; Panel Report, US – 
Clove Cigarettes , para. 7.401.  WT/DS435/R/Add.1 • WT/DS441/R/ Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 on an asserted inability to demonstrate a positive effect from those changes as evidence that the 
measure has not contributed and will not contribute to its public health objectives.91  
57. In doing so, the complainants disregard the relevant legal  and evidentiary standards for 
assessing the contribution of a measure to its public health objectives.92 In particular, the 
complainants ' arguments ignore the Appellate  Body's findings in Brazil – Retreaded Tyres  that: 
 … certain complex public health or environmental problems may be 
tackled only with a comprehensive policy comprising a multiplicity of 
interacting measures. In the short term, it may prove difficult to isolate 
the contribution to public health or environmental objectives of one 
specific mea sure from those attributable to the other measures that are 
part of the same comprehensive policy. Moreover, the results obtained 
from certain actions … can only be evaluated with the benefit of time.93 
58. Tobacco plain packaging is clearly such a measure  and should be approached in the way 
recommended by the Appellate  Body. The complainants cannot discharge their burden merely by 
asserting that at this point in time they are unable to isolate the specific effects of the measure in 
the data.  
59. Further, e ven if the evidence established that at this point, the measure has had no 
discernible effect on smoking initiation, quitting, relapse or smoking around others in its first three 
years of implementation (which it does not), such evidence would be insuffici ent to establish that 
the measure is not apt to contribute to its public health objectives in the future. Tobacco plain 
packaging is a long term public health measure that, for the reasons explained below, will take 
time for its full effects to become appa rent. In addition, the measure 's immediate effects may be 
difficult to isolate in the short term in the datasets that are available. Finally, the complainants ' 
attempts to demonstrate that there is no effect from tobacco plain packaging on smoking 
behaviou r that can be discerned and isolated in the current data sets have failed. The 
complainants ' quantitative evidence is deeply flawed and when these flaws are corrected, the 
quantitative evidence is consistent with tobacco plain packaging already having an e ffect. 
1. Tobacco plain packaging is a long term measure  
60. Throughout these proceedings, the complainants have contended that whether or not an 
effect of the measure can be isolated within the short time since its implementation is dispositive. 
Contrary to the complainants ' arguments,94 the tobacco plain packaging measure was always 
expected to have its greatest effects in the long term95 – a fact explicitly acknowledged at the time 
of the measure 's introduction.96 This is due to the time required for the  cohort of children who 
have never been exposed to fully -branded tobacco packaging to reach adolescence and therefore 
to be included in national health surveys; and the nature of tobacco addiction.97  
61. In these circumstances, even if the complainants ha d succeeded in establishing that the 
measure has had no effect at this point in time (which they have not), this would not be sufficient 
to discharge the complainants ' burden. The complainants must instead establish that not only has 
the tobacco plain pack aging measure not worked to date, it will never work.  
2. The immediate effects of the measure may be difficult to discern in the data  
                                                
91 See, e.g. Dominican  Republic 's response to Panel Question No. 126, para. 273; Honduras ' response to 
Panel Question No. 124, p. 35.  
92 Australia 's second written submission, paras. 434 -439. 
93 Australia 's second written submission, para. 436; Appellate  Body Report, Brazil – Retreaded Tyres , 
para. 151.  
94 See, e.g., the Dominican  Republic 's response to Panel Question No. 126, para. 283; Honduras ' 
response to Panel Question No. 126, p. 37; Indonesia 's Response to Panel Question No. 126, para. 77.  
95 Australia 's first written submission, para. 12; Australia 's second written submission, paras. 495 -499; 
Australia's opening statement at the second substantive meeting of the Panel, para. 20; Australia 's response to 
Panel Question No. 200, para. 320.  
96 Australia 's first written submission, para. 670, Annexure E, paras. 11 -17; Australia 's second written 
submissi on, paras. 489, 492 -505; 
97 Australia 's first written submission, para. 670, Annexure E, para. 12; Australia 's second written 
submission, paras. 495 -496. WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
- B-107 - 
 62.  The complainants ' claimed inability to isolate a statistically significant effect on smoking 
prevalence or tobacco c onsumption that is attributable to the tobacco plain packaging measure in 
the short time since the measure 's implementation does not in itself establish that the measure is 
not already working.98 Time is required for the effects of tobacco control measures , like tobacco 
plain packaging, to be detected and isolated in the data.99 As Professor  Chaloupka demonstrated, 
it took four years before statistically significant effects of the introduction of graphic health 
warnings in Canada could be discerned in the r elevant data.100 
63. As Dr  Chipty and Professor  Scharfstein explain, there is significant scope for the policy to be 
working exactly as intended but for its effects to prove difficult to isolate in the data in the short -
term.101 Australia has addressed the  complainants ' experts ' attempts to respond to some aspects 
of this evidence.102 In other respects, the complainants and their experts have simply failed to 
respond at all to the evidence of Australia 's experts.103 
64. The complainants ' related contention that the effects of the tobacco plain packaging 
measure will "wear out " over time is equally unfounded and contrary to the available evidence.104 
The complainants ' own evidence establishes that the reduced appeal associated with tobacco plain 
packaging did  not wear out.105 Further, a number of post -implementation studies reveal that 
tobacco plain packaging has had certain effects on smoking behaviour, including a significant and 
lasting  reduction in smoking at outdoor venues where children are present.106 The expert reports 
of Professors  Slovic and Dubé clearly demonstrate that the permanent absence  of features 
designed to appeal to consumers and potential consumers does not "wear out " – tobacco 
packaging does not become more appealing in the continued absen ce of such features.107 
Professor  Chaloupka 's evidence establishes that, in fact, the impact of tobacco plain packaging is 
likely to grow over time.108  
3. The post -implementation quantitative evidence supports the proposition that the 
measure is working  
65. Australia has explained at paras. 56 -65 above that a claimed inability to isolate a plain 
packaging effect in the limited period since the measure 's implementation is insufficient to 
discharge the complainants ' legal burden. However, assuming arguendo that such a conclusion 
would be determinative of whether the measure is apt to contribute to its public health objectives, 
the evidence before the Panel is plainly insufficient to demonstrate that the measure has in fact  
made no contribution to its public h ealth objectives since its introduction. Indeed, properly 
analysed, the evidence indicates that the measure is already working.  
66. In particular, Australia 's evidence including that of Dr  Chipty shows that the 2012 packaging 
changes have made a statistic ally significant contribution to reductions in smoking prevalence and 
tobacco consumption. Dr  Chipty has also demonstrated that small reasoned corrections to the 
                                                
98 Australia 's second written submission, paras. 495 -499; Australia 's comments on responses to Panel 
Question No. 197, para. 211, citing Expert Reports of T. Chipty, Exhibit AUS -586, paras. 34 -40, and Exhibit 
AUS-591, paras. 47 -52. 
99 Australia 's first written submission, Annexure E, paras. 12, 14 -15; Australia 's second written 
submission, paras. 492 -505; Australia 's response to Panel Question No. 200, paras. 319 -341. 
100 Australia 's first written submission, Annexure E, para. 16; Australia 's response to Panel Question 
No. 126, para. 160, fn 38; Australia 's second written submission, para. 497; Australia 's response to Panel 
Question No. 200, paras. 333 -335, citing Expert Report of F. Chaloupka, Exhibit AUS -9, paras. 89 -96; 
Australia 's comments on responses to Panel Question No. 197, paras. 262 -267. 
101 Australia 's first written submission, Annexure E, paras.  14-15 and 23 -45; Australia 's response to 
Panel Question No. 4, paras. 3 -12; Australia 's response to Panel Question No. 200, paras. 329 -332. 
102 Australia 's response to Panel Question No. 200, paras. 329 -332. 
103 Australia 's comments on responses to Panel Question No. 197, para. 213, fn 341, citing Expert 
Report of D. Scharfstein, Exhibit AUS -587. 
104 Australia 's second written submission, paras. 501 -505; Australia 's response to Panel Question 
No. 196, paras. 243 -247; Australia 's comments on responses to Pa nel Question No. 197, paras. 377 -380; 
Australia 's comments on responses to Panel Question No. 203, paras. 395 -400. 
105 Australia 's comments on responses to Panel Question No. 203, para.  398. 
106 Australia 's second written submission, para. 464, citing Zach er et al, Exhibit AUS -223. 
107 Australia 's second written submission, paras. 502 -504; Australia 's comments on responses to Panel 
Question No. 203, para. 398.  
108 Australia 's comments on responses to Panel Question No. 197, para. 380.  WT/DS435/R/Add.1 • WT/DS441/R/ Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 models originally proposed by the complainants produce results showing a statistically signifi cant 
plain packaging effect.  
67. The complainants ' experts have responded to this evidence by abandoning the models they 
originally advocated and creating multiple new models with more restrictive assumptions;109 
making unfounded criticisms of Australia 's expert, including criticising her adoption of approaches 
to the data that they themselves originally endorsed;110 falsely asserting that Australia has only 
responded to a narrow subset of the complainants ' empirical evidence;111 and reporting their 
results  in ways that are more restrictive than the approach originally advocated by the 
complainants earlier in these proceedings.112  
4. Conclusion  
68. Accordingly, the complainants have no credible basis for asserting that they have 
demonstrated on the basis of  "consistent and clear " evidence that the tobacco plain packaging 
measure has "not worked " and will not work in the future.113 Rather, the quantitative data upon 
which the complainants rely are entirely consistent with the measure having contributed to 
reducing smoking prevalence and tobacco consumption in the limited period since its 
implementation. The assessment of the available post -implementation quantitative data thus 
confirms that the complainants have failed to discharge their burden of establishing  that the 
tobacco plain packaging measure has not contributed and is not apt to contribute to its objectives.  
IV. THE COMPLAINANTS HAV E FAILED TO DEMONSTR ATE THAT THE TOBACCO  PLAIN 
PACKAGING MEASURE IS  INCONSISTENT WITH TH E TRIPS  AGREEMENT  
69. The complain ants' claims under the TRIPS  Agreement are based on interpretations of the 
relevant provisions that find no basis in the ordinary meaning of these provisions, properly 
interpreted in their context and in light of the object and purpose of the Agreement. Ra ther, their 
claims are based on theories of "interests " that supposedly "pervade " the TRIPS  Agreement, and 
on attempts to rewrite various provisions of the TRIPS  Agreement to create rights and obligations 
that do not exist in the text itself.  
A. THE COMPL AINANTS HAVE FAILED TO DEMONSTRATE THAT THE MEASURE IS 
INCONSISTENT WITH AR TICLE  20 OF THE TRIPS  AGREEMENT  
70. The complainants have failed to establish a prima facie  case that the tobacco plain 
packaging measure imposes "special requirements " that "encum ber" the "use of a trademark in 
the course of trade ". In particular, the complainants have failed to demonstrate how any special 
requirements imposed by the measure encumber the use of a trademark to distinguish the goods 
or services of one undertaking fro m those of other undertakings in the course of trade and have 
therefore failed to demonstrate the threshold applicability of Article  20. Even if the complainants 
have established a prima facie case of applicability, they have failed to demonstrate that any  
encumbrance imposed by the tobacco plain packaging measure has been imposed "unjustifiably ".  
1. The complainants have failed to establish that the measure encumbers by special 
requirements the use of trademarks in the course of trade  
(a) The relevant "use" of a trademark under Article  20 of the TRIPS  Agreement 
is the use of a trademark to distinguish the goods or services of one undertaking 
from those of other undertakings  
71. All parties appear to agree that, to establish a violation of Article  20, a com plainant must 
demonstrate that any special requirements imposed by the measure at issue "encumber " the "use" 
                                                
109 Australia 's openin g statement at the second substantive meeting of the Panel, paras. 105 -108; 
Australia 's response to Panel Question No. 196, paras. 185, 188 -220; Australia 's comments on responses to 
Panel Question No. 197, paras. 229 -233, 238 -244, 245 -247. 
110 Australia 's comments on responses to Panel Question No. 197, paras. 223 -54. 
111 Australia 's comment on response to Panel Question No. 197, paras. 220 -225. 
112 Australia 's opening statement at the second substantive meeting of the Panel, paras. 90 -104; 
Australia 's comm ents on responses to Panel Question No. 197, paras. 255 -261. 
113 Australia 's comments on responses to Panel Question No. 197, paras. 257, 259 -261. WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
- B-109 - 
 of a trademark in the course of trade. The parties further appear to agree that Article  15.1 of the 
TRIPS  Agreement provides the basis for identify ing the relevant "use" of a trademark under 
Article  20;114 and that this "use" is the use of a trademark to distinguish the goods or services of 
one undertaking from those of other undertakings.115 To demonstrate that a measure encumbers 
the "use" of a tra demark in the course of trade under Article  20, a complainant must therefore 
demonstrate that the measure encumbers the use of a trademark "to distinguish  the goods or 
services of one undertaking from those of other undertakings ".  
72. Until the second sub stantive meeting of the Panel, however, the parties appeared to 
disagree on what it means for trademarks to "distinguish " the goods of one undertaking from 
those of other undertakings. The complainants argued that the relevant "use" of a trademark 
under Ar ticle 20 also encompasses the use of a trademark to "distinguish " products "in terms of 
their quality, characteristics, and reputation ".116 This proposition has no interpretative foundation. 
Nothing in the text of Article  15.1 refers to the use of trademar ks to distinguish products in terms 
of their "quality, characteristics, and reputation ", or even implies such a use. Rather, the formula 
is taken from a different  section of the TRIPS  Agreement – Section 3 – which pertains to 
geographical indications.117  
73. In an evolution of their position,118 the complainants now appear to accept Australia 's 
understanding of which "use" of a trademark is relevant under Article  20 and which "uses" are not. 
While the complainants ' formula of "quality, characteristics, and  reputation " appeared to be simply 
a euphemism for the use of trademarks to advertise and promote tobacco products,119 in the 
course of the proceedings the complainants recharacterised their notion of "quality, characteristics, 
and reputation ", as referrin g to the "consistency " function of trademarks.120 The parties now 
appear to agree that it is the ability of a trademark to convey a consistency  of quality, rather than 
any particular perceived  quality ( "high quality ", "value ", "masculine ", "feminine ", etc.) that may be 
relevant to the source distinguishing function of trademarks described by Article  15.1 of the 
TRIPS  Agreement.  
(b) The use of trademarks to advertise and promote the trademarked product is 
not a relevant "use" of trademarks under Article  20 of the TRIPS  Agreement  
74. In addition to distinguishing the products of one undertaking from those of other 
undertakings, it is widely recognised that trademarks serve an advertising function by conveying 
certain associations with the trademarked product.121 Particularly in the case of a largely 
undifferentiated consumer product like tobacco products, trademark owners carefully calibrate the 
associations conveyed by the trademark to appeal to different market segments.122  
75. While the use of trademarks to  advertise and promote a product is an acknowledged 
function of trademarks, no party (or third party) has advanced an argument as to why this should 
be considered a relevant "use" of trademarks under Article  20. It therefore appears to be common 
ground tha t limiting the use of trademarks to increase the perceived appeal of tobacco products is 
not an "encumbrance " upon the use of trademarks that falls within the scope of Article  20. It 
                                                
114 See Dominican  Republic 's first written submission, para. 248; Indonesia 's first written submission, 
para. 132; Honduras ' first written submission, para. 155; Cuba 's response to Panel Question No. 87.  
115 Australia 's second written submission, para. 86.  
116 Dominican  Republic 's first written submission, paras. 14, 240; Dominican Republic 's response to 
Panel Qu estion No. 87, para. 4;  Honduras ' first written submission, para. 144; Indonesia 's response to Panel 
Question No. 87, para. 2.  
117 Australia 's second written submission, paras. 97 -103; Australia 's comments on the complainants ' 
responses to Panel Question N os. 167 and 168, para. 127.  
118 See in particular the Dominican  Republic 's opening statement at the second substantive meeting of 
the Panel, para. 7; the Dominican  Republic 's response to Panel Question No. 167; Australia 's comments on 
responses to Panel Qu estion Nos. 167 and 168, paras. 127 -129. 
119 Australia 's second written submission, para. 118; Australia 's comments on responses to Panel 
Question Nos. 167 and 168, para. 128.  
120 Dominican  Republic 's opening statement at the second substantive meeting of the Panel, para. 7; 
Australia 's comments on the complainants ' responses to Panel Question Nos. 167 and 168, para. 130.  
121 Australia 's second written submission, para. 91. See also Expert Repo rt of N. Tavassoli, Exhibit 
AUS-10, para. 34.  
122 See Expert Rep ort of N. Tavassoli, Exhibit AUS -10, Sections 2.1 -2.4; Australia 's first written 
submission, paras. 71 -82, 85 -86, and exhibits cited therein.  WT/DS435/R/Add.1 • WT/DS441/R/ Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 follows that evidence pertaining to such a limitation, at which the tobac co plain packaging measure 
is directed, is not relevant to establishing a prima facie  case of inconsistency under this provision.  
(c) The complainants have not even attempted to demonstrate that the tobacco 
plain packaging measure encumbers the relevant u se of trademarks in the course 
of trade  
76. The existence of an encumbrance is an evidentiary  question. While the complainants have 
placed massive quantities of expert evidence on the record of this dispute, including 
commissioning numerous studies and em pirical analyses specifically for these proceedings, they 
have failed to adduce any relevant evidence.123 In particular, they have offered no evidence at all 
that any special requirements established by the tobacco plain packaging measure encumber the 
use of trademarks to distinguish the tobacco products of one undertaking from those of other 
undertakings – even in response to the Panel 's specific question asking them to identify such 
evidence.124 The complainants ' inability to identify any empirical eviden ce to support this 
contention, which is a key element of their claim under Article  20, is also notable in the light of 
their insistence that the Panel focus exclusively on post -implementation empirical evidence to 
assess the effectiveness of the tobacco pl ain packaging measure.125  
77. Absent such empirical evidence, the Dominican  Republic and Indonesia fall back on their 
arguments concerning "downtrading " as "evidence " that the permitted use of brand and variant 
names on retail tobacco packaging does not "adequately distinguish commercial source, quality, 
characteristics, and reputation. "126 However, the complainants ' downtrading theory is based on the 
inability of tobacco companies to use figurative elements and other design features to create 
perceived  differences between "premium " and "value " brands.127 As all parties agree, the use of 
trademarks to advertise and promote a product (e.g. by creating perceptions or positive 
associations with the product) is not part of the source distinguishing function of trademarks 
protected under Article  20. The complainants ' downtrading assertions, even if proven, therefore in 
no way discharge their task of demonstrating that the tobacco plain packaging measure 
encumbers the source distinguishing function of a trademark.128 
78. In the absence of any evidence, the complainants essentially argue that because Article  15.1 
of the TRIPS  Agreement provides that "[a]ny sign, or any combination of signs ", including 
"figurative elements and combinations of colours ", shall be "eligible for registration as 
trademarks ", any limitation on the use of colours, figurative elements, and other signs that are 
eligible for registration as trademarks constitutes an encumbrance on the capability to distinguish 
the goods of one undertaking from those of other undertakings.129 Such an argument in no way 
discharges the complainants ' burden of demonstrating that any special requirements established 
by the tobacco plain packaging measure encumber the use of a trademark to distinguish the 
products of one undertaking from those of another in the course of trade.130 
2. Article  20 does not encompass the prohibitive elements of the tobacco plain 
packaging measure  
                                                
123 Australia 's second written submission, paras. 121 -128; Australia 's comments on responses to Panel 
Question Nos . 167 and 168, paras. 133 -136, 141; Dominican  Republic 's response to Panel Question No. 206, 
para. 313; Honduras ' response to Panel Question No. 206; Cuba 's response to Panel Question No. 206.  
124 See Dominican  Republic 's response to Panel Question No. 167 , para. 185; Cuba 's response to Panel 
Question No. 168; Honduras ' response to Panel Question No. 168; and Indonesia 's response to Panel Question 
No. 168, paras. 32 -34. 
125 Australia 's comments on responses to Panel Question Nos. 167 and 168, paras. 136; 
Dominican  Republic 's response to Panel Question No. 206, para. 313; Honduras ' response to Panel Question 
No. 206; Cuba 's response to Panel Question No. 206.  
126 Dominican  Republic 's response to Panel Question No. 167, para. 185; Indonesia 's response to Panel  
Question No. 168, para. 31.  
127 See para. 33 above; Expert Report of J. Steenkamp, Exhibit DR -HON-5, paras. 62, 64; 
Dominican  Republic 's response to Panel Question No. 169, para. 194.  
128 Australia 's comments on responses to Panel Question Nos. 167 and 16 8, paras. 137 -138. 
129 Dominican  Republic 's first written submission, paras. 365 -366; Dominican  Republic 's response to 
Panel Question No. 167, para. 170; Honduras ' responses to Panel Question Nos. 87 and 168; Cuba 's response 
to Panel Question No. 87; Indon esia's response to Panel Question No. 87.  
130 Australia 's comments on responses to Panel Question Nos. 167 and 168, paras. 139 -141. WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 79. Article  20 of the TRIPS  Agreement does not encompass the aspects of the tobacco plain 
packaging measure which prohibit the use of trademarks on tobacco packaging and products. 
Properly interpreted in context, Article  20 concerns special requirements that encumber how a 
trademark may be used when municipal law otherwise permits the use of tradem arks.131 A 
contrary interpretation of Article  20 has the potential to bring within its scope a variety of 
measures that, in Australia 's view, were never intended to be covered by the TRIPS  Agreement, 
such as advertising restrictions and point -of-sale restr ictions.132 The complainants appear to agree 
with Australia that Article  20 was not meant to cover these types of measures,133 arguing that the 
term "special requirements " does not encompass measures that only "incidentally " affect the use 
of trademarks.134 It is on this basis that the complainants seek to explain the application of 
Article  20 to the tobacco plain packaging measure, but not to other measures. The complainants 
have provided no interpretative basis for this distinction.135 All third parties t hat address this issue 
agree that there is no basis for the distinction.136 Nor can the complainants articulate how such a 
distinction would operate in practice.  
80. However, assuming arguendo  that the special requirements include both the prohibitive and 
permissive aspects of the measure, and considering the tobacco plain packaging measure as a 
whole, the fact remains that the complainants have failed to adduce any evidence to demonstrate 
that the measure encumbers the ability of the permitted word mark, i n a standardised form, to 
distinguish the product of one undertaking from those of other undertakings.137  
3. The complainants ' interpretation of the term "unjustifiably " is unfounded  
81. Even if the Panel were to find that the complainants have proven tha t the tobacco plain 
packaging measure encumbers by special requirements a relevant use of trademarks in the course 
of trade, the complainants have failed to prove that Australia has imposed this encumbrance 
"unjustifiably ".  
82. All parties appear to agree  that, in order to be found not "unjustifiable ", the encumbrance 
must be imposed in pursuit of a legitimate objective .138 The legitimacy of Australia 's public health 
objectives has not been questioned in this dispute. All parties also appear to agree that,  in order to 
be found not "unjustifiable ", there must be a nexus  between the encumbrance imposed by the 
special requirements and its legitimate objective,139 and this connection must be one that is 
rational or reasonable.  
83. However, the  Dominican  Republ ic, Honduras, Cuba and a minority of the third parties 
believe that in order to be found not "unjustifiable ", the encumbrance must be the least-restrictive 
option available  to accomplish the Member 's legitimate objective, in light of reasonably available 
alternatives  that would make an equal or greater degree of contribution to the fulfilment of that 
                                                
131 Australia 's first written submission, paras. 338 -345. 
132 Australia 's second written submission, paras. 132 -139. 
133 See Honduras ' opening statement at the first substantive meeting of the Panel, para. 27. See also 
Dominican  Republic 's opening statement at the first substantive meeting of the Panel, para. 16.  
134 See Dominican  Republic 's response to Panel Question No. 38; s ee also Indonesia 's response to Panel 
Question No. 38; Honduras ' response to Panel Question No. 38.  
135 See, e.g. Dominican  Republic 's response to Panel Question No. 95; Dominican  Republic 's opening 
statement at the first substantive meeting of the Panel, paras. 15 -17; Honduras ' response to Panel Question 
No. 38; Honduras ' opening statement at the first substantive meeting of the Panel, paras. 23 -26; Indonesia 's 
response to Panel Question Nos. 95, 96. See Australia 's first written submission, para. 341; Aus tralia's 
response to Panel Question No. 38; Australia 's second written submission, paras. 134 -142; Australia 's 
comments on responses to Panel Question No. 172, paras. 155 -159. 
136 See also Norway 's third party response to Panel Question No. 13; South Afric a's third party response 
to Panel Question No. 13; Chinese Taipei 's third party response to Panel Question No. 13 ; New  Zealand 's third 
party response to Panel Question No. 13;  Canada 's third party response to Panel Question No. 13.  
137 Australia 's first wr itten submission, para. 344; Australia 's second written submission, para. 213 and 
fn. 211.  
138 Australia 's first written submission, para. 366; Dominican  Republic 's first written submission, para. 
743; Honduras ' first written submission, para. 296; Cuba 's first written submission, paras. 319 -320; 
Indonesia 's response to Panel Question No. 108.  
139 Australia 's first written submission, paras. 370 -383; Dominican  Republic 's first written submission, 
para. 388; Honduras ' first written submission, para. 296; Cub a's first written submission, paras. 317 -318; 
Indonesia 's response to Panel Question No. 108.  WT/DS435/R/Add.1 • WT/DS441/R/ Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 objective while imposing a lesser degree of encumbrance upon the use of trademarks140 – a test 
that is functionally equivalent to a standard of "necessity ". Further, the complainants argue that 
any interpretation of the term "unjustifiably " must take into account "the nature of trademarks and 
trademark protection ". It is on this basis that the complainants argue that Australia was required 
to undertake an "individualised assessment " of the "specific features " of particular trademarks.  
(a) The term "unjustifiably " requires a rational connection between any 
encumbrance upon the use of trademarks resulting from the measure and the 
pursuit of a legitimate objective  
84. The ordinary meaning of the term "unjustifiably " focuses on the rationality or 
reasonableness of the connection between the encumbrance imposed by a measure and the 
measure 's legitimate public policy objective.141 Under a rational connection standard, the relevant 
inquiry is whether the complainants have shown that the relationship between the encumbrance 
imposed by the measure and the measure 's objective is not one that is within the range of rational 
or reasonable outcomes.142 
85. All parties appear t o agree that an encumbrance that "goes against " or "cannot be 
reconciled with " its objective is one that is neither rational nor reasonable.143 There is no credible 
evidence or argument before the Panel that the tobacco plain packaging measure will undermi ne 
its public health objectives and the complainants abandoned this argument at the first hearing.144 
In order to prove a violation of Article  20, the complaining Member must demonstrate that the 
responding Member has "unjustifiably  encumbered " the use of a trademark in the course of 
trade.145 As with any affirmative obligation, it is the complaining Member that bears the burden of 
proving that the obligation has been violated.146 Thus, the complainants must demonstrate that 
any encumbrance imposed by the m easure is incapable of contributing to its objectives in order to 
discharge their burden of proof.147  
(b) The term "unjustifiably " is not functionally equivalent to a standard of 
"necessity " 
86. The majority of the third parties agree with Australia that the term "unjustifiably " requires 
an evaluation of the rationality or reasonableness of the relationship between the encumbrance 
and its objective, and that this term cannot be understood as equivalent to a standard of 
"necessity ".148 And yet, the complain ants have treated their analysis of whether the tobacco plain 
packaging measure is "unjustifiable " under Article  20 of the TRIPS  Agreement as essentially 
interchangeable with their analysis of whether the measure is "more trade -restrictive than 
necessary " under Article  2.2 of the TBT  Agreement. Such an approach ignores the ordinary 
meaning of the term "unjustifiable " and represents an attempt by the complainants to rewrite 
Article  20 to say something that it does not.  
i. The term "unjustifiably " does not r equire a "weighing and balancing " analysis  
                                                
140 See, e.g. Honduras ' response to Panel Question No. 108; Dominican  Republic 's first written 
submission, para. 743; Cuba 's first written submission, paras. 356 -362. 
141 See Australia 's first written submission, paras. 370 -383. 
142 Australia 's second written submission, para. 149.  
143 Dominican  Republic 's first written submission, para. 737; Honduras ' first written submission, para. 
297; Cuba 's first written submi ssion, para. 319; Indonesia 's first written submission, para. 360; Australia 's 
response to Panel Question No. 105, paras. 62 -66; Australia 's second written submission, para. 150.  
144 Expert Report of J. List, Exhibit DR/IND -1, para. 16. See also Expert Rep ort of J. Klick, Exhi bit 
HON-118, fn 24; cited in Australia 's second written submission, para. 150.  
145 See, e.g. Dominican  Republic 's response to Panel Question No. 104, para. 113; Australia 's second 
written submission, paras. 156 -157. 
146 See Australia 's first written submission, paras. 427 -430; Australia 's second written submission, 
paras. 154 -157. 
147 Australia 's second written submission, para. 151.  
148 See New  Zealand 's third party written submission, paras. 61 -63; Singapore 's third party written 
subm ission, paras. 52 -53; Norway 's third party written submission, para. 59; Uruguay 's third party written 
submission, paras. 52 -53; Argentina 's third party written submission, para. 10; European Union 's third party 
written submission, paras. 24 -37; China 's third party written submission, para. 49; Japan 's third party written 
submission, para. 19.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 87. The relevant inquiry under a proper interpretation of the term "unjustifiably " is whether 
there is a rational relationship between the encumbrance imposed by the measure and the pursuit 
of a legitimate public policy objective, rather than a relational analysis of various factors that are 
more appropriately considered within the context of a "necessity " analysis.149  
88. The Declaration on the TRIPS  Agreement and Public Health  serves to underscore that the 
term "unjustifiably " in Article  20 provides Members with a wide degree of latitude to implement 
measures to protect public health and, unlike the term "necessary ", contemplates a range of 
possible outcomes that are "able to be shown to be just, reasonable, or c orrect " or that are "within 
the limits of reason ". In this relevant context, it is not a panel 's function to "weigh and balance " 
the considerations, including public health considerations, that the Member took into account when 
crafting the measure at issu e in order to substitute the panel 's own assessment for that of the 
implementing Member.150 Rather, the panel 's function is to evaluate whether the complaining 
Member has demonstrated that an encumbrance upon the use of trademarks resulting from the 
measur e at issue is "unjustifiable ".  
ii. The term "unjustifiably " does not impose a standard of "least restrictiveness " 
89. Interpreting the term "unjustifiably " to include a requirement of "least restrictiveness " would 
render this term functionally equivalent to a standard of "necessity ".151 The term "necessary " 
requires an evaluation of whether the measure at issue was the least restrictive means of 
accomplishing the Member 's legitimate objective in light of other reasonably -available alternative 
measures that  would have made an equal or greater degree of contribution to that objective.152 
The fact that Article  20 does not use the term "necessary ", which had a well -established meaning 
in the GATT acquis  prior to the Uruguay Round,153 as the basis for its standa rd of justification must 
be given interpretative effect,154 and indicates that Article  20 does not impose a requirement of 
"least restrictiveness ".  
90. The complainants ' argument that the term "unjustifiably " should be interpreted to impose a 
requirement of "least restrictiveness " is based on a contextual argument. In essence, the 
complainants argue that because trademark owners have a "legitimate interest " in using their 
trademarks under Article  17 of the TRIPS  Agreement or a "protected treaty interest " in the use of 
trademarks, the term "unjustifiably " in Article  20 must be interpreted to encompass a requirement 
of "least restrictiveness ".155  
iii. The context of Article  17 
91. The complainants have offered no explanation for why the context provided by A rticle 17 
would require the Panel to read the requirements of that provision into Article  20. The contextual 
relevance of Article  17 to the interpretation of Article  20 is primarily by way of contrast.156 It is 
contextually significant that the TRIPS  Agree ment does not address encumbrances upon the use of 
trademarks as "exceptions " to the "rights conferred " by a trademark. This confirms that the 
TRIPS  Agreement does not confer upon trademark owners a right to use their trademarks, as the 
parties have now ag reed.157 Furthermore, the fact that Article  20 does not require Members to 
"take into account the legitimate interests of the owner of the trademark ", in contrast to 
Article  17, strongly suggests that the drafters of the TRIPS  Agreement did not consider th is to be a 
                                                
149 Australia 's first written submission, paras. 384 -408; Australia 's response to Panel Question No. 105, 
paras. 65 -66; Australia 's second written submission, paras. 159-164. 
150 Australia 's second written submission, para. 163.  
151 Australia 's first written submission, paras. 396 -408. 
152 Australia 's second written submission, para.167.  
153 Australia 's first written submission, para. 392; Australia 's second written su bmission, para. 168.  
154 See Australia 's first written submission, para. 394 and fn 575; Australia 's second written submission, 
paras. 169 -171. 
155 Australia 's second written submission, para. 172.  
156 See Australia 's response to Panel Question No. 99; Aus tralia's second writt en submission, 
paras.  179-185. 
157 Australia 's second written submission, para. 180; See, however, Cuba 's response to Panel Question 
No. 99.  WT/DS435/R/Add.1 • WT/DS441/R/ Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 relevant or necessary requirement in the case of measures that impose an encumbrance upon the 
use of a trademark.158  
92. The obligation in Article  17 – to "take account of " the "legitimate interests " of trademark 
owners when establishing except ions to the rights of exclusion conferred by a trademark – is a 
limited affirmative obligation and does not mean that a Member must not prejudice those 
legitimate interests.159 It provides no basis for the complainants ' argument that a trademark 
owner 's legitimate interest is an "interest " that must be "pervasive " in the interpretation of the 
Agreement 's trademark provisions.160 If anything, it is the absence  of a comparable obligation in 
Article  20 that provides the more relevant context for the interpreta tion of the term "unjustifiably ". 
iv. "Protected Treaty Interest " 
93. In a closely related argument, the complainants refer to the use of trademarks as a 
"protected treaty interest " or "protected interest " and suggest that because the drafters of the 
TRIPS  Agreement chose to "protect " this "interest " in Article  20, this provision must be interpreted 
to require the least possible intrusion upon the use of trademarks.161 
94. This approach is not supported by a proper interpretation of Article  20 in accordance  with 
the Vienna Convention. It is neither based on the context of Article  20 nor on a consideration of 
the object and purpose of the TRIPS  Agreement. The object and purpose of the TRIPS  Agreement 
is to promote the "effective and adequate protection of int ellectual property rights ".162 All parties 
agree that these rights do not include a "right" to use trademarks.  
95. The obligation set forth in Article  20 of the TRIPS  Agreement is that Members may not 
encumber by special requirements the use of trademarks in the course of trade "unjustifiably ".163 
For the reasons that Australia has explained, the term "unjustifiably ", properly interpreted, is not 
equivalent to a standard of "necessity " and does not impose a requirement of "least 
restrictiveness ". The compla inants ' arguments about "protected treaty interests ", whatever their 
interpretative relevance, do not support a different conclusion.  
v. The jurisprudence under the chapeau to Article  XX 
96. Finally, the complainants ' reliance on prior panel and Appellate  Body reports interpreting the 
chapeau to Article  XX of the GATT  1994 to support their interpretation of the term "unjustifiably " 
are based on misguided analogies between Article  XX of the GATT  1994 and Article  20 of the 
TRIPS  Agreement.  
97. The jurispruden ce concerning the meaning of the term "unjustifiable " in the chapeau to 
Article  XX of the GATT  1994 confirms that the term "unjustifiably " concerns the rationality or 
reasonableness of the connection between the encumbrance and its objective.164 The 
compla inants, on the other hand, have sought to find support in this jurisprudence for their 
contention that the ordinary meaning of the term "unjustifiably " is equivalent to a standard of 
"necessity ".165 Article  20 of the TRIPS  Agreement is not an exceptions pr ovision, and there is no 
basis to transpose the structure and functions of Article  XX of the GATT  1994 into Article  20 of the 
TRIPS  Agreement, as the Dominican  Republic argues. The term "unjustifiably " in Article  20 of the 
TRIPS  Agreement does not take on a different meaning merely because it stands by itself, whereas 
it is only one element of the legal inquiry under a different and unrelated provision of the covered 
agreements.166 Moreover, the examples that the complainants cite in support of their argume nts 
                                                
158 Australia 's second written submission, para. 182; See also, e.g. Singapore 's third party w ritten 
submission, para. 49; New  Zealand 's third party response to Panel Question No. 14; Canada 's third party 
response to Panel Question No. 14; Norway 's third party response to Panel Question No. 14.  
159 Australia 's second written submission, para. 184.  
160 Australia 's second written submission, para. 184.  
161 See, e.g. Dominican  Republic 's response to Panel Question Nos. 108 and 89, para. 26; Indonesia 's 
response to Panel Question No. 99.  
162 Australia 's second written submission, para. 187.  
163 Australi a's second written submission, para. 193.  
164 Australia 's second written submission, paras. 195, 199.  
165 See, e.g. Dominican  Republic 's opening statement at the first substantive meeting of the Panel, 
paras. 49 -50; Australia 's second written submission, p ara. 196.  
166 Australia 's second written submission, para. 197.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
- B-115 - 
 that a measure must be the "least-restrictive " in order to be "not unjustifiable " reflect the 
application by panels and the Appellate  Body of the entire  standard set forth in the chapeau, i.e. "a 
means of arbitrary or unjustifiable discrimination betwe en countries where the same conditions 
prevail, or a disguised restriction on international trade ".167  
(c) The term "unjustifiably " does not require an "individualised assessment " 
98. The complainants, the  Dominican  Republic in particular, argue that any interpretation of the 
term "unjustifiably " must take into account "the nature of trademarks and trademark 
protection ",168 as the basis for the assertion that the term "unjustifiably " requires an 
"individualised assessment " of the "specific features " of ind ividual trademarks, at least in some 
cases.169  
99. The Dominican  Republic 's "individualised assessment " argument has no interpretative basis. 
The Dominican  Republic has made clear that the foundation for its argument is its theory of 
"legitimate interests ",170 which Australia has already refuted at paras. 91 -92 above, rather than 
the ordinary meaning of the term "unjustifiably ". The Dominican  Republic has not identified 
anything in the context of Article  20 or in the object and purpose of the TRIPS  Agreeme nt that 
would support this asserted requirement.171 
100. The Dominican  Republic 's "individualised assessment " argument appears to be based on the 
proposition that because trademarks are registered and enforced on an individual basis, it follows 
that any en cumbrance upon the use of trademarks must be justified on an individual basis, at least 
if the rationale for the encumbrance relates to the "specific features " of trademarks.172 Contrary to 
the Dominican  Republic 's assertions, the panel 's findings in EC – Trademarks and Geographical 
Indications (US) provide no support for this approach. The panel found that even though the 
regulation at issue required a case -by-case analysis of the geographical indication at the time of 
registration, "nothing in the text of  Article  17 indicates that a case -by-case analysis is a 
requirement under the TRIPS  Agreement. "173  
101. Further, an entire category  of trademarks might possess some feature that is relevant to the 
objective of a measure covered by Article  20. Nothing in A rticle 20 of the TRIPS  Agreement implies 
that any sort of "individualised assessment " is required, under any circumstance. Whether or not a 
measure covered by Article  20 is "unjustifiable " will depend upon the rationale of the measure as it 
relates to the affected category of trademarks as a whole.174  
i. The complainants ' "individualised assessment " argument is based on a 
misunderstanding or mischaracterisation of the manner in which the tobacco plain 
packaging measure operates  
102. The premise of the comp lainants ' "individualised assessment " argument is that the concern 
underlying the tobacco plain packaging measure is that there are "specific features " of particular 
trademarks that increase the appeal of tobacco products, detract from the effectiveness of  graphic 
health warnings, and mislead consumers as to the harms of tobacco use. The complainants appear 
to believe that the term "unjustifiably " requires Australia to identify every trademark used in 
Australia in connection with tobacco products, and then evaluate each trademark against a set of 
criteria that would allow Australia to determine whether or not that particular trademark implicates 
Australia 's public health concerns.175 
                                                
167 Australia 's second written submission, para. 198.  
168 Dominican  Republic 's response to Panel Question No. 89, para. 25; Dominican  Republic 's opening 
statement at the first substantive meet ing of the Panel, paras. 27 -29. 
169 Dominican  Republic 's response to Panel Question Nos. 99, para. 69, and 108, paras. 127 -131; 
Honduras also makes this argument: see Honduras ' first written submission, paras. 289 -291, 309.  
170 Dominican  Republic 's respons e to Panel Question No. 99, para. 69.  
171 Australia 's second written submission, para. 201.  
172 Australia 's second written submission, para. 202.  
173 Panel Report, EC – Trademarks and Geographical Indications (US),  para. 7.672 (emphasis added), 
cited in Au stralia 's second written submission, para. 202.  
174 Australia 's second written submission, para. 203 -204. 
175 Australia 's second written submission, para. 288.  WT/DS435/R/Add.1 • WT/DS441/R/ Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 103. The premise of the complainants ' argument is incorrect. The premise of  the tobacco plain 
packaging measure is not that "specific features " of particular trademarks increase the appeal of 
tobacco products, detract from the effectiveness of graphic health warnings, or mislead consumers 
as to the harms of tobacco use. The premi se of the tobacco plain packaging measure is that 
requiring a standardised, plain appearance for retail tobacco packaging eliminates, or at least 
significantly curtails, the ability of tobacco companies to use the package as a vehicle for 
advertising and p romoting the product, which in turn reduces the appeal of tobacco products, 
increases the effectiveness of graphic health warnings and reduces the ability of the package to 
mislead. This goal has nothing to do with the "specific features " of trademarks and , instead, has 
"everything to do with features of the product inside the packaging ", namely that it is a consumer 
product that is uniquely hazardous to human health. Allowing tobacco companies to use figurative 
elements and other non -standardised design el ements on the package can only serve to increase 
the appeal of the package relative to a package design that does not permit the use of these 
elements.176  
104. The Dominican  Republic concedes that no "individualised assessment " is required when the 
measur e does not seek to address concerns about the "specific features " of trademarks, even 
under its erroneous interpretation of the term "unjustifiably ".177  
105. For these reasons, no purpose would be served by examining the "specific features " of 
particular trademarks because those features in isolation are irrelevant to the policy decision to 
require all tobacco products to be sold in a standardised, plain package.178 The complainants ' 
"individualised assessment " argument therefore provides no basis for find ing that the tobacco plain 
packaging measure is "unjustifiable ".179 
4. The complainants have failed to prove that any encumbrance resulting from the 
measure is "unjustifiable " 
(a) By requiring a standardised, plain appearance for tobacco products and 
packa ging, the measure contributes to its objective of improving public health  
106. The tobacco plain packaging measure lays out detailed requirements that specify the 
standardised, plain appearance of tobacco products and retail packaging, including by prohibi ting 
the use of all signs, whether or not any of those signs are also trademarks . The measure prohibits 
the use of trademarks (other than trademarked brand and variant names) not because they are 
trademarks, but because the use of these signs would re -introduce opportunities for advertising 
and promoting the product. At the same time, the measure permits the use of brand and variant 
names in a standardised format because these particular signs distinguish the tobacco products of 
one undertaking from those o f other undertakings. The tobacco plain packaging measure thus 
reduces the ability of tobacco companies to use retail tobacco packaging to advertise and promote 
tobacco products, while preserving the ability of tobacco companies to use trademarks to 
distin guish their products from those of other undertakings.180  
107. The "encumbrance " upon the use of trademarks, if any, that the Panel must evaluate in 
relation to a legal standard of "unjustifiability " is necessarily an "encumbrance " that results from 
the special requirements just described. As explained above, Australia does not consider that the 
prohibitive aspects of the tobacco plain packaging measure are "special requirements " that are 
encompassed by Article  20 of the TRIPS  Agreement.181 However, assumi ng, arguendo,  that the 
special requirements at issue include both the permissive and prohibitive aspects of the measure 
relating to the use of trademarks, the issue before the Panel is whether the complainants have 
demonstrated that any encumbrance resulti ng from these special requirements, when viewed as a 
whole,182 is "unjustifiable ". Even if the use of trade marks to advertise and promote a product 
were encompassed by "use" within the meaning of Article  20, the complainants have failed to 
                                                
176 Australia 's second written submission, paras. 289 -294; 296 -298. 
177 Dominican  Republic 's response to Panel Question No. 108, paras. 133 -134. 
178 Australia 's second written submission, para. 295.  
179 Australia 's second written submission, para. 299.  
180 Australia 's second written submission, para. 210 -212. 
181 See para. 78 above.  
182 Australia 's second written submission, para. 213 and fn. 211, citing Appellate  Body Report, EC – 
Asbestos,  para. 64; Appellate  Body Report, EC – Seal Products,  para. 5.193.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
- B-117 - 
 prove that it i s "unjustifiable " for Australia to encumber the use of trademarks to advertise and 
promote tobacco products.  
(b) The evidence on the record demonstrates that encumbering the use of 
trademarks to advertise and promote tobacco products is capable of contribu ting 
to the measure 's objectives  
108. Without prejudice to the burden of proof, Australia has outlined significant evidence at Part 
III above, including reports of eminent public health institutions such as the United States 
Surgeons General, the WHO, the United States National Cancer Institute, and the United States 
Institute of Medicine, which clearly demonstrates that the tobacco plain packaging measure, and 
any encumbrance it imposes, is capable of contributing to its public health objectives. This 
evidence shows that: (i) there is a clear link between advertising and smoking -related behaviours; 
(ii) retail packaging is a recognised form of advertising and promotion, and also affects smoking -
related behaviours; and (iii) because retail tobacco packaging represents a medium for advertising 
and promoting tobacco products, the restriction of the advertising and promotional use of 
trademarks on retail tobacco packaging is capable of affecting smoking -related behaviours, just as 
other restrictions on tobacco a dvertising and promotion have been shown to do.183 
109. Therefore, there is clearly a rational connection between any encumbrance imposed by the 
tobacco plain packaging measure and its public health objectives.  
(c) The complainants have failed to show tha t any encumbrance upon the use of 
trademarks resulting from the measure is not capable of contributing to its 
objectives  
110. The complainants bear the burden of demonstrating that any encumbrance upon the use of 
trademarks in the course of trade resulting  from the tobacco plain packaging measure is 
"unjustifiable ". Having abandoned the proposition at the first substantive meeting of the Panel that 
the tobacco plain packaging measure would "backfire " or "go against " its objectives, i.e. that it 
would lead t o an increase  in tobacco prevalence and consumption, the complainants therefore bear 
the burden of demonstrating that any encumbrance upon the use of trademarks resulting from the 
tobacco plain packaging measure is not capable of contributing to the measur e's legitimate public 
health objectives. As Australia has demonstrated at Part III above, the complainants have failed to 
discharge this burden.  
5. Conclusion  
111. The complainants have failed to show that the tobacco plain packaging measure is 
inconsiste nt with Article  20 of the TRIPS  Agreement. The complainants have failed to show that 
the measure encumbers by special requirements the relevant "use" of a trademark to distinguish 
the goods of one undertaking from those of other undertakings in the course of trade, and have 
therefore failed to establish the threshold applicability of Article  20. The use of trademarks to 
advertise and promote tobacco products is not a relevant "use" of trademarks under Article  20. 
Any encumbrance upon this use is therefore i rrelevant to establishing the applicability of 
Article  20.  
112. The complainants have failed to provide a coherent interpretative or factual basis for their 
assertion that the prohibitive elements of the tobacco plain packaging measure are "special 
requir ements " that fall within the scope of Article  20, while other widely -adopted measures that 
affect the use of a trademark do not. Assuming arguendo that these prohibitive elements do fall 
within the scope of Article  20, the complainants have failed to demon strate that the measure as a 
whole encumbers the relevant use of a trademark.  
113. Even if the Panel finds that the complainants have established an encumbrance on the use 
of a trademark, they have failed to demonstrate that any encumbrance upon the use o f 
trademarks in the course of trade resulting from the special requirements at issue has been 
imposed "unjustifiably ". Specifically, the complainants have failed to demonstrate that any such 
encumbrance goes against or is otherwise not capable of contribut ing to its objectives and 
                                                
183 Australia 's second written submission, paras. 159 -178. WT/DS435/R/Add.1 • WT/DS441/R/ Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 therefore that there is no rational connection between the encumbrance and the objective. There 
is, in fact, overwhelming evidence to demonstrate that tobacco plain packaging is capable of 
contributing to the legitimate public hea lth objectives set forth in the TPP  Act. By requiring the 
standardisation of the appearance of retail tobacco packaging and of the product itself, there is a 
clear rational connection between the encumbrance and the public health objectives of the 
measure,  and the complainants have failed to demonstrate otherwise.  
114. For the sake of completeness, Australia notes that the Panel would need to reach the same 
conclusion even if it were to accept the position of some parties that the term "unjustifiably " 
requires the Panel to "weigh and balance " the extent to which the tobacco plain packaging 
measure encumbers a relevant use of trademarks, the extent to which it is capable of making a 
contribution to its public health objectives, and the importance of the publi c health objectives that 
the measure seeks to fulfil.  
115. The tobacco plain packaging measure preserves the ability of tobacco companies to use 
trademarks to distinguish their products from those of other undertakings, while curtailing the use 
of retail t obacco packaging to advertise and promote tobacco products, detract from the 
effectiveness of graphic health warnings, and mislead consumers as to the harms of tobacco use in 
order to achieve a vital public policy objective. If the Panel were to "weigh and  balance " these 
factors, there is no question that Australia 's tobacco plain packaging measure is not unjustifiable.  
116. Thus, under any conceivable interpretation of the term "unjustifiably ", the complainants 
have failed to discharge their burden of prov ing that any encumbrance upon the use of trademarks 
in the course of trade resulting from the special requirements imposed by the tobacco plain 
packaging measure is "unjustifiable ". The Panel must therefore reject the complainants ' claims 
under Article  20 of the TRIPS  Agreement.184 
B. THE COMPLAINANTS ACK NOWLEDGE THAT THERE IS NO "RIGHT OF USE " UNDER THE 
TRIPS  AGREEMENT, AND SO TH EIR CLAIMS UNDER ART ICLES  2.1, 15.4, 16.1, 16. 3, 22.2(B) AND 
24.3 MUST FAIL  
117. The complainants ' claims under Articles  2.1 (inc orporating Article  6quinquies A(1) and 
Article  10bis of the Paris  Convention), 15.4, 16.1, 16.3, 22.2(b) and 24.3 of the TRIPS  Agreement, 
all of which are dependent on a "right of use ", are fundamentally flawed and must be dismissed by 
the Panel. The defec ts in the complainants ' claims are summarised below.  
118. In relation to Article  2.1 of the TRIPS  Agreement, incorporating Article  6quinquies  A(1) of 
the Paris  Convention, Honduras maintains that Members are required to "ensur[e] that trademark 
owners can 'use' their trademarks "185 in order for those trademarks to be "accepted for filing and 
protected as is ", despite Honduras ' express acknowledgment that trademark owners have no 
positive right to use those trademarks. Honduras has failed to demonstrate that  Australia 's 
tobacco plain packaging measure prevents the registration of trademarks that are registered in the 
territory of another Member based on their form and therefore, that the tobacco plain packaging 
measure is inconsistent with Article  2.1 of the TRIPS  Agreement incorporating 
Article  6quinquies  A(1) of the Paris  Convention.  
119. In relation to Article  15.4, the complainants argue that Members must guarantee (or at least 
not prevent) the use of all signs that are not yet "capable of distinguishing " goods, so that these 
"non-inherently distinctive " signs may then potentially become distinctive in the future, so that 
they may constitute a trademark that is then eligible for registration. The complainants ' 
interpretation of Article  15.4 fundamentally c onfuses the concepts of "signs" and "trademarks ".186 
A proper interpretation of Article  15.4 makes clear that a Member can regulate a product in a way 
that may restrict or prohibit the use of a trademark in its territory, as long as a Member does not 
                                                
184 Australia 's second written submis sion, paras. 301 -306. Australia does not separately address the 
complainants ' arguments concerning "less restrictive alternatives " under Article  20 of the TRIPS  Agreement 
because this is clearly not required under a legal standard of "unjustifiability ". See paras. 89 -90 above. 
Australia notes, however, that the "less restrictive alternatives " that the complainants purport to identify in this 
context are the same that they identify in connection with their TBT claims, addressed at Part E below.  
185 Honduras ' first written submission, para. 266.  
186 Australia 's first written submission, paras. 303 -305; Australia 's second written submission, para. 25.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 refuse to register that trademark based on the nature of a product.187 The complainants have 
failed to establish that under the tobacco plain packaging measure, Australia refuses to register 
trademarks based on the nature of the underlying product, and therefor e that the measure is 
inconsistent with Article  15.4.  
120. In relation to Article  16.1, the complainants argue that Members must ensure that 
trademarks can be used in order to ensure that a "likelihood of confusion " is created in the market, 
so that trade mark owners have increased opportunities to exercise their right of exclusion to 
prevent this confusion. These arguments, besides being nonsensical, cannot be reconciled with the 
complainants ' admission that Article  16.1 obliges Members to confer only nega tive rights of 
exclusion on trademark owners.188 The complainants have therefore failed to demonstrate that the 
tobacco plain packaging measure is inconsistent with Article  16.1 of the TRIPS  Agreement.  
121. In relation to Article  16.3, Indonesia argues tha t Members are under an obligation to 
guarantee (or at least not prevent) trademark owners to use their trademarks in order to 
"maintain " their well -known status or to "become " well known in the future.189 However, the rights 
conferred under Article  16.3 of  the TRIPS  Agreement (and Article  6bis of the Paris  Convention) are 
negative rights of exclusion.190 Properly interpreted, Article  16.3 protects well known registered 
trademarks – not trademarks that may become well known in the future or trademarks that w ere 
once well known.191 The tobacco plain packaging measure in no way prevents a trademark owner 
from availing itself of the protections that are afforded to owners of registered well known 
trademarks in accordance with Article  16.3.192  
122. In relation t o Article  2.1, incorporating Article  10bis of the Paris  Convention, the 
complainants argue that Members must allow the use of signs and trademarks on tobacco 
packaging because the omission of these signs and trademarks is liable to confuse and mislead 
consumers and constitutes an act of unfair competition. However, Article  10bis actually requires 
that Members assure effective protection against "particular deeds " of "dishonest " or "untruthful " 
commercial "rivalry " – i.e. attempts by a market actor to gain a  commercial advantage over a rival 
market actor that are liable to influence consumers on the basis of false or misleading 
representations.193 Australia provides a range of legal mechanisms for affected private parties to 
prevent or obtain redress for fals e or misleading representations,194 and thus gives effect to its 
obligations under Article  10bis. The tobacco plain packaging measure has no impact on the 
availability of these legal mechanisms,195 and the complainants have not suggested otherwise. 
Instead , the complainants maintain that the tobacco plain packaging measure violates Article  10bis 
because the measure allegedly "compels " private actors to engage in acts of unfair competition.196 
Even assuming that government regulations that compel private act ors to behave in certain ways 
were to fall within the scope of Article  10bis, the complainants have failed to demonstrate either 
that the measure compels acts of competition or that the measure compels acts of competition 
that are unfair.197 Accordingly, t he complainants ' unfair competition claims should be dismissed in 
their entirety.  
123. In relation to Article  22.2(b) of the TRIPS  Agreement, the complainants argue that the 
provision requires Members to guarantee the use of geographical indications so tha t consumers 
                                                
187 Australia 's first written submission, paras. 244 -246, 298 -301. See also Singapore 's third party 
written sub mission, paras. 23 -26; Norway 's third party written submission, paras. 27 -30; New  Zealand 's third 
party written submission, paras. 17 -25; Uruguay 's third party written submission, para. 50; Argentina 's third 
party written submission, para. 22; Canada 's third party written submission, paras. 35 -43; South Africa 's third 
party oral statement at the first substantive meeting of the Panel, paras. 3.3 -3.5. 
188 Australia 's second written submission, para. 14.  
189 See Australia 's second written submission, para. 33 . 
190 See Expert Report of C. Correa, Exhibit AUS -16, para. 18.  
191 See Australia 's first written submission, paras. 324 -325. See also Canada 's third party written 
submission, paras. 54 -57; New  Zealand 's third party written submission, paras. 34 -39; Singap ore's third party 
written submission, paras. 31 -34; Uruguay 's third party written submission, paras. 46, 107.  
192 Australia 's first written submission, para. 331.  
193 See Australia 's first written submission, paras. 446 -449. 
194 See Australia 's first writt en submission, para. 458.  
195 See Australia 's first written submission , para. 459.  
196 Indonesia 's first written  submission, paras. 151, 161 -168, 178 -181; Cuba 's first written submission, 
paras. 383 -388; Dominican  Republic 's first written submission, paras . 854-856, 875 -879, 883; Honduras ' first 
written submission, paras. 687 -690, 694.  
197 Australia 's second written submission, paras. 41 -44. WT/DS435/R/Add.1 • WT/DS441/R/ Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 are not misled into thinking that all tobacco products from all geographical origins are the same, 
so as to constitute an act of unfair competition. The complainants ' interpretation of Article  22.2(b) 
is contrary to its plain text, which makes clear that the nature of protection provided is negative198 
and requires Members to provide the legal means for interested parties to prevent any act of using 
a geographical indication that constitutes an act of unfair competition (as defined by Article  10bis 
of the Paris  Convention).199 Australia provides a range of legal mechanisms for interested parties 
to prevent any such act by third parties.200 The complainants have failed to demonstrate that the 
tobacco plain packaging measure is inconsistent with Ar ticle 22.2(b) of the TRIPS  Agreement.201 
124. Finally, in relation to Article  24.3 of the TRIPS  Agreement, the complainants argue that 
Members are obligated to allow geographical indications to be used in a manner that will "allow for 
indications to acquir e, maintain, or enforce their status as geographical indications ".202 The 
complainants ' claims that the tobacco plain packaging measure is inconsistent with this provision 
are based on the existence of an asserted protected "right of use " in relation to ge ographical 
indications under Australian law at the time of entry into force of the TRIPS  Agreement. As the 
complainants have now correctly acknowledged that no "right to use " geographical indications 
existed under Australian law prior to 1  January 1995,203 the complainants ' claims under 
Article  24.3 of the TRIPS  Agreement must be dismissed.204  
125. In sum, and as Australia has demonstrated in its written submissions,205 each of the 
complainants ' claims under Article  2.1 (incorporating Article  6quinquies A(1) and Article  10bis of 
the Paris  Convention), 15.4, 16.1, 16.3, 22.2(b) and 24.3 of the TRIPS  Agreement hinges upon 
the existence of a positive "right of use " with respect to signs, registered trademarks and 
geographical indications. As the complainants t hemselves have expressly acknowledged that there 
is no such "right of use ", and given that the complainants have offered no legal justification or 
evidence in support of their claims, their claims under each of these provisions must fail.  
V. THE COMPLAINAN TS HAVE FAILED TO ES TABLISH A PRIMA FACIE CASE THAT THE 
TOBACCO PLAIN PACKAG ING MEASURE IS INCON SISTENT WITH ARTICLE  2.2 OF 
THE TBT  AGREEMENT  
126. The complainants ' claims under Article  2.2 of the TBT  Agreement fail at the threshold. The 
tobacco plain pack aging measure is entitled to the presumption in Article  2.5 that it does not 
constitute an unnecessary obstacle to international trade, and the complainants have failed to 
rebut that presumption with the type of evidence required.206 Even if the complainan ts' claims 
were found to overcome that fundamental hurdle, the complainants have also failed to establish a 
prima facie  case that the tobacco plain packaging measure is trade -restrictive at all, let alone that 
it is more trade -restrictive than  necessary ha ving regard to the contribution it makes to its public 
health objectives and the risks that non -fulfilment of those objectives would create.  
A. THE COMPLAINANTS HAV E FAILED TO REBUT TH E PRESUMPTION IN ART ICLE 2.5 OF THE 
TBT AGREEMENT THAT THE M EASURE IS N OT AN UNNECESSARY OB STACLE TO INTERNATIO NAL 
TRADE  
127. Australia enacted its tobacco plain packaging measure in accordance with the 
FCTC Guidelines, which set out the relevant international standard for the plain packaging of 
tobacco products.207 A technic al regulation adopted for a legitimate objective in accordance with 
                                                
198 Australia 's first written submission, paras. 479 -485. 
199 Australia 's first written submission , paras. 469 -472, 4 80-482, 485; Australia 's second written 
submission, para. 67.  
200 Australia 's first written submission, paras. 486 -487. 
201 See Australia 's first written submission, paras. 477 -487. 
202 Dominican  Republic 's response to Panel Question No. 48, para. 216.  
203 See Dominican  Republic 's response to Panel Question No. 48, para. 213; Indonesia 's response to 
Panel Question No. 48, citing its response to Panel Question No. 44.  
204 See Australia 's second written submission, para. 69.  
205 Australia 's first written subm ission, Part  IV.B and Part  IV.C; Australia 's second written submission, 
Part II.B. 
206 Australia 's response to Panel Question No. 162; Australia 's second written submission, paras. 347 -
356; Australia 's response to Panel Question No. 67, paras. 161 -164. 
207 Australia 's first written submission, paras. 567 -582; Australia 's second written submission, 
paras.  316-345; Australia 's responses to Panel Question No. 128, No. 129, Nos. 135, No. 150.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 the relevant international standard benefits from the presumption in Article  2.5 of the 
TBT Agreement, whereby it is rebuttably presumed not to constitute an unnecessary obstacle to 
intern ational trade under Article  2.2.208 The presumption reflects one of the central purposes of the 
TBT Agreement, to incentivise Members to adopt and use relevant international standards, in order 
to harmonise technical regulations, on as wide a basis as poss ible. 
128. The FCTC – one of the most widely embraced treaties in the United Nations system – 
explicitly recommends the implementation of tobacco plain packaging in the FCTC  Guidelines for 
Article  11 (concerning the packaging and labelling of tobacco produ cts) and Article  13 (concerning 
tobacco advertising, promotion, and sponsorship).209 The FCTC  Guidelines for Article  11 recognise 
that: 
 [Tobacco plain packaging] may increase the noticeability and 
effectiveness of health warnings and messages, prevent the  package 
from detracting attention from them, and address the industry package 
design techniques that may suggest that some products are less harmful 
than others.210 
129. The FCTC  Guidelines reflect the international scientific consensus211 on the comprehe nsive 
range of tobacco control measures, including tobacco plain packaging, that countries should enact 
in order to address the grave and serious health impact of tobacco consumption and are relied on 
by the 180 Parties to the FCTC in implementing their ow n tobacco control measures.  
130. Consistent with the criteria for determining what is an "international standard " for the 
purposes of Article  2.5,212 Australia has demonstrated that the FCTC  Guidelines are: standards 
within the meaning of the TBT  Agreemen t;213 have been adopted by the FCTC  COP, which is an 
"international standardizing body or organization " that has "recognised activities in 
standardization214 and whose membership is open to the relevant bodies of at least all 
Members ";215 and have been mad e available to the public.216  
131. For these reasons, Australia has demonstrated that the FCTC  Guidelines are an international 
standard that is "relevant " to the tobacco plain packaging measure, which has been adopted "in 
accordance with " those Guidelines .217 The FCTC  Guidelines were developed by working groups in 
which FCTC Parties (including at least one of the complainants) participated, were adopted by the 
FCTC COP, and were based on "available scientific evidence and the experience of the Parties 
themselves in implementing tobacco control measures. "218 The FCTC  Guidelines provide 
"guidelines " for "common and repeated use " by the FCTC Parties, concerning the characteristics of 
a "product " (tobacco), and related "processes and production methods " (manufa cture and sale of 
tobacco products).219  
132. The complainants contend that the FCTC  Guidelines are not "international standards ", on 
two bases. First, the complainants maintain that the FCTC  COP is not an "international 
standardizing body ". As Australia h as demonstrated, this claim is without merit: the FCTC  COP has 
"recognized activities in standardization ", as is evidenced by the COP 's role in developing 
guidelines for testing and measuring contents and emissions of tobacco products, and for the 
                                                
208 Australia 's first written submission, paras. 567 -582. 
209 WHO, Ex hibit AUS -109, Article  s 11, p. 63 and 13, pp. 99 -100. 
210 WHO, Exhibit AUS -109, Article  11, p. 63.  
211 Panel Report, US – Clove Cigarettes , para. 7.414, cited in Australia 's second written submission, 
para. 271.  
212 Panel Report, US – Tuna II (Mexico) , para. 7.664, cited in Australia 's first written submission, 
para. 570. 
213 Australia 's first written submission, paras. 571 -574. 
214 Australia 's second written submission, paras. 333 -341; Australia 's response to Panel Question 
No. 128 
215 Australia 's first w ritten submission, paras. 575 -579; Australia 's second written submission, 
para. 316, citing Appellate  Body Report, US – Tuna II (Mexico) , para. 359.  
216 Australia 's first written submission, para. 580.  
217 Australia 's first written submission, para. 582; A ustralia 's second wr itten submission, 
paras.  316-318. 
218 WHO, Exhibit AUS -42, para. 19. See also Australia 's first written submission, paras. 103 -113. 
219 Australia 's first written submission, para. 573; Australia 's second written submission, para. 316.  WT/DS435/R/Add.1 • WT/DS441/R/ Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 regulati on of those contents and emissions.220 Second, the complainants argue that in order to be 
considered an international standard, it must be sufficiently "precise " so as to be relied upon for 
"common and repeated use ", within the meaning of the definition of  a standard in Annex 1.2 of the 
TBT Agreement. This contention has no legal basis in the TBT  Agreement.221 Moreover, the 
FCTC Guidelines are capable of and are in fact being relied upon for "common and repeated 
use".222 In particular, Ireland, the United K ingdom, France, Hungary, New Zealand, Norway and 
Chile, have now either adopted or proposed their own tobacco plain packaging measures in 
reliance on the FCTC  Guidelines.223 
133. The complainants also argue that if some element of Australia 's measure goes beyond the 
international standard, then those aspects of Australia 's measure that are consistent with the 
FCTC Guidelines should be deprived of the benefit of the presumption under Article  2.5. Not only is 
there no factual basis for this argument, given th at Australia 's measure is clearly in accordance 
with the properly identified scope of the FCTC  Guidelines,224 there is also no legal basis for this 
argument in the text of Article  2.5 of the TBT  Agreement.225  
134. Given that the tobacco plain packaging me asure benefits from the presumption in Article  2.5 
that it does not constitute an "unnecessary obstacle to international trade " within the meaning of 
Article  2.2, and the complainants have failed to adduce any evidence of the type that would be 
required to  rebut this presumption,226 the Panel need not proceed further in its analysis of the 
complainants ' claim under Article  2.2 of the TBT  Agreement.  
B. THE COMPLAINANTS HAV E FAILED TO MAKE A PRIMA FACIE  CASE THAT THE MEASUR E IS 
TRADE -RESTRICTIVE UNDER AR TICLE  2.2 OF THE TBT  AGREEMENT  
135. Notwithstanding their failure to rebut the presumption established by Article  2.5, the 
complainants ' claims under Article  2.2 would fail in any event because they have not established a 
prima facie  case that the tobacco plain  packaging measure is "trade -restrictive " under a proper 
interpretation of that provision.  
1. The complainants ' claims of trade -restrictiveness fail as a matter of law  
136. Properly interpreted, the terms "trade-restrictive " and "obstacle to international trade" in 
Article  2.2 require the complainants to establish that the tobacco plain packaging measure will 
result, or has resulted, in a limiting effect on international trade in tobacco products.227 
137. The complainants ' claims of trade -restrictiveness do  not even attempt to meet this 
fundamental requirement. The complainants have instead tried to expand the standard of trade -
restrictiveness to an abstract and meaningless concept of a "limitation on competitive 
opportunities "228 in order to accommodate the ir principal claim:229 that the design, structure and 
operation of the tobacco plain packaging measure has a limiting effect on the ability to use design 
features  on tobacco packaging to advertise and promote tobacco products.230 The complainants 
further c ontend that a "limitation on competitive opportunities " solely within a particular product 
                                                
220 Australia 's second written submission, paras. 333 -341. 
221 Australia 's second written submission, paras. 321 -323; Australia 's response to Panel Question 
No. 163, para. 101; Australia 's comments on responses to Panel Question No. 163, para. 119.  
222 Australia's second written submission, paras. 324 -327. Australia 's response to Panel Question 
No. 163; Australia 's comments on responses to Panel Question No. 163.  
223 Australia 's response to Panel Question No. 163.  
224 Australia 's response to Panel Question N o. 135.  
225 Australia 's responses to Panel Question Nos. 135 and 150.  
226 Australia 's response to Panel Question No. 162; Australia 's second written submission, paras. 347 -
356; Australia 's response to Panel Question No. 67, paras. 161 -164. 
227 Australia 's second written submission, paras. 363 -398; Australia 's first written submission, paras. 
521-530; Australia 's response to Panel Question No. 117, paras. 110 -113; Australia 's comments on responses 
to Panel Question Nos. 151 and 165, paras. 37 -49. 
228 Austral ia's second written submission, paras. 370 -374; Australia 's comments on responses to Panel 
Question Nos. 151 and 165, paras. 40 -49. 
229 Australia 's comments on responses to Panel Question Nos. 151 and 165, paras. 43 -45, 54 -55. 
230 Australia 's opening state ment at the second substantive meeting of the Panel, paras. 157 -158; 
Australia 's comments on responses to Panel Question Nos. 151 and 165, paras. 43 -44. 54 -55. WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 segment or solely for a particular Member231 suffices to demonstrate a measure 's 
trade restrictiveness, even where the measure enhances  overall trade in that product.232 
138. The complainants ' proposed "limitation on competitive opportunities " standard of trade -
restrictiveness cannot be reconciled with either the text of Article  2.2 or the jurisprudence of the 
Appellate  Body and thus fails as a matter of law.233 
2. The complainants ' claims of trade -restrictiveness fail as a matter of evidence  
139. The complainants ' alternative bases for claiming that the tobacco plain packaging measure is 
trade -restrictive fail for a lack of evidence. None of the complainants has substa ntiated its claims 
that the tobacco plain packaging measure entails compliance costs, or increases barriers to market 
entry, such as to constitute a limiting effect on international trade in tobacco products.234  
140. The complainants ' only attempt to esta blish actual trade effects is their argument that the 
tobacco plain packaging measure has caused "downtrading " in the Australian market by shifting 
demand for tobacco products from higher -priced to lower -priced products. Even if the Panel were 
to find that  downtrading is attributable in part to the tobacco plain packaging measure,235 that fact 
alone would be insufficient to demonstrate a limiting effect on overall trade in tobacco products, 
with respect to either the volume or value of trade.236 An alleged decrease in sales in the premium 
segment alone does not establish a limiting effect on the volume  of overall trade in tobacco 
products. Moreover, the uncontested evidence before the Panel is that real weighted prices of 
cigarettes have increased since the introduction of the tobacco plain packaging measure; and the 
complainants ' own experts accept that the measure has caused prices to increase.237 The 
complainants ' downtrading claims thus also fail to establish a limiting effect on the value of overall 
trade in tobacco products.  
141. The complainants acknowledge that evidence of actual trade effects may be required when a 
qualitative assessment of a non -discriminatory technical regulation fails to establish any trade -
restrictive effects.238 However, not one  of the complainants has introduced a single piece of 
evidence demonstrating that tobacco producers in their countries have experienced a decrease in 
export volumes, prices, revenues or profits  in Australia attributable to the tobacco plain packaging 
measu re.239 Given the resources at the complainants ' disposal, it is reasonable to assume that if 
such evidence supported their claims this would have been provided to the Panel.240 
142. The complainants have thus failed entirely – as a matter of both law and f act – to 
demonstrate any credible basis on which to conclude that Australia 's measure is  
trade -restrictive within the meaning of Article  2.2. Accordingly, the Panel need not proceed further 
in its analysis.  
C. THE COMPLAINANTS HAV E FAILED TO ESTABLIS H THAT THE MEASURE IS IN CAPABLE OF 
CONTRIBUTING TO ITS OBJECTIVES  
143. In the unlikely event that the Panel were to consider that the complainants have made a 
prima facie  case that the tobacco plain packaging measure is "trade -restrictive " under a proper 
interpretation of that term, the complainants have failed in their attempt to establish that the 
                                                
231 Australia 's second written submission, paras. 383 -385, 397; Australia 's response to Panel Qu estion 
No. 154; Australia 's comments on responses to Panel Question Nos. 151 and 165, para. 63.  
232 Australia 's second written submission, paras. 383 -397. 
233 Australia 's second written submission, paras. 363 -398; Australia 's first written submission, para s. 
521-530; Australia 's response to Panel Question No. 117, paras. 110 -113; Australia 's comments on responses 
to Panel Question Nos. 151 and 165, paras. 37 -49. 
234 Australia 's first written submission, paras. 547 -561; Australia 's response to Panel Question  No. 155.  
235 Australia 's first written submission, paras. 542 -545; Australia 's second written submission, paras. 
414-420. 
236 Australia 's first written submission, paras. 533 -541; Australia 's second written submission, paras. 
407, 409 -413. 
237 Australia 's comments on responses to Panel Question Nos. 151 and 165, paras. 59 -60. 
238 See, e.g. Dominican  Republic 's and Honduras ' responses to Panel Question No. 117.  
239 Australia 's response to Panel Question No. 117, paras. 122 -123; Australia 's opening statement  at the 
second substantive meeting of the Panel, para. 149.  
240 Australia 's opening statement at the second substantive meeting of the Panel, para. 149.  WT/DS435/R/Add.1 • WT/DS441/R/ Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 tobacco plain packaging measure is not capable of contributing to its objectives of reducing the 
use of and exposure to tobacco products in Australia.  
144. As outl ined in Part  III above, the overwhelming weight of the qualitative evidence 
unequivocally establishes that, by prohibiting tobacco packaging from being used to advertise and 
promote tobacco products – and thereby reducing the appeal of tobacco products, in creasing the 
effectiveness of graphic health warnings, and reducing the ability of tobacco packaging to mislead 
consumers – the tobacco plain packaging measure is capable of discouraging smoking initiation 
and relapse, encouraging cessation, and reducing p eople 's exposure to tobacco products. The 
quantitative evidence corroborates this conclusion, and is consistent with the tobacco plain 
packaging measure operating synergistically with other elements of Australia 's comprehensive 
tobacco control policy to re duce further the use of tobacco products and exposure to tobacco 
smoke in Australia. Moreover , the complainants ' own concessions and evidence clearly establish 
that the measure is apt to contribute to achieving its objectives.  
145. The complainants have t hus failed entirely to discharge their burden of establishing that the 
tobacco plain packaging measure is incapable of contributing to its public health objectives.  
D. THE COMPLAINANTS HAV E FAILED TO ESTABLIS H THAT THE RISKS ARI SING FROM 
NON-FULFILMENT OF THE MEASURE 'S OBJECTIVES ARE NOT  GRAVE  
146. The grave risks to public health that would arise from non -fulfilment of the objectives of the 
tobacco plain packaging measure overwhelmingly weigh in favour of a finding that the tobacco 
plain packaging measure is no more trade -restrictive than necessary to achieve those objectives 
within the meaning of Article  2.2. In an attempt to persuade the Panel of the counter -intuitive 
proposition that those risks would be anything other than serious and grave, the complai nants 
have once again misconstrued the relevant legal standard.241  
147.  To this end, the Dominican  Republic and Indonesia have fundamentally misinterpreted the 
nature of the relevant risks that the Panel must assess. Contrary to the plain text of Article  2.2, 
which makes clear that this aspect of the holistic analysis requires the Panel to assess the "risks 
non-fulfilment would create " – i.e. the risks that would arise assuming non-fulfilment of the 
tobacco plain packaging measure 's objectives – both comp lainants argue that the Panel must 
instead assess the likelihood  of the measure not fulfilling its objectives.242 Honduras also makes 
the preposterous argument that because Australia has adopted a comprehensive approach to 
tobacco control that has successf ully reduced smoking prevalence and consumption, the 
consequences of not further reducing tobacco -related premature deaths and serious disease 
through the tobacco plain packaging measure would not be grave.243  
148. Properly interpreted, the risks that wou ld arise from the non -fulfilment of the public health 
objectives of the tobacco plain packaging measure are significant and grave, and the 
consequences would include increased tobacco -related deaths and disease in Australia.244 This is 
affirmed by the ackn owledgment by Honduras and the Dominican  Republic, respectively, that the 
nature of the serious health risks at issue is a "paramount " concern to any society,245 and that the 
consequences of not fulfilling the measure 's objectives "would be serious and gra ve",246 providing 
unequivocal support for the conclusion that the tobacco plain packaging measure is no more trade -
restrictive than necessary to fulfil its legitimate objectives.  
E. THE COMPLAINANTS HAV E FAILED TO PROPOSE ALTERNATIVE MEASURES  THAT ESTABLIS H 
THAT THE TOBACCO PLA IN PACKAGING MEASURE  IS MORE TRADE -RESTRICTIVE THAN 
NECESSARY  
                                                
241 Australia 's second written submission, para. 527.  
242 Australia 's second written submission, paras.  532, 541 -542; Australia 's comments on responses to 
Panel Question No. 157, paras. 86 -94. 
243 Australia 's second written submission, paras. 545 -547. 
244 Australia 's second written submission, paras. 531 -540, 543 -544; Australia 's first written submission, 
paras. 683 -694; Australia 's comments on responses to Panel Question No. 157, paras. 86 -90. 
245 Australia 's second written submission, para. 540; Honduras ' first written submission, para. 891.  
246 Australia 's second written submission, para. 543; Dominican  Republic 's first written submission, 
para. 1029.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 149. Finally, were the Panel to continue its holistic analysis under Article  2.2, notwithstanding the 
complainants ' failure to establish that the tobacco plain packaging me asure is trade -restrictive 
under a proper interpretation,247 the complainants have failed to discharge their burden of 
proposing reasonably available alternatives that are less trade -restrictive than the tobacco plain 
packaging measure, and that are capabl e of making an equivalent contribution to its public health 
objectives.248  
150. In particular, three of the complainants ' four purported "alternatives " – an increase in excise 
tax, an increase in the minimum legal purchase age for tobacco products, and im proved social 
marketing campaigns – are not alternatives at all, as they constitute variations on existing 
elements of Australia 's comprehensive tobacco control policy.249 Consistent with the findings in 
Brazil – Retreaded Tyres , such measures cannot be a substitute for the tobacco plain packaging 
measure,250 particularly given the importance of a comprehensive approach to tobacco control.251 
Rather, any such substitution would narrow the range of mechanisms deployed in Australia 's 
comprehensive tobacco con trol policy, thereby limiting its ability to impact the broadest range of 
consumers and potential consumers possible and undermining the effectiveness of existing tobacco 
control measures.252 This would weaken Australia 's comprehensive tobacco control poli cy by 
reducing the synergies between its components, as well as its total effect.253 The complainants 
have failed to demonstrate that, within this policy context, any of their three proposed variations 
to existing measures would (or could) make an equivale nt degree of contribution to the objectives 
of the tobacco plain packaging measure.254 
151. Furthermore, the complainants ' criticisms of Australia 's existing measures are entirely 
unfounded, given that Australia: is a world leader in its use of excise as a  tobacco control 
measure255 – a fact that Honduras has expressly acknowledged;256 has in place an extensive and 
dynamic range of policies to restrict youth access to tobacco;257 and is a world leader in its use of 
social marketing campaigns as a tobacco co ntrol strategy.258  
152. With respect to the only actual alternative measure the complainants propose – a pre -
vetting scheme – the complainants have failed to provide any credible evidence or argument to 
support their implausible assertion that the scheme would make "an equivalent or greater 
contribution " to that of the tobacco plain packaging measure when its purpose is to eliminate the 
standardisation  of tobacco  packaging,259 and reinstate tobacco packaging as a vehicle for 
                                                
247 Appellate  Body Report, US – Tuna II (Mexico) , para. 322, fn 647.  
248 Australia 's first written submission, paras. 700 -742; Australia 's second written submission, paras. 
550-569; Australia 's response to Pa nel Question No. 157, paras. 68 -71; Australia 's comments on responses to 
Panel Question No. 157, paras. 74 -95. 
249 Australia 's first written submission, paras. 703 -706; Australia 's second written submission, paras. 
551-554; Australia 's response to Panel Qu estion No. 64, paras. 142 -144; Australia 's response to Panel 
Question No. 148, para. 21.  
250 Appellate  Body Report, Brazil – Retreaded Tyres, paras. 159, 172.  
251 Australia 's first written submission, paras. 38 -49; Australia 's comments on responses to Pane l 
Question No. 159, para. 100.  
252 Australia 's response to Panel Question No. 64, paras. 141 -144; Australia 's second written 
submission, para. 562; Australia 's response to Panel Question No. 148, paras. 26 -27; Australia 's comments on 
responses to Panel Que stion No. 159, para. 102.  
253 Australia 's first written submission, para. 706; Australia 's response to Panel Question No. 64, paras. 
142-144; Australia 's response to Panel Question No. 69, para. 181; Australia 's second written submission, 
paras. 553 -554; A ustralia 's response to Panel Question No. 148, paras. 23 -27; Australia 's response to Panel 
Question No. 157, paras. 38 -40; Australia 's response to Panel Question No. 158; Australia 's comments on 
responses to Panel Question No. 161, paras. 107 -111. 
254 Australia's first written submission, paras. 718 -724; Australia 's second written submission, paras. 
556-562; Australia 's response to Panel Question No. 139, para. 41; Australia 's comments on responses to 
Panel Question No. 157, paras. 74 -80; Australia 's commen ts on responses to Panel Question Nos. 151 and 
165, paras. 56 -57. 
255 Australia 's response to Panel Question No. 158.  
256 Australia 's response to Panel Question No. 158, para. 87.  
257 Australia 's first written submission, paras. 709 -711. 
258 Australia 's first written submission, paras. 713 -717; Australia 's comments on responses to Panel 
Question No. 157, para. 79.  
259 Australia 's first written submission, para. 728; Australia 's second written submission, para. 564.  WT/DS435/R/Add.1 • WT/DS441/R/ Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 advertising and promoting tobac co products.260 In any event, a pre -vetting scheme is not 
"reasonably available " due to the prohibitive costs and burdens it would entail.261  
153. Moreover, the complainants have failed to discharge their burden of proposing alternatives 
that are less trade-restrictive than the tobacco plain packaging measure.262 Under the 
complainants ' abstract "limitation on competitive opportunities " test, their alternatives are in fact 
more trade -restrictive than the tobacco plain packaging measure263 – a conclusion th e 
complainants have sought to obscure through various contrived arguments.264 Furthermore, under 
a proper interpretation of trade -restrictiveness, the complainants explicitly assume that their 
alternatives would be equally restrictive of the volume of trad e in tobacco products in order to 
make an equivalent contribution to the objectives of the tobacco plain packaging measure.265 
There is no basis in WTO jurisprudence for preferring an equally  trade -restrictive alternative to the 
measure at issue.266  
154. Thus, an assessment of the complainants ' proposed alternative measures reinforces the 
conclusion that the tobacco plain packaging measure is no "more trade -restrictive than necessary " 
to fulfil its legitimate objectives under Article  2.2 of the TBT  Agreeme nt.  
VI. CUBA HAS FAILED TO E STABLISH A PRIMA FACIE CASE UNDER ARTICLE  IX:4 OF 
THE GATT  1994  
155. The basis of Cuba 's claim that the tobacco plain packaging measure is inconsistent with 
Article  IX:4 of the GATT  1994 is that the prohibition on the use of th e mark "Habanos " on the 
packaging of Cuba 's large hand -made cigars ( "LHM") materially reduces their value.  
156. This argument is entirely without merit, because: (i) Cuba has failed to establish that 
measures affecting marks other than country of origin ma rks fall within the scope of Article  IX;267 
(ii) even assuming, arguendo,  that other marks, such as the mark "Habanos " fell within scope, the 
Appellate  Body has unambiguously confirmed that Article  IX only disciplines measures that require 
marks of origin,  not measures that prohibit such markings;268 and (iii) Cuba has failed to 
substantiate its assertion that there has been any reduction in the value of Cuban LHM cigars since 
the introduction of the tobacco plain packaging measure, let alone to demonstrate  a "material " 
reduction that is attributable to the prohibition on the use of the mark "Habanos ".269 Each of these 
factors is fatal to Cuba 's argument.  
                                                
260 Australia 's first written submission, para. 728; Australia 's second written submission, paras. 564 -
569; Australia 's response to Panel Question No. 157; Australia 's comments on responses to Panel Question 
No. 157, paras. 84 -85. 
261 Australia 's first written submission, paras. 725 -728, 736, 740;  Australia 's opening statement at the 
second substantive meeting of the Panel, para. 155; Australia 's response to Panel Question No. 157; 
Australia 's comments on responses to Panel Question No. 157, paras. 81 -83. 
262 Australia 's first written submission, p aras. 734 -736, 740; Australia 's second written submission, 
para. 563.  
263 Australia 's first written submission, paras. 734 -736, 740; Australia 's second written submission, 
para. 563; Australia 's opening statement at the second substantive meeting of the Pa nel, para. 156; Australia 's 
response to Panel Question No. 151, paras. 45 -51; Australia 's comments on responses to Panel Question Nos. 
151 and 165, para. 61; Australia 's comments on the Dominican  Republic 's response to Panel Question No. 153, 
paras. 68 -69. 
264 Australia 's comments on responses to Panel Question Nos. 151 and 165, paras. 50 -55. 
265 Australia 's opening statement at the second substantive meeting of the Panel, para. 157; Australia 's 
response to Panel Question No. 151, para. 40; Australia 's comm ents on responses to Panel Question Nos. 151 
and 165, para. 58.  
266 Australia 's comments on responses to Panel Question Nos. 151 and 165, para. 58.  
267 Australia 's first written submission, paras. 750 -751; Australia 's response to Panel Question No. 83; 
Canada's third party written submission, para. 104.  
268 Australia 's second written submission, paras. 577 -578; Australia 's response to Panel Question 
No. 133; Appellate  Body Report, US – COOL (Article  21.5 – Canada and Mexico) , para. 5.356; Australia 's first 
written submission, paras. 745 -749. 
269 Australia 's second written submission, paras. 579 -585; Australia 's response to Panel Question 
No. 137. WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 157. Even assuming, arguendo , that the tobacco plain packaging measure were somehow found 
provisionally inconsistent with Article  IX:4, the measure would benefit from the exception under 
Article  XX(b).270 
158. Given that Cuba has failed to establish a prima facie case that the tobacco plain packaging 
measure is inconsistent with Article  IX:4 of the GATT  1994, Cuba 's claim must be rejected in its 
entirety.  
VII. CONCLUSION  
159. For the reasons stated herein and explained more fully in Australia 's written submissions, 
oral statements, responses to questions from the Panel, and comments on the complainants ' 
respo nses, each of the complainants ' claims in this dispute is unfounded both in law and fact.  
160. Moreover, the complainants ' claims and arguments in this case have disturbing implications 
for all WTO Members considering the adoption of public health measure s and for the WTO dispute 
settlement system itself.271 The improbable standard272 by which the complainants have asked the 
Panel to evaluate Australia 's tobacco plain packaging measure has no foundation in WTO law and 
ignores entirely the policy context in  which public health policymakers discharge their important 
responsibilities.273 The complainants ' claims and arguments in this case threaten the essential right 
of a WTO Member, as consistently recognised by prior panels and the Appellate  Body, to decide 
the level of protection it seeks to achieve when it comes to protecting the lives and wellbeing of its 
citizens.274 
161. Tobacco plain packaging is a legitimate public health measure, based upon an extensive 
body of scientific evidence and the explicit rec ommendations of the Parties to the FCTC. The 
evidence demonstrates that the measure is already contributing to achieving Australia 's public 
health objectives and its effects are likely to grow over the long term. The complainants have 
failed to demonstrate  that this effective tobacco control measure is inconsistent with Australia 's 
obligations under the covered agreements. Australia therefore respectfully requests that the Panel 
reject the complainants ' claims under Articles  2.1 (incorporating Article  6quinquies  A(1) and 
Article  10bis of the Paris  Convention), 15.4, 16.1, 16.3, 20, 22.2(b), and 24.3 of the 
TRIPS  Agreement, Article  2.2 of the TBT  Agreement,275 and Article  IX:4 of the GATT  1994 in their 
entirety.  
 
_______________  
 
                                                
270 Australia 's second written submission, paras. 586 -595; Australia 's first written submission, 
paras.  754-761. 
271 Australia 's closing statement at the second substantive meeting of the Panel.  
272 Australia 's closing statement at the second substantive meeting of the Panel, paras. 7 -22. 
273 Australia 's closing statement at the second substantive meeting of the Pane l, paras. 15 -20, 27 -35. 
274 Australia 's closing statement at the second substantive meeting of the Panel, paras. 30 -32. 
275 Australia notes that in their respective requests for the establishment of a Panel the complainants 
made claims under Article  2.1 of  the TBT  Agreement and Article  III:4 of the GATT  1994 (national treatment). 
The complainants have not pursued these claims in any of their written or oral submissions in these 
proceedings. These claims must therefore be considered to have been abandoned by  the complainants.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 ANNEX  C 
ARGUMENTS OF THE THIRD PARTIES  
Contents  Page  
Annex  C-1 Executive summary of the arguments of Argentina  C-2 
Annex  C-2 Executive summary of the arguments of Brazil  C-6 
Annex  C-3 Executive summary of the arguments of Canada  C-11 
Annex  C-4 Executive summary of the arguments o f China  C-14 
Annex  C-5 Executive summary of the arguments of the European Union  C-18 
Annex  C-6 Executive summary of the arguments of Guatemala  C-22 
Annex  C-7 Executive summary of the arguments of Japan  C-28 
Annex  C-8 Executive summary of the arguments of the Republic of Korea  C-32 
Annex  C-9 Executive summary of the arguments of Malawi  C-34 
Annex  C-10 Executive summary of the arguments of New Zealand  C-37 
Annex  C-11 Executive summary of the arguments of Nicaragua  C-40 
Annex  C-12 Executive summary of the arguments of Nigeria  C-43 
Annex  C-13 Executive summary of the arguments of Norway  C-49 
Annex  C-14 Executive summary of the arguments of Oman  C-53 
Annex  C-15 Executive summary of the arguments of Peru  C-55 
Annex  C-16 Executive summary of the argumen ts of the Philippines  C-56 
Annex  C-17 Executive summary of the arguments of Singapore  C-58 
Annex  C-18 Executive summary of the arguments of South Africa  C-62 
Annex  C-19 Executive summary of the arguments of Chinese Taipei  C-64 
Annex  C-20 Executive summ ary of the arguments of Thailand  C-65 
Annex  C-21 Executive summary of the arguments of Turkey  C-70 
Annex  C-22 Executive summary of the arguments of Uruguay  C-75 
Annex  C-23 Executive summary of the arguments of Zambia  C-77 
Annex  C-24 Executive summary o f the arguments of Zimbabwe  C-79 
 WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 ANNEX  C-1 
EXECUTIVE SUMMARY OF  THE ARGUMENTS OF ARG ENTINA* 
1. Argentina believes that Australia 's plain packaging measure is designed to safeguard public 
health, forms part of the campaign to discourage people from smokin g and was introduced in 
exercise of the State 's regulatory powers. The promotion of tobacco and advertising campaigns for 
tobacco are among the major threats to public health.  
 
2. Argentina sees Article 8 of the TRIPS Agreement as an express recognition of  the scope that 
Members retain under that Agreement to adopt laws and regulations for public policy purposes, 
including the protection of public health.  
 
3. Furthermore, the Doha Declaration on the TRIPS Agreement and Public Health, approved by 
WTO Members  in November  20011, provides a relevant interpretative framework for the scope of 
certain Articles of the TRIPS Agreement.  
 
4. The above -mentioned Declaration not only establishes that the Agreement does not and should 
not prevent WTO Members from taking m easures to protect public health, it also reaffirms the 
right of Members to use, to the full, the provisions of the Agreement which provide flexibility for 
this purpose. It also advocates a balance between States ' powers to pursue health policies and the 
intellectual property rights established in the TRIPS Agreement.  
 
5. Argentina also notes that the Doha Declaration reflects the consensus among WTO Member 
countries in favour of directly applying the principles of interpretation of international law to the  
TRIPS Agreement. Paragraph 5(a) of the Declaration emphasizes the importance of rules such as 
Article 8 of the TRIPS Agreement in interpreting the provisions of the Agreement in the light of 
Article 31 of the Vienna Convention on the Law of Treaties, whic h states that treaties shall be 
interpreted in the light of their object and purpose.2 
 
6. As regards the interpretation of the scope of Article 20 of the TRIPS Agreement in relation to 
the principles established in TRIPS Article 8.1, Argentina considers t hat the Panel should bear in 
mind that this instrument should be implemented in a manner supportive of Members ' right to 
protect public health.  
 
7. Without prejudice to the foregoing, Argentina believes that the standardization of the elements 
of the trade mark (colour, logo, etc.), as provided for by the plain packaging measure, may limit its 
distinctiveness within the meaning of Article 15.1. Such standardization, together with a significant 
reduction in the distinguishing variables of a trademark, may lea d to a certain amount of confusion 
for the consumer.  
 
8. In addition, both Australia and a number of third parties3 have elaborated upon aspects of the 
advertising function of cigarette and tobacco packaging, given that these are high -exposure 
products whi ch consumers carry around with them and display in various settings. For this reason, 
it has been said that tobacco product packaging plays an important role in communicating a 
trademark and is one of a range of marketing measures aimed at various types of  consumer. In 
particular, emphasis has been placed on how cigarette product packaging contributes to 
encouraging young people to take up smoking. It follows, by converse implication, that the 
absence of the above -mentioned elements of the trademark which m ake it attractive, in addition 
to health warnings, may make plain packaging an effective measure for achieving the objectives 
pursued.  
 
9. In Argentina 's view, the prohibition contained in Article 15.4 of the TRIPS Agreement refers to 
the registration of a  trademark, while the plain packaging measure prescribes the modalities for 
                                                
* Original Spanish.  
1 WTO Ministerial Conference, Declaration on the TRIPS Agreement and Public Health 
(WT/MIN(01)/DEC/2, 20  November  2001).  
2 Idem.  
3 Norway's third p arty submission , para. 123. Without prejudice to the Panel 's acceptanc e of unsolicited 
submissions in these proceedings, the issue was also addressed by the World Health Organization in its 
amicus  curiae  submission dated 16  February  2015, p. 9.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 the use of the registered trademark. Consequently, Argentina does not consider Article 15.4 of the 
TRIPS Agreement to refer to the enjoyment of rights, but merely to their availabi lity. Nevertheless, 
Argentina imagines that one of the main objectives of registration, particularly in those countries 
in which registration is constitutive, is the actual use of the registered trademark.  
 
10. Regarding the interpretation of Article 16 of  the TRIPS Agreement, in particular Articles 16.1 
and 16.3, Argentina understands, as the Appellate Body has pointed out4, that the rights conferred 
by these Articles are rights of exclusion granted to the owner of the trademark to "prevent third 
parties f rom using in the course of trade identical or similar signs ". Argentina recalls that the 
purposes of trademark registration include preventing a third party from either registering or using 
a trademark, and it is to these exclusive rights to trademarks tha t the Articles in question refer.  
 
11. It is Argentina 's understanding that by virtue of the requirements established by the Plain 
Packaging Act for the use of a trademark, a new sign is created that is different from the 
registered trademark, and this is why two different signs have coexisted in Australia for the same 
trademark ever since the Plain Packaging Act entered into force: a registered sign of restricted use 
and an unregistered sign the use of which is prescribed.  
 
12. Argentina considers this sit uation to be particularly relevant in the cases referred to in 
Article  16.1 and 16.3 of the TRIPS Agreement and agrees with Japan that the right conferred on 
the trademark owner is a right to exclude.5 
 
13. Argentina also notes that although tobacco plain packaging ensures a standardized form6 of 
trademark use, this use may be subject to variations in the colours, sizes and fonts used, which 
could lead to a proliferation of prescribed trademarks that differ from country to country. 
Argentina therefore belie ves that the use of the trademark in the prescribed form should enjoy the 
same protection as the registered trademark, as the trademark may otherwise be vulnerable to 
unauthorized use.  
 
14. Regarding the issue of geographical indications, Argentina is of t he view that Article 24.3 of 
the TRIPS Agreement should be analysed grammatically. The Spanish version of this Article states 
that the purpose of the obligation not to diminish protection is "la protección de las indicaciones 
geográficas que existía en él inmediatamente antes de la fecha de entrada en vigor del Acuerdo 
sobre la OMC ". In this analysis, "protección " is the nucleus and "de las indicaciones geográficas … " 
the indirect modifier. Consequently, Argentina disagrees with Australia and believes that  the 
purpose of the obligation not to diminish protection concerns the protection of geographical 
indications in general.  
 
15. This interpretation is corroborated by the French version of the Article: "Lorsqu 'il mettra en 
oeuvre la présente section, un Mem bre ne diminuera pas la protection des indications 
géographiques qui existait dans ce Membre immédiatement avant la date d 'entrée en vigueur de 
l'Accord sur l 'OMC." Here again, the reference is clearly to the protection of geographical 
indications in gener al. Indeed, if the text referred to particular geographical indications, it would 
use the plural "qui existaient ". 
 
16. As regards the TBT Agreement 's applicability to this case, Argentina considers that, in 
conformity with the Appellate Body 's analysis in  the case cited by Australia, EC - Bananas III7, 
where a measure is addressed by two or more covered agreements, it is the norm that deals 
specifically and in detail with the particular subject matter that should be applied. In this respect, 
Argentina agre es with Australia that the appropriate legal framework for analysing an alleged 
trademark restriction is the TRIPS Agreement and not the TBT Agreement.  
 
17. However, should the Panel be of the opinion that the TBT Agreement applies to this case, 
Argentina would submit that the complainants ' claim requires that the Panel examine whether the 
                                                
4 US – Section 211 Appropriations Act , paras. 186 -188 (WT/DS176/AB/R) "[…] Article 16 confers on the 
owner of a registered trademark an internationally agreed minimum level of "exclusive rights " that all WTO 
Members must guarantee in their domestic legislation. These exclusive rights protect the owner against 
infringement of the regist ered trademark by unauthorized third parties. " 
5 Japan's t hird party submission, para. 4.  
6 In accordance with Article 46 of the Guidelines for implementation of Article 11 of the WHO Framework 
Convention on Tobacco Control . 
7 Australia's first written sub mission , para. 511.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
- C-4 - 
 
 technical regulation that regulates the physical aspect of the plain packaging is necessary under 
Article 2.2 of the TBT Agreement. In this respect, Argentina recalls tha t the issue of necessity has 
been analysed8 in previous cases, and it was understood that the jurisprudence under Article XX of 
the GATT 1994 was relevant to the interpretation of the term "necessary " under the 
TBT Agreement.  
 
18. Article 2.2 of the TBT Ag reement establishes that "technical regulations shall not be more 
trade -restrictive than necessary to fulfil a legitimate objective … ". In fact, the rule itself includes, 
among the legitimate objectives, "protection of human health or safety ". Moreover, t he Panel in 
US — Clove Cigarettes " … considered it to be self -evident that the objective of reducing youth 
smoking is a "legitimate " one".9 
 
19. Argentina is of the view that it might be useful, in carrying out an analysis to determine 
whether or not a me asure is inconsistent under Article 2.2 of the TBT Agreement, to bear in mind 
that the Article can be split into two sentences, the first of which provides that: "Members shall 
ensure that technical regulations are not prepared, adopted or applied with a v iew to or with the 
effect of creating unnecessary obstacles to international trade ". 
 
20. The second sentence states that: "For this purpose, technical regulations shall not be more 
trade -restrictive than necessary to fulfil a legitimate objective, taking account of the risks 
non-fulfilment would create ". 
 
21. As regards the legitimate objectives, this Article provides a non -exhaustive list that expressly 
includes those mentioned below:  
 
"Such legitimate objectives are, inter alia: national security require ments; the prevention of 
deceptive practices; protection of human health or safety, animal or plant life or health, or the 
environment. In assessing such risks, relevant elements of consideration are, inter alia: available 
scientific and technical informat ion, related processing technology or intended end -uses of 
products ". 
 
22. In order to determine whether a measure violates the provisions of Article 2.2, we need to 
consider the following points:  
 
(a) The link between the first and second sentence: the pr ovisions contained in the first 
and second sentences do not refer to different obligations, but to the same obligation. In 
US - Clove Cigarettes , the Panel stated that it sufficed to note that the second sentence 
was introduced by the words "for this purpo se", thereby establishing a direct link 
between the two sentences and implying that the second explained the meaning of the 
first.10 
 
(b) In both US - Clove Cigarettes11 and US - Tuna II , the Panel established a two -step review 
mechanism to analyse the compl iance of the challenged technical regulations with the 
provisions of Article 2.2. Under that mechanism, to determine whether a technical 
regulation was in conformity with the said provisions, the Panel had to:  
(i) ascertain whether that regulation pursued or fulfilled a legitimate objective;  
(ii) if that were the case, examine whether the provisions of the regulation were more 
trade -restrictive than necessary to fulfil that objective, taking into account the risks 
non-fulfilment would create.  
(c) The notion  of "necessity " is reflected in both the first and second sentences of Article  2.2, 
through the reference in the first sentence to "unnecessary obstacles to international 
trade ", and in the second sentence to "not … more trade -restrictive than necessary ". As 
the Appellate Body observed in US  – Tuna II (Mexico), the assessment of "necessity ", in 
the context of Article 2.2, involves a "relational analysis " of the following factors:  
(i) the trade restrictiveness of the technical regulation;  
                                                
8 Panel Report, US - Clove Cigarettes , paras. 7.353 -7.368.  
9 Panel Report , US - Clove Cigarettes , para.  7.347.  
10 Document WT/DS406/R, fn 618.  
11 Document WT/DS406/R.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 (ii) the degree of contribution that it makes to the achievement of a legitimate 
objective;  
(iii) the nature of the risks at issue and the gravity of the consequences that would arise 
from non -fulfilment of the objective(s) pursued by the Member through the 
measure.  
 
23. In a particular case, a panel 's determination of what is considered "necessary " will be based on 
a consideration of all these factors.  
 
24. By its terms, Article 2.2 of the TBT Agreement requires an assessment of the necessity of the 
trade restrictiveness of the measure at issue. In this regard, the Appellate Body in US – Tuna II 
(Mexico)  defined "trade -restrictive " to mean "having a limiting effect on trade ". Moreover, it found 
that the reference in Article  2.2 to "unnecessary obstacles " implied that "some " trade 
restrictiveness was allowed and, further, that what was actually prohibited were those restrictions 
on international trade that "exceed what is necessary to achieve the degree of contribution that a 
technical regulation makes to the achievement of a l egitimate objective ". 
 
25. In US - Tuna, the Panel stated that the burden rested with Mexico, as the complainant, to 
demonstrate that the conditions were met to conclude that a violation of Article 2.2 of the 
TBT Agreement existed.12 
 
26. In US - Tuna II (M exico) , the Appellate Body found that the term "fulfil" was concerned with 
the degree of contribution that the technical regulation makes towards the achievement of the 
legitimate objective.13 This finding was based on the wording of the sixth recital14 of the preamble 
to the TBT Agreement, which provides that, subject to certain qualifications, a Member shall not be 
prevented from taking measures necessary to achieve its legitimate objectives "at the levels it 
considers appropriate ". 
 
27. Argentina agrees th at the objective of protecting public health is legitimate per se  and that, 
although the objective of reducing the attractiveness of products is not in itself legitimate, it is so 
in this dispute, given the harmful nature of tobacco products.  
 
28. As for t he value that should be assigned to the WHO Guidelines, Argentina agrees with the 
Panel in US - Clove Cigarettes  that the Guidelines "are non -binding on parties "15 and that "the 
WHO Partial Guidelines do not necessarily apply directly to the particular regu latory needs of a 
particular country. "16 It also agrees that these Guidelines, "'drawing on the best available scientific 
evidence and the experience of Parties ', do show a growing consensus within the international 
community to strengthen tobacco -control p olicies … ".17 
 
29. Lastly, with regard to the differences in the interpretation of the term "unjustifiable ", found in 
the chapeau  of Article XX of the GATT 1994, and the term "unjustifiably ", in Article 20 of the 
TRIPS  Agreement, and bearing in mind the di fference in the regulatory structure of Article XX of 
the GATT 1994 and Article 20 of the TRIPS Agreement, Argentina wishes to emphasize, above all, 
that, in its view, each of the above -mentioned articles, as well as the terminology used therein, 
should be  interpreted in the light of the Agreement in which it appears.  
 
30. Accordingly, Argentina believes that the notion of "unjustifiable impediment " should be 
interpreted in the light of the provisions of the TRIPS Agreement, taking into account the 
Agreemen t's objectives and purposes in accordance with the Doha Declaration, without 
extrapolating the application of Article XX of the GATT.  
                                                
12 Document WT/DS381/R.  
13 Appellate Body Report, US – Tuna II (Mexico) , para. 315. 
14 The sixth recital reads as follows: " Recognizing that no country should be prevented from taking 
measures necessary to ensure the quality of its exports, or for the protection of human, animal or plant life or 
health, of the environment, or fo r the prevention of deceptive practices, at the levels it considers appropriate, 
subject to the requirement that they are not applied in a manner which would constitute a means of arbitrary 
or unjustifiable discrimination between countries where the same c onditions prevail or a disguised restriction 
on international trade, and are otherwise in accordance with the provisions of this Agreement [.]" 
15 United  States – Measures Affecting the Production and Sale of Clove Cigarettes,  WT/DS406/R, 
para. 7.230.  
16 Ibid. 
17 Ibid. WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 ANNEX C -2 
EXECUTIVE SUMMARY OF  THE ARGUMENTS OF BRA ZIL 
I. The FCTC as a global public health treaty  
 
1. The WHO Framework  Convention on Tobacco Control (FCTC) became the first global public 
health treaty and is nowadays considered the most widely embraced treaty in the United Nations ' 
history with 180 Parties. The FCTC recognizes that the spread of the tobacco epidemic is a global 
problem with serious consequences for public health. Scientific evidence has unequivocally 
established that tobacco consumption and exposure to tobacco smoke cause death, disease and 
disability. Furthermore, as tobacco use may have severe economic i mpact on health systems, it 
poses a heavier burden on developing and least developed countries. Accordingly, the FCTC calls 
for the widest possible international cooperation to achieve an effective, appropriate and 
comprehensive international response. Bra zil believes that the effective implementation of the 
FCTC represents an important legacy to present and future generations. In this sense, it is 
important to bear in mind that the Convention is above all an evidence -based treaty that reaffirms 
the right o f all people to the highest standards of health.  
2. Since its entry into force, the FCTC has been providing governments with important 
guidance and cooperation opportunities to enhance their national tobacco -control policies., 
Article  2.1 of the FCTC encou rages Parties to implement measures beyond those required by its 
provisions and protocols, even to impose stricter requirements, as long as they are consistent with 
the Convention and are in accordance with international law. Brazil is also convinced that it is of 
great importance to maintain tobacco control efforts up -to-date with any changes in the tobacco 
market and with new control strategies, as well as to continuously base it on current and relevant 
scientific, technical and economic considerations.  
II. Article 2.1 of the FCTC and the guidelines of the Conference of Parties.  
 
3. Under Article 2.1 of the FCTC, Parties are not merely allowed to exceed the Convention in 
terms of measures for tobacco control, but they are encouraged to do so, especially w hen read in 
the context of other provisions. For example, Article 5.1 of the FCTC, under "General Obligations ", 
establishes that "[e]ach Party shall develop, implement, periodically update and review 
comprehensive multisectoral national tobacco control str ategies, plans and programmes in 
accordance with this Convention and the protocols to which it is a Party ". Moreover, the second 
part of Article 2.1 makes clear that "(…) nothing in these instruments shall prevent a Party from 
imposing stricter requirement s (…) ". The preamble of the Convention deems it necessary both "to 
be alert to any efforts by the tobacco industry to undermine or subvert tobacco control efforts " and 
to "promote measures of tobacco control based on current and relevant scientific, techni cal and 
economic considerations ".   
 
4. Brazil believes that FCTC guidelines should be taken into consideration as relevant context, 
especially if such guidelines are to be qualified as relevant international standards under Article 2.5 
of the TBT Agreemen t. In the US -Clove Cigarettes dispute, for example, the Panel clearly 
expressed its awareness of the "important international efforts to curb smoking within the context 
of the WHO FCTC and its WHO Partial Guidelines " and considered the FCTC guidelines rele vant to 
its understanding that the existence of "extensive scientific evidence supporting the conclusion 
that banning clove and other flavoured cigarettes could contribute to reducing youth smoking ".  
This view was shared by the Appellate Body, which also recognized the importance of Members ' 
efforts on tobacco control in the World Health Organization and expressed its belief that nothing in 
the Covered Agreements is to be interpreted as preventing Members from devising and 
implementing public health polici es generally, and tobacco -control policies in particular.   
 
5. At the same time that Article 2.1 of the FCTC requires that measures going beyond the 
Convention are to be in accordance with international law, which naturally includes international 
trade la w, WTO Covered Agreements fully recognize and respect the sovereign right of Members to 
take regulatory measures in response to legitimate public health concerns.  
 
III. The WTO recognizes Members ' right to protect public health.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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6. As recognized at the 4 th Ministerial Meeting of the WTO in Doha 2001, nothing in the WTO 
rules prevents its Members from taking measures for the protection of human life or health, at the 
levels they consider appropriate, provided that such measures are (i) neither applied in a  manner 
which would constitute a means of arbitrary or unjustifiable discrimination between countries 
where the same conditions prevail, (ii) nor represent a disguised restriction on international trade, 
(iii) otherwise in accordance with the provisions of  the WTO Agreements.  
  
7. Specifically in what concerns commitments under the TRIPS Agreement, WTO Members 
adopted the Declaration on the TRIPS Agreement and Public Health at the Doha Ministerial 
Conference, where they agreed that such Agreement does not and should not prevent members 
from taking measures to protect public health. At the same time, the right of Members to use, to 
the full, the provisions in the TRIPS Agreement, which provide flexibility for such purpose, was 
reaffirmed. WTO Members recogni zed that these flexibilities included, among others, the 
imperative of having each provision of the TRIPS Agreement read in the light of its object and 
purpose (Articles 7 and 8), when applying the customary rules of interpretation of public 
international law. Brazil agrees that the protection of human health is of utmost importance and 
that the Covered Agreements in general and the TRIPS Agreement in particular afford Members 
enough policy space to pursue such objective. Nonetheless, Brazil believes that i n pursuing its 
public policies objectives, Members must take into consideration the rights and obligations under 
the WTO, and the need to ensure a proper balance between them.  
 
IV. Use of a registered trademark in the course of trade  
 
8. The very fact th at trademarks are protected under the WTO evidences that such intellectual 
property is important to the multilateral trading system, particularly in what concerns fair 
competition and market access. As emphasized in the Amicus curiae brief of Brazil 's Nati onal 
Confederation of Industry (CNI), trademarks are important assets to companies that have 
long-term plans to grow on a worldwide scale.  Likewise, the Brazilian Intellectual Property 
Association (ABPI) recalled that considerable investments are made int o the creation, development 
and protection of trademarks, as they are deemed essential to the success of business operations 
domestically and abroad.   
 
9. Although the use of a registered trademark in the course of trade is not an automatic step 
following  registration (as there could be several government requirements to be fulfilled 
beforehand), Brazil understands that the registration of a trademark does entail an expectation of 
use, and a very legitimate one, that would not only give concrete expression  to the protection 
conferred under TRIPS Agreement to trademarks, but also ensure that they can fulfill their 
socio-economic function. As the Panel in the EC -Geographical Indications dispute affirmed, the 
function of trademarks, as described in Article 15. 1 of the TRIPS Agreement, can be understood as 
distinguishing goods and services of undertakings in the course of trade. Accordingly, every 
trademark owner has a legitimate interest in preserving the distinctiveness, or capacity to 
distinguish, of his trad emark so that it can perform that function. If the function of a trademark is 
to distinguish goods and services, then such function can only be fulfilled if: (i) third parties are 
prevented from using identical/similar signs for identical/similar goods or services where such use 
would result in a likelihood of confusion and (ii) the trademark is actually used in the course of 
trade. Accordingly, the TRIPS Agreement expressly grants owners of registered trademarks 
exclusive rights in relation to the first co ndition (Article 16.1) and, in relation to the second 
condition, it prohibits Members from unjustifiably encumbering the use of a trademark in the 
course of trade with special requirements (Article 20). Brazil is aware that nowhere in the 
TRIPS  Agreement i s found a provision such as "the owner of a registered trademark shall have the 
right to use it in the course of trade ". Yet, it also seems clear that Article 20 not only recognizes 
the importance of use of a trademark in the course of trade for it to fulf ill its socio -economic 
function, but it also protects such use from special requirements that would otherwise unjustifiably 
encumber it.  
 
V. Article 20 of the TRIPS Agreement protects registered trademarks from having its 
use unjustifiably encumbered by s pecial requirements.   
 
10. Brazil understands that Article 20 of the TRIPS Agreement establishes a clear obligation on 
WTO Members not to unjustifiably encumber the use of a trademark in the course of trade with 
special requirements. This obligation takes  into account the importance of use for a trademark to WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 fulfill its socio -economic function, but at the same time, if read jointly with Article 8.1, it does not 
prevent Members from adopting measures to protect public health. In this sense, if a WTO Member 
believes that another Member has adopted a measure inconsistent wi th the obligation under 
Article  20, it would have to adduce evidence on its favor, whereas the respondent would still need 
to demonstrate otherwise.  
 
11. In Brazil 's view, the term "special requirements " under Article 20 would not be restricted to 
requirements specifically applicable to individual trademarks, so that any horizontal requirement 
would be automatically deemed unjustifiable, thus inc onsistent with this provision. Brazil 
understan ds that the term "special requirements " in Article 20 may also refer to requirements 
applicable to a group of related trademarks, not just to an individual trademark.  Consequently, 
the fact that a measure at issue is horizontal does not seem to be in itse lf proof of violation of 
Article 20 of the TRIPS Agreement.  
 
12. Brazil is also not convinced that the prohibition of use of trademarks would be out of the 
scope of Article 20 of the TRIPS Agreement. This article provides a non -exhaustive list of examples  
of special requirements (introduced by the term "such as ") that could represent an encumbrance 
to the use of trademarks, and this list per se does not exclude prohibition of use from the scope of 
the Article. According to dictionary definition, Brazil und erstands that "encumbering the use " would 
be equivalent to "impeding the use ", thus prohibitions do seem to be a form of encumbrance – 
probably the most radical one if compared to the examples provided in Article 20. Furthermore, if 
prohibition of use was deemed to be out of the scope of Article 2 0, then a loophole in the 
TRIPS  Agreement could be created, whereby it would be possible to circumvent the obligation of 
no-unjustifiable -encumbrance by prohibiting the use of trademarks altogether.  
 
V.1   Interpr etation of the expression "use of a trademark in the course of trade ". 
13. Brazil does not consider that the fact that a market for a given product is considered "dark" 
(i.e. the consumers only see the product after the purchase, that is, after the course of trade is 
concluded) has a bearing in the scope of Article 20.  The expression "use of a trademark in the 
course of trade " under Article 20 of the TRIPS Agreement is better understood as an opposition to 
other uses of a trademark which are of no concern to the WTO, such as use in letterheads, 
promotional material and advertisement, or even under sponsorship contracts. If jointly read with 
Article 15, the expression "use of a trademark in the course of trade " seems to restrict the scope 
of the provision to  the situation where trademarks are applied to goods or services in order to 
distinguish goods and services of one undertaking from those of oth ers. Thus, the scope of 
Article  20, particularly in what concerns the expression "use of a trademark in the cour se of 
trade ", is not subject to when or whether consumers actually get in direct contact with products 
and their trademarks.  
 
V.2   The assessment of whether an encumbrance posed by a measure at issue is 
 unjustifiable.  
14. For Brazil, the term "unjustifia bly" as expressed in Article 20 of the TRIPS Agreement is 
associated with the term "encumbered " and not with the expression "special requirements ". 
Therefore, what seems to be central to the analysis of consistency with Article 20 is not so much 
whether a measure is unjustifiable, but whether the encumbrance it poses to the use of a 
trademark is unjustifiable. Accordingly, Brazil believes that, when assessing whether a special 
requirement unjustifiably encumbers the use of a trademark in the course of trade , it may not 
suffice to demonstrate the lack of a rational connection between the measure at issue and a 
certain policy objective. Rather, complainants would have to demonstrate that the encumbrance 
posed by the measure is not commensurate with the importa nce of the objective pursued. 
Likewise, it would not suffice for the respondent to explain the reasons for adopting a given 
requirement: it would also have to adduce evidence in order to prove there is a balance between 
the importance of the objective purs ued and the encumbrance posed by its measure. 
Consequently, if the encumbrance posed by a special requirement is demonstrated to be excessive 
in relation to the importance of the objective pursued, it would probably not be justifiable at the 
same time.  
 
15. The term "unjustifiably " aims to achieve a fair balance between a Member 's ability to 
regulate and its obligation to refrain from encumbering how a trademark may be used.  Thus, 
more than the assessment of whether the objective pursued is legitimate and whether there is a WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 rational connection between the measure at issue and such objective, the term "unjustifiably " 
seems to add to the standard of analysis the question of whether the encumbrance posed by the 
measure is commensurate/equivalent to the importa nce of the objective pursued  
 
VI. TBT and Articles 2.2 and 2.5  
 
16. Brazil understands that a measure may fall under more than one of the Covered 
Agreements. In this sense, a measure dealing with intellectual property issues may also be a 
technical regulat ion within the meaning of the TBT Agreement insofar as it deals with product 
characteristics, labelling or other TBT -related matters concerning trade in products. The analysis of 
the TBT Agreement and the TRIPS Agreement should be independent from one anot her, as there is 
not a relationship of lex specialis between them. While the TBT Agreement deals with technical 
regulations and their effects on the trade of goods, the TRIPS Agreement establishes Intellectual 
Property Rights in what they relate to trade. They integrate different annexes of the Marrakesh 
Agreement and deal with substantially different obligations and the inconsistency of the obligations 
in one of them does not bring about necessarily a violation of the other.  
 
17. As regards the degree of contribution of a measure to its stated objective, Brazil considers it 
should be discerned by the design, structure and operation of the measure; the evidence relating 
to the application of the measure should be taken into account as an objective piece of 
information. In situations where measures have been only recently implemented, the panel may 
want to include in its assessment not only evidence of the impacts of actual application of the 
measure, but also take into account what the measure – in light of its design and structure – may 
achieve in a longer temporal perspective. Given the fact that the adopted measures are inserted in 
an overall strategy which contains other measures, the attainment of its stated objectives may 
sometimes only be fully discern ed in the interplay of all elements of the strategy and over the 
course of time.  
 
18. The analysis of the measure should start with article 2.5, both in what concerns the 
compatibility with a relevant international standard as well as with the presence of a legitimate 
objective. This order of analysis makes procedural sense, because if the two conditions above are 
fulfilled and not rebutted, a presumption of compatibility with article 2.2 emerges: the measure 
does not create an unnecessary obstacle to inter national trade.  As regards the objectives, while 
there may be other legitimate objectives under the TBT Agreement, only those explicitly 
mentioned in article 2.2 will generate a rebuttable presumption.  
 
19. Article 2.5, second sentence, establishes a reb uttable presumption of compatibility with 
Article 2.2 for those technical regulations prepared, adopted or applied to fulfil a legitimate 
objective and that are in accordance with relevant international standards. Brazil understands that 
the nature of the second sentence of Article 2.5 is not of an exception, but of a conditioned 
procedural right. The relevant implication of this conclusion is that the responding party is required 
only to establish – on a prima facie  basis - that the challenged measure is i n accordance with an 
international standard and fulfils a legitimate objective: the burden is then shifted to the 
complaining party to demonstrate that the measure either does not comply with these two 
conditions or does create unnecessary obstacles to int ernational trade. This view is confirmed by 
the last sentence of Article 2.5.  In this sense, Brazil also believes that the jurisprudence of the 
Appellate Body in EC – Hormones regarding the relationship between Articles 3.1, 3.2 and 3.3 of 
the SPS Agreeme nt can be of relevance in the interpretation of Articles 2.2 and 2.5.  
 
20.  Two requirements must be met in order for a technical regulation to fall under Article 2.5. 
As regards the first, the technical regulation must be prepared, adopted or applied for  one of the 
legitimate objectives explicitly mentioned in paragraph 2. Therefore, while there may be other 
legitimate objectives under the TBT Agreement, only "national security requirements; the 
prevention of deceptive practices;  protection of human healt h or safety, animal or plant life or 
health, or the environment " may generate a rebuttable presumption for measures under 
Article  2.5. With respect to the second requirement, related to the concept of "international 
standardizing bodies ", Brazil would like  to recall that, contrary to the SPS Agreement (Annex A 
(3)), the TBT Agreement does not have a list of international standardizing organizations explicitly 
listed in its text; the TBT could then be seen as being more welcoming to new standardizing bodies 
than the SPS Agreement. The jurisprudence in US –Tuna II  may be useful in determining whether 
the entity in question is an international standardizing body. In that case, the Appellate Body 
understood that the  body's membership must be open to the relevan t bodies of at least all WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 Members, be active in the action of standardization and be recognized as such. These criteria 
should be addressed, according to the Appellate Body, "in a holistic manner ". 
 
Conclusion  
 
21. It is unequivocal that tobacco is a unique  product, and that efforts under the FCTC represent 
the increasing global commitment to counteract the devastating consequences of tobacco 
consumption and exposure to tobacco smoke. Furthermore, it is recognized that nothing in the 
WTO's Covered Agreements  prevents its Members from taking measures for the protection of 
human life, including those that may affect intellectual property. Brazil believes that the Panel 's 
interpretations and findings can and should contribute to give proper balance to, on the on e hand, 
policy space for governments in the application of legitimate measures to protect public health, 
and on the other, rights and obligations under WTO Agreements.  
 WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 ANNEX C -3 
EXECUTIVE SUMMARY OF  THE ARGUMENTS OF CAN ADA 
I  THE TRIPS AGREEMENT  
A. The r ole of Articles 7 and 8.1 of the TRIPS Agreement and paragraph 4 of 
the Doha Declaration on Public Health in the interpretation of the 
TRIPS  Agreement  
1.  Articles 7 and 8.1 of the TRIPS Agreement and paragraph 4 of the Doha Declaration on Public 
Health pr ovide the lens through which the TRIPS Agreement must be interpreted. Paragraph 4 of 
the Doha Declaration on Public Health elaborates upon the principles and objectives articulated in 
Articles 7 and 8.1 of the TRIPS Agreement, and comprises part of the rel evant interpretive 
context. The Doha Declaration on Public Health clearly and expressly directs how the provisions of 
the TRIPS Agreement are to be interpreted. It meets the test set out by the Appellate Body in 
US – Clove Cigarettes  as a "subsequent agree ment between the parties " within the meaning of 
Article 31(3)(a) of the Vienna Convention.1 The Panel therefore needs to take it into account in the 
interpretation of the provisions of the TRIPS Agreement.  
B. Article 2.1 and Article 10 bis of the Paris Conv ention  
2.  Canada recalls that the first paragraph of TRIPS Article 2 incorporates by reference certain 
provisions of the Paris Convention, including Article 10 bis. Article  10bis of the Paris Convention is 
comprised of two components: an obligation and a d efinition. The first paragraph establishes the 
obligation to assure to nationals of the other countries of the Paris Union effective protection 
against unfair competition. The second and third paragraphs set out a definition of "unfair 
competition " and an illustrative list of acts, allegations, and indications that are expressly 
prohibited.  
3.  The ordinary meaning of the terms in the context of Article 10 bis suggests that the phrase "act 
of competition " is concerned solely with the commercial behaviour of actors competing in the 
market. Where a Member through its measures is regulating  the market or its private actors, such 
measures do not constitute "acts of competition " and fall outside the scope of the definition of 
"unfair competition " under Article 10 bis. 
C. Article 15.4  
4.  The complainants confuse two concepts that are distinct under Section 2 of the 
TRIPS  Agreement: 1) registration, and 2) rights that flow from registration. Article 15.4 only 
obliges Members to ensure that the "nature of the goods " do not form an obstacle to registration  
of the trademark. Article 15.4 neither addresses protections flowing from trademark registration, 
nor establishes a right to use a registered trademark. Further, contrary to the complainants ' 
assertions, Article 15.4  does not guarantee an opportunity, or grant a right, to acquire 
distinctiveness for non -inherently distinctive signs. This would create a right to use a sign if that 
sign has the potential to become a trademark, which is not a right protected under the TR IPS 
Agreement. A finding of a right to use a sign or trademark under the TRIPS Agreement would 
effectively restrict Members ' ability to take legitimate measures to protect public health. Members 
have clearly and unequivocally preserved the freedom to regul ate in the interest of protecting 
public health and this is evident in TRIPS Articles 7 and 8.1, and paragraph 4 of the Doha 
Declaration on Public Health. The TRIPS Articles in issue, including Article 15.4, must be 
interpreted in a manner supportive of a Member 's right to protect public health.  
                                                
1 Appellate Body Report, US – Clove Cigarettes , para. 262.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 D. Articles 16.1 and 16.3  
5.  The single right conferred on the owner of a registered trademark under Article  16.1 is set out 
in the first sentence.  As confirmed by a previous panel , this right consists only of the  trademark 
owner 's entitlement to prevent third parties  from unauthorized use where such use would result in 
a likelihood of confusion.2 Contrary to the complainants ' arguments, WTO Members are not obliged 
under Article 16.1, or elsewhere in the TRIPS Agre ement, to preserve or strengthen either the 
mark or the owner 's ability to successfully demonstrate a "likelihood of confusion ". Underlying the 
complainants ' argument under Article 16.3 is a claim of a right to use a mark in order to acquire or 
maintain st atus as a "well-known " mark. Article 16.3 does not establish a right to use a mark. It 
follows from this that the provision also does not protect a mark 's status or ability to acquire 
status as a "well-known " mark.  The complainants ' interpretation of Arti cle 16.1 and Article 16.3 is 
not supported by the text, the negotiating history, case law, or TRIPS Article 8.1 and paragraph 4 
of the Doha Declaration on Public Health, and must be rejected.  
E. Article 20  
6.  Article 20 disciplines certain requirements th at Members can impose on how a trademark is 
used. If a panel finds that the measure constitutes a "special requirement "; that "encumbers "; the 
"use" of a trademark; "in the course of trade " it must then determine whether the measure is 
"unjustifiable ". If a panel finds in the affirmative, then the measure violates Article 20.  
7.  In terms of the allocation of the burden of proof to demonstrate that a measure is 
"unjustifiable ", Canada disagrees with the complainants that the burden shifts to the defending 
Member to prove that a measure is "justifiable ". The word "unjustifiably " in the text does not 
create an exception but rather comprises a component of the affirmative obligation. Therefore the 
complainants must show, as part of their prima facie  case, that the Australian measure is 
"unjustifiable ". 
8.  It is essential that the test established to determine whether a special requirement is 
"unjustifiable " safeguards the integrity of the obligation under Article  20 while ensuring regulatory 
flexibility to prot ect public health. Having regard for the ordinary meaning of the words, existing 
case law, and relevant context, including other TRIPS provisions and the Doha Declaration on 
Public Health, Canada proposes that the elements to be examined in determining whe ther a 
requirement is "unjustifiable " under Article 20 constitute the following: 1) whether the objective of 
the requirement is legitimate. This element involves identifying the objective of the requirement 
and determining whether it is "legitimate "; 2) wh ether there is a rational connection between the 
requirement and the legitimate objective; 3) whether the requirement contributes to the objective; 
and 4) the extent to which the requirement encumbers how a trademark can be used. Ultimately, 
a determinatio n of whether the measure in issue is "unjustifiable " must be made on a case -by-
case basis taking into account all relevant facts, and weighing and balancing these elements.  
II.  THE TBT AGREEMENT - ARTICLES 2.2 AND 2.5  
9.  In response to the Parties ' argum ents regarding the app licability of the TBT and 
TRIPS  Agreements, Canada considers that these agreements are not mutually exclusive – both can 
apply to the same measure, including a measure that deals with intellectual property.  
10.  With respect to Articl e 2.2, Canada considers that the Appellate Body 's findings regarding the 
assessment of contribution  of a measure to its objective in US – COOL (21.5) and Brazil -Retreaded 
Tyres  are particularly relevant to this case. In particular, that the measure 's objec tive, its 
characteristics, and the nature, quantity, and quality of evidence that is available will have a 
bearing on whether the measure 's degree of contribution can be assessed in quantitative or 
qualitative terms, and will influence the degree of precis ion of that analysis.3 Further that a panel 
may rely on a qualitative analysis in assessing the contribution of a measure to the realization of 
the objective pursued by it4 and when dealing with measures that form part of a comprehensive 
strategy to addres s a public policy issue, the contribution that any proposed alternative measure 
                                                
2 Panel Report, EC – Trademarks and Geographical Indications (US) , fn. 558.  
3 Appellate Body Report, US – COOL (Article 21.5 – Canada and Mexico) , para. 5.211.  
4 Appellate Body Reports , Brazil – Retreaded Tyres , paras. 146, 151 -153; and US – COOL (Article  21.5 – 
Canada and Mexico) , para. 5.209.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 would make to the achievement of the objective must be viewed in the light of any decreased 
effectiveness of other measures within the strategy that could result from substitut ing the 
challenged measure.5 
11.  Further, it is the overall degree of contribution that a measure makes to its objective that is 
relevant in identifying the contribution of the measure in issue, rather than any isolated aspect of 
contribution; which remai ns the case even where a measure deploys various methods or 
techniques that jointly or separately contribute to achieving the objective.6 Further, a panel may 
conclude that an alternative measure that might otherwise have been found to make an equivalent 
degree of contribution to the achievement fails to do so because, for example, the objective is of 
vital importance, the nature of the risks involve human health, or the severity of the consequences 
of non -fulfilment of the objective are grave.7 
12.  A find ing by the Panel that the FCTC Guidelines8 are "relevant international standards " for the 
purposes of Article 2.5, and the Australian measures are "in accordance " with these standards 
would create a rebuttable presumption that the measures are not unnecess ary obstacles to trade. 
The standard of proof that the Panel would require of the complainants to demonstrate that the 
Australian measures violate Article  2.2 must be higher than that required to make out 
a prima  facie case as it must reflect such a findin g of a rebuttable presumption.  
III.  THE GATT 1994 - ARTICLE IX  
13.  A "mark of origin " for the purposes of Article IX:4 is not a trademark or a geographical 
indication. Rather it is a country of origin marking such as "product of Canada " or "made in 
Canad a". Paragraph 4 of Article IX stipulates that a Member 's laws and regulations relating to the 
marking of imported products must permit compliance without, inter alia , materially reducing their 
value. The phrase "permit compliance " in Article IX:4 illustrat es the purpose of the provision, 
which is to discipline how compliance with a marking requirement may be prescribed. The 
provision serves only to limit a Member 's laws and regulations relating to marking requirements in 
terms of how compliance  with such re quirements can be prescribed.  
 
 
                                                
5 Appellate Body Report , Brazil – Retreaded Tyres , para. 172.  
6 Appellate Body Report, US – COOL (Article 21.5 – Canada and Mexico) , para. 5.255.  
7 Ibid. para. 5.254.  
8 WHO Framework Convention on Tobacco Control: guidelines for implementation  (2013 Edition).  
(Exhibit AUS -109) WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 ANNEX C -4 
EXECUTIVE SUMMARY OF  THE ARGUMENTS OF CHI NA 
I.  INTRODUCTION  
1.  China first present s its general view that WTO Members are entitled to adopt appropriate 
measures for protection of public health. T hereafter , China  provide s observations on the claims 
made by the complainants under Articles 2.1, 16.1, 16.3, 20, 22.2(b)  and 24.3 of the 
TRIPS  Agreement  and the claims under Article 2.2 of the TBT Agreement.  
II. WTO  MEMBERS MAY TAKE APPROPRIATE MEASURES FOR PROTECTION O F 
PUBLIC  HEALTH  
2.  The present disputes involve a general question whether and, if so, to what extent 
WTO Members may take public health measures under the WTO Agreements. A lthough trade 
interests are main concerns under the WTO system  which is a multilat eral trading system , 
WTO Agreements recognize and accommodate societal values and interests, such as protection of 
public health which is "both vital and important in the highest degree "1. WTO Members are entitled 
to take appropriate public health measures . However, Members have no unlimited discretion to 
adopt public health measures, but should ensure that the measures they take are not 
WTO-inconsistent.  
3.  As to the tobacco plain packaging measures (PP measure) at issue, China shares the view of 
Australi a that tobacco use seriously harms human life and health and notes that the complainants 
do not take issue with this. A s a matter of fact, Chinese government  has been developing and 
applying various effective measures to control tobacco use . China further notes that the scope of 
the measures being challenged in these disputes is limited. Australia applies a comprehensive 
range of tobacco control measures. The complainants do not challenge measures other than the 
PP measure in these disputes. In addition, ce rtain claims aim at only limited aspects of the PP 
measure. For instance, claims under Articles 16.1, 16.3 and 20 appear to concern only the 
PP "trademark requirements ", and not the PP "form requirements ".  
III. OBSERVATIONS ON CERTAIN CLAIMS UNDER THE TRI PS AGREEMENT  
A.  Claims Under Article 16.1  
4.  The Panel need s to consider whether a trademark owner has rights or interests to use its own 
trademark and whether its own use of the trademark is a necessary condition for it to effectively 
exercise the right to prevent unauthorized third party 's use conferred by Article 16.1 . 
5.  The panel in EC – Trademarks and Geographical Indications (Australia)  stated that every 
trademark owner has  "a legitimate interest in preserving the distinctiveness, or capacity to 
distinguish, of its trademark so that it can perform that function ", including  the interest in using  its 
own trademark in connection with the relevant goods and services .2 This statement appears to 
confirm that the inherent nature of a trademark requires it  to be used in the course of trade, being 
either a right to use or a minimum opportunity of use. Article 20 also supports this interpretation. 
It implies that the owner of a trademark has a right or legitimate interest to use the trademark in 
the course of  trade; otherwise, WTO Members would be able to take any measures to encumber 
the use of a trademark as they wish.  
6.  China further notes that in cases where a third party uses similar  signs for identical or similar 
goods or services, the trademark owner  bears the burden of proof to  demonstrate  that such use of 
the third party  result s in a likelihood of confusion. To the extent that the prohibition or strict 
restriction of use of a trademark necessarily reduces or removes the distinctiveness of that 
trade mark and thus impedes the trademark owner to demonstrate the likelihood of confusion, such 
measure s could be found inconsistent with Article 16.1.  
                                                
1 Appellate Body Report, EC – Asbestos,  para.172.  
2 Panel Report,  EC – Trademarks and Geographical Indications (Australia) , para.7.664.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 B.  Claims Under Article 16.3  
7.  In view of the arguments proffered by the parties, the Panel is expected t o consider  whether 
the coverage of Article 16.3 would extend to the acquirement and m aintain ing of the well -known 
trademark status and whether use is a necessary condition to acquire and m aintain  the well -known 
trademark status.  
8.  China notes that Artic le 16.3 provides additional protection to existing  well-known trademarks, 
and such protection does not apply to trademarks that may become well known in the future or 
trademarks that were once well known . Nevertheless, the Panel may wish to consider if it is 
appropriate  to entirely separate  the issue of additional  protection of well -known trademarks and 
the issue of the acquirement and m aintain ing of the well -known trademark status. To give an 
extreme example , if a Member sets such an extremely high standar d that no trademark could be 
qualified as a well -known trademark, the additional protection accorded to well -known trademark 
would be meaningless.  
9.  As to the second question, it  appears that use is an important, if not indispensable , way to 
acquire or maintain  the well -known status. As Article 16.2 provides, "[i]n determining whether a 
trademark is well known, Members shall take account of the knowledge  of the trademark in the 
relevant sector of the public ". And it is widely recognized that the duration , extent and 
geographical area of any use of the mark  are highly relevant indicators as to the determination 
whether or not a mark is well -known by the relevant sector of the public.  Therefore, the Panel 
needs to consider if the PP measure, by prohibiting or strictly restrict ing the use of tobacco 
trademarks, necessarily  results in that tobacco trademarks cannot acquire or maintain the 
well-known status and thus are denied the protection accorded under Article 16.3.   
C.  Claims Under Article 20  
10.  For a m easure to be found in violation of Article 20, it should be established that the measure 
imposes "special requirements " that "unjustifiably " "encumber[s] " "the use of a trademark " "in the 
course of trade ".  
11.  "[S]pecial requirements " would include  those  mandated requirements that: (i) apply to a 
limited product class; (ii) apply only for a particular purpose; or (iii) are distinct from those that 
apply generally or "usually ". To the extent that the PP measure prohibits the use of certain types 
of tradema rks, e.g. figurative trademarks, on tobacco products and their packaging  and requires  
the use of the brand name/word mark of tobacco products  in a standardized form and font, it 
impose s "special requirements " within the scope of Article 20.   
12.  As to the  meaning of the term "in the course of trade ", Australia appears to read th is term in 
a too narrow sense by suggesting that this term  refers only to the course of a particular 
transaction of buying and selling. The same term is used in Articles 16.1 and 24 .8 of the 
TRIPS  Agreement  as well as  Article 10 bis (3) of the Paris Convention, which is incorporated into 
the TRIPS Agreement. It is widely accepted that th e term means "in commercial activities " or "in 
commerce ", in a broader sense.  
13.  In view of  the above, it appears to China that the focus of the contention between the parties 
would be whether the PP measure unjustifiably  encumber s the use of trademarks in the course of 
trade. Noting that the meaning of "unjustifiably " under Article 20 has not yet bee n explored by 
prior panels and/or the Appellate Body, China make s several observations. First, prohibition of the 
use of a trademark is not per se  unjustifiable as suggested by some complainants. Article 20 
envisages that the use of a trademark could be pr ohibited, provided that such prohibition is not 
unjustifiable. Second, the standard of "unjustifiably " under Article 20 is not necessarily the same 
as that of "necessary " under Article 2.2 of the TBT Agreement or Article XX of the GATT 1994. The 
jurisprude nce regarding the latter may not be simply transplanted into the former.  Third, the 
underlying test is not merely a question of existence/non -existence of rational connection between 
the measure and the policy objectives pursued  as Australia appears to sug gest, but calls for 
evaluation on the extent  of the rational connection. While a special requirement that has no 
"rational connection " with a legitimate objective is unjustifiable, this does not necessarily mean 
that a special requirement is justifiable as  long as it has any extent of "rational connection " with a 
legitimate objective. This observation initially originates from the ordinary meaning of the term WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 "unjustifiably ", which, like the words "just", "reasonable " and "defensible ", implies certain 
discretionary judgement. China takes note that Australia 's interpretation of "unjustifiably " under 
Article 20  essentially relies on the Appellate Body 's interpretation  of the term "unjustifiable " in the 
context of Article XX of the GATT 1994.3 However, the two terms do not necessarily have the same 
meaning. While Article XX of the GATT 1994 sets out a two -tier test, Article 20 of the 
TRIPS  Agreement contains only a single  "unjustifiably/justifiably " test which implies that this test 
would have to bear more funct ions or set a higher threshold. On the other hand, even the 
instances identified by the Appellate Body as "unjustifiable " within the meaning of Article XX of the 
GATT 1994 are not limited to those in which the measure at stake bears no relationship to the 
legitimate objective.  For instance, a measure that is "informal " and "casual " and is not 
"transparent " and "predictable " was found "unjustifiable ".4   
14.  Based on  the above observations, China expects that the Panel will weigh and balance, in a 
holistic  manner, all relevant  factors, including but not limited to: (i) the policy objective and its 
importance ; (ii) the extent of the rational connection or, in other words, the degree of contribution 
of the measure to the policy objective ; and (iii) the extent of encumbrance imposed by the 
measure.  Given that there are few disputes among the parties with respect to the above factors 
(i) and (iii), the Panel 's examination is expected to concentrate more on the contribution of the 
trademark requirements to the obj ective of tobacco control. Both sides put forward extensive 
evidence to illustrate that the trademark restriction does (not) and can  (not) make contribution to 
that objective. The Panel is expected to objectively assess this factual matter, and  when 
necess ary, to exercise its right to seek information under Article 13 of the DSU, including 
consulting experts to obtain opinions on factual issues concerning scientific or technical matters.   
D.  Claims Under Articles 2.1 and 22.2(b)  
15.  In China 's view, the key contention is the definition of "unfair competition " under the relevant  
provisions, i.e. whether it must be  a result from the market actor 's acts or it could also encompass 
the government regulatory measures.   
16.  The PP measure appears not to be an ac t of unfair competition within the meaning  of 
Article  10bis of the Paris Convention. First, the "act of competition " is defined under Article 10 bis 
(2) as any act "contrary to honest practices in industrial or commercial  matters ". It appears 
difficult to characterize  the acts that are taken by competitors to comply with the legal 
requirements as acts "contrary to honest ". Second, Article  10bis (3) provides that three categories 
of acts "shall be prohibited ". The PP measure does not fall within the scope of the second or third 
category, i.e.  false allegations and misleading indications or allegations, nor fall within the scope of 
the first category which clearly refers to acts of "a competitor ".  
17.  Alternatively, if the Panel were to interpret "unfair comp etition " as compassing government  
regulatory measures and/or its impact on the market, it needs to carefully assess the detailed 
facts of the dispute, including a range of legal mechanisms available in Australia, so as to 
determine whether the PP measure c ompels market actors to engage in acts of unfair competition 
or Australia fails to assure an effective protection against unfair competition due to the 
PP measure.  
E.  Claims Under Article  24.3  
18.  Article 24.3 is a standstill provision  which requires t hat a Member, in addition to comply with 
the minimum standard s established by the provisions of the TRIPS Agreement, shall maintain the 
existing protection level of geographical indications (GIs) in that Member prior to the entry into 
force of the WTO Agre ement. It thus concerns the pre -existing protection of GIs in that Member. 
Assuming that the protection of GIs under Section 3, Part II of the TRIPS Agreement refers only to 
negative rights, i.e. rights to prevent third parties ' illegal use of GIs, it does  not necessarily follows 
that the pre -existing protection of GIs in a Member is limited to negative rights.  To the extent that 
the pre -existing protection in a Member include s the right to use GIs, the Member is not permitted 
to diminish the protection by  prohibiting the use of GIs.  In any event, the complainants need to 
establish a prima facie  case that, prior to January 1995, Australian law permit s the owners of GIs 
                                                
3 Australia 's first written submission, paras.366 -369. 
4 Appellate Body Report, US – Shrimp , paras.180 and 181.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 to use established GIs on their products , and/or to use a word or non -word indication on their 
products so as to develop GIs. 
IV. OBSERVATIONS ON CLAIMS UNDER THE TBT AGREEMENT  
19.  In order to establish a violation of Article 2.2 of the TBT Agreement, a complainant must first 
demonstrate  that the challenged measure constitutes a "technical r egulation " within the meaning 
of Annex 1:1 of th e TBT Agreement. China notes that it is undisputed the "form requirements " 
imposed by the PP measure are technical regulations. In China 's view, the "trademark 
requirements " also fall within the scope of the definition of a technical regulation  as clarified by the 
Appellate Body in previous cases such as EC-Asbestos , EC-Sardines  and EC-Seal Products . 
These trademark requirements are subject to not only  the provisions of the TRIPS Agreement  but 
also the provisi ons of the  TBT Agreement, including Article 2.2.  
20.  Article 2.2 of the TBT Agreement sets out a three -tier test of consistency, namely: ( i) whether 
the measure is "trade -restrictive "; (ii) whether the measure fulfills a legitimate objective; and ( iii) 
whether the measure is "not more trade -restrictive than necessary " to fulfill a legitimate objective, 
taking account of the risks non -fulfilment would create.  
21.  As to t he first element , what should be assessed is whether the measure has a limiting effect  
on trade, i.e. importation of tobacco products in the current disputes, rather than whether it 
results in discrimination between the treatment of imported goods and domestic goods. L ike the 
term "restrictions " in Article XI of the GATT 1994 , trade -restric tiveness is of  a broad coverage. 
Furthermore, the limiting effect of restrictions "need not be demonstrated by quantifying the 
effects of the measure at issue ", but "can be demonstrated through the design, architecture, and 
revealing structure of the measu re at issue considered in its relevant context ".5  
22.  As to the s econd  element , the Panel is expected to objectively assess the factual matter 
whether the PP measure s make contribution, and to what extent, to the objective of tobacco 
control. The Appella te Body has noted that the degree of contribution may be discerned from the 
design, structure and operation  of the measure , as well as from evidence relating to the 
application  of the measure.6 The evidence concerning the post -implementation period is not the 
only evidence to establish the contribution , and might not give decisive guidance either .  
23.  As to the third element, "a comparison of the challenged measure and possible alternative 
measures should be undertaken "7 in most cases . In the context of s uch "comparative  analysis ", 
it may be relevant to consider in particular: ( i) whether the  proposed alternative measure is less 
trade -restrictive; ( ii) whether it would make  an equivalent contribution to the relevant legitimate 
objective, taking account  of the risks non -fulfilment would create; and ( iii) whether it is reasonably 
available.8 An issue the Panel may need to address is the meaning of the terms "the risks 
nonfulfilment would create ". China considers that the fact that a legitimate objective is of  great 
importance does not, in itself, lead to the conclusion that "the risks non -fulfilment would create " 
are grave. A panel should assess the importance of the legitimate objective together with the 
measures that are applied, or the measures proposed by the complainants, to fulfil this objective.  
In case that a challenged measure does not contribute to the objective or a reasonable available  
alternative could make greater contribution to the objective , "the risks non -fulfilment would 
create " are not grave .  
 
                                                
5 Appellate Body Report, Argentina – Import Measures , para. 5.217.  
6 Appellate Body Report, US – Tuna II (Mexico) , para.317.  
7 Ibid, para.322.  
8 Ibid, para.322.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 ANNEX C -5 
EXECUTIVE SUMMARY OF  THE ARGUMENTS OF THE  EUROPEAN UNION  
I.  TRIPS  
1.  The term "unjustifiably " in Article 20 has not yet been clarified by panels or the Appellate Body. 
The EU view is that as drafted, Article 20 of the TRIPS Agreement provi des for a flexible tool of 
interpretation, that leaves open what degree of justification or deference may be appropriate in 
particular cases, just as the degree of deference under Article XX of the GATT 1994 is open, in the 
sense that it depends upon which  specific subparagraph of that provision is being applied, and 
accordingly what nexus is required between the measure and the legitimate objective. How much 
deference is appropriate in a particular case depends on further contextual considerations, as 
described below.  
2.  There are limits on the extent to which case law on the issue of 'unjustifiable discrimination ' in 
Article XX can inform an interpretation of the term "unjustifiably " in Article 20 of the TRIPS. 
However, the European Union considers that some guidance concerning the meaning of the term 
'unjustifiable ' in Article 20 of the TRIPS Agreement can be gleaned from prior clarifications by the 
DSB of the term "unjustifiable discrimination " under the chapeau of Article XX of the GATT 1994.  
3.  As re gards the different tests that have been discussed by the parties, we consider that their 
nature is the same or very similar with the key difference being a different degree of justification 
or, more precisely, deference. Properly understood, the five -level structure of the test is just a 
rationalising heuristic tool. Whether it is used as a tool to intensify judicial control of acts by 
WTO Members is not determined by the structure of the test but by the degree of judicial restraint 
practised in applying i t. In this sense, more important than the structure of the test is the question 
which degree of deference to the WTO Member is appropriate in examining a measure under 
Article 20 of the TRIPS Agreement.  
4.  In our view, Article 20 of the TRIPS Agreement pr ovides for a flexible tool of interpretation, 
that leaves open what degree of justification or deference may be appropriate in particular cases, 
just as the degree of deference under Article XX of the GATT 1994 is open, in the sense that it 
depends upon wh ich specific subparagraph of that provision is being applied. The concept of 
"justifiable " is broad, in the sense that it is broad enough to capture the various types of 
justification, with their various types of nexus, set out in Article XX of the GATT 19 94. We are not 
saying that this necessarily implies a lighter test or more deference than would be the case under 
Article XX.  
5.  While Article 20 of the TRIPS Agreement provides a flexible interpretative tool, capable of 
capturing the full range of possi ble justifications, the European Union would like to note that, 
in this particular case, given that the measure at issue is a technical regulation, we consider that 
the interpretation and application of Article 20 of the TRIPS Agreement should be contextua lly 
informed by Article 2.2 of the TBT Agreement. This means that to the extent Article 20 of the 
TRIPS Agreement is applicable, such an encumbrance would not be justifiable if at the same time 
it is inconsistent with Article 2.2 of the TBT Agreement. This  would then not give rise to any 
conflict, nor any question of how any such conflict might need to be resolved.  
6.  The provision must also be read in the light of the objectives and principles of the 
TRIPS  Agreement. The provisions of the TRIPS Agreement provide a wide margin of discretion for 
setting up an intellectual property regime that is capable of responding to public health concerns. 
We have referred to Article 7 and Article 8 of the TRIPS Agreement in support of our view. These 
provisions are impo rtant for interpreting other provisions of the Agreement, including where 
measures are taken by Members to meet health objectives. These provisions are relevant context 
and clarify the object and purpose of the TRIPS Agreement, pursuant to Article 31(1) of  the 
Vienna  Convention on the Law of Treaties . The European Union recalls also the importance of the 
Doha Declaration on the TRIPS Agreement and Public Health.  
7.  We do not agree with the complainants that the measure at issue can be reasonably 
characteri sed as "the ultimate encumbrance ". It may be a serious encumbrance, but we do not 
think that it is the most serious, given that the package may still contain the name of the brand 
and variant. Furthermore, it seems to us that a general prohibition on use w ould not have more of WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 an impact on right holders than mandated use contrary to the trademark owner 's wishes, although 
that is a matter that might have to be considered taking into account the fact patterns of particular 
cases. We do consider, however, that  it is an encumbrance that will need to be justified under 
Article 20 of the TRIPS Agreement.  
8.  Article 20 of the TRIPS Agreement, when considered as a whole, is not an exception to a 
violation. The "unjustifiably " element may be understood as qualifying  language that limits the 
scope of the obligation that is imposed.  
9.  As regards the allocation of the burden of proof, splitting up the obligation in Article 20 seems 
artificial insofar as the obligation is concerned that "[t]he use of a trademark in the  course of trade 
shall not be unjustifiably encumbered by special requirements ". It is thus up to the complainant to 
establish a prima facie case in this respect.  
II. TBT AGREEMENT  
A. Technical Regulation  
10.  The European Union considers that the fact tha t the terminology, symbol, packaging, marking 
or labelling requirement is also a trademark or a geographical indication does not, without more, 
take the document outside the scope of Article 2.2 of the TBT Agreement. Article 20 of the 
TRIPS  Agreement and A rticle 2.2 of the TBT Agreement apply concurrently. T he concept of 
lex specialis  is a useful analytical tool, but is not to be mechanistically applied. In thinking about 
which of the two agreements, or specific provisions within them, is to be considered m ore specific 
the Panel may wish to consider (1) the overall design and architecture of the WTO Agreement (2) 
what an appropriate metric of specificity might be and (3) the procedural efficiency with which the 
dispute might be resolved.  
11.  As regards the order of analysis, the European Union considers that the Panel has discretion, 
and that the Panel would remain within the bounds of that discretion if it would decide to deal first 
with the claims under the TBT Agreement, and subsequently with the claims u nder the 
TRIPS  Agreement. Having conducted an analysis under Article 2.2 of the TBT Agreement the Panel 
may then find itself well -placed to address the claims and arguments of the Parties under 
Article  20 of the TRIPS Agreement. In doing so, it may find it  convenient to refer to earlier parts of 
its analysis (such as, for example, what the objective of the measure is and whether or not such 
objective is legitimate), and it may also find that it does not necessarily need to resolve all aspects 
of the disagre ements between the Parties concerning Article 20 of the TRIPS Agreement.  
B. Article 2.5 of the TBT Agreement  
12.  The Panel must make an objective assessment of this matter, based on a comprehensive 
analysis of the nature, content and objectives of the Gui delines. The Panel must consider whether 
or not the Guidelines are "relevant international standards ", taking into account the definition of 
the term "standard " in Annex 1, paragraph 2 of the TBT Agreement. The Panel should also take 
into account the TBT C ommittee Decision on Principles for the Development of International 
Standards.  
13.  We consider that the Guidelines are relevant irrespective of whether or not they are a 
"relevant international standard " within the meaning of Article 2.5 of the TBT Agree ment. That is 
because Article 2.2 of the TBT Agreement requires the Panel to take into account the "risks 
non-fulfilment would create ". It further requires that, in assessing such risks, relevant elements of 
consideration are, inter alia , available scienti fic and technical information, related processing 
technology or intended end -uses of products. The European Union considers that the Guidelines 
fall within the open category delimited by the final sentence of Article 2.2 of the TBT Agreement.  
14.  Thus, gi ven that the objective of the measure is a reduction in the prevalence of smoking, 
non-fulfilment of the objective would mean no reduction in the prevalence of smoking, or a 
reduction in prevalence less than that aimed for. As explained by Australia, the "risk" that this 
would "create " is the risk that the measure would not make any contribution (or would make a 
lesser contribution) to changing attitudes to smoking in Australia, that is, that it would not make 
any contribution (or would make a lesser contri bution) to the de -normalisation of smoking. 
In assessing that risk, the Guidelines are "relevant ", particularly because they speak precisely to WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 the means by which the relevant international organisation considers that tobacco control can be 
effectively enh anced. Therefore, they will need to be considered and taken into account by the 
Panel, irrespective of whether or not they are a "relevant international standard " within the 
meaning of Article 2.5 of the TBT Agreement. Furthermore, the foregoing analysis c onfirms that 
the legitimate public health objective in this case can be defined with specific reference to tobacco 
and smoking. This means that any alternative measures proposed must also address that specific 
issue, as opposed to other unrelated public he alth issues.  
C. Article 2.2 of the TBT Agreement  
1. Trade -restrictive  
15.  The terms "obstacles to international trade ", "trade -restrictive " and "effect on trade " appear 
to be used interchangeably in the relevant provisions of the TBT Agreement, and refer  to 
something with a limiting effect on trade. The issue can be addressed both in terms of what the 
measure is actually causing (although evidence of this, including trade statistics, is not dispositive) 
and what it is apt to cause. Within the holistic wei ghing and balancing exercise, it should not be 
necessary to consider whether or not the trade -restriction is significant, although excessively 
hypothetical or remote effects would be insufficient. Increased costs, even if absorbed by firms, 
would generally  give rise to a trade -restriction. Trade -restrictiveness is not the same as the impact 
on competitive opportunities used in the first step of an analysis of whether or not there is de facto  
discrimination, the first concept being about the "size of the cak e" and the second concept being 
about how the cake is divided up (between all market participants). It would be necessary 
to consider the question of trade -restriction with respect to the trade of all Members, because 
a highly trade liberalising measure th at happened to discriminate between two Members would not 
be trade -restrictive (although it might breach the rules against unjustified discrimination).  
16.  Referring to the recent Appellate Body Report, US – COOL (Article 21.5 – Canada and 
Mexico) , it is to be observed that, in the context of Article 2.2 of the TBT Agreement, it may not 
always be possible to quantify a particular factor or to do so with precision.  
17.  We think that the trade effects of the measure should be measured as a whole, for all 
Members. It would not be enough for one complainant to demonstrate that its volume has 
decreased (the volume of some other complainant or complainants having increased). 
Consequently, we are not persuaded that the issue of downtrading, without more, demonstr ates a 
trade -restriction, at least insofar as it is simply limited to the observation that the market share of 
one complainant is increasing at the expense of another.  
18.  We see some connection between the discussion about whether or not the measure is 
trade-restrictive, on the one hand, and the discussion about whether or not the measure makes a 
contribution to its objective, on the other hand.  
2. The legitimate objectives of the measure at issue  
19.  The European Union considers that the overarching obj ective of improving public health by, 
over time, reducing the prevalence of smoking, is a legitimate objective. By contrast, the aim of 
reducing the appeal of products generally  is not per se  legitimate. However, the aim of reducing 
the appeal of tobacco  products is legitimate, as reflected in the FCTC Guidelines (which, as we 
have already indicated, should be accorded appropriate weight in the overall assessment), because  
tobacco products are harmful to public health, and protecting public health is per se  legitimate.  
3. The contribution of the measure at issue to the fulfilment of the legitimate 
objectives  
20.  In the context of Article XX of the GATT 1994, a demonstration of a material contribution to 
the achievement of its objective can be made by resort ing to evidence or data, pertaining to the 
past or the present. It might also be determined that a measure is necessary on the basis of a 
demonstration that the measure at issue is apt to produce a material contribution to the 
achievement of its objective.  This demonstration could consist of quantitative projections in the 
future, or qualitative reasoning based on a set of hypotheses that are tested and supported by 
sufficient evidence. It should also be possible for Members to defend their measures based o n WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 appropriate analysis and/or scientific evaluation in circumstances where, prior to the adoption of 
the measure, empirical data about its long term effects are not yet known.  
21.  We consider that the Parties are entitled to support their arguments also o n the basis of the 
information that has since become available.  
22.  We think that packaging is relevant to consumer behaviour, particularly in the context of 
discouraging initiation, which is especially important for a highly addictive product, such as 
tobacco. Packaging may be used to convey advertising messages. Advertising is capable of 
increasing demand, including by influencing adolescent behaviour, also with respect to initiation. 
Certain packaging may be capable of influencing cessation and relapse  behaviour.  
4. The alternative measures  
23.  We consider that the contribution of the alternative measures is to be measured by reference 
to the contribution to the overarching legitimate objective of improving public health by, over time, 
reducing the pre valence of smoking. It is not necessary to measure it by reference to the 
subsidiary aims. In other words, the alternative measures do not have to operate through the 
same causal pathway as the measure at issue (although in assessing the effectiveness of t he 
measure at issue compared to the alternative measures the Panel will, as already indicated, also 
take the aims and means into account).  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 ANNEX C -6 
EXECUTIVE SUMMARY OF  THE ARGUMENTS OF GUA TEMALA* 
I. INTRODUCTION  
1. Guatemala appreciates the opportunity to submit its views with respect to the matters under 
consideration in the present disputes. Guatemala makes this third party written submission 
because of its systemic interest in the correct interpretation of the Agreement on Trade -Related 
Aspects of Int ellectual Property Rights (TRIPS) and the Agreement on Technical Barriers 
to Trade  (TBT) . 
2. In no way is Guatemala questioning Australia 's legitimate objectives to improve public 
health by encouraging people to give up or reduce smoking or using tobacco p roducts as well as 
by reducing people 's exposure to second -hand smoke from tobacco products.  
3. In this submission, Guatemala will not comment upon all legal issues raised in this dispute. 
Rather, Guatemala will focus on the following:  
a. The relationship between the TBT and the TRIPS Agreements when assessing the 
Plain Packaging ( "PP") measure;  
b. The legal interpretation of Articles 19 and 20 of the TRIPS Agreement;  
c. The scope and application of Article 15.4 of the TRIPS Agreement;  
d. The relationship b etween Australia 's obligations under the FCTC and those under 
the WTO Agreements.  
4. Guatemala reserves the possibility to express further its opinion with respect to these as 
well as other issues at a later stage in the present proceedings. Guatemala hop es that its written 
and oral submissions may be of assistance to the Panel.  
II. THE RELATIONSHIP BET WEEN THE TBT AND THE  TRIPS AGREEMENTS IN 
ASSESSING THE PP MEA SURES  
5. In their First Written Submission, the complainants maintain that the PP Measures are  
technical regulations within the scope of Art.2.2 of the TBT Agreement.1 Australia contends that its 
PP Measure should be assessed in a manner that a differentiation must be made between the 
"physical requirements " and the "trademark requirements " of the measure:  
"The tobacco plain packaging measure establishes: (1) certain 
requirements as to the usage of trademarks on tobacco packages 
and products (the "trademark requirements "); and (2) certain 
requirements as to the physical characteristics of tobacco p ackages 
and products (the "physical requirements ").2 
6. According  to Australia, the "physical requirements " are technical regulations within the scope 
of the TBT Agreement.3 However, the "trademark requirements ", in its view, are not technical 
regulations pursuant to the TBT Agreement and, for this reason, they can only be assessed under  
Article 20 of the TRIPS Agreement. Australia further contends that Article 20 of the 
TRIPS  Agreement addresses the subject matter more "specifically, and in detail " than A rticle 2.2 of 
                                                
* Guatemala's written submission is used as its executive summary.  
1 Cuba's First Written Submission. Section VI.D. (p. 144 -150); Indonesia 's First Written Submission. 
Section V.B. (p. 142 -175); Dominican Republic First Written  Submission, Section V.II. (p.267 -293); 
Honduras ' First Written Submission, Section VII, (p.163 -196).    
2 Australia 's First Written Submission. Para.506.  
3 Australia 's First Written Submission. Para.507.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 the TBT Agreement.4 
7. In Australia 's opinion, if the "trademark requirements " were to be considered under both the 
TRIPS and the TBT Agreements, the panel would be agreeing with the complainants that Article 20 
of the TRIPS Agreement and Art icle 2.2 of the TBT Agreement share "the same subject matter ".5 
8. Australia also argues that even if the Panel were to consider that the requirements affecting 
the use of trademarks can be "technical regulations " within the scope of the TBT  Agreement, 
Article 20 of the TRIPS Agreement would remain the applicable provision in respect of the 
trademark requirement imposed by the tobacco plain packaging meas ure to the exclusion of 
Article  2.2 of the TBT Agreement.6 
9. The WTO covered agreements must be interpr eted in a coherent and consistent manner. 
Whenever a measure imposed by a Member falls within the scope of two or more covered 
agreements, the analysis of such measure should be made in a way that all the covered 
agreements concerned are taken into account  and the obligations contained in each of them are 
carefully observed. This harmonized view is in accordance with the constituting principles of the 
WTO, established in Article 2 of the Marrakesh Agreement:  
"The agreements and associated legal instruments  included in 
Annexes 1, 2 and 3 (hereinafter referred to as "Multilateral Trade 
Agreements ") are integral parts of this Agreement, binding on all 
Members. " 
10. In US-Anti Dumping and Countervailing Duties (China) , when addressing a situation in which 
the a pplication of a covered agreement was being considered to the exclusion of another, the 
Appellate Body stated that:  
"Such an interpretative approach is difficult to reconcile with the 
notion that the provisions in the WTO covered agreements should be 
interpreted in a coherent and consistent manner, giving meaning to 
all applicable provisions harmoniously. 
Members have entered into 
cumulative obligations under the covered agreements and should 
thus be mindful of their actions under one agreement when taking  
action under another. "7 
11. Likewise, the Appellate Body in Argentina - Footwear (EC)  explained that:  
"..the Panel was correct in saying that "Article XIX of GATT and the 
Safeguards Agreement must a fortiori be read as representing an 
inseparable package of rights and disciplines which have to be 
considered in conjunction. " Yet a treaty interpreter must read all 
applicable provisions of a treaty in a way that gives meaning to all of 
them, harmoniously. And, an appropriate reading of this 
"inseparable packa ge of rights and disciplines " must, accordingly, be 
one that gives meaning to all the relevant provisions of these two 
equally binding agreements. "8 (emphasis added).  
12. Guatemala agrees with Australia that each of the Agreements at issue deals with a di fferent 
"subject matter ".9 The question, however, is whether the measure at issue can be assessed 
simultaneously under different agreements or, as Australia proposes, the TRIPS  Agreement should 
be considered more specific and, thus, applied to the exclusio n of the TBT  Agreement.   
                                                
4 Australia 's First Written Submission. Para.511.  
5 Australia 's First Written Submission. Para. 508.  
6 Australia 's First Written Submission. Para. 511.  
7 Appellate Body Report, United States – Definitive Anti -Dumping and Countervailing Duties on Certain 
Products from China, WT/DS379/AB/R. Para. 570  
8 Appel late Body Report, Argentina – Safeguard Measures on Imports of Footwear, WT/DS121/AB/R. 
Para. 81  
9 Australia 's First Written Submission. Paras. 508 - 510. WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 13. Guatemala understands Australia 's argument as referring to the principle of lex specialis 
derogat  legi generali . This principle is "inseparably linked with the question of conflict " and does 
not apply if two agreements "…deal with the same subject from different point of view or [is] 
applicable in different circumstances, or one provision is more far -reaching that but not 
inconsistent with, those of the other ".10  
14. This is the first time that the question of the relationship  between the TBT and the 
TRIPS  Agreements arises. In Guatemala 's view, however, the TBT Agreement and the 
TRIPS  Agreement, even assuming for the sake of the argument that they might deal with the 
same subject matter, they do that from a different point of view and apply in different 
circumstances.  
15. Therefore, Guatemala is not persuaded that the provisions of the TRIPS Agreement are 
applicable to the exclusion of the provisions of the TBT Agreement.  
III. INTERPRETATION OF AR TICLES 19 AND 20 OF THE TRIPS AGREEMENT.  
16. In its written submission, Cuba argues that "Article 20 (of the TRIPS Agreement) sets limits 
on the ability of WTO Members to constrain the use, by commercial actors, of trademarks in the 
course of trade. "11 In its view, this is the only pro vision in the TRIPS Agreement where there is an 
explicit limit on the ability of States to regulate the use of protected subject matter.12 
17. Australia on the other hand, accepts that the PP Measure: "…imposes "special requirements " 
upon the use of tradem arks insofar as it requires that any word trademarks used on retail tobacco 
packaging must appear in a certain form. However, Australia does not consider that the aspects of 
the tobacco plain packaging measure that prohibit the use  of certain trademarks on  tobacco 
products and their retail packaging are "special requirements " that f all within the scope of 
Article  20"13 (emphasis added).  
18.  Australia appears to interpret Article 20 on the basis of Article 19 of the TRIPS Agreement. 
In Australia 's view, Ar ticle 19 "…specifically contemplates that 'government requirements ' may 
prohibit  the use of a trademark altogether " (emphasis added). Therefore, "if domestic law 
prohibits the "use" of certain trademarks altogether, then those trademarks are not being 'use[d] 
… in the course of trade ' and Article 20 is therefore not engaged ".14  
19. Australia then concludes that "[i]n light of the object and purpose of the TRIPS Agreement, 
Article 20 is best interpreted as imposing a discipline on how a Member may encumber the use of 
a trademark in the course of trade when its domestic laws and regulations otherwise do not 
prohibit the use of that trademark. "15  
20. Guatemala understands Australia 's arguments as proposing that Articles 19 and 20 are 
mutually exclusive. If a measure imposes a prohibition, Article 19 applies to the exclusion of 
Article  20.   
21. Guatemala is not persuaded by Australia 's interpretation. First, Guatemala understands that 
Article 19 deals specifically with the "requirement of use " to "maintain a r egistration " while 
Article  20 addresses the situation of "other requirements " to the exclusion of the "requirement of 
use" in Article 19.  Moreover, pursuant to Article 19 a special requirement of use to maintain a 
registration is applicable to the extent that "use is required  to maintain a registration " (emphasis 
added). This provision does not deal, however, with general prohibitions to the use or registration 
of a trademark as Australia apparently is contending.  
22. Second, Article 20 applies provided t hat the requirement at issue is not a "requirement of 
use" to "maintain a registration ". However, such provision does not appear to be dependent of 
                                                
10 Panel Report, Indonesia – Certain Measures Affecting the Automobile Industry, WT/DS54/R, 
WT/DS55/R,  WT/DS59/R, WT/DS64/R and Corr.1 and 2, adopted 23 July 1998, footnote 649.  
11 Cuba's First Written Submission. Para. 297.  
12 Idem. 
13 Australia 's First Written Submission. Para.339.  
14 Australia 's First Written Submission. Para.341.  
15 Australia 's First W ritten Submission. Para.342 . WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
- C-25 - 
 whether the requirement at issue is an encumbrance or a total prohibition. The ordinary meaning 
of "encumbra nce" is an "impediment…a burden "16 and "to encumber " is "[h]amper, impede 
(a person, movement, etc.); act as a check or restraint on ".17 Therefore, Guatemala respectfully 
submits that the expression "unjustifiably encumbered " also encompasses unjustifiable  
prohibitions or "impediments " to the use of a trademark.  
23. Finally, from a more general perspective, Guatemala fails to see how Australia 's 
interpretation would justify the fact that the TRIPS Agreement would allow Members to impose a 
prohibition to th e use of a trademark, without conditions , while those conditions only would be 
applicable when a Member imposes encumbrances other than a total prohibition. Put differently, 
Guatemala is not convinced that the TRIPS Agreement would support the notion that Members 
have a total freedom to impose prohibitions but not when they impose limitations on the use of 
trademarks.  
IV. SCOPE AND APPLICATIO N OF ARTICLE 15.4 OF  THE TRIPS AGREEMENT.   
24. Article 15.4 of the TRIPS Agreement provides that "[t]he nature of th e goods or services to 
which a trademark is to be applied shall in no case form an obstacle to registration of the 
trademark ". Ukraine contends that "[i] n direct violation of this principle, the TPP Act has rewritten 
Australia 's TM Act in order to create a sub -species of second -class registered trademark protection 
for tobacco products alone because of the nature of the product to which these trademarks 
apply. "18  
25. According to Ukraine, the Australian PP Measure "…prohibits the use of non -inherently 
distinctive signs. The sole reason for the prohibition on use of such signs on tobacco products and 
their packaging is the nature of the product ". Ukraine adds that "Australia 's sole reason for 
prohibiting the use of trademarks on tobacco products and their p ackaging is the nature of the 
product to which the trademark is to be applied. "19   
26. In response, Australia argues that "[t]he tobacco plain packaging measure is consistent with 
Article 15.4 because it does not prevent the registration of trademarks bas ed on the nature of the 
underlying product (i.e. tobacco). "20 Moreover, Australia indicates that the TPP Act does not 
prevent an owner from registering a trademark under the Trade Marks Act.21 
27. In Guatemala 's view, the question before the Panel is wheth er Australia 's regulations "form 
an obstacle to registration of the trademark " and, in that case, whether such an obstacle is linked 
to the "nature of the goods or services to which a trademark is to be applied ". 
28.  From Australia 's explanation, Guatemal a understands that the registration of trademarks of 
tobacco products is not prevented by the measures at issue. Rather, Ukraine 's argument appears 
to focus on situations in which a specific sub -category of products, not being inherently distinctive 
signs,  might nevertheless be the subject of registration dependent on use.  
29. If Guatemala understands correctly, Ukraine formulates the proposition that a prohibition on 
the use of a trademark prevents its registrability (where Article 15.3 would be applicabl e) and 
forms an obstacle to registration of the trademark because of the "nature of the goods " 
(in accordance with Article 15.4).   
30. If that understanding is correct then Guatemala is not persuaded with Ukraine 's argument. 
Guatemala submits that in those  very specific situations described above, the alleged obstacle to 
registration of a trademark would be the lack of use (pursuant to Article 15.3) but not necessarily 
the "nature of the goods or services to which a trademark is to be applied " (in accordanc e with 
Article 15.4).  
31. Guatemala is mindful, however, that the measures at issue limit the use of trademarks and, 
                                                
16 Shorter Oxford English Dictionary, Sixth Edition, Oxford University Press, 2007, Vol. 1, p. 828.  
17 Ibid, p. 827.  
18 Ukraine 's First Written Submission. Para. 182.  
19 Ukraine 's First Written Submission. Para. 183  
20 Australi a's First Written Submission Para.308  
21 Idem.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
- C-26 - 
 
 for that reason, prevents economic operators from registering marks on the basis of its use. 
Notwithstanding that, Guatemala does not see t hat this situation would amount to a violation of 
Article 16.4 of the TRIPS Agreement.  
V. AUSTRALIA 'S OBLIGATIONS UNDER THE FCTC AND ITS REL ATION TO ITS WTO 
OBLIGATIONS  
32. Australia argues that it must comply with its obligations under the FCTC. Specifi cally, 
Australia refers to Article 11 (concerning the packaging and labelling of tobacco products) and 
Article 13 (concerning tobacco advertising, promotion and sponsorship) of the FCTC.22 According to 
Australia, "Article 11 of the FCTC requires Parties to  implement measures to eliminate the 
propensity of tobacco packaging to mislead consumers about the health effects of smoking and to 
require health warnings on tobacco packaging.* Article 13 requires Parties to implement 
comprehensive bans on tobacco adver tising, promotion and sponsorship " (footnote omitted).23 
33. In 2007, the FCTC Conference of Parties adopted nine Guidelines. Among those, one for 
Article 11, which states the following:  
 "Parties should consider  adopting measures to restrict or prohibit 
the use of logos, colours, brand images or promotional information 
on packaging other than brand names and product names displayed 
in a standard colour and font style (plain packaging) " (emphasis 
added)24 
34. Additionally, Guidelines for Article 13 provides  that:  
"Parties should consider  adopting measures to restrict or prohibit the 
use of logos, colours, brand images or promotional information on 
packaging other than brand names and product names displayed in 
a standard colour and font style (plain packagi ng)" (emphasis 
added)25  
35. The Dominican Republic advanced the argument that the Implementation Guidelines are of a 
non-binding nature, and that the Articles 11 and 13 of such Guidelines only offer recommendations 
to FCTC Parties to "consider adopting " plain packaging, but in no way are the Parties obliged to 
adopt plain packaging.26 
36. Guatemala concurs with the Dominican Republic.  The expression "should consider " in both 
Guidelines, which are of a non -binding nature, does not amount to a binding oblig ation for 
Australia or any other WTO Member. Therefore, Guatemala does not see a conflict of international 
obligations.  
37. In Indonesia – Autos , the Panel made a reference to situations in which there may be 
conflicts between two treaties. In particular,  that Panel explained the following:  
"In international law for a conflict to exist between two treaties, 
three conditions have to be satisfied. First, the treaties concerned 
must have the same parties. Second, the treaties must cover the 
same substantive s ubject matter. Were it otherwise, there would be 
no possibility of conflict. Third, the provisions must conflict, in the 
sense that the provisions must impose mutually exclusive obligations 
… '[T]echnically speaking, there is a conflict when two (or more) 
                                                
22 Australia 's First Written Submission. Para.104.  
23 Idem.  
24 WHO Framework Convention on Tobacco Control: Guidelines for Implementation (2013 edition) 
Exhibit AUS -109, Article 11, para. 46.   
25 WHO Framewor k Convention on Tobacco Control: Guidelines for Implementation (2013 edition) 
Exhibit AUS -109, Article 13.   
26 Dominican Republic First Written Submission. Para.187.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
- C-27 - 
 treaty instruments contain obligations which cannot be complied 
with simultaneously '".27 
38. In view of the above, if Australia would have chosen not to implement plain packaging 
measures, it would still be in compliance with its alleged obligations under the FCTC. As a matter 
of fact, plain packaging is only one among several measures that implement a comprehensive 
approach to tobacco control.  
39. Guatemala is also of the view that Members should, and are able to, comply with the 
FCTC Guidelines, in a man ner that such compliance does not compromise their obligations 
contained in the WTO covered agreements.  
 
                                                
27 Panel Report, Indonesia – Certain Measures Affecting the Automobile Industry, WT/DS54/ R, 
WT/DS55/R, WT/DS59/R, WT/DS64/R and Corr.1 and 2, adopted 23 July 1998, and Corr. 3 and 4, 
DSR 1998:VI, 220,  footnote 649.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 ANNEX C -7 
EXECUTIVE SUMMARY OF  THE ARGUMENTS OF JAP AN 
I. Characteristics of Trademark Protection Under the TRIPS Agreement  
1. Article 16.1 of the TRIP S Agreement confers on trademark owners a right to exclude others 
from using the owner 's trademark.  However, the TRIPS Agreement also makes clear that 
trademark owners have "legitimate interests " that WTO Members must take into account in certain 
circumst ances, such as when providing limited exceptions to trademark rights, as provided by 
Article 17 of the TRIPS Agreement.  The  panel in EC –Trademarks and Geographical Indications 
had identified one such "legitimate interest " as the interest in using one 's own trademark.1  Thus, 
"the use of a trademark, " as part of a trademark owner 's legitimate interests, must be taken into 
account when interpreting the TRIPS Agreement, in particular, when analyzing the "justifiability " of 
any encumbrance in the context of A rticle 20 of the TRIPS Agreement.  
II. Article 20 of the TRIPS Agreement  
A. Special Requirements  
2. Article 20 of the TRIPS Agreement is concerned with "special " requirements. Japan 
understands that the first sentence of Article 20 prohibits Members from im posing different or 
additional conditions that "unjustifiably " restrict the use of a trademark, in the context of buying or 
selling goods or services.   
3. In interpreting "special requirements " within the meaning of Article 20, Japan wishes to 
emphasize t hat the underlying raison d 'etre for a trademark is to enable consumers to tell goods 
and services apart.  Article 15 stipulates that trademarks must be "capable of distinguishing the 
goods or services of one undertaking from those of other undertakings. " Because the tobacco plain 
packaging measure impairs the ability of a trademark owner to distinguish its goods or services 
from those of other economic operators, there is no doubt that such a prohibition constitutes a 
"special requirement " within the meani ng of Article 20.   
4. Australia agrees that "the tobacco plain packaging measure imposes special requirements on 
the use of trademarks, at least in some respects. "2  However, Australia argues that "Article 20 is 
best interpreted as imposing a discipline o n how a Member may encumber the use of a trademark 
in the course of trade when its domestic laws and regulations otherwise do not prohibit the use of 
that trademark. "3   
5. Japan disagrees with Australia 's interpretation of the scope of Article 20.  A proh ibition on 
the use of a trademark is a "special requirement " within the meaning of Article 20.  Australia 's 
proposed interpretation would yield outcomes that are counterintuitive.  Conditions that interfere 
with, but do not prohibit, the use of a trademark  would only be allowed under Article 20 if such 
restrictions are justifiable.  Yet, under Australia 's interpretation, a total prohibition on the use of a 
trademark would always be allowed without any discipline, even though it effectively deprives the 
trademark of value.  
B. Unjustifiability  
6. As for the question of whether the plain packaging measure "unjustifiably " encumbers the 
"use of a trademark in the course of trade ", Australia relies on one aspect of the interpretation of 
the term "unjustifiable " in Article XX of the GATT 19944 and concludes that Article 20 of the 
                                                
1 Panel Report, EC –Trademarks and Geographical Indications , para. 7.664.  
2 Australia 's first written submission, para. 336.  
3 Ibid. para. 342.  
4 Appellate Body Report, EC – Seal Products , para. 5.306.  Australia also refers to Appellate Body 
Report, Brazil – Retreaded Tyres , paras. 225, 227 -228. WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
- C-29 - 
 TRIPS  Agreement requires "a rational connection between any special requirements imposed upon 
a use of trademarks in the course of trade and a legitimate public policy objective. "5   
7. Japan agrees that, in interpreting the term "unjustifiably " in Article 20 of the 
TRIPS  Agreement, guidance may be drawn from the interpretation of the term "unjustifiable " in 
the chapeau of GATT Article XX.  However, in EC – Seal Products , the Appellate Bod y observed 
that the question of whether the discrimination can be reconciled with, or is rationally related to, 
the policy objective is  "one element in a 'cumulative ' assessment of 'unjustifiable discrimination '",6 
and further explained that "[i]n US – Shrimp, the Appellate Body relied on a number of factors  in 
finding that the measure at issue resulted in arbitrary or unjustifiable discrimination. "7 Further, in 
Brazil – Retreaded Tyres , the Appellate Body found that "[i]n certain cases the effects of the 
discrimination may be a relevant factor, among others, for determining whether the cause or 
rationale of the discrimination is acceptable or defensible and, ultimately, whether the 
discrimination is justifiable. "8  Also, in US – Shrimp , the Appellate Body e xamined as one of the 
relevant factors the existence of a reasonably available alternative measure to determine whether 
the discrimination was unjustifiable.9 
8. Thus, although the focus of analysis should be "on the cause of the discrimination, or the 
rationale put forward to explain its existence, "10 and it is difficult to see how discrimination can be 
justified if "the rationale for discriminating does not relate to the pursuit of or would go against the 
objective " of the measure, the determination of whe ther there is a rational connection between the 
rationale of discrimination and the policy objective pursued requires the examination of "a number 
of factors ". Such inquiry may also involve the examination of the effect and nature of the means of 
discrimin ation adopted to achieve a policy objective and the rational connection of such adopted 
means to the end pursued.   
9. It is also important to note that the analysis required under GATT Article XX, which refers to 
unjustifiable discrimination, may be narro wer in scope than th e analysis required under 
TRIPS  Article 20, which need not focus exclusively on the discriminatory aspects of the 
encumbrance.   
10. In Japan 's view, a panel reviewing the claim under Article 20 of the TRIPS Agreement must 
determine whe ther the nature and extent of the encumbrance on the use of the trademark has a 
rational connection to the policy objective.  In so doing, the following factors may be relevant: Is 
the encumbrance rationally related to the stated purpose, or does it run co ntrary to that purpose? 
Where the policy objective is legitimate, does the encumbrance result from a single and unbending 
solution applied across a wide range of situations where the problem is more or less present? Is 
the encumbrance reasonably calibrated  to contribute to the policy objective?  
11. Japan additionally notes that there is a degree of uncertainty in Australia 's description of the 
objectives of its measure.  It is obvious that if the objective of a measure at issue is not precisely 
identified, it would be impracticable to assess effectively and properly whether the measure is 
reasonably calibrated to contribute to its policy objective. The first objective ( "reduc[ing] the 
appeal of tobacco products to consumers ") as set out in subsection 3(2)(a)  of the TPP Act appears 
to relate to discouraging consumers from smoking no matter whether they are fully informed of 
the harmful effect of tobacco products.  In contrast, the second and third objectives, as set out in 
subsections 3(2)(b) and 3(2)(c), appe ar intended to prevent consumers ' misunderstanding of the 
health risk of tobacco products (rather than cause consumers not to smoke even if they fully and 
accurately understand such risk).11   
12. With respect to the first objective  under subsection 3(2)(a) , Japan invites the Panel to ask 
Australia which aspect(s) of trademarks used on tobacco products are the ones that make tobacco 
                                                
5 Australia 's first written submission, para. 383.  
6 Appellate Body Report, EC – Seal P roducts , para. 5.306.  
7 Ibid. para. 5.305 (emphasis added; footnotes omitted) . 
8 Appellate Body Report, Brazil – Retreaded Tyres , para. 230.  
9 Appellate Body Report, US - Shrimp , para. 171.  
10 Appellate Body Report, Brazil – Retreaded Tyres , para. 226.  
11 The Panel may wish to confirm whether Australia considers that the objective of the plain packaging 
measure is to prevent consumers ' misunderstanding, rather than, to cause Australian consumers not to smoke 
even if they fully and accurately understand the he alth risk of tobacco products (without banning the 
consumption and sales of tobacco products).  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
- C-30 - 
 
 products appeal to consumers and why restrictions on the other aspects of the trademark are 
warranted.  On the other hand,  with respect to the latter two objectives under subsections 3(2)(b) 
and (c) , Japan invites the Panel to ask Australia what aspects of the trademarks, in particular , 
what figurative aspects of the trademarks, give rise to consumers ' misunderstanding of the harm  
of the products in Australia 's market.  If any figurative aspect of trademarks may give rise to such 
misunderstanding, Japan would like to invite the Panel to further ask whether and how Australia 's 
position is consistent with the general understanding of  the function of trademarks, which is by 
their nature to distinguish goods or services in the course of trade as provided in Article 15 and is 
not to contribute to misunderstanding by consumers about the products and their quality.   
13. Finally, Japan als o believes that Article 8.1 of the TRIPS Agreement makes clear that the 
measures necessary to protect public health are only permissible if they are "consistent with the 
provisions of this Agreement. "  Article 8.1 is not an exception to the Agreement, but an affirmation 
that the Agreement as a whole already takes into account the ability of Members to take measures 
pursuant to public policy objectives.  Therefore, taking a measure pursuant to public health does 
not in and of itself make the measure justifia ble.  To permit otherwise would provide Members with 
overly broad powers to restrict trademarks.  
III. The Relationship Between the TRIPS and TBT Agreements  
14. Japan disagrees with Australia 's argument that "Article 20 of the TRIPS Agreement would 
apply to  the exclusion of Article 2.2 of the TBT Agreement in respect of " the so -called "trademark 
requirements. "  Japan also disagrees with Australia 's assertion that "Article 20 of the 
TRIPS  Agreement would clearly address this subject matter [i.e. requirements affecting the use of 
trademarks] more 'specifically, and in detail ' as compared to Article 2.2 of the TBT Agreement.12   
15. In Japan 's view, the relationship of different covered agreements must be determined on the 
basis of objective scrutiny of the relev ant provisions of those covered agreements, as any two 
covered agreements "are both 'integral parts ' of the WTO Agreement that are 'binding on all 
Members. "13  
16. In addition, as Australia admits, Article 2.2 of the TBT Agreement "encompasses all manner 
of 'technical regulations, '" which are defined in Annex 1.1 of the TBT  Agreement .  There is  nothing 
in the TBT Agreement that  a priori excludes measures regulating the use of a trademark from the 
scope of Article 2.2.  Japan is of the view that the tobacco p lain packaging measure is in fact a 
"technical regulation, " as defined under Annex 1.1 of the TBT Agreement.  
17. Finally , Australia refers to certain statement by the Appellate Body in EC – Bananas III  to 
support its position14.  However, the Appellate Body 's findings there related to the order of analysis 
and do not stand for the proposition that a provision of one covered agreement which "deals 
specifically, and in detail " with the particular subject matter applies to the exclusion of a provision 
on anothe r agreement which also deal with the same matter.  
IV. Article 2.2 of the TBT Agreement – Trade Restrictiveness  
18.  Australia considers it "axiomatic that, in order to make a prima facie  case under this 
standard [of Article 2.2], a complainant must establi sh, as a threshold matter, that the technical 
regulation at issue is 'trade -restrictive '."15  Trade -restrictiveness was not characterized by the 
Appellate Body as a threshold issue in US – Tuna II (Mexico) , or subsequently in US – COOL .  
Rather, the trade -restrictiveness of the measure is one of the factors of the relational, multi -factor 
test developed by the Appellate Body to determine whether a measure is consistent with 
Article  2.2 of the TBT Agreement.16 
                                                
12 Australia 's first written submission, paras. 508 -511. 
13 Appellate Body Report, Argentina – Footwear (EC) , para. 81.  
14 Australia 's first written submission, par a. 511. 
15 Australia 's first written submission, para. 522 (referring to Appellate Body Report, US – Tuna II 
(Mexico) , footnote 647 to para. 322).  
16 Appellate Body Report, US – Tuna II (Mexico) , para. 322.  See also  Appellate Body Report, US - 
COOL , para. 3 74. WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 V. Article 2.2 of the TBT Agreement – Identificati on of Legitimate Objective and the 
Measure 's Contribution  
19.  Japan considers that, in order to conduct an objective analysis on the legitimacy of the 
objective and the relational and comparative analyses of the necessity of the measure (especially 
with r egard to the degree of contribution and the risks of non -fulfilment) under Article 2.2 of the 
TBT Agreement, it is essential to identify the objective or the policy rationale of the challenged 
measure as precisely as possible at the outset.  As the Appella te Body explained, "the relevant 
objective is the benchmark against which a panel must assess the degree of contribution made by 
a challenged technical regulation, as well as by proposed alternative measures. " 17   
20.  Accordingly, Japan invites the Panel to examine the objectives of the plain package 
measure in the same manner as described by Japan with regard to Article 20 of the TRIPs 
Agreement (i.e., to examine whether the objective is to prevent consumers from misunderstanding 
the health risk of tobacc o products or to cause consumers not to smoke even if they fully and 
accurately understand such risk, what aspects of trademarks give rise to the consumers ' 
misunderstanding, and the consistency with the generally recognized function of trademarks of 
distinguishing goods or services).   
VI. Article 2.2 of the TBT Agreement – Burden of Proof  
21.  Japan recognizes that, as the Appellate Body has established, the complainant has the 
burden of proof for its claim under Article 2.2 that the challenged measure cr eates an unnecessary 
obstacle to international trade.  After the complainant has presented its prima facie case, it is then 
for the respondent to rebut the complainant 's prima facie  case.  Japan notes that, considering that 
the respondent country is in the  best position to have the relevant facts and evidence about its 
own measures or the regulatory context of the measures, complainants should not be required to 
bear too heavy a burden to establish its prima facie case under Article 2.2 of the TBT Agreement .  
In other words, complainants should not be required to provide a full analysis of the trade -
restrictiveness of the alternative measure, before the burden shifts to the respondent to rebut the 
complainant 's prima facie  case. 
VII. Article 2.5 of the TBT A greement  
22.  Japan observes that Article 2.5 establishes a rebuttable presumption that a technical 
regulation does not create an unnecessary obstacle to international trade when certain conditions 
are met.  Such legal presumptions, while capable of being rebutted, are by definition not easily 
overcome, as new evidence and argumentation would be needed to shift the burden once again.  
In Japan 's view, the difficulty in rebutting a presumption under Article 2.5 may depend on the  level 
of precision  in the int ernational standards at issue.  If the international standard is quite 
prescriptive and is followed closely by the relevant Member, such a presumption would arguably be 
more difficult to rebut.  If, on the other hand, the reliance on the international stan dard is loosely 
based, or the international standard is too broad, the presumption would be easier to rebut.  Such 
determinations should, in Japan 's assessment, be made on a case -by-case basis.  
                                                
17 Appellate Body Report, US – COOL , para. 387.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 ANNEX C -8 
EXECUTIVE SUMMARY OF  THE ARGUMENTS OF THE REPUBLIC OF KOREA* 
Mr. Chairman and Members of the Panel , 
1. Korea appreciates this opportunity to present its views in this dispute, in which Korea has 
systemic interest with respect to the interpretation of the TBT and TRIPS Agreements. Korea also 
has systemic in terest in how the WTO decides on the relationship between WTO rules and other 
international agreements.  Today, Korea would like to briefly comment on a couple of key issues 
on which we request the Panel 's clear guidance.  
2. Korea believes that WTO Member s have the right to pursue legitimate domestic regula tory 
and public policy objectives , such as public health . This right to regulate should be protected as a 
sovereign right of all Member countries , and is sufficiently reflected in the GATT 1994, as well as 
the TBT and SPS agreements.   
3. At the same time, Korea is mindful of a main function of the WTO,  that is ensuring that 
"trade flows as smoothly, predictably, and freely as possible. " Striking the right balance between 
pursuing public health  objectives,  and securing free trade is particularly important  in this dispute . 
In this regard, Korea would like to submit the following observations.  
4. First, this Panel should provide clear guidance on the relationship between WTO rules and 
rules established by oth er international organizations. In this dispute, the WHO is the other 
international organization. But the Panel should also consider provisions of the TRIPS Agreement. 
Since protecti ng intellectual property rights  is essential for creating value through tr ade, 
trade -restrictive measures that violate the TRIPS Agreement should  not be allowed.  
5. Second , Korea requests the Panel to provide guidance on the relationship between WTO 
rules and WHO rules. While in principle the object and purpose of other inter national agreements 
should not be allowed to undermine the interpretation or application of WTO Agreement 
provisions , the value of the F ramework Convention on Tobacco Control  ("FCTC") should be 
sufficiently respected . The FCTC is currently ratified by 180 co untries, making it the most widely 
ratified convention among UN Member states. In particular, Korea notes that Article 46 of the 
guidelines for Article 11 of the FCTC recommends the adoption of plain packaging.  Korea believes 
that the Panel 's decision wit h respect to the relationship between this specific FCTC 
recommendation and relevant provisions of the WTO Agreements will be crucial in resolving the 
key issues of this dispute.  
6. Third, Korea requests the Panel to give clear guidelines on the scope of t he rights under the 
TRIPS Agreement. The complainants claim that the plain packaging measure improperly restricts 
the use of trademarks, and is thus inconsistent with the TRIPS Agreement. Australia argues  that 
the TRIPS Agreement provides negative rights o f exclusion; therefore, it is argued that Australia 's 
measure is TRIPS -consistent. The Panel 's interpretation of the scope of trademark rights will have 
a significant impact on the policies of WTO Members. In Korea 's view, a narrow interpretation of 
Article 20 of the TRIPS Agreement would lead to severe restrictions on trademark rights.  
7. In this regard, Korea notes t he panel 's interpretation of Article 17 of the TRIPS Agreement 
in EC – Trademarks and Geographical Indications.  The panel in that dispute fou nd that a 
"legitimate  interest " includes the trademark owner 's interest in using its own trademark. In 
interpreting Article 20 of the TRIPS Agreement, this legitimate interest of the trademark owner 
should be considered.  
8. Finally, Korea respectfully req uests this Panel to give guidance on the interpretation of 
Article 8.1 of the TRIPS Agreement.  Article 8.1 reaffirms the right to adopt measures necessary to 
                                                
* Korea requested that its oral statement serve as its executive summary.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 protect public health in formulating laws and regulations. It is noted, however, that such legiti mate 
policy goals are permissible only if consistent with provisions of the TRIPS Agreement.  
9. This concludes Korea 's oral statement . Thank you . 
 WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 ANNEX C -9 
EXECUTIVE SUMMARY OF  THE ARGUMENTS OF MAL AWI 
I.  INTRODUCTION  
1.  Malawi presented its views to th e Panel in Australia - Certain Measures Concerning Trademarks, 
Geographical Indications And Other Plain Packaging Requirements Applicable To Tobacco Products 
And Packaging (DS435, DS441, DS458, DS467)  in a written submission dated 10 April 2015 and in 
a third party oral statement on 3 June 2015. Malawi is pleased to provide the Panel with a 
summary of the views it expressed in these dispute settlement proceedings.  
2.  For Malawi, the strict packaging requirements imposed by Australia under the Tobacco Plain  
Packaging Act 2011, Tobacco Plain Packaging Regulations 2011 and 2012 and the Trade Marks 
Amendment (Tobacco Plain Packaging) Act 2011 (the "plain packaging measures ") raise systemic 
questions about international trade and intellectual property law. These  measures also have the 
potential to greatly and negatively impact the economic and trade interests of Malawi, as a small, 
landlocked least -developed country, which depends on tobacco farming for a substantial portion of 
its economic output and its economi c development.  
3.  Malawi is the world 's largest producer of Burley tobacco and the sixth largest grower of 
unmanufactured tobacco. Tobacco is the third largest export product by volume (after maize and 
sugar), but the value of the tobacco is more than do uble the value exports of maize and sugar 
combined. Agriculture accounts for about 33 percent of Malawi 's GDP and 90 percent of export 
revenues. Tobacco accounts for over 60 percent of the value of Malawi 's exports and it contributes 
to 15 percent of its G DP. Malawi 's share in world total exports is a mere 0.01 percent.  
4.  Over two families in Malawi or about seventy percent of the population directly rely on tobacco 
and related industries for their livelihood. All of Malawi 's tobacco production is used fo r the 
production of cigarettes sold internationally.  
5.  Given the predominant role for tobacco in Malawi 's international trade portfolio, it is essential 
for Malawi to ensure that measures directly or indirectly affecting the trade of tobacco and tobacco  
products are consistent with the WTO Agreements. Plain packaging measures are highly trade 
distortive and will have a substantial and disproportionate effect on Malawi 's economy by driving 
down legitimate demand for high -quality tobacco leaf and supportin g illicit trade in low -quality 
products outside of the legitimate international trade in this important export product.  
6.  Malawi considers that the balancing requirement of Article 2.2 of the Agreement on Technical 
Barriers to Trade ( "TBT Agreement "), wh ich provides that any technical regulation must not be 
more trade -restrictive than necessary, is a fundamental and central principle of the WTO system. 
A careful assessment of the contribution, if any, of the plain packaging measures to its legitimate 
objective must thus be performed on the basis of the evidence before the Panel to undertake the 
weighing and balancing exercise of Article 2.2.  
7.  Malawi does not question the health objective pursued by Australia but considers that a 
WTO Member cannot simply  invoke health -related grounds to justify highly trade restrictive 
measures particularly in the absence of evidence that these measures will contribute to the stated 
objective.  
8.  Based on the review of the facts before the Panel, Malawi submits that no convincing evidence 
exists regarding the contribution of plain packaging to the reduction of smoking. Australia has not 
engaged on the assessment of the actual effectiveness of its measure by reference to actual 
smoking behaviour and has instead relied on theories of behavioral sciences to explain a 
convoluted chain reaction of affecting perceptions and attitudes that should first take place in 
order to, at some later stage, affect smoking behavior. Malawi takes note of the arguments 
regarding the lack of p redictive validity of behavioral sciences. This seems to be confirmed by the 
most recent market data from Australia and, in particular, the analysis of the data collected by 
Australia in its National Plain Packaging Tracking -Survey that demonstrate the ine ffectiveness of WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 plain packaging to change smoking behavior or even have an impact on individuals ' perceptions, 
intentions and attitudes about smoking.  
9.  Malawi also submits that plain packaging is not at all necessary because less trade restrictive 
alternatives, such as an increase in taxes, were available to Australia and would have had a 
contribution to the stated objective. Experience in other Members evidences that smoking can be 
more effectively combated without plain packaging.  
10.  Malawi is of th e view that the provisions of Article 2.2 of the TBT Agreement must be strictly 
applied in the present disputes. Absent sufficient evident of an actual effective contribution of 
technical regulations to the stated objective and the absence of less trade -restrictive alternatives, 
highly trade -restrictive technical regulations such as plain packaging measures cannot be 
confirmed. A lowering of the standards set in previous disputes would lead to increase risks of the 
imposition of unnecessary and restrictive technical regulations not supported by sufficient 
justifications. In addition to having a direct impact on the products they regulate, technical 
regulations affect the inputs in such products. It is essential for Malawi that the impact of 
Australia 's plain  packaging measures on the trade of tobacco be considered by the Panel as it 
directly affects economic development and the livelihood of most of its population.  
11.  As regards arguments under the TRIPS Agreement, Malawi understands that Australia 's view 
is effectively that for certain products that pose a health risk, including but certainly not limited to 
tobacco products, trademarks are necessarily misleading and their use may be restricted, without 
any indication that the affected signs provide misleadi ng information. Under Australia 's approach, 
substantive trademark rights would depend on the policy choices by each Member whether 
products or category of products are to be considered as harmful or not. Given that a great variety 
of products pose certain health or other risks, accepting Australia 's position would effectively mean 
that any Member could ban the use of trademarks for any product category. Because of the crucial 
role of trademarks in a global economy as a means of entering new markets and comp eting over 
market share, this would have devastating consequences for the export strategy of Malawi in the 
tobacco sector.  
12.  By significantly restricting the forms of signs that may constitute a trademark with the 
imposition of plain packaging, Australi a violates Article 15.1 of the TRIPS Agreement.  
13.  The plain packaging measures imposed by Australia fail to take into consideration the purpose 
and benefit of trademarks for consumers and producers alike. Trademarks are used with the view 
of differenti ating products and services and are thus essential to competition. They are recognized 
as one of the essential tools to penetrate new markets. If they cannot be affixed on products and 
their packaging, trademarks cannot pursue their distinguishing function .  
14.  The prohibition of the use of trademark on plain packaging coupled with the imposition of 
strict packaging requirements results in the adoption of a generic form of packaging that will lead 
to the commoditization of tobacco products. The reduction in the ability of consumers to 
distinguish between products will have a negative impact on the prices of tobacco products and, 
in turn, affect prices of tobacco as manufacturers of tobacco products will have to be more 
competitive. This will be highly detr imental to Malawi as it is a least -developed country whose 
economy is dependent tobacco.  
15.  Australia 's plain packaging measures also constitute an unjustifiable encumbrance on the use 
of trademarks that is inconsistent with Article 20 of the TRIPS Agree ment because they prohibit 
trademark owners from using their trademarks, as registered, tobacco products. Australia has 
prohibited the use of registered trademarks without examining whether registered trademarks 
previously used were one of the reasons that  led people to smoke or prevented them from 
smoking. Given the constant decline in smoking and prevalence in Australia over the decade that 
preceded the introduction of plain packaging, trademarks are unlikely to have had any significant 
effects on smoking  rates.  
16.  Malawi further considers that the restrictions imposed on the use of geographical indications 
is contrary to Articles 24.3 and 22.2(b) of the TRIPS Agreement. Plain packaging measures 
diminish the protection that existed in Australia before th e entry into force of the WTO Agreement 
and do not provide any means to prevent the use of geographical indications. Geographical WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 indications are particularly important for developing and least -developed Members as  it may allow 
their products to gain marke t recognition because of the characteristics or quality  that is 
attributable to their origin.  
17.  The livelihood of the majority of Malawi 's population is dependent on tobacco growing and 
trade for its livelihood. The ever -increasing regulatory requireme nts imposed on tobacco products 
significantly impair the economic development of Malawi as they have negative effects on the 
volume and value of tobacco traded. The negative consequences of plain packaging measures on 
least-developed country Members that a re dependent on tobacco must be considered together 
with the legal arguments presented by all the Parties. The economic and social consequences of 
plain packaging on the most vulnerable Members that have no other option but to continue to rely 
on tobacco g rowing for their economic development cannot be ignored.  
18.  For Malawi, the plain packaging measures adopted by Malawi are inconsistent with its 
obligations under the TBT and TRIPS Agreements. Malawi does not question the objective pursued 
by Australia but is of the view that it has sufficient policy space to such objective and could have 
adopted effective and less trade -restrictive measures consistent with the WTO Agreements.  
 WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 ANNEX C -10 
EXECUTIVE SUMMARY OF  THE ARGUMENTS OF NEW  ZEALAND  
I.  Introducti on 
1.  This case raises important systemic issues concerning the right of WTO Members to regulate 
the marketing of a product in order to protect their legitimate public health objectives. 
New Zealand is concerned to ensure that the balance of rights and ob ligations that Members 
negotiated in the WTO Agreement is maintained, and that the Agreement on Trade -Related 
Aspects of Intellectual Property Rights  ("TRIPS Agreement ") and the Agreement on Technical 
Barriers to Trade  ("TBT Agreement ") are properly interp reted and applied. This is particularly 
important when dealing with a product that is the single largest cause of preventable death 
and disease in New  Zealand, Australia and many other countries.  
2.  The complainants in this dispute allege that Australia 's tobacco plain packaging measure 
is inconsistent with a large number of provisions in the TRIPS Agreement and the TBT Agreement. 
The complainants have proposed interpretations of the provisions they rely on that do not have 
any basis within the text of the  agreements at issue, and ignore customary rules of treaty 
interpretation. This raises serious concerns for New  Zealand.  
II.  The "Nature of the Goods " does not Form an Obstacle to the Registration of a 
Tobacco Trademark under Article 15.4  
3.  Article 15 of the TRIPS Agreement sets out what is the "Protectable Subject Matter " with 
respect to trademarks. Article 15.1 addresses what may constitute a trademark, and Article 15.4 
addresses what obstacles to registration of a trademark are not permitted. Section  28 of 
Australia 's Tobacco Plain Packaging Act 2011 means that even if a person is prevented by the 
tobacco plain packaging measure from using a trademark on retail packaging of tobacco products, 
the ability to register the trademark in Australia is not af fected. The nature of the tobacco products 
to which a trademark is applied therefore cannot  form an obstacle to the registration of the 
trademark. The complainants argue that by preventing the use of certain "signs" the tobacco plain 
packaging measure is a n "obstacle to registration " as it prevents those signs from acquiring 
distinctiveness and therefore becoming a trademark. However this seeks to conflate Article 15.1 
with Article 15.4 and goes well beyond the ordinary meaning of Article 15.4. Australia is  not 
in violation of Article 15.4, properly interpreted.  
III. The Tobacco Plain Packaging Measure does not Reduce the Rights Conferred on the  
Owner of a Registered Trademark under Article 16.1 or Article 16.3  
4.  Article 16 of the TRIPS Agreement sets out  the "Rights Conferred " on the owners of registered 
trademarks. Article 16.1 provides an "exclusive right to prevent " the use of certain signs where 
such use would result in the likelihood of confusion. Article 16.3 confers on owners of well -known 
register ed trademarks the right to prevent third parties from using the trademark. The "right to 
prevent " is a negative right that enables the trademark owner to seek relief where a third party 
uses its trademark in certain circumstances. The rights of the tradema rk owner are rights vis -à-vis 
other traders. They are not positive rights vis -à-vis a WTO Member to use the trademark. 
Members are required, however, to provide the opportunity for trademark owners to register the 
trademark so that the rights of the tradem ark owner can be protected. Australia has complied with 
its obligations in this regard and has not violated Articles 16.1 or 16.3 of the TRIPS Agreement.  
IV. The Tobacco Plain Packaging Measure does not Violate Article 20 of TRIPS  
5.  In order to demonstr ate a violation of Article 20 of the TRIPS Agreement, a complainant must 
establish that:  
(i) the measure at issue imposes special requirements  on the use of trademarks;  
(ii) the special requirements encumber the use of a trademark in the course of trade ; 
and WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
- C-38 - 
 
 (iii) the measure at issue imposes the encumbrance unjustifiably . 
6.  Article 20 of the TRIPS Agreement sets out that the use of a trademark in the course of trade 
shall not be unjustifiably encumbered by special requirements, a non -exhaustive list of which 
are set out in Article 20, each of which deal with the use of a trademark. If it is established that 
the tobacco plain packaging measure imposes special requirements, which encumber the use 
of a trademark in the course of trade, it must further be es tablished that the use is not 
"unjustifiably " encumbered. Drawing on the views of the WTO Appellate Body expressed in 
Brazil  - Retreaded Tyres1 and EC – Seal Products , 2 the ordinary meaning of "unjustifiably ", in its 
context and in light of its object and  purpose, is clear that the use of a trademark is justifiably 
encumbered by special requirements only if there is no rational connection between the imposition 
of the special requirements and a legitimate objective.  
7.  New Zealand acknowledges that the wo rding, and object and purpose, of Article XX of the GATT 
are different to Article 20 of the TRIPS Agreement and that Article 20 does not include the notion 
of discrimination. Notwithstanding those differences, New  Zealand considers that the 
Appellate  Body's reasoning in Brazil – Retreaded Tyres and EC – Seal Products provides useful 
guidance on, and is consistent with, the ordinary meaning of the term "unjustifiably " in the context 
of Article 20 of the TRIPS Agreement.  
8.  This interpretation of the term "unjustifiably " is consistent with the context provided by other 
provisions of the TRIPS Agreement and the object and purpose of the TRIPS Agreement. 
Article  8.1 and the 2001 Doha Ministerial Declaration on the TRIPS Agreement and Public Health 
confirm that the TRIPS Agreement should be interpreted in a manner supportive of WTO Members ' 
right to protect public health, and signal that protecting public health is of particular importance 
to Members.  
9.  The complainants appear to interpret Article 20 as importi ng a "necessity " test or a "least 
trade -restrictive " test. Such an approach reads words into the text of Article 20 which are absent. 
Given that the notions of "necessity " and "least trade -restrictive " were not included in Article 20, 
it is reasonable to d raw the inference that the drafters of Article 20 did not intend to incorporate 
those notions. The fact that these notions are nowhere evident on the face of Article 20 means 
that the ordinary meaning of the terms must be given their interpretative effect.  New Zealand also 
notes that it is important to not bring a necessity or least trade -restrictive test in through the back 
door by developing a test which is, in all intents and purposes, equivalent to a "necessity " or 
"least trade restrictive " test. 
V.  The tobacco plain packaging measure is not trade -restrictive under Article 2.2  
10.  The complainants have alleged that Australia 's tobacco plain packaging measure contravenes 
Article 2.2 of the Technical Barriers to Trade (TBT) Agreement. The protection of h uman health 
is clearly one of the "legitimate objectives " covered by Article 2.2 of the TBT Agreement and the 
risks of non -fulfilment are grave. Article 2.2 protects the expectations of WTO Members that 
technical regulations will not limit trade to a great er extent than is necessary to fulfil a legitimate 
objective, taking into account the risks non -fulfilment would create. It has not been established 
that the tobacco plain packaging measure is trade -restrictive or that there are any changes in 
market condi tions resulting from the tobacco plain packaging measure which have a limiting effect 
on trade in imported tobacco products. In any case, the evidence adduced by Australia 
demonstrates that the tobacco plain packaging measure contributes to its public heal th objectives 
by reducing the appeal of tobacco products and contributing to the broader objectives of 
discouraging uptake, encouraging quitting and thereby reducing exposure to smoke. The 
complainants have failed to discharge their burden of making a prima facie  case of violation of 
Article 2.2 of the TBT Agreement. Furthermore, the Guidelines for the implementation of 
Articles  11 and 13 of the Framework Convention on Tobacco Control (FCTC) recommend that 
Parties consider the adoption of plain packaging of  tobacco products. As such, the measures fall 
under Article 2.5 of the TBT Agreement.  
                                                
1 Appellate Body Report, paras 226 -227. 
2 Appellate Body Report, para 5.306.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 VI.  Analysis of the Complainants ' evidence comparing smoking prevalence in Australia 
and New  Zealand  
11.  New Zealand also comments on the complainants ' evidence which s eeks to compare smoking 
prevalence in Australia and New  Zealand. The "Expert Report of J. Klick " on the Effect of 
Australia 's Plain Packaging Law on Smoking, submitted by Ukraine,3 contains numerous 
shortcomings, flawed analysis and draws invalid conclusio ns. This is of particular concern to 
New Zealand because of the comparison the Report makes with data from New  Zealand. 
In particular, Klick 's study sets up a false and virtually impossible evaluation test by looking for a 
marked short -term reduction in po pulation smoking prevalence and tobacco consumption. 
Furthermore, the use of New  Zealand as a comparison case is superficial and misleading, the data 
sets used by Professor Klick cannot be relied upon, and the presentation of the survey results in 
the Repo rt is also misleading.  
12.  New Zealand notes that the Panel is entitled to rely on empirical evidence available at the 
time of the implementation of a measure, and post -implementation evidence which assists in 
assessing the rational connection between the  measure and the legitimate objective, and the 
degree to which the measure contributes to the legitimate public policy objectives of a 
WTO Member. To discard such evidence would fail to fulfil the standard of review of a Panel set out 
in Article 11 of the DSU: to make an objective assessment of the facts of the case. In assessing 
such empirical evidence, however, a Panel should examine any evidence objectively with an 
inquiring mind. Where there are fatal flaws in the evidence, such as Professor Klick 's Rep ort, the 
Panel should not give that evidence any weight.  
13.  Furthermore, the fact that Australia 's measures have been implemented relatively recently is 
an important factor that the Panel should bear in mind when assessing the complainants ' evidence 
and Australia 's evidence concerning the post -implementation period. When determining the 
significance of each piece of evidence, and what weight the Panel should give to that evidence, 
the Panel should keep in mind that the impact of tobacco plain packaging o n smoking rates as part 
of a comprehensive suite of measures will be felt most significantly in the longer -term. Where an 
objective is to change behaviour over the long -term, evidence of impact in the immediate post -
implementation period will clearly be le ss persuasive. This is especially the case where, as in this 
case, the complainants seek to draw definitive conclusions on the success of tobacco plain 
packaging solely on the basis of rates of smoking prevalence soon after the measure 's 
implementation.  
VII. Conclusion  
14.  In New  Zealand 's view that the complainants have failed to demonstrate that Australia 's 
measure is inconsistent with the WTO agreements at issue in this dispute.  
                                                
3 Expert Report by J. Klick, "The Effect of Australia 's Plain Packaging Law on Smoking: Evidence from 
Survey and Market Data " (Exhibit UKR -5). WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 ANNEX C -11 
EXECUTIVE SUMMARY OF  THE ARGUMENTS OF NIC ARAGUA  
1.  This Execut ive Summary of the arguments of Nicaragua in this dispute reflects the written and 
oral submissions of Nicaragua to the Panel.1 The Government of Nicaragua is grateful for this 
opportunity to summarize its views and sincerely hopes that the Panel will take  into account 
its concerns in respect of Australia 's Tobacco Plain Packaging Act of 2011 . 
2.  Nicaragua is a developing country and a party to the World Health Organization 's Framework 
Convention on Tobacco Control. Nicaragua shares therefore the objective  of implementing effective 
tobacco -control measures to protect public health while, at the same time, facilitating 
and promoting trade and economic growth.  
3.  Nicaragua is very concerned with the imposition of tobacco -control measures that have not 
proven  to be effective and that negatively impact its trade and economic interests. In this respect, 
Nicaragua notes that it has an important domestic tobacco sector involved in growing tobacco leaf 
and manufacturing tobacco products. More than 30,000 workers ar e directly employed by 
the tobacco sector and an additional 180,000 individuals are indirectly employed. Thus, Nicaragua 
is concerned with this trade -restrictive technical regulation that lacks a sound scientific basis and 
is not consistent with the covere d Agreements of the World Trade Organization ( "WTO"). 
4.  Nicaragua is not questioning Australia 's right to seek to regulate the sale of tobacco products. 
It is seriously concerned about the fact that plain packaging has failed to contribute to its public 
health objective.  Plain packaging limits the ability to use trademarks on lawfully available 
products and is having the effect of severely restricting international trade.  
5.  In the course of this dispute, Nicaragua has highlighted some of the WTO obliga tions Australia 
violates by enforcing an unnecessary measure restricting the ability to use trademarks 
to distinguish lawful products, and the effects this has on a developing country like Nicaragua. In 
this regard, Nicaragua notes its support of the claim s and arguments developed by Cuba, 
the Dominican Republic, Honduras, Indonesia and Ukraine under the WTO Agreements.  
6.  Before considering its concerns with the Australian measure under the Agreement on 
Trade -Related Aspects of Intellectual Property Right s ("TRIPS Agreement ") and the Agreement on 
Technical Barriers to Trade ( "TBT Agreement "), Nicaragua wishes to point out that it sees 
no "systemic concerns " with the application of both Agreements to the same measure. Indeed, 
applying all relevant and appli cable WTO disciplines to a Members ' challenged measure is 
a common feature of WTO disputes and is required of Panels by Articles 7.2 and 11 of the 
Understanding on Rules and Procedures Governing the Settlement of Disputes ( "DSU"). 
7. Considering its impact  on intellectual property rights issues protected by the 
TRIPS  Agreement, Australia 's plain packaging measure is a unique regulation. It is the first of its 
kind to deny the essential functions of trademarks to a specific group of products. No longer can 
trademarks perform their essential function of source identification and distinguishing products 
between competitors.  Thus, rather than to "protect " trademark rights under the TRIPS Agreement 
and the Paris Convention  for the Protection of Industrial Proper ty ("Paris Convention "), Australia, 
through the implementation of the plain packaging measure, prevents trademark protection.  
8.  Nicaragua considers that the plain packaging measure violates Articles 15.1 and 15.4 of the 
TRIPS Agreement by prohibiting the  use of all non -word marks without individually assessing 
them. The figurative and non -inherently distinctive signs resulting from the plain packaging 
requirements imposed by Australia cannot constitute a "trademark " as defined in the 
TRIPS  Agreement. Aust ralia's plain packaging measure is product -specific because the prohibition 
to use registered trademarks only applies to a distinct category of products.  
                                                
1 Nicaragua 's third party written submission of 10 April 2015, oral statement at the third party session 
of the first Panel hearing of 3 June 2015, and replies to the questions to the third parties of the Panel of 
6 July 2015.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 9.  Nicaragua is not convinced by Australia 's formalistic argument that plain packaging does not 
affect the substantive rights set forth in Article 16 of the TRIPS Agreement because trademarks 
that can no longer be used remain registered in Australia.  The text of Article 16 establishes 
an important link between the use of a trademark, its strength, and t he ability for a trademark 
owner to protect its mark against infringement. Thus, by preventing the ability to use trademarks, 
Australia reduces the level of protection below the minimum level guaranteed by Articles 16.1 and 
16.3 of the TRIPS Agreement.  
10.  In relation to Article 20 of the TRIPS Agreement, Nicaragua is of the view that the 
requirement it imposes is very clear. This article establishes that a regulatory measure that 
encumbers the use of trademarks is subject to the disciplines of the TRIPS A greement. Thus, the 
argument that trademarks only provide "negative " rights is disproved by the text of Article 20, 
which clearly protects the use of a trademark from unjustifiable encumbrances. In other words, 
trademarks must, in principle, be permitted t o be used without undue government encumbrances.  
11.  Further, Nicaragua notes that the plain packaging measure is a "special requirement " subject 
to Article 20 of the TRIPS Agreement, but that general advertising restrictions are not "specific " 
to tradema rk use and thus not within the purview of Article 20. This distinction is important 
because Nicaragua submits that Members retain a wide degree of latitude for effective regulation 
of private conduct which may impact on trademark use in an incidental way. The great degree of 
policy space afforded to Members to regulate in this area also provides context to understand the 
broad scope of the term "unjustifiably. " 
12.  Nicaragua considers that the term "unjustifiably " must not be interpreted in a narrow manner  
to allow any encumbrance that is merely related to a legitimate policy objective. In this respect, 
Australia 's reading of the term as only requiring "a rational connection " with the policy objective is 
clearly not sustainable. Most Members appear to agree  that Australia 's reading of "unjustifiable " is 
unduly narrow. In the view of Nicaragua, "unjustifiably " denotes a standard of proportionality and 
suitability and the term was included in Article 20 to allow limited and proportionate encumbrances 
only. Nic aragua notes that Article XX of the General Agreement on Tariffs and Trade of 1994 
("GATT 1994 ") provides relevant context to interpreting Article 20 of the TRIPS Agreement but 
would remind the Panel that a number of differences between those provisions mu st be taken into 
account, as set out in our replies to the Panel 's questions. The same is true for the terms of 
Article  8.1 of the TRIPS Agreement, as also set out in our replies to the Panel 's questions.  
13.  Nicaragua submits that Australia violates its obligations under Article 20 because a special 
requirement that prohibits the use of a trademark and has, as its main goal the destruction of its 
origin and distinguishing functions, is not a "proportionate " encumbrance and is thus necessarily 
"unjustifiab le." In addition, a measure that does not individually assess the trademarks in question 
but instead bluntly prohibits the use of these trademarks violates Article 20.  In other words, 
Australia 's plain packaging measure is a disproportionate regulatory me asure that impairs the very 
substance of the rights afforded to trademarks under the TRIPS Agreement.0  
14.  Finally, Nicaragua has reviewed the evidence submitted in this dispute concerning the 
contribution of the plain packaging measure to its public heal th objective. It is persuaded by 
the evidence of the Complainants showing that plain packaging has not had any positive effect 
either on overall numbers of smokers or on consumption in the two years following its 
implementation. Nicaragua notes that Austra lia has not been able to adequately respond and 
provide information to counter the evidence submitted by the Complainants. Australia 's reliance 
on behavioral sciences and theories of marketing is not persuasive when there are facts to the 
contrary on the r ecord. Thus, plain packaging is an unjustifiable encumbrance because it is not 
"necessary " for the protection of public health as it does not contribute to reducing smoking, 
as confirmed by the data before the Panel.  
15.  In sum with respect to the TRIPS i ssues in this dispute, Nicaragua considers that the 
prohibition on the use of trademarks and the requirement to use brand names in a standardized 
form are unjustifiable encumbrances imposed on the use of a trademark. Plain packaging therefore 
the obligatio ns of Australia under the TRIPS Agreement.  
16.  As regards the consistency of the Australian measure with the TBT Agreement, Nicaragua 
finds that the measure – which is contained in a document that lays down product or production -WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
- C-42 - 
 
 related requirements for marking and labeling – is clearly a technical regulation subject to the 
disciplines of that Agreement. Regarding the claim of violation of Article 2.2 of the TBT Agreement, 
Nicaragua considers that plain packaging is more trade -restrictive than necessary t o fulfill the 
stated objective of reducing the use of tobacco products.  
17.  The legal standard to be applied has been developed over time in disputes relating to 
Article  2.2 of the TBT Agreement and Article XX of the GATT 1994, both of which set forth 
a "necessity " test. Nicaragua notes that a measure which is trade -restrictive and which does not 
effectively contribute at all to the fulfillment of the legitimate objective can never be considered 
to be "necessary. " All such measures constitute "unnecessary " obstacles to trade and need not be 
analyzed with respect to less trade -restrictive alternative measures.  
18.  First, the very strict packaging and product requirements imposed by Australia necessarily 
restrict competitive opportunities in the Australian market, despite the irrelevant fact that origin -
based discrimination may not be a part of the measure. In fact, plain packaging is a strong 
disincentive for Nicaragua and other Members to export their products to Australia as it makes it 
extremely difficul t, if not impossible, for any manufacturer of tobacco products not currently 
present in the Australian market to enter that market.  
19.  Second, as presented by the Complainants, the facts show the lack of contribution of the plain 
packaging measure to it s public health objective. Nothing in the evidence submitted by Australia 
convincingly contradicts these conclusions.  Plain packaging has had a detrimental effect as it has, 
in particular, resulted in a development of illicit trade. Less trade restrictive  alternatives were 
available to Australia to pursue its stated health objectives. Thus, to Nicaragua it is clear that 
Australia is in violation of Article 2.2 of the TBT Agreement.  
20.  In conclusion, Nicaragua supports effective tobacco control policies that genuinely contribute 
to reducing smoking and protecting health. However, Australia 's tobacco plain packaging measure 
that was adopted with a health protection objective in mind fails to comply with the international 
obligations imposed by the TRIPS Ag reement in respect of trademarks and violates Australia 's 
obligations under Article 2.2 of the TBT Agreement.  
21.  The protection of trademarks and the enforcement of rules governing the imposition of 
technical regulations are important, especially so for developing countries where tobacco is grown 
and where tobacco products are manufactured. Nicaragua therefore respectfully requests the Panel 
to take its comments into consideration when resolving these disputes which have important 
systemic implications fo r all WTO Members.  
 WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 ANNEX C -12 
EXECUTIVE SUMMARY OF  THE ARGUMENTS OF NIG ERIA*  
INTRODUCTION  
 Nigeria appreciates the opportunity to present its views to the Panel in disputes DS434, 
DS435, DS441, DS458 and DS467. The measure in this dispute relates to the Australia Tobacco 
Plain Packaging Act 2011 ( "TPP Act "), which: (1) prohibits the use of logos, brand imagery, colours 
and promotional text on the retail packaging of tobacco products; (2) permits the use of brand, 
business or company name and any variant n ames on retail packaging, as long as these names 
appear in a standardised form; (3) imposes certain restrictions upon the shape and finish of retail 
packaging for tobacco products; and (4) imposes other requirements pertaining to the appearance 
of tobacco products. In addition, the measure also imposed the use of large pictorial health 
warnings covering 75% of the front of the package and 90% of the back of a package of 
cigarettes.  
2. This submission would focus on: (i) economic importance of Tobacco in Nig eria; (ii) the 
protection of trademarks under the Agreement on Trade Related Aspects of Intellectual Property 
Rights (TRIPS Agreement); and (iii) regulatory requirements under the Agreement on Technical 
Barriers to Trade (TBT Agreement).  
ECONOMIC IMPORTANC E OF TOBACCO IN NIGE RIA 
3. Nigeria has manufacturing facilities that generates substantial economic activity, tax 
revenue and employment. Therefore, tobacco provides employment and income to many Nigerian 
farmers. Given the importance of tobacco to Nigeria 's economic development, we believe that the 
health concerns related to tobacco use do not lead to the adoption of unnecessary trade 
restrictiion and unlawful regulatory measures which harm producers without benefiting the general 
public interest.  
4. Niger ia is a party to the World Health Organization 's Framework Convention on Tobacco 
Control ( "FCTC") to which TPP Act refers.  Nigeria considers that the FCTC does not mandate plain 
packaging and does not permit Members to violate their international obligati ons.  In fact, no 
provision of the FCTC refers to plain packaging and it is thus not part of any of the minimum 
obligations of the FCTC.  Article 2.1 of the FCTC suggests that the parties may go beyond their 
FCTC obligations as long as they act in accordan ce with international law, including WTO law.  
When the non -binding Guidelines on Articles 11 and 13 dealing with packaging and advertising 
were adopted, it was recommended that plain packaging should be considered, it is clear that this 
was neither an obl igation to adopt plain packaging nor a suggestion to ignore domestic 
constitutional principles nor international legal obligations.  The adoption suggested by the 
FCTC Guidelines was simply to review if plain packaging would be an effective means and wheth er 
it was a measure that could be consistent with Member 's international legal obligations under the 
TRIPS  Agreement.  
PROTECTION OF TRADEMARKS UNDER THE TRIPS AGREEMENT  
6. Nigeria considers that it is well -established that trademarks play an important role  in a 
competitive market by allowing producers to differentiate their products.  This function of 
distinguishing products is the essence of trademarks and it fulfils an important role in ensuring fair 
and effective competition in the market.  A global mark et without trademarks is unimaginable.  
7. The evidence presented by Ukraine, Honduras, Dominican Republic, Indonesia and Cuba 
(hereinafter "the Complainants ") confirms the essential role that trademarks play in competition 
and trade.  The function of disti nguishing products is what creates competitive opportunities, 
domestically and in international trade.  The WIPO report on "Global Brands " that some of the 
Complainants have referred to adequately summarises the vital role of trademarks in the 
marketplace.1  In addition, the expert report of Professor Neven, submitted by Ukraine, offers 
                                                
* Nigeria's written submission is used as its executive summary.  
1 See World Intellectual Property Organization, "World Intellectual Property Report: Brands – Reputation 
and Image in the Global Ma rket Place " – Exhibit UKR -20. WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
- C-44 - 
 
 further useful insights into the different functions that trademarks perform and their important role 
for entering new markets through their communication function.2 
8. The important role of trademarks in competition and trade does not seem to be disputed 
between the Parties.  Clearly, only when permitted to be used on products can trademarks perform 
this function and not when they simply sit on a register.  One of the issues  in dispute is whether 
these economic functions of trademarks are translated into binding legal obligations in the 
TRIPS  Agreement.  
9. In this respect, Nigeria has carefully considered the legal arguments presented by both sides 
on the interpretation of th e relevant provisions of the TRIPS Agreement. The Complainants3 argue 
that the trademark ban imposed by Australia 's plain packaging measure contradicts a number of 
principles embodied in the various provisions of the TRIPS Agreement.  They point out that t he 
measure does not address specific concerns related to particular trademarks in contradiction with 
the trademark -specific approach of the TRIPS Agreement.  They also highlight that the measure 
bans all non -word marks thus creating a differentiation betwe en different types of marks based on 
their form, in violation of the principle enshrined in Article 15.1.  Furthermore, it is argued that it is 
the nature of the product rather than the nature of the trademark that is driving Australia 's ban on 
trademarks in violation of the rule laid down in Article 15.4 of the TRIPS  Agreement.  
10. According to the Complainants, the rights that are to be conferred to trademark owners as a 
result of registration are based on and determined by the possibility of using the tr ademark in 
commerce (i.e. in relation with consumers). The essence of their argument under Article 16 of the 
TRIPS Agreement is that there is a direct and inseparable link between the use of the mark, the 
strength of the mark, and its scope of protection g uaranteed under Article 16 of the 
TRIPS  Agreement.  Furthermore, they argue that the ability of a trademark owner to prevent 
unauthorized use by third parties, is a means to an end; the end being the use of the trademark 
as a distinctive sign by the tradem ark owner.  
13. In view for the importance of trademarks, Nigeria is of the view that the arguments 
presented by Australia are not convincing. Nigeria agrees with the Complainants that prohibiting 
the use of validly registered trademarks for reasons unrelat ed to the specific trademark is 
inconsistent with the TRIPS Agreement 's requirement to "protect " trademarks. The 
TRIPS  Agreement, therefore, seeks to protect intellectual property rights for the value they bring 
to trade as sources for ensuring effective c ompetition and providing competitive opportunities.  In 
Nigeria 's view, if this measure that prohibits the use of otherwise valid trademarks had been 
applied to a different product, the violation would have been obvious, therefore, trademarks are 
not prote cted and the rights conferred on trademark owners are not guaranteed if the trademarks 
cannot be used since they are distinguishing marks that differentiate products.  
14. Nigeria considers that the expert report of Professor Dinwoodie that was submitted by  
Ukraine as exhibit UKR -1 convincingly explains how the opportunity to use a trademark is 
inseparable from and determinative of the scope of protection of the trademark.  It is almost a 
matter of common sense that if genuine use of the trademark is a requi rement for maintaining 
trademark protection -- as foreseen in Article 19 of the TRIPS Agreement and as reflected in 
Australian law -- then a minimum opportunity of use must be considered to form part of the 
framework of trademark protection.  This we under stand to be reflected also in Article 20 of the 
TRIPS Agreement which prevents Members from encumbering the use of trademarks with 
unjustifiable regulatory requirements.  
15. The text of the TRIPS Agreement thus reflects the economic logic that trademarks a re worth 
protecting in international agreements because of their distinguishing function and their related 
beneficial role in the economy.  A trademark can only play this role when it is used.  That is the 
reason why the TRIPS Agreement focuses on distinct iveness as the only criterion for finding a sign 
to constitute a 'trademark '; that is why use may be required to maintain registration; and that is 
why Article 20 exists (i.e. to protect the use of trademarks in commerce from unjustifiable 
regulatory requi rements).  The registration and the possibility of preventing unauthorized third 
parties from using similar signs on similar products, or even on dissimilar products in the case of 
well-known marks, is effectively meaningless if the trademark is not allowe d to perform its main 
                                                
2 Expert Report by D. Neven, et al., "The Effects of Plain Packaging Regulation on Competition and 
Tobacco Consumption: An Economic Assessment " – Exhibit UKR -3, p.39.  
3 Although there are some differences between the specific arguments of the Complainants and some 
develop certain arguments that others do not, as a third party to all five disputes, we refer to the arguments of 
the Complainants as a whole.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
- C-45 - 
 function.  To read the entire chapter of the TRIPS Agreement on the "protection " of trademarks 
without taking into consideration the rationale of such protection does not give effective meaning 
to the provisions of the TRIPS Agreement . 
16. Use is thus an essential element of the rights conferred by the TRIPS Agreement to owners 
of trademarks.  The opposite approach that the fundamental, minimum rights conferred on 
trademark owners is simply to have their marks registered but without an  opportunity to use 
them. It is not a convincing interpretation of the TRIPS Agreement.  This we understand also to be 
the view expressed by another leading expert on public international law, Judge Schwebel, in his 
expert report submitted as exhibit UKR -24. 
17. In sum, we agree with the Complainants that Australia 's plain packaging measure is 
inconsistent with key provisions of the TRIPS Agreement dealing with the definition of trademarks, 
the rights conferred and the limitations imposed on governmental re quirements encumbering the 
use of trademarks. This is not to say that Australia cannot deal with trademarks that are 
misleading or deceptive or that are of such a nature to violate public morals; those are all 
well-established reasons for invalidating the registration and protection of a trademark and can be 
the basis for preventing its use.  However, that requires an analysis of the specific sign in question 
and its allegedly misleading nature.  Australia 's blunt plain packaging measure does not examine 
the trademark against a general criterion of deception but simply bans all trademarks.  That is not 
permissible under the TRIPS Agreement.  
18. Although trademark rights may be "negative rights ", these rights are dependent on, 
determined by and ultimately con ferred for the purpose of the trademark owner 's use of the 
trademark.  Nigeria agrees with Professor Dinwoodie 's characterization of "use" as the "lifeblood " 
of the trademark.5 
19. Nigeria is of the view that Australia 's plain packaging measure prevents ow ners from 
enjoying the benefits of their trademarks ' value and goodwill and makes it impossible for 
trademark owners to differentiate their brands from those of their competitors.  A measure that 
commoditizes the product and its packaging will encourage th e influx of counterfeit and pirated 
products in the market.  From a trade perspective, Nigeria considers that trademarks play an 
important role in penetrating new markets.  Plain packaging thus frustrates manufacturers who are 
not presently active on the A ustralia market to launch their products in that market.  
20. This does not mean that Nigeria considers that trade or intellectual property rights are more 
important than health; clearly not.  But, based on the arguments presented by the Parties that 
does n ot seem to be the question under consideration in these disputes. The TRIPS  Agreement 
allows for health -based exceptions as is clear in the context of patent protection where the 
TRIPS  Agreement expressly allows for compulsory licensing.  This flexibility has been further 
clarified in the 2001 Doha Declaration on TRIPS and Public Health and the 2003 Decision on 
implementation of paragraph 6 of the Doha Declaration on the TRIPS Agreement and public health 
that related to access to medicines.  Trademarks were  never the subject of such debate.  
21. The conditions imposed for permitting compulsory licensing however reveal a balanced 
approach in a very dramatic context where access to medicines can have a direct and 
demonstrably life -saving effect.  There is no s imilar provision in the TRIPS section on trademarks 
permitting direct or indirect trademark expropriation and imposing conditions safeguarding respect 
for different interests.  This is probably a reflection of the different nature of trademarks compared 
with patents.  A patent owner claims exclusivity over a potentially life -saving product and can 
dictate the conditions for making this product available to the public.  A health exception therefore 
seems obvious.  In contrast, a trademark owner merely claims  ownership over a sign that it wants 
to use to distinguish the product from that of competitors.  Given that it is clear from the text of 
the TRIPS Agreement that a sign that is misleading for example, about the product 's positive 
health characteristics mu st not be registered and may be refused from being used, no other health 
exception seems to be necessary.  
22. Finally, Nigeria considers that the result of adopting Australia 's interpretation would have 
negative effects on trademark owners as well as the c onsumers and would not be a correct 
approach to balancing trade and health interests at the WTO.  
                                                
4 Expert Report by S.M. Schwebel, "On Whether the Owner of a Registered Tr ademark Has the Right To 
Use that Trademark ". Exhibit UKR -2. 
5 Expert Report by G.B. Dinwoodie, "Compatibility of Restrictions on the Use of Trade Marks within the 
TRIPS Agreement ", p. 1. Exhibit UKR -1 WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
- C-46 - 
 
 REGULATORY REQUIREMENTS UNDER THE TBT AGREEMENT  
23. Nigeria recalls that in 2011 Australia 's proposed plain packaging measure was notified in the 
WTO as a tech nical regulation that may significantly affect trade with other Members.  Many 
Members, including Nigeria, expressed their concern over this proposal in the TBT Committee.  
Nigeria referred to the manufacturing facilities in the tobacco sector which genera ted substantial 
economic activity, tax revenue and employment in Nigeria.  Tobacco provided employment and 
income to many Nigerian farmers, and there was therefore a concern about the systemic 
implications of the Australian measure, and its direct and indi rect commercial consequences for 
Nigeria 's national economy.  Nigeria expressed the view that the proposed plain packaging 
measure was more trade restrictive than necessary to fulfil legitimate health objectives, and was 
contrary to Article 2.2 of the TBT Agreement.6   
24. Nigeria subsequently explained that it was concerned that the measure would remove all 
distinguishing designs, logos, colours and other similar marks from the packaging of branded 
tobacco making it virtually impossible to identify any spe cific branded product.  This would make it 
difficult for foreign manufacturers to enter the Australian market.  Nigeria thus requested scientific 
and technical information demonstrating that plain packaging would reduce the number of 
smokers in Australia a nd how the measure would comply with Articles 2.2 and 2.4 of the 
TBT Agreement and urged Australia to take into account Members ' views and concerns and to 
produce an alternative measure that would ensure compliance with Australia 's WTO obligations.7 
25. More recently, Nigeria also raised concern over a similar plain packaging proposal of Ireland.  
At the TBT Committee meeting of March 2014, Nigeria expressed concern over the precedent that 
plain packaging measures could set, particularly regarding the impos ition of similar restrictions on 
heavily regulated products such as alcoholic beverages, snack foods and carbonated drinks.  At the 
meeting, Nigeria did not object to the objective of protecting human health, but considered that it 
was uncertain whether pl ain packaging measures could contribute to the achievement of such 
objective.  Nigeria stated that these measures appeared to be more trade restrictive than 
necessary to fulfil their objective.8 
Nigeria was therefore particularly interested in examining th e Parties ' legal and factual arguments 
relating to Australia 's plain packaging measure.  
26. Nigeria notes that the Complainants have challenged Australia 's plain packaging measure for 
being inconsistent with Article 2.2 of the TBT Agreement.  The Complaina nts argue that Article  2.2 
requires a weighing and balancing of the trade restrictiveness of the measure, the degree of 
contribution to the fulfilment of the objective and the availability of less restrictive but equally 
effective alternative measures.   
27. Nigeria considers that the TBT Agreement disciplines Members ' application of technical 
regulations that are unnecessarily trade restrictive.  The Agreement requires WTO Members to 
weigh and balance approaches to legitimate public policy objectives, like  the reduction of the level 
of smoking, with the interests of WTO trading partners.  At a minimum, the costs and market 
access difficulties that a regulation imposes must actually contribute to the fulfilment of the 
objective.  Furthermore, the trade restr iction that results from the regulation should be 
proportionate to the contribution to the fulfilment of the objective.  Also, if an alternative measure 
exists that constitutes less of a market impediment and is as effective or more effective as the 
measur e actually imposed, the less restrictive alternative measure should be applied.  That legal 
standard is well -established and should not be different dependent on the nature of the product.  
28. Nigeria carefully reviewed the many facts and evidence included  in the numerous exhibits 
submitted by the Parties on the actual or likely effectiveness of the measure.  Based on this 
review, Nigeria considers that the evidence presented by the Complainants demonstrates that the 
plain packaging measure has failed to co ntribute to the reduction of smoking and is not likely to 
reduce smoking in the future either.  
29. The plain packaging measure is a technical regulation that contains a number of strict 
packaging and labelling requirements that apply to tobacco products.  The objective of Australia 
when adopting the plain packaging measure was to reduce smoking prevalence levels for the 
Australian population as a whole and for Aboriginals and Torres Straight Islanders in particular.  
The public health objective that is also  reflected in the text of the TPP Act is thus to improve public 
                                                
6 G/TBT/M/55, paras. 185 – 186. 
7 G/TBT/M/56, para. 16 6. 
8 G/TBT/M/62, para. 2.182.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
- C-47 - 
 health by reducing initiation and increasing cessation.  Nigeria fully supports this objective. 
However, the legitimate nature of the objective does not justify the means chosen to pursue this  
objective.  
30. Economic expert evidence that the Complainants submitted to the Panel highlights the 
detrimental effect on access to the Australian market and the distortion of competitive 
opportunities that result from the mandated lack of opportunity to differentiate products through 
trademarks and packaging designs.9  Thus, the plain packaging measure imposes a very significant 
restriction on competition and trade.  However, the evidence submitted also shows that Australia 's 
trade -restrictive plain packa ging measure is not at all necessary to fulfil the stated objective of 
health protection.  The facts show that two years after the implementation of plain packaging, the 
measure has not contributed to the reduction of smoking or the changing of smoking beh aviour 
more generally.  It has therefore not contributed to the protection of public health.  The study by 
Professor Klick comparing the situation in Australia (with plain packaging) with that in New 
Zealand (without plain packaging) over the same period o f time, confirms that plain packaging has 
not changed people 's smoking behaviour and there is therefore no evidence that it has reduced 
smoking.10  The study confirms the market data and other objective evidence from Australia that 
the Complainants submitt ed. 
31. It seems speculative to argue, as Australia does, that the measure is likely to contribute in 
the future if in the first two years it has not produced any effects.  In fact, Nigeria considers 
persuasive the evidence presented by the Complainants on  the reasons why people take up 
smoking and why they find it difficult to quit.  The experts consider that packaging and trademarks 
do not play a role in these behaviours.  If that is the case, then it is difficult to see on what basis 
one would expect the  removal of trademarks and the standardization of packaging to have any 
effect.  In so far as the measure is supposed to deal with consumer information, Nigeria notes that 
plain packaging does not provide any information.  In fact, there is general awarene ss that 
smoking is very dangerous to consumers ' health so it is not clear to Nigeria what and the 
consumer information objective plain packaging would serve.  In any case, Nigeria notes that the 
large health warnings imposed by Australia under a different set of rules and regulations have not 
been challenged by the Complainants.  
32. The economic analysis of supply and demand presented by Professor Neven in his expert 
report confirms the unlikely nature of any positive contribution of plain packaging.  In fa ct, his 
conclusion is that it is highly likely that plain packaging will have the opposite effect.11 This 
suggests that the "risk of non -compliance " with the objective is higher with plain packaging than it 
is without  plain packaging.  The trends analysis submitted by the Dominican Republic shows the 
down -trading effect of plain packaging and also confirms the adverse consequences of plain 
packaging.12 
33. All of the evidence points in the same direction.  Australia 's plain packaging measure has not 
changed  smoking behaviour thus far and will not do so in the future because it is simply not apt to 
do so.  Rather, the evidence confirms that the measure risks undercutting Australia 's health 
objective by promoting price -based competition that increases consumpt ion and by stimulating 
illicit trade.  
Under such circumstances, the debate about alternatives becomes meaningless.  In any case, 
Nigeria wishes to make two observations on the alternatives that were presented and on 
Australia 's rejection of these alternati ves.  First, the fact that a measure already exists does not 
mean that there cannot be an "alternative ".  Indeed, it is well established that taxation is the 
single most effective tobacco control instrument. That being the case, then for sure a proposed 
increase of the relevant Australian taxes to meet the recommendation of the World Health 
Organization would constitute an alternative measure.  Nigeria understands this to have been the 
                                                
9 Expert Report by D. Neven, et al., "The Effects of Plain Packaging Regulation on Competition and 
Tobacco Consumption: An Economic Assessment. ", pp. 37 -40. Exhibit UKR -5. 
10 Expert Report by J. Klick, "The Effect of Australia 's Plain Packaging Law on Smoking: Evidence from 
Survey and Market Data ", p. 2. Exhibit UKR -5. 
11 Expert Report by D. Neven, et al., "The Effects of Plain Packaging Regulation on Competition and 
Tobacco Consumption: An Economic Assessment. ", Exhibit UKR -3, pp 32 -35, p.44.  
12 Empirical Assessment of Australia 's Plain Packaging Regime, prepared by the Institute for Policy 
Evaluation (Dr. David Afshartous, Ph.D; Professor Marcus Hagedorn; Prof essor Ashok Kaul; and 
Professor  Michael Wolf) (7 October 2014), p. 2. Exhibit DR -100 WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 view of the WTO in the past as well.13 Second, Nigeria considers that if  an institution exists for 
dealing with consumer protection issues related to packaging, as is the case in Australia, then a 
better use of this institution seems to be an alternative that merits further consideration before 
imposing novel measures like pla in packaging.  
34. Nigeria is of the view that ample policy space should be given to Members to pursue 
legitimate objectives like the protection of public health.  Australia has one of the strictest tobacco 
control regimes in the world and we commend Austra lia for its effective fight against smoking.  
However, precisely in such circumstances, care should be taken to maintain a balanced approach 
and to ensure that further restrictions on trade and intellectual property rights are lawful and 
necessary.  Nigeri a considers that the legal arguments presented by the Complainants in respect 
of the violation of intellectual property rights and the evidence submitted to demonstrate the lack 
of contribution of the plain packaging measure confirm that Australia 's plain packaging measure is 
an unnecessary and unlawful means to a legitimate end.  Nigeria is of the view that, if the product 
is legally available on the market and if there are no indications that the specific trademark is 
misleading or deceptive, and if it is  not otherwise offensive or violating public morals in Australia, 
then trademarks should in principle be allowed to be used on a product to fulfil their important 
economic functions.  
CONCLUSION  
Nigeria continue to support the right of Members to take measu res to protect public health in 
accordance with the WTO agreements and we commend Australia for its fight against smoking. 
However, care should be taken to maintain a balanced approach that would ensure consistency 
with the WTO law. Nigeria considers that the legal arguments presented by the complainants in 
respect of the violation of WTO law and the evidence confirms that the measure at issue is 
inconsistent with the WTO law. It is therefore, our view that if a product is legally available in the 
market an d if there is no indications that the specific trademark is misleading or deceptive, then 
trademarks should in principle be allowed to be used on a product to fulfil their important 
economic function.  
 
                                                
13 See, for example, Panel Reports, China – Measures Related to the Exportation of Rare Earths, 
Tungsten, and Molybdenum , WT/DS431/R / WT/DS432/R / WT/DS433/R  / and Add.1, adopted 
29 August  2014, upheld by Appellate Body Reports WT/DS431/ AB/R / WT/DS432/AB/R / WT/DS433/AB/R, 
para. 7.186.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 ANNEX C -13 
EXECUTIVE SUMMARY OF  THE ARGUMENTS OF NOR WAY 
I ISSUES RELATED TO TH E TRIPS AGREEMENT  
 
A. The TRIPS Agreement and the protection of public health  
1. The TRIPS Agreement recognizes a right for Members to protect public health. Of particular 
relevance in this regard are Articles 7 and 8.1, as well a s the Declaration on the TRIPS Agreement 
and Public Health  (Doha Declaration on Public Health). The Doha Declaration on Public Health  gives 
express interpretative guidance, affirming that "the Agreement can and should be interpreted and 
implemented in a ma nner supportive of WTO members ' right to protect public health ". While the 
Declaration does not qualify as an authoritative interpretation under the Marrakesh Agreement, 
paragraph 4 of the Declaration must be considered a "subsequent agreement " within the meaning 
of Article 31(3)(a) of the Vienna Convention. In light of this, the relevant TRIPS provisions should 
be interpreted in a manner supportive of Members ' rights to protect public health.  
B.  The TRIPS Agreement does not provide for a "right to use " a trademark  
2. The complainants ' legal claims under the TRIPS Agreement are based on a contention that 
the Agreement provides for a positive right to use a registered trademark.1 Norway strongly 
disagrees with this contention, and submits that the complain ants' assertion of a "right to use " 
does not have any support in the relevant provisions of the Agreement, when properly interpreted. 
Rather, the TRIPS Agreement confers negative rights to prevent certain uses by third parties.  
C. Legal issues related to Article 20 of the TRIPS Agreement  
3. The parties disagree on whether it is the complainants or the respondent that has the 
burden of proof under Article 20. According to the Appellate Body, "the burden of proof rests upon 
the party, whether complaining or defending, who asserts the affirmative of a particular claim of 
defence ". 2 Who has the burden of proof depends on the legal character of the provision at issue.  
Norway holds that Article 20 is best characterized as "a single affirmative obligation ".3 Based on 
this, the burden of proof under Article 20 rests on the complainants. To establish a violation of 
Article 20, the complainants must show that the use of a trademark "in the course of trade " has 
been "unjustifiably " "encumbered by special requirements ". In the following, Norway will set out 
its view on the interpretation of these different elements.  
4. Firstly, regarding the term "in the course of trade ", Norway agrees with most of the parties 
in this dispute that it refers to the process of buying an d selling goods and services, and that any 
encumbrance after this point of time is outside the scope of Article 20.4 Secondly, Norway submits 
that the term "special requirement " must be understood as referring to requirements regarding 
how a trademark may be used, and not to requirements prohibiting the use of a trademark. 
Reference is made to Australia 's arguments in this regard.5  
5. Thirdly, when it comes to the test to be applied in assessing the "unjustifiability " of an 
encumbrance on use, Norway agree s with Australia that the term "unjustifiably " must be 
interpreted to be referring to an inquiry of whether there is a "rational connection " between the 
"special requirements " and the policy directive behind those requirements.6 In Norway 's view, the 
compl ainants ' argument that the term "unjustifiably " refers to a similar standard to that of 
"necessity ", is not compatible with a proper interpretation in accordance with the ordinary meaning 
                                                
1 See, for instance, Australia 's First Written Submission para. 227 -229, 235.  
2 Appellate Body Report, United States – Wool Shirts and Blouses , p. 14.  
3 Australia 's First Written Submission, paras. 428 -430. 
4 See Australia 's First Written Submission para. 349, fn. 539. Only Honduras seems to have a divergent 
view, see Honduras ' First Written Submission, para. 224. See also Australia 's First Written Submission, fn. 350.  
5 Australia 's First Written Submission , part IV, D, 2.  
6 See Australia 's First Written Submission, paras. 362 -363. WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 to be given to this term in its context and in light of the object a nd purpose of the 
TRIPS  Agreement.   
6. "Unjustifiably " is defined to mean "not capable of being justified ".7 This does not encompass 
notions of "necessity " and "least restrictiveness ". The term "unjustifiable " is used several places in 
the WTO Agreements,  as part of the phrase "arbitrary and unjustifiable discrimination ". In that 
context, the Appellate Body has set out that one of "the most important factors " in the assessment 
of "unjustifiable " is "the question of whether the discrimination can be reconci led with, or is 
rationally related to, the policy objective with respect to which it has been provisionally justified ".8 
The ordinary meaning of the word "unjustifiable ", as it is interpreted in these reports, supports the 
understanding that "unjustifiably " in Article 20 must be referring to an inquiry of whether there is 
a "rational connection " between the "special requirements " and the policy directive behind those 
requirements.  
7. The context of the term "unjustifiable " further substantiates this unders tanding. In this 
regard, Norway would in particular refer to the fact that the drafters of the TRIPS Agreement 
included the term "necessary " several places in the Agreement, but chose not to use it in 
Article  20. This choice must be given effect. Thus, the  complainants cannot be heard with their 
argument that the term "unjustifiably " should be interpreted as to encompass notions of 
"necessity ", "least restrictiveness " and "reasonable available alternatives ".  
8. The "object and purpose of the Agreement, as expressed, in particular, " in Article 8.1 
supports an interpretation of the word "unjustifiably " that preserves the scope of Members ' right to 
pursue legitimate policy objectives through measures that are in conformity with the provisions of 
the Agreement.  Norway submits that an interpretation in line with the ordinary meaning of the 
term, as set out above, best serves the principle in Article 8.1  
9. Based on the above, it is clear that the scope of Article 20 does not include the prohibitive 
elements of th e plain packaging measure. Furthermore, it follows from a proper interpretation of 
the word "unjustifiably " that it does not refer to notions such as "necessity " or least 
trade -restrictiveness ", but rather to an inquiry of whether there is a "rational conn ection " between 
the "special requirements " and the policy directive behind those requirements.  
II ISSUES RELATED TO TH E TBT AGREEMENT  
 
A. Introduction  
10.  The TBT Agreement Article 2.2 contains rules applicable to measures that meet the 
definition of a "technical regulation " in paragraph 1 of Annex 1 of the TBT Agreement .9 Norway 
finds that the requirements relating to packaging, marking or labelling must be considered to be 
"technical regulations " in accordance with this definition, and does not find it necessary to 
distinguish between the restriction on the use of a trademark and the physical requirements in the 
assessment of Article 2.2.  
B.  The FCTC Guidelines are relevant international standards in accordance with 
Article 2.5 of the TBT Agreement  
11.  Article 2.5 provides that technical regulations that are prepared, adopted or applied for a 
legitimate objective mentioned in Article 2.2, and is "in accordance with relevant international 
standards " are rebuttably presumed not to constitute "unnecessary  obstacles to international 
trade " within the meaning of Article 2.2.  
12.  Norway is of the view that, firstly, the technical regulation at issue has been adopted in 
order to protect human health, which is a legitimate objective under Article 2.2. Secondl y, the 
plain packaging measure was adopted inter alia  to give effect to Australia 's obligations under the 
FCTC, in particular the Guidelines for the implementation of FCTC Articles 11 and 13. Thirdly, 
Norway agrees with Australia 's reasoning and conclusion  in its first written submission that the 
FCTC Guidelines for the implementation of Articles 11 and 13 can be considered to be "relevant 
                                                
7 Collins English Dictionary , 9th ed. HarperCollins Publishers, 2007.  
8 Appellate Body Report, EC – Seal Products , para. 5.306.  
9 See e.g. Appellate Body Reports, EC – Sardines , para. 175; and EC - Asbestos , para. 59.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
- C-51 - 
 international standards " under Article 2.5, in line with the definition in the TBT Agreement Annex 1 
and the ISO/IEC Gu ide 2: 1991.  Finally, the plain packaging measure must be considered to be 
"in accordance " with these guidelines.  
13.  Consequently, the measure shall be "rebuttably presumed not to create an unnecessary 
obstacle to international trade ". The presumption seems to imply that a higher standard of proof is 
required in relation to the question of whether a measure is an unnecessary international trade 
obstacle under Article 2.2, as compared to the cases where the presumption in Article 2.5 is not 
applicable.  
C.  The assessment of whether the measure can be considered to be more trade 
restrictive than necessary under Article 2.2 of the TBT Agreement   
14.  According to Article 2.2, it must be assessed whether a measure is "more trade -restrictive 
than necessary to  fulfil a legitimate objective ". Norway is of the view that the complainants as a 
threshold matter must demonstrate that the technical regulation at issue is "trade -restrictive ".  
15.  If the Panel deems that the complainants have made a prima facie case t hat the measure is 
trade -restrictive, the Panel must assess whether the measure is more trade -restrictive than 
necessary to fulfil a legitimate objective, taking into account the risks non -fulfilment would create. 
The Appellate Body has explained that the assessment of "necessity " requires an identification of 
the objective pursued with the measure10 an evaluation of the objectives ' legitimacy11 as well as a 
relational analysis.12  
16.  In this regard, Norway firstly recalls that the plain packaging measure ai ms at protecting 
human health, a legitimate objective under Article 2.2. This objective is "both vital and important 
in the highest degree "13 a consideration that must be taken into account in the assessment of 
whether the measure is necessary.  
17.  Second ly, if the Panel were to conclude that the measure is trade -restrictive, it must assess 
the degree of trade -restrictiveness. In case the restrictiveness is considered to be minimal, even a 
small degree of contribution by the measure to the legitimate objec tive would in Norway 's view be 
sufficient to conclude that the measure does not exceed what is necessary.  
18.  Thirdly, when assessing the measure 's degree of contribution to the legitimate objective, the 
Panel should view complex health problems, such as  the one at issue, in the broader context of the 
comprehensive strategies implemented to fight such problems.14 The Panel should in particular 
take into account the difficulties in measuring the effects of an instrument working in synergy with 
other measure s, the overarching objective of promoting public health, as well the expectation that 
the effects of the measure may manifest themselves gradually over several years.  
19.  Fourthly, Norway is of the view that both the nature and gravity of the risks that n on-
fulfilment would create, supports a conclusion that the plain packaging measure is not more 
restrictive to trade than what is necessary. The nature of the risks to human health is both vital 
and important in the highest degree, and the gravity of the co nsequences that would arise from 
non-fulfilment of the objective is also unquestionably severe.  
20 Lastly, Norway agrees with Australia that equally efficient alternative measures do not 
appear to exist.15 Inter alia , some of the proposed alternatives measu res must rather be 
                                                
10 Appellate Body Report, US – Tuna II (Mexico) , paras. 313-314; and Appellate Body Report, US – 
COOL , para. 371.  
11 Appellate Body Report, US – Tuna II (Mexico) , para. 313; and Appellate Body Report, US – COOL , 
paras. 370 and 372.  
12 Appellate Body Report, US – Tuna II (Mexico) , paras. 315, 318 - 319 and 321.  See also Appellate 
Body Report, US – COOL , para. 373 -375, 377  and 390.  
13 In the context of Article XX(b) of the GATT 1994, see Panel Report, EC – Asbestos, para. 1 72 (citing 
Appellate Body Report, Korea – Various Measures on Beef , para. 162); Appellate Body Report, Brazil – 
Retreaded Tyres , para. 144.  
14 Appellate Body Report, Brazil – Retreaded Tyres , para. 154.  
15 The complainants submit that the objective of the mea sure could equally well be attained through 
other measures, such as excise increases, youth access to tobacco products, the Australian consumer law, 
social marketing campaigns and pre -vetting schemes.   WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
- C-52 - 
 
 considered supplements  to the plain packaging measure. Norway also questions whether some of 
the alternative measures in fact would be less trade restrictive. Further, it must be noted that one 
of the intended effects of the plain packag ing measure is to close the last gap in the ban on 
tobacco advertising. In Norway 's view, none of the proposed alternative measures can close this 
gap and thereby reinforce the effect of existing measures.  
 WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 ANNEX C -14 
EXECUTIVE SUMMARY OF  THE ARGUMENTS O F OMAN  
1. Oman views tobacco use as one of the greatest threats to public health the world has ever 
faced. According to the WHO, tobacco consumption currently kills nearly six million people a year 
through direct use and the deadly effects of second -hand s moke that averages to one person 
dying every six seconds. Tobacco is without doubt the single most preventable cause of death in 
the world today. It is the only legal consumer product that kills up to half of those who use it as 
intended and recommended by  the manufacturer.  
2. Oman is of the view that the challenged Australian Plain Packaging Legislation aims to prevent 
tobacco advertising and promotion. It achieves its stated goals of: reducing the attractiveness and 
appeal of tobacco products to consumers , particularly young people; increasing the noticeability 
and effectiveness of mandated health warnings; and reducing the ability of the tobacco product 
packaging to mislead consumers about the harms of smoking.  
3. Oman considers that the relevant provisio ns of the Covered Agreements raised in this dispute 
achieve a balance that respects WTO Members ' sovereign regulatory autonomy, particularly in 
relation to public health.  
4. Oman notes that Article 2.2 of the TBT was designed to provide policy space for Me mbers to 
implement various national policies, including on human health or life in the form of technical 
regulations. Article 2.2 recognises Members ' right to implement such technical regulations upon 
the understanding that such measures should not create unnecessary obstacles to trade. In other 
words, the text recognises the existence of legitimate concerns that may result in the application 
of measures that may restrict or inhibit trade, and permits such measures provided that they are 
"…not more trade -restrictive than necessary to fulfil a legitimate objective, taking account of the 
risks non -fulfilment would create ".  
5. Accordingly, an assessment of Article 2.2 is not about whether the measure at issue restricts 
trade, but rather whether it satisfies th e requirements enunciated in Article 2.2 that bear upon its 
contribution to achieving a legitimate objective on the one hand and the necessity of the measure 
on the other.  
6. In respect of the issue of "necessity " in the context of TBT Article 2.2, Oman r ecalls that in 
US-Tuna II ,1 the Appellate Body drew on its reasoning in Korea – Various Measures on Beef ,2 
noting that: "[a]t one end of this continuum lies 'necessary ' understood as 'indispensible '; at the 
other end, is 'necessary ' taken to mean as 'makin g a contribution to. '" Oman considers that this 
assessment is of instructive value to the Panel and should inform its Article 2.2 analysis for the 
determination of what is to be considered "necessary ".  
7. Oman subscribes to the relevant argumentation and factual evidence articulated in 
Australia 's Submission that clearly demonstrate that plain packaging contributes to a reduction in 
smoking rates and tobacco consumption.  
8. Protecting public health is a legitimate objective of the utmost importance to eac h WTO member 
individually and to the global community as a whole. The objective or target of protecting human 
health by reducing tobacco use is not achieved by any one measure, but rather by a host of 
measures working collectively to achieve the legitimate  objective at the levels sought by the 
Member implementing the measure. Plain packaging is one such measure.  
9. Moreover, Paragraph 4 of the preamble of the TBT Agreement expressly acknowledges a 
Member 's right to implement measures for the protection of human life or health "…at the levels it 
considers appropriate ", subject to the requirement that they do not discriminate between 
                                                
1 Appellate Body Report, United States – Measures Con cerning the Importation, Marketing and Sale of 
Tuna and Tuna Products , WT/DS381/AB/R, para 318  
2 Appellate Body Report, Korea – Measures Affecting Import of Fresh, Chilled and Frozen Beef , 
WT/DS161/AB/R, para 161  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
- C-54 - 
 
 members or act as a disguised restriction on trade. Plain packaging is aimed at protecting human 
health through reducing tobacc o use, which is a legitimate objective. The measure treats all 
tobacco products on an equal footing and is therefore not discriminatory. And the WHO FCTC 
Guidelines expressly acknowledges plain packaging as a legitimate measure to curb smoking3, it 
can the refore hardly be deemed a disguised restriction on trade.  
10. Oman considers the language used in the preamble as expressly affording discretion for 
Members to determine the level of aspiration of their technical regulations.  
11. The Panel in US-Clove Ci garettes4 established that the burden of proof rests upon the party 
alleging a violation of Article 2.2. This means that in order for a complainant to successfully argue 
an Article 2.2 claim they would be required to present a prima facie case demonstratin g 
inconsistency with said Article.  
12. Moreover, Article 2.5 provides that where a technical regulation is in accordance with relevant 
international standards there shall be a rebuttable presumption that it does not create 
unnecessary obstacles to interna tional trade. In other words, where the measure at issue meets 
the conditions set out in Article 2.5, the Panel 's Article 2.2 analysis must begin from a rebuttable 
presumption that the measure is not an unnecessary obstacle to trade. Oman regards that such  a 
rebuttable presumption should have the effect of placing a heavier burden on the complainant 
alleging an Article 2.2 violation to substantiate its claims.  
13. In this respect, Oman considers that the WHO Framework Convention on Tobacco Control 
("FCTC") constitutes "relevant international standards ". We are mindful that there does not exist 
an explicit definition for international standards in the WTO covered agreements, but we consider 
that the TBT Agreement provides sufficient guidance in this regard f or a finding that the FCTC 
constitutes "relevant international standards ".  
14. In respect of the claims made under the TRIPS Agreement, Oman considers that nothing in the 
TRIPS Agreement confers on owners of trade marks a positive right to use their trade  marks. 
Moreover, Article 8.1 of the TRIPS Agreement contemplates Members ' right to formulate and 
amend their regulations for the protection of public health as long as they are consistent with the 
TRIPS Agreement.  
15. Furthermore, the Doha Declaration on  the TRIPS Agreement and Public Health, adopted by the 
WTO Ministerial Conference on 14 November 2001, explicitly recognises "WTO Members ' right to 
protect public health " and confirms WTO Members ' agreement that TRIPS "can and should be 
interpreted and imp lemented in a manner supportive of " that right.  
16. In addition to the WTO Agreements, WHO FCTC also provides the international legal basis for 
the implementation of the Plain Packaging of tobacco products. Australia 's measure reflects 
multilateral consens us on tobacco control. The Guidelines for the implementation of Articles 11 and 
13 of the WHO FCTC specifically recommend that all Parties to this convention (180 parties thus 
far) consider adopting tobacco plain packaging to "increase the … effectiveness of health warnings " 
and "eliminate the effects of advertising … on packaging ".  
17. Oman considers that the matters before this Panel must be considered in the broader context 
of international efforts to curb the global consumption of tobacco products, an aspiration which is 
grounded in the indisputable scientific evidence connecting tobacco consumption to various 
diseases.  
 
                                                
3 See Part II.F of the WHO Framework Conven tion on Tobacco Control Guidelines  
4 Panel Report, United States – Measures Affecting the Production and Sale of Clove Cigarettes , 
WT/DS406/R, para 7.331  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 ANNEX C -15 
EXECUTIVE SUMMARY OF  THE ARGUMENTS OF PER U* 
1. Peru welcomes this opportunity to participate in these disputes as a third party. As we 
indicated when we asked to be joined as a third party, our interest is mainly systemic, inasmuch 
as we are interested in the interpretation given to the relevant provisions of the TRIPS Agreement, 
the TBT Agreement and the GATT 1994, in relati on to the public health measures adopted by a 
WTO Member regarding tobacco products and products derived from tobacco. At the same time, 
this case is of interest to us because the Panel's decision will also have an impact on the 
commitments made under the WTO agreements with regard to the implementation of other 
international instruments, such as the WHO Framework Convention on Tobacco Control, 
among  others.  
 
2. A plain packaging measure on a particular product, of the kind implemented by Australia, 
could b e considered a limitation of the use of a trademark granted to tobacco products or products 
derived from tobacco. In particular, Article 20 of the TRIPS Agreement provides that the use of a 
trademark in the course of trade shall not be unjustifiably encumb ered by special requirements, 
such as use in a manner detrimental to its capability to distinguish the goods or services of one 
undertaking from those of other undertakings. However, the key term in this provision is 
"unjustifiably", since it recognizes th at the right to use the trademark is not absolute and that 
there could be justified grounds for its limitation. In this connection, the TRIPS Agreement itself 
recognizes the principle that Members have the capacity to adopt measures necessary to protect 
public health, including tobacco control measures.  
 
3. On the other hand, the WTO commitments are not isolated from the international 
commitments assumed by Members in other areas. In particular, the WHO Framework Convention 
on Tobacco Control has been in fo rce since 2005. There are currently 180 Parties to the 
Convention, including Australia, Ukraine, Honduras and Peru.  
 
4. Australia has indicated that the measure at issue is in line with the "Guidelines for 
implementation of Article 11 (Packaging and labell ing of tobacco products) of the WHO Framework 
Convention on Tobacco Control" and that the document in question constitutes a relevant 
international standard, within the meaning of Article 2.4 of the TBT Agreement. In this connection, 
paragraph 46 of the Gu idelines calls on the Parties to consider adopting measures to restrict or 
prohibit the use of logos, colours, brand images or promotional information on packaging other 
than brand names and product names displayed in a standard colour and font style, 
i.e. plain packaging.  
 
5. In this regard, in addition to the analysis of the provisions of the TRIPS Agreement, it is 
necessary to resolve the dispute by analysing the provisions of the TBT Agreement, in order to 
determine whether it is possible to consider th e Conference of the Parties (COP) to the WHO 
Framework Convention on Tobacco Control as a standard -setting institution and, if so, whether the 
above -mentioned Guidelines constitute a relevant international standard.  
 
6. In the present case, Peru considers it necessary for the Panel to rule on both aspects, given 
the impossibility of applying the principle of judicial economy, since the measure at issue covers 
both intellectual property aspects (use of the trademark) and provisions relating to technical 
regulations (labelling of tobacco products and by -products).  
 
7. Peru thanks the Panel, the parties and the other third parties for their attention and, having 
concluded its statement at this hearing, remains at the disposal of the Panel to provide any further  
clarification required.  
 
Thank you.  
 
                                                
* Original Spanish. Peru's oral statement is used as its executive summary.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
- C-56 - 
 
 ANNEX C -16 
EXECUTIVE SUMMARY OF  THE ARGUMENTS OF THE  PHILIPPINES* 
1. Mr. Chairman, members of the Panel, staff of the Secretariat, the Philippines appreciates the 
opportunity to appear before you today as a third part y in these disputes.  
2. As we had articulated in the 1 May 2012 consultations in DS435, the Philippines has 
multi-dimensional interests in the dispute. We noted our substantial trade interest in the matter, 
having started cigarette exports to Australia in  2010 and experiencing significant export growth 
with a promising upside.  
3. On the other hand, the Philippines also noted that it is a party to the Framework Convention 
on Tobacco Control (FCTC), and is interested in understanding the relevance of the me asure to the 
effective implementation of the FCTC, and the nexus of the measure and its avowed public health 
policy objective. We give importance to public health policy objectives, as espoused in Article 8 of 
the TRIPS Agreement and the Doha Ministerial D eclaration on Public  Health.  
4. Equally important, the Philippines takes note of the importance of the dispute. We are keen 
on further understanding the nexus between the measure at issue on one hand, and the Trade -
Related Aspects of Intellectual Property  Rights (TRIPS) Agreement and the Technical Barriers to 
Trade (TBT) Agreement on the other hand, in the context of the public health policy objectives. 
This nexus, we believe, is possible to define in the least trade distortive or restrictive manner.  
5. The measure at issue is Australia 's Tobacco Plain Packaging Act 2011 and related legal 
instruments, which mandates the use of uniform plain packaging on retail packs and the tobacco 
products themselves. The measure is in furtherance of the public health poli cy objective of 
regulating tobacco consumption. It distinguishes the products mainly by the brand name, which is 
itself printed in uniform font and size.  
6. The Philippines is aware of the unprecedented attention placed by various Members and 
stakeholders in these consolidated disputes, having joined the five complainants, the respondent, 
and forty -one other third parties in the panel proceedings.  
7. Given the comprehensive written submissions and statements by the parties and third 
parties before this este emed Panel, we trust that a fair and enlightened outcome that upholds the 
WTO agreements and legitimate interests of Members within the multilateral trading system will be 
achieved.   
8. Even as we closely monitor the proceedings in order to determine how best to protect and 
promote the interests of thousands of our tobacco farmers and employment -generating 
enterprises, as well as the health and well -being of our citizens, the Philippines understands that a 
legal determination of the consistency of the meas ure with the TRIPS Agreement and the 
TBT Agreement would have to be made.  
9. On the intellectual property side, the findings of these disputes would touch upon the scope, 
nature (i.e., a positive or negative right), and allowable special requirements on th e use of a 
trademark and a geographical indication. The findings may also delve into the extent of the public 
health policy space vis -à-vis the rights provided in the TRIPS Agreement. On the technical 
regulation aspect, evidence will show whether or not th e measure is an unnecessary obstacle to 
trade, and whether it is more trade -restrictive than necessary.  
10. We are cognizant, furthermore, that in the bigger picture, trade in the 21st century is imbued 
with multi -dimensional aspects. Intellectual property , public health policy, environmental concerns, 
and information technology are but some areas that affect trading between economies. Even 
domestically, balancing the immediate concerns of farmers and manufacturers with long -term 
health imperatives is neces sary to fully protect and project national interest. We do not conduct 
                                                
* The Philippines' oral st atement is used as its executive summary.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 trade in a vacuum, and the other dimensions affecting trade are often politically significant. These 
other dimensions may also have to be considered in any positive resolution to the di sputes.  
11. The Philippines is also interested in knowing whether the measure and the findings in these 
disputes would have any implications on the conduct of international trade in other goods and 
services. Will tobacco products, given their public health  effects, be considered sui generis , or will 
they be a gateway towards a more prevalent use of plain packaging to deter the use of other 
products?  
12. Mr. Chairman, as we listen intently to our discussions today and analyze carefully 
developments in the mo nths ahead, we are still left to wonder how a plain pack of cigarettes 
aimed at reducing attractiveness has generated an unprecedented amount of global attention.  
13. This serves to remind us that the rules and decisions we undertake abstractly in this 
esteemed organization have concrete, real -life impact on our peoples – from the farmers that 
painstakingly plant and harvest tobacco for a living, to manufacturers that produce and package 
high-quality goods, and to consumers and citizens whose well -being th is organization has vowed 
to uphold. We trust that the decisions we undertake in these disputes will ultimately redound to 
the benefit of our peoples.  
14. This dispute has put forward novel arguments and interpretations of the relevant covered 
agreements, and the Philippines as a 3rd party has assessed the implications of these proceedings 
taking into account national objectives.  The Philippines reserves its rights under Article X.4 of the 
DSU for a recourse to normal dispute settlement proceedings under t he DSU.  
15. Thank you, Mr. Chairman.  
 WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 ANNEX C -17 
EXECUTIVE SUMMARY OF  THE ARGUMENTS OF SIN GAPORE  
I.  Introduction  
1.  This dispute is about whether the measure at issue ( "Plain Packaging Measure ") is permitted 
under the covered agreements. It is not about  whether public health or trade should prevail. It is 
also not about whether or not intellectual property rights (IPR) are important and should be 
protected. There is no question that the covered agreements can and should be read 
harmoniously, in a manner that strikes a proper balance between respect for IPR and the right to 
protect public health.  
2.  Singapore has grave concerns that in seeking to challenge the Plain Packaging Measure, the 
complainants have sought to stretch the meaning of the provisions b eyond the terms of the 
covered agreements and created obligations where there are none. Such interpretation will inject 
considerable uncertainty into the multilateral trading system and must be rejected.  
II. Analysis and Comments  
A.  Claims under the TRIP S Agreement  
Horizontal Remarks  
3.  The complainants claim that they do not assert that the TRIPS Agreement establishes a positive 
right of use of a trademark. Nonetheless, they argue that trademarks must be allowed to be used 
or granted an opportunity to b e used. In substance, this is no different from asserting a positive 
right of use. However, trademark rights, as accorded by the TRIPS Agreement, are negative rights. 
They are a right to exclude others from using certain signs. They do not encompass a righ t to use 
a trademark. Any claim of a right of use of a trademark under the TRIPS Agreement is neither  
supported by the relevant text, context, or objective and purpose of the TRIPS Agreement, nor by 
WTO jurisprudence. Although the panel in EC – Protection of Trademarks and Geographical 
Indications (US) suggested that owners of trademarks have a legitimate interest to preserve the 
distinctiveness of their trademarks, the panel also made clear that legitimate interest is not 
synonymous with rights conferred u nder the TRIPS Agreement. Hence, it would be erroneous to 
conflate the two when interpreting the TRIPS Agreement.  
TRIPS Articles 2.1, 15.4, 16.1, 16.3, 22.2(b) and 24.3  
4.  In Singapore 's view, the claims in respect of Articles 2.1, 15.4, 16.1, 16.3, 22.2( b) and 24.3 
must fail. The correct interpretation and application of the provisions are as follows:  
a) Article 6 quinquies  of the Paris Convention (incorpora ted by Article 2.1 of the 
TRIPS  Agreement) obliges a Member to accept for filing and protection "as is" trademarks 
that are duly registered in another country. The provision does not address the nature of 
the protection that flows from registration, or obligate Members to grant trademark owners 
a "right of use " in respect of their trademarks. This readin g is consistent with WIPO 's view 
that Article 6 quinquies  A(1) does not address the question of use;  
b) Article 10 bis of the Paris Convention (incorporated by Article 2.1 of the TRIPS Agreement) 
addresses "acts of unfair competition " which are acts of comme rcial dishonesty in the 
sense of misrepresentation. The provision is not directed at market conditions. The ability 
to use brand, business or company names with variant names on tobacco packaging 
(which themselves may be trademarks or elements of trademark s) enables consumers to 
clearly distinguish the tobacco products of one undertaking from another;  
c) Article 15.4 addresses the registration of a trademark by providing that the nature of the 
goods to which a trademark is to be applied shall not form an ob stacle to registration. 
The provision deals with registration and not use. Contrary to what the complainants claim, WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 tobacco -related signs that are non -inherently distinctive and have not acquired 
distinctiveness are not capable of constituting trademarks; they are non -registrable per se 
and therefore a fortiori , there cannot be any "obstacle to registration " because of the 
nature of the goods or services involved. Furthermore, Members are under no obligation to 
enable a sign to acquire distinctiveness;  
d) Article 16.1 accords the protection that follows from registration which is the exclusive 
right to prevent unauthorised use of identical or similar signs on identical or similar goods 
where such use would result in a likelihood of confusion. It creates a ne gative right to 
exclude and not a positive right of use. E ven if it is argued that trademark owners have a 
legitimate interest to preserve the distinctiveness of their trademarks, such interest is not 
a "right" under Article 16.1, much less a right to use a trademark. The erosion of any 
legitimate interest to preserve distinctiveness through use is not a violation of Article 16.1 ;  
e) Article 16.3 protects registered well -known trademarks by preventing the registration or 
use of  those trademarks on dissimil ar goods. The provision creates a negative right to 
prevent registration or use and not a positive right of use. Article 16.3 does not impose on 
Members an obligation to enable an owner to maintain the well -known status of a 
trademark. Likewise, Article 16 .3 does not oblige Members to permit the use of a 
trademark in order to enable it to acquire well -known status;  
f) Article 22.2(b) obliges a Member to provide, in respect of geographical indications ( "GI"), 
the legal means for interested parties to preven t any use  that constitutes an act of unfair 
competition. This is not the same as a positive right of use;  
g) Article 24.3 prohibits a Member from diminishing the protection of GI that existed in the 
Member immediately prior to the date of entry into force of the WTO Agreement. The 
complainants have not demonstrated a relevant GI that existed in Australia prior to 
1 January 1995. In any event, the protection of GI in Australia has not been diminished by 
the Plain Packaging Measure because no positive right o f use of GI ever existed under 
Australian law.  
TRIPS Article 20  
5.  Article 20 provides that the use of a trademark in the course of trade shall not be unjustifiably 
encumbered by special requirements. In Singapore 's view, Article 20 addresses the use of 
trademarks on goods that are lawfully placed on the market and is not concerned with measures 
that regulate the availability of the goods themselves on the market. However, this does not mean 
that all measures that address the use of trademarks on goods tha t may be lawfully placed on a 
market fall within the scope of Article 20.  We submit that aspects of the Plain Packaging Measure 
that prohibit the use of "non-word" trademarks are outside the scope of Article 20.  
6.  We also submit that the Plain Packaging Measure is not unjustifiable as it bears a rational 
connection with a legitimate public health objective and does not go against that objective . 
Accordingly, the measure does not contravene Article 20.  
Encumbered by special requirements  
7.  For the reason s that follow, aspects of the Plain Packaging Measure that prohibit the use of 
trademarks fall outside the scope of Article 20. First, having regard to the ejusdem generis  canon 
of construction, we note that a prohibition on the use of trademarks is not of  the same type as the 
situations illustrating the term "encumbered by special requirements ". 
8.  Second, this reading is confirmed by the negotiating history of Article 20. Commentators have 
explained that Article 20 was directed at certain practices during the Uruguay Round, such as 
requiring foreign trademarks to be used with the trademark or trade name of the local licensee. 
We note that in the records of the Uruguay Round negotiations, the practices discussed did not 
include prohibitions on the use of t rademarks.  
9.  Third, the objection that this reading creates a "loophole " which would allow Article 20 to be 
circumvented by prohibiting the use of trademarks altogether is entirely beside the point. Article WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 20 clearly does not contemplate or deal with th e prohibition of use of trademarks and we must be 
cautious when tenuous policy arguments are being made to over -ride the clear ambit of a carefully 
negotiated provision.  
Unjustifiably  
10.  In Singapore 's view, the test of "unjustifiably " is not that as fou nd in Article 17, which governs 
exceptions to rights conferred by a trademark, because the ability to use a trademark is not a right 
conferred by Article 16. Therefore, a test that involves the sort of balancing exercise envisaged in 
Article 17 should be r ejected as Article 17 is not applicable in this context.  
11.  Secondly, the test is also not that of necessity, whether as understood under Article XX of 
GATT 1994 or Article 2.2 of the TBT Agreement. Singapore notes that the term "necessary " is used 
in other parts of the TRIPS Agreement, such as Articles 8.1, 27.2 and 39.3, and can have a range 
of meanings depending on the context in which it is used. The adoption of different terms in 
separate provisions of the same agreement – "unjustifiably " in Article  20 and "necessary " in 
Articles 8.1, 27.2 and 39.3 etc. – indicates that the drafters intended "unjustifiably " in Article 20 to 
have a meaning other than "necessary ".  
12.  Thirdly, contrary to the complainants ' view, the test does not require individualiz ed 
assessment of trademarks. Singapore submits that if no such requirement exists in the 
assessment of exceptions to "rights " conferred by a trademark, a fortiori  the same does not apply 
in the present context as the ability to use a trademark is not a "right" conferred by a trademark.  
Furthermore, the Plain Packaging requirements should be assessed holistically rather than 
individually to determine if they are unjustifiable under Article 20 as the requirements reinforce 
one another to, among others, reduc e the appeal of tobacco products to consumers.  
13.  In our view, consistent with past decisions by the Appellate Body, a measure is not 
unjustifiable if it bears a rational connection to a legitimate objective and does not go against that 
objective. The as sessment of whether a measure bears a rational connection to a legitimate 
objective involves the assessment of the following factors:  
The importance of the interest sought to be protected;  
The extent of the encumbrance; and  
The degree of contribution of the measure to the policy objective.  
14.  We submit that this reading is consistent with the ordinary meaning of the term 
"unjust ifiably ", in its context, and in light of the object and purpose of the TRIPS Agreement. 
Pursuant to Article 8.1, which recognizes and affirms the sovereign right of Members to adopt 
public health measures, and paragraph 4 of the Doha Declaration on the TR IPS Agreement and 
Public Health , which constitutes a subsequent agreement within the meaning of Article 31(3)(a) 
of the Vienna Convention on the Law of Treaties , the term "unjustifiably " should be  interpreted 
in a manner which supports WTO Members ' right t o protect public health.  
15.  Finally, the Plain Packaging Measure is not unjustifiable as it bears a rational connection with 
legitimate public health objectives and does not go against those objectives. In this connection, 
we note that the body of evide nce supports the conclusion that Plain Packaging is effective in 
reducing the appeal of tobacco products.  
B.  Claim under the TBT Agreement  
TBT Article 2.2  
16.  Singapore submits that the Plain Packaging Measure is not more trade -restrictive than 
necessar y to fulfil its public health objectives.  
17.  As a preliminary matter, we consider that both the trademark requirements and format 
requirements should be considered together, in assessing the consistency of the Plain Packaging 
Measure with Article 2.2 of the TBT Agreement. In our view, both trademark requirements and WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 format requirements are "technical regulations " within the meaning of Annex 1.1 of the 
TBT Agreement and are subject as a whole to the TBT Agreement.  
Trade -restrictiveness  
18.  We submit that  trade -restrictiveness should be seen as an absolute standard, rather than as a 
relative standard, and suggest that the Panel assess trade -restrictiveness by comparing the effect 
on an imported product before and after the introduction of the measure, sole ly by assessing the 
effect on that product alone . To have to delve into a "like product " analysis will be inappropriately 
veering towards an Article 2.1 analysis. The test of trade -restrictiveness should accommodate a 
scenario where a respondent Member imp oses a technical regulation that adversely affects an 
imported product, where such product stands alone and has no other competition in the market . 
Furthermore, contrary to Australia 's and EU 's position, we take the view that affected trade can be 
between the complaining Member and the defending Member alone.  
19.  Based on the object and purpose of the TBT Agreement, we suggest that the heart of the 
Article 2.2 obligation lies in the necessity test. We see the attractiveness of the Dominican 
Republic 's argu ment that "Article 2.2 assumes that technical regulations are restrictive " (emphasis 
added). The TBT Agreement is about technical barriers  to trade. We submit that even if technical 
regulations should not be considered to be inherently trade -restrictive, t he threshold for "trade -
restrictiveness " in this context should not be unduly onerous.  
Legitimate objective  
20.  The Panel should reject the complainants ' narrow focus on smoking prevalence as the primary 
basis for assessing the degree of the Plain Packag ing Measure 's contribution to its objectives. 
The objectives of the Plain Packaging Measure are set out in section 3 of the Tobacco Plain 
Packaging Act, and further elaborated on in Part II.H of Australia 's first written submission. 
Singapore supports Aust ralia's submission on the causal pathway through which the 
Plain Packaging Measure will ultimately contribute to the achievement of its broader objectives by 
discouraging uptake, encouraging quitting, discouraging relapse and reducing exposure to smoke.  
Suite of tobacco control measures  
21.  The contribution of the Plain Packaging Measure to its public health objectives has to be 
understood and evaluated in the context of the comprehensive suite of tobacco control measures 
in Australia. The adoption of a co mprehensive suite of tobacco control measures leads to greater 
reductions in tobacco use than would result from the separate effects of individual tobacco control 
policies.  
Contribution to public health objectives  
22.  The scientific and expert evidence su bmitted by Australia demonstrates the contribution of the 
Plain Packaging Measure to its public health objectives. Singapore notes that no single study forms 
an evidence base by itself, but multiple well -conducted studies that point towards the same 
conclu sions and provide a strong evidence base for public policy. On the other hand, the expert 
reports relied on by the complainants to challenge the evidence base for plain packaging are 
flawed for the reasons set forth in paragraphs 3 to 10 of Annexure E to A ustralia 's first written 
submission.  
23.  Finally , we agree that each of the alternative measures proposed by the complainants cannot 
substitute for the contribution of the Plain Packaging Measure to its objectives as the 
Plain Packaging Measure plays a di stinct and complementary role within the suite of tobacco 
control measures.  
III. Conclusion  
24.  For the reasons stated above, Singapore 's view is that the Plain Packaging Measure does not 
contravene: (i) Articles 2.1, 15.4, 16.1, 16.3, 20, 22.2(b) and 24. 3 of the TRIPS Agreement; and 
(ii) Article 2.2 of the TBT Agreement.WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 ANNEX C -18 
EXECUTIVE SUMMARY OF  THE ARGUMENTS OF SOU TH AFRICA  
I. INTERPRETATION OF THE TRIPS AGREEMENT  
1. Paragraph 5(a) of the Doha Declaration on the TRIPS Agreement and Public Health 
recognises that: "In applying the customary rules of interpretation of public international law, each 
provision of the TRIPS Agreement shall be read in the light of the object and purpose of the 
Agreement as expressed, in particular, in its objectives and p rinciples. " 
 
2. Article 31(1) of the Vienna Convention on the Law of Treaties sets out the general rule on 
interpretation in the following manner: "A treaty shall be interpreted in good faith in accordance 
with the ordinary meaning to be given to the terms  of the treaty in their context and in the light of 
its object and purpose. " 
 
3. In EC — Trademarks and Geographical Indications1, the Panel referred to the principles of 
the TRIPS Agreement set out in Article 8.1: "These principles reflect the fact that t he 
TRIPS  Agreement does not generally provide for the grant of positive rights to exploit or use 
certain subject matter, but rather provides for the grant of negative rights to prevent certain acts.  
 
4. It is evident that the only "rights conferred " with respect to trademark owners under the 
TRIPS Agreement are  negative rights of exclusion provided for in Article 16 which protect the 
position of trademark owners in relation to other traders in the market. These negative rights do 
not delimit the public re gulatory relationship between owners of trademarks and sovereign 
governments and does not prohibit legitimate public policy measures in respect of the use of such 
trademarks or geographical indications.  
 
5. The Panel is hereby reminded that the "right of u se" theory as advanced by the 
complainants under Articles 2.1, 15, 16, 20, 22, and 24 of the TRIPS Agreement are unsupported 
by the ordinary meaning of these provisions.  
 
II. ARTICLES 2.1, 15.4 &  16.1 OF THE TRIPS AG REEMENT  
 
A. Article 2.1 of the TRIPS Agr eement  
6. Article 2.1 of the TRIPS Agreement provides that WTO 'Members shall comply with 
Articles 1 through 12, and Article 19, of the Paris Convention (1967) '  in respect of Parts II, III and 
IV of the TRIPS Agreement.  Article 6quinquies A(1) of the Par is Convention, which provision is 
incorporated into the TRIPS Agreement pursuant to TRIPS Article 2.1. It provides that a Member 
may not deny the registration of a trademark that is registered in the territory of another Member 
based on its form.   Article 6quinquies A(1) is not directed towards the "use" of trademarks but 
towards their registration and validity and does not grant the trademark owners a positive "right of 
use" in respect of their trademarks.  
 
7. A trademark registered under Article 6quinquie s can be the subject of a limitation or 
prohibition for other grounds contained in laws outside of trademark law.  
 
B. Article 15.4 of the TRIPS Agreement  
8. Article 15.4 of the TRIPS Agreement makes clear that a Member can regulate a product 
in a way that may restrict or prohibit the use of a trademark in its territory, as long as a Member 
does not refuse to register a trademark based on the nature of a product.  
 
9. No positive right of use is accorded by Article 15.4 of the TRIPS Agreement to any holder 
and cannot be interpreted as preventing a Member from limiting or prohibiting the use of 
                                                
1 (Panel Reports, EC — Trademarks and Geographical Indications (US), para. 7.210(Australia), 
para. 7.246.)  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
- C-63 - 
 trademarks for the commercialization of goods or services based on public health, security, or 
other reasons.  
10. Hence it should be noted that tobacco plain packaging m easures should be considered 
consistent with Article 15.4 because they do not prevent the registration of trademarks based on 
the nature of the underlying product (i.e. tobacco).  
 
C. Article 16.1 of the TRIPS Agreement  
11. On the basis of the ordinary mea ning of the terms contained in Article 16.1, the right 
accorded to the owners of registered trademarks is a negative right, i.e. the right to exclude use 
by others.  
 
12. Consequently plain packaging measures should be adjudged not to prevent owners of 
registered trademarks from exercising their right to seek forms of relief in the event that a  third 
party uses an identical or similar sign in the course of trade where such use creates a likelihood of 
confusion based on the nature of the right conferred under  Article 16.1.  
 
III. Article 20 of the TRIPS Agreement  
13. A proper interpretation of the term "unjustifiably " in Article 20 dictates that no 
"necessity " or "least trade -restrictive " standard is present in Article 20. The term "unjustifiably " 
does not have  the same meaning as "necessary " and should not be interpreted to impose a 
standard similar to the analysis required under Article 2.2 of the TBT Agreement, including its 
notions of "least restrictiveness " and "reasonably available alternatives ". 
 
14. Since previous interpretations of the word "unjustifiable " have been made in context of 
the phrase "arbitrary or unjustifiable discrimination ", as it appears in Article XXof the GATT 1994 
and Article XIV of the GATS, the Panel is invited to note that Article 2 0 of the TRIPS  Agreement is 
fundamentally different to Article XX of the GATT 1994 and Article XIV of the GATS. The latter 
articles operate as exceptions to a violation of another provision of the covered agreements 
whereas Article 20 of the TRIPS Agreemen t is not of such a nature. The physical text of Article 20 
of the TRIPS Agreement simply does not support such a reading. If  the drafters of the agreement 
intended such an outcome they would have explicitly provided for this.  
 
IV. Article 2.2 of the TBT A greement  
15. Since South Africa is a signatory to the Framework Convention on Tobacco Control 
(FCTC), it  would be appropriate to direct the Panel 's attention to the "Guidelines " for the 
implementation of Articles 11 and 13 of the FCTC which recommend that parties consider the 
adoption of plain packaging of tobacco products.2 If plain packaging measures are to be seen as 
technical regulations, the FCTC Guidelines are "relevant international standards " within the 
meaning of Article 2.5.  
 
16. Accordingly, and  to the extent that the definition of a "technical regulation " encompasses 
measures affecting the use of a trademark, any tobacco plain packaging measure is presumed not 
to create an unnecessary obstacle to international trade under the second sentence of Article 2.5.  
V. Conclusion  
17. Any "plain packaging " measures that are undertaken by any Member should be adjudged 
to be legitimate policy measures to achieve public health objectives insofar as they comply with 
the requirements of the TRIPS Agreement or i nsofar as they may be adjudged technical measures, 
that they do not violate provisions of the TBT Agreement.  
 
18. The Panel is reminded of the provisions of Article 3(2) of the Understanding on Rules and 
Procedures Governing the Settlement of Disputes (Ann ex 2).  
 
                                                
2 At the third session of the Conference of the Parties (COP) to the Framework Convention adopted 
Guideline s for implementation of Article 13 ' and Guidelines for implementation of Article 11 on packaging and 
labelling of tobacco products in November 2008.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 ANNEX C -19 
EXECUTIVE SUMMARY OF  THE ARGUMENTS OF THE  SEPARATE CUSTOMS TER RITORY  
OF TAIWAN, PENGHU, K INMEN AND MATSU* 
1. In May 2003, the World Health Organization (WHO) adopted the Framework Convention on 
Tobacco Control (FCTC) – a treaty with publi c health objectives that required signatories to enact a 
set of universal tobacco control policies to limit the use of tobacco in all forms worldwide.  
2. Article 11 of the FCTC stipulates that each Party shall adopt and implement effective 
packaging and label ling measures to ensure that "tobacco product packaging and labelling do not 
promote a tobacco product by any means that are false, misleading, deceptive or likely to create 
an erroneous impression about its characteristics, health effects, hazards or emis sions. . . " 
Guidelines for implementation of Article 11 of the WHO FCTC suggest Parties should consider 
adopting plain packaging measures that we believe will lower the consumer 's affinity for and 
consumption of tobacco products.  
3. Our accession to the FCTC was approved by the Legislative Yuan on January 18, 2005, and 
promulgated by the President on March 30, 2005.  We are committed to abide by the 
FCTC obligations.  We are also in full support of the direction to adopt measures restricting the 
packaging and labelling of tobacco products pursuant to the FCTC Guidelines, which is universally 
proposed and overwhelmingly supported by governments, experts, and NGOs alike.  
4. Even though our Government has not enacted any plain packaging -related legislation to 
date, w e will continue to monitor international trends, including the outcome of this case, and 
solicit comments from all interested parties, taking into account the balance between national 
health and free trade, scientific evidence, and prior implementation exp eriences, as bases for our 
future tobacco policy.  
 
                                                
* Chinese Taipei's written submission is used as its executive summary.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 ANNEX C -20 
EXECUTIVE SUMMARY OF  THE ARGUMENTS OF THA ILAND* 
I. INTRODUCTION  
1. The health risks and negative effects of smoking are well -recognized around the world. 
Several countries have been actively ta king a variety of measures to combat tobacco consumption 
and reduce smoking prevalence. The necessity of measures adopted in pursuit of public health 
interests is explicitly recognized under the WTO framework itself. Under certain conditions, 
WTO Members a re allowed to take actions in order to regulate and control tobacco products so as 
to address public health concerns. Indeed, while states have to exercise their regulatory powers 
within the boundaries of their accepted commitments, a proper  balance needs to be struck to 
ensure that the WTO 's rules -based trading system is compatible with and supportive of public 
health interests.  
2. Thailand joins the Australia - Tobacco Plain Packaging dispute because of our systemic 
interest in the interpretation of the WTO's rights and obligations when the measures at issue are 
adopted for public health objectives. Needless to say, the rulings of this dispute will have 
important implications on how WTO Members could adopt and implement tobacco regulation 
measures, especi ally in the manner that may affect intellectual property rights holders. Several  
WTO Members are awaiting the result of this dispute in order to decide whether or not they are 
able to take measures similar to Australia 's plain packaging requirements consis tently with the 
WTO obligations. In this regard, Thailand hopes that the Panel 's decision on the legal issues raised 
in this dispute will provide a clear guidance for WTO Members in an attempt to regulate tobacco 
products in a WTO -consistent manner.  
3. Thailand acknowledges that the complainants have made several claims against Australia 's 
plain packaging requirements  under the Agreement on Trade -Related Aspects of Intellectual 
Property Rights  ("TRIPS Agreement "), the Agreement on Technical Barrier to Trad e 
("TBT Agreement "), and the General Agreement on Tariffs and Trade 1994  ("GATT 1994 "). In this 
written submission, Thailand would like to focus on the issue as to how the TRIPS Agreement 
should be interpreted in general, but reserve the right to make any further comment on other legal 
issues at the later stage in the proceedings.  
II. THE INTERPRETATION O F THE TRIPS AGREEMEN T 
4. One of the important tasks of the Panel in this dispute is to clarify and interpret the 
TRIPS  Agreement with respect to the use o f tobacco control measures allegedly affecting 
trademarks and geographical indications rights holders. Thailand believes that any interpretation 
of the TRIPS provisions should be carried out in accordance with the well -established rules of 
treaty interpret ation under public international law, with particular attention given to the objective 
and purpose agreed upon by the parties of the treaty at issue.  In addition, any subsequent 
agreement between the parties relevant to the interpretation of the concerned subject matters 
also needs to be considered. This submission will examine each of these elements in the following 
sections.  
A. CUSTOMARY RULES OF IN TERPRETATION OF PUBL IC INTERNATIONAL LAW  
5. At the outset, the Understanding on Rules and Procedures Govern ing the Settlement of 
Disputes  ("DSU") provides a mandate that the dispute settlement system of the WTO serves to 
clarify the existing provisions of the covered agreements "in accordance with customary rules of 
interpretation of public international law ".1 These customary rules of treaty interpretation are 
codified under Article 31 of the Vienna Convention of the Law of Treaties  ("VCLT") which provides 
in relevant part that:  
1. A treaty shall be interpreted in good faith in accordance with the ordinary mean ing 
to be given to the terms of the treaty in their context and in the light of its object and 
purpose.  
... 
                                                
* Thailand's written submission is used as its executive summary.  
1 Article 3.2 of the DSU; The "covered agreements " refers to the agreements listed in Appendix to the 
DSU. See also Article 1.1 of the DSU.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
- C-66 - 
 
 3. There shall be taken into account, together with the context:  
(a) any subsequent agreement between the parties regarding the interpretation of th e 
treaty or the application of its provisions;  
6. Article 31 of the VCLT has been recognized by the Appellate Body in various disputes as 
customary rules for the interpretation of the covered agreements.2 Accordingly, Thailand is of the 
view that the custo mary rules of treaty interpretation set forth in the VCLT need to be strictly 
followed by the Panel for its interpretation of the TRIPS Agreement. In particular, any unclear 
TRIPS provision must be interpreted in good faith according to the ordinary meanin g of the words 
in their context and in the light of the object and purpose of the TRIPS Agreement. Moreover, any 
subsequent agreement among WTO Members relevant to the TRIPS Agreement also needs to be 
taken into account by the Panel in forming the interpre tation.  
B. THE OBJECTIVE AND PUR POSE OF THE TRIPS  AGREEMENT  
7. Pursuant to the customary rules of treaty interpretation of public international law set out 
above, Thailand wishes to draw the Panel 's attention to the objective and purpose of the 
TRIPS  Agree ment, which is indispensable for the interpretation of controversial issues in this 
dispute. The provisions relating to the objective and purpose of the TRIPS Agreement are set forth 
under Articles 7 and 8, which provide in relevant part as follows:  
Artic le 7 
Objectives  
The protection and enforcement of intellectual property rights should contribute to the 
promotion of technological innovation and to the transfer and dissemination of 
technology, to the mutual advantage of producers and users of technologic al 
knowledge and in a manner conducive to social and economic welfare, and to a 
balance of rights and obligations . (emphasis added)  
Article 8  
Principles  
1. Members may, in formulating or amending their laws and regulations, adopt 
measures necessary to prot ect public health  and nutrition, and to promote the public 
interest in sectors of vital importance to their socio -economic and technological 
development, provided that such measures are consistent with the provisions of this 
Agreement . (emphasis added)  
1. Article 7 of the TRIPS Agreement  
8. TRIPS Article 7 makes clear that, in implementing the TRIPS Agreement, the protection 
and enforcement of intellectual property rights should promote social and economic welfare in the 
society. As such, it is evident that  the TRIPS Agreement does not intend only to protect the 
interests of "private rights ", but also to safeguard other important socio -economic interests of 
WTO Members.3 
9. Moreover, Article 7 establishes that the TRIPS Agreement needs to strike a balance 
between rights and obligations. In US — Section 211 Appropriations  Act, the panel observed that 
this objective constitutes an expression of "good faith " which "prohibits the abusive exercise of a 
state's rights ".4 Although Thailand agrees that WTO Members mu st exercise their rights reasonably  
in accordance with the obligations prescribed under the TRIPS Agreement, the legitimate rights of 
WTO Member governments, on the other hand, cannot be unreasonably  undermined by the 
TRIPS  obligations.5 In this regard, Th ailand considers that the TRIPS Agreement must be 
interpreted, in the light of the objectives of the TRIPS Agreement, so as to enable WTO Members 
                                                
2 See, for example, Appellate Body Report, US – Gasoline , p.17; Appellate Body Report , India – Patents 
(US), para. 46; Appellate Body Report, US – Hot-Rolled Steel , para. 60.  
3 See the fourth recital of the Preamble of the TRIPS Agreement, which reads "[r]ecognizing that 
intellectual property rights are private rights ". 
4 Panel Report, US — Section 211 Appropriations Act , para. 8.57;  Appellate Body, US - Shrimp , para. 158.  
5 The Appellate Body in US - Shrimp  stated that the good faith principle "controls the exercise of rights 
by states. One application of this principle, the application wi dely known as the doctrine of abus de droit , 
prohibits the abusive exercise of a state 's rights and enjoins that whenever the assertion of a right "impinges 
on the field covered by [a] treaty obligation, it must be exercised bona fide, that is to say  reaso nably "" 
(emphasis added) (footnote omitted). See Appellate Body Report, US - Shrimp , para. 158.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 to implement the TRIPS obligations in a manner that could maintain the overall balance between 
the protection of private rights and the sovereign rights to pursue socio -economic interests for 
public in general.  
2. Article 8 of the TRIPS Agreement  
10. Article 8 is regarded as one of the TRIPS provisions providing for the object and purpose of 
the TRIPS Agreement.6 In particular, Article 8.1 explicitly recognizes WTO Members ' right to adopt 
measures necessary to protect public health, among other public policy objectives , on condition 
that such measures are consistent with the terms of the TRIPS Agreement. As the im portance and 
necessity of public health protection cannot be overemphasized, the following points should be 
borne in mind while reading the TRIPS principles for the Agreement 's interpretation purposes.   
11. First, previous case law has confirmed that mean ing and effect must be given to all terms 
of the treaty. According to the Appellate Body in US - Gasoline , "[a]n interpreter is not free to 
adopt a reading that would result in reducing whole clauses or paragraphs of a treaty to 
redundancy or inutility ".7 Accordingly, Thailand considers that the whole Article 8.1 should be read 
by the Panel in a way that harmoniously gives meaning and effect to each and every parts of the 
said Article , which includes not only the TRIPS -consistency requirement but also the a ffirmation of 
WTO Members ' rights to act in pursuit of public health interests.   
12. Secondly, it should be noted that the TRIPS Agreement only establishes minimum  levels of 
protection that must be extended by WTO Members to specific types of intellectual  property and 
requires WTO Members to implement certain enforcement obligations to ensure that those levels 
of protection are observed within their respective territories.  According to TRIPS Article 1.1, 
"Members may, but shall not be obliged to, implement  in their law more extensive protection than 
is required by this Agreement ". As such, in assessing the TRIPS -consistency, it is essential for the 
Panel to determine what the minimum  standards relating to the protection of intellectual property 
rights at is sue are. In Thailand 's view, the minimum standards that WTO Members are obliged to 
give effect to are those expressed by the text of the TRIPS Agreement. Any additional requirement 
resulting in higher standards of protection should not be implied or read i nto the Agreement unless 
the text itself says so.  
13. Moreover, while WTO law provides for general exceptions to the GATT obligations under 
certain conditions, an exception to the TRIPS obligations does not clearly exist. That is to say, 
whereas a measure necessarily adopted to protect public health is justifiable pursuant to 
GATT  Article XX (b), the very same measure may not be excused from the violations of the 
TRIPS  obligations if it does not meet the minimum standards of protection set forth under the 
TRIPS Agreement.8 Given the absence of TRIPS general exceptions, Thailand is of the view that 
the interpretation of obligations under the TRIPS Agreement should be treated with greater care 
and supportive of public interests that are of vital importance to t he society as a whole.  This position is 
reinforced by the Preamble of the TRIPS Agreement which desires to establish a mutually 
supportive relationship between the WTO and relevant international organizations, which 
presumably includes the World Health Org anization in terms of public health issues.9  
14. In the light of the discussion above, Thailand considers that, for the purposes of the 
TRIPS  Agreement 's interpretation, Article 8.1 is an interpretative guidance which affirms that 
WTO Members may exercise  their rights to adopt measures necessary to address public health 
concerns. Such measures are presumed to be TRIPS -consistent unless the complainants discharge 
a burden of proving otherwise. In deciding so, the Panel needs to be cautious not to assert hig her 
standards of protection than those explicitly required by the TRIPS Agreement. Any interpretation 
made out of any unclear TRIPS provision should be supportive of public health so as to avoid 
possible conflicts between intellectual property rights and p ublic interests to the greatest extent 
possible.  
                                                
6 See Doha Ministerial Conference, Declaration on the TRIPS Agreement and Public Health, Adopted on 
14 November 2001, WT/MIN(01)/DEC/2, 20 November 2001, paragr aph 5(a).  
7 Appellate Body Report, US - Gasoline , p.23. 
8 See paragraph 12 of this written submission for the discussion of the minimum  standards of protection 
as required by the TRIPS Agreement.  
9 See the Preamble of the TRIPS Agreement, which reads "[d]esiring to establish a mutually supportive 
relationship between the WTO and the World Intellectual Property Organization (referred to in this Agreement 
as "WIPO ") as well as other relevant international organizations ". WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 C. THE DECLARATION ON THE TRIPS  AGREEMENT AND PUBLIC HEALTH 
15. On 14 November 2001, WTO Ministers adopted by consensus the Declaration on the 
TRIPS  Agreement and Public Health (the "Doha Declaration "), stressing the significant role of the 
objectives and principles contained in the TRIPS Agreement.10 In particular, paragraphs 4 and 5(a) 
of the Doha Declaration read:  
4. We agree that the TRIPS Agreement does not and should not prevent Members 
from taking mea sures to protect public health. Accordingly, while reiterating our 
commitment to the TRIPS Agreement, we affirm that the Agreement can and should 
be interpreted and implemented in a manner supportive of WTO Members ' right to 
protect public health and, in p articular, to promote access to medicines for all.  
In this connection, we reaffirm the right of WTO Members to use, to the full, 
the provisions in the TRIPS Agreement, which provide flexibility for this purpose.  
5. Accordingly and in the light of  paragraph 4 above , while maintaining our 
commitments in the TRIPS Agreement, we recognize that these flexibilities include:  
(a)  In applying the customary ru les of interpretation of public international law, 
each provision of the TRIPS Agreement shall be read in the light of the object and 
purpose of the Agreement as expressed, in particular, in its objectives and principles.  
16. Thailand is of the view  that, for the purposes of this dispute, the Doha Declaration is 
relevant to the interpretation of the TRIPS provisions at issue. In this section we will first examine 
the legal status of the Doha Declaration and then its implications on the TRIPS Agreement and 
public health.  
1. The Legal status of the Doha Declaration  
17. At the beginning, Thailand acknowledges that the Doha Declaration may fall short of being 
characterized as an authoritative interpretation within the meaning of Article IX:2 of the 
Marrakesh  Agreement Establishing the WTO  (the "WTO Agreement "), which provides that the 
Ministerial Conference and the General Council of the WTO possess the "exclusive authority to 
adopt interpretations of [the WTO Agreement] and of the Multilateral Trade Agreements ".11 Since 
the Doha Declaration was not adopted based on a recommendation of the TRIPS Council, one of 
the "two specific requirements " prescribed under Article IX:2  of the WTO Agreement , it may not 
strictly constitute an authoritative interpretation which h as a "pervasive legal effect " and is 
generally  "binding on all Members ".12    
18. Nevertheless, given the way it was adopted, Thailand considers that the Doha Declaration 
should have the interpretative effects indifferent from the formal authoritative inte rpretation. In 
particular, the Doha Declaration was agreed at the WTO Ministerial Conference, the highest 
decision -making body of the WTO. The Doha Declaration, therefore, arguably constitutes a 
"Ministerial Decision " within the meaning of Article IX:1  of the WTO Agreement,  establishing an 
interpretative guidance of the TRIPS Agreement in the area of public health.13 As a result, the 
Doha Declaration is an indispensable instrument complement to the reading and interpreting of the 
TRIPS provisions in this di spute.  
19. In addition, Thailand believes that the Doha Declaration also reflects a "subsequent 
agreement " within the meaning of Article 31.3(a) of the VCLT. In US - Clove Cigarettes , the 
                                                
10 Doha Ministerial Conference, Declar ation on the TRIPS Agreement a nd Public Health, Adopted on 
14 November 2001, WT/MIN(01)/DEC/2, 20 November 2001.  
11 The "Multilateral Trade Agreements " refers to the agreements and associated legal instruments  
included in Annexes 1, 2, and 3 of the WTO Agr eement. See Article II of the WTO Agreement.  
12 According to the Appellate Body in US - Clove Cigarette , "two speci fic requirements" under 
Article  IX:2 of the WTO Agreement are (i) a decision by the Ministerial Conference or the General Council to 
adopt su ch interpretations shall be taken by a three -fourths majority of Members; and (ii) such interpretations 
shall be taken on the basis of a recommendation by the Council overseeing the functioning of the relevant 
Agreement. See Appellate Body Report, US - Clove Cigarette , paras. 250 -251. 
13 Article IX:1 of the WTO Agreement provides that "The WTO shall continue the practice of decision 
making by consensus followed under GATT 1947. Except as otherwise provided, where a decision cannot be 
arrived at by consensus , the matter at issue shall be decided by voting. At meetings of the Ministerial 
Conference and the General Council, each Member of the WTO shall have one vote. Where the European 
Communities exercise their right to vote, they shall have a number of votes equal to the number of their 
member States which are Members of the WTO. Decisions of the Ministerial Conference and the General 
Council shall be taken by a majority of the votes cast, unless otherwise provided in this Agreement or in the 
relevant Multilat eral Trade Agreement " (footnote omitted).  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 Appellate Body found that paragraph 5.12 of the Doha Ministerial De cision is a subsequent 
agreement among Members on the interpretation of Article 2.12 of the TBT Agreement on the 
basis that "it clearly expresses a common understanding, and an acceptance of that understanding 
among Members ".14 Since the Doha Declaration e xpresses an agreed understanding of 
WTO Members and was adopted by consensus, it  should be regarded as a subsequent agreement 
among WTO Members relevant to the TRIPS Agreement 's interpretation. This subsequent 
agreement states a common understanding regar ding the right of WTO Members to address public 
health concerns, while reaffirming that the TRIPS Agreement are meant to be interpreted in a 
manner supportive of such right. Pursuant to Article 31.3(a) of the VCLT, therefore, the Panel has 
to take the Doha  Declaration into account for the purposes of the treaty interpretation.  
2. The Implications of the Doha Declaration  
20. The Doha Declaration recognizes WTO Members ' right to adopt measures for public health 
objectives and emphasizes that "the TRIPS Agree ment does not and should not prevent members 
from taking measures to protect public health ".15 Following this principle, all WTO Members agreed 
that the TRIPS Agreement "can and should be interpreted and implemented in a manner 
supportive of WTO members ' right to protect public health ".16  
21. The first part of paragraph 4 of the Doha Declaration makes clear that the interpretation of 
the TRIPS Agreement should not diminish WTO Members ' right to address public health concerns 
for the sake of society as a wh ole. Indeed, when the relevant provisions are clear and explicit, it 
goes without saying that WTO Members should adopt any necessary measure in accordance with 
such provisions of the TRIPS Agreement. But in cases of ambiguity or where more than one 
interpr etation is possible, Thailand considers that the Panel should attach a greater importance to 
the interpretation that causes the least interferences with the exercise of WTO Members ' right to 
protect public health.  Pursuant to the Doha Declaration , the inte rpretation of the TRIPS provisions 
should demonstrate the supportive role of the trade -related intellectual property rights to protect 
public health interests.  
22. The second part of paragraph 4 of the Doha Declaration reaffirms the right of 
WTO Members to  use flexibilities contained in the TRIPS Agreement for the purposes of public 
health protection. One of the available TRIPS flexibilities is spelled out under paragraph 5(a) of the 
Doha Declaration, reiterating that the TRIPS Agreement must be read in the  light of the objective 
and purpose, particularly those expressed in TRIPS Articles 7 and 8. Thailand considers that this 
statement goes beyond merely affirming the relevance of objectives and principles of the 
TRIPS  Agreement for the purposes of treaty in terpretation. In particular, it suggests that the 
interpretation of the TRIPS Agreement in the light of the object and purpose set out in Articles 7 
and 8 is one of the  flexibilities  that may be used by WTO Members "to the full ".17 As a result, in 
discharg ing the duty of legal interpretation, the Panel should  read the TRIPS Agreement in a 
manner that gives sufficient flexibility to accommodate the public health needs of WTO members, 
in accordance with objectives and principles of the TRIPS Agreement.  
III. CONCLUSION  
23. In reaching a conclusion whether or not Australia 's plain packaging requirements fall foul 
of the TRIPS obligations, the Panel needs to conduct an interpretation of several TRIPS provisions. 
In Thailand 's view, the TRIPS Agreement should be r ead and interpreted through a strict 
application of the customary rules of interpretation of public international law. The objective and 
purpose of the TRIPS Agreement, as well as the Doha Declaration, are particularly relevant to the 
case at hand. They ex plicitly affirm that WTO Members have the right to adopt measures 
necessary to protect public health. The burden is on the complainants to prove that Australia 's 
plain packaging requirements do not meet the minimum  standards explicitly required by the term s 
of the TRIPS Agreement. For the interpretation of any unclear provision, the Panel should exercise 
its discretion in a manner that gives necessary flexibility to WTO Members to address public health 
concerns, and ensures that the spirit of the TRIPS Agre ement is supportive of and compatible with 
public interests.  
24. Thailand hopes that our submission are of assistance to the Panel.  
                                                
14 Appellate Body Report, US - Clove Cigarette , para. 267.  
15 The Doha Declaration, paragraph 4.  
16 The Doha Declaration, paragraph 4.  
17 The Doha Declaration, paragraph 4.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 ANNEX C -21 
EXECUTIVE SUMMARY OF  THE ARGUMENTS OF TUR KEY* 
I. INTRODUCTION  
 
1. Turkey thanks the Panel for giving the opportu nity to present its views in the proceedings of 
this important Panel. At the outset, we would like to underline that Turkey fully respects members ' 
rights to seek for methods of enhancing the protection of public health. In this regard, like all the 
partie s to the dispute, Turkey has the understanding that measures addressed to the control of 
consumption of tobacco and particularly those aiming at preventing tobacco products from 
becoming appealing to under -aged consumers, encompass legitimate public health  objectives 
within the World Trade Organization (WTO) context. This is an objective to which Turkey, as well, 
is strongly committed.  
2. Within this understanding, Turkey wishes to contribute by expressing its views on some 
systemic issues regarding the in terpretation of the provisions of the Agreement on Trade -Related 
Aspects of Intellectual Property Rights (the TRIPS Agreement).   
3. Therefore, with this submission, Turkey aims to contribute to the Panel 's analysis by 
assessing two elements, which, in Tur key's view, have systemic implications. These issues are; i) 
Whether there exists a "right of use " in the TRIPS Agreement for the trademark owners, and ii) 
burden of proof under Article 20 of the TRIPS Agreement.  
II.  WHETHER THERE EXISTS "A RIGHT OF USE " IN THE TRIPS AGREEMENT FOR THE 
TRADEMARK OWNERS  
4. One of the core issues lying at the heart of the legal claims related to the TRIPS Agreement 
in this dispute is whether there is a positive "right of use " for the trademark owners implied in the 
provisions  of the Agreement. In other words, the parties to the dispute disagree on whether there 
is an obligation on Members, stemming from the TRIPS Agreement, to recognise trademark 
owners ' right to use their trademarks during the course of trade.  
5. The respond ent, Australia, argues that the provisions of the TRIPS Agreement do not include 
any explicit right to use for trademark owners.1 After a provision by provision analysis, Australia 
concludes that in none of the provisions related to trademarks, the right t o use is mentioned 
except in Article 20. In its view, even Article 20 of the TRIPS Agreement, which provides that "the 
use of a trademark in the course of trade shall not be unjustifiably encumbered by special 
requirements ", does not confirm the existence of such a right as the Article "governs the 
relationship between a government as a regulator and all traders and trademark owners rather 
than the relationship between competing traders "2  Accordingly, for Australia, Article 20 does not 
provide, explicitly or implicitly, that "WTO Members are obliged to recognize the right to use 
trademarks, even if the commercialization of the goods is permitted. "3 
6. In Australia 's view, the text of the TRIPS Agreement confirms that trademark rights 
conferred under the Agr eement are negative in nature rather than positive. This means that rights 
conferred in the Agreement are the rights of trademark owners to exclude or prevent other parties 
from using the same or similar marks whereas positive rights would refer to rights to actually use 
the trademark.4 Therefore, Members are free to pursue legitimate policy objectives, and the 
negative rights granted under the Agreement do not limit regulations adopted by Members which 
may or may not restrain the use of trademarks.  
                                                
* Turkey  requested that its third party s ubmission serve as its executive summary.  
1 Australia 's First Written Submission, para 243  
2 Australia 's First Written Submission, para 254  
3 Australia 's First Written Submission, para 254  
4 Australia 's First Written Submission, para 255 -258 
 WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 7. Australia's position with regard to right to use of a trademark is significant since, if this 
position holds true, then, as Australia argues, most of the claims under the TRIPS Agreement 
would lose their legal grounds as they assume an implicit right to use in  the relevant provisions. If 
there is no right to use for trademark owners, the complainants will have very little legal grounds 
to challenge a restriction of the use of trademark in the course of trade.  
8. On the other hand, the complainants argue that, contrary to Australia 's view, the right to 
use a trademark for a trademark owner is inherent in the provisions of the TRIPS Agreement. In 
complainants ' view, first, use is a fundamental component of trademark regimes. For instance, 
Dominican Republic makes  an extensive argumentation on why use is essential for the trademark 
owner. For Dominican Republic, the function of a trademark –creating distinctiveness or 
differentiation of the goods or services from others - cannot be fulfilled without the use in 
comme rce.5 Without the use, a registered trademark would be unable to differentiate a product, 
and expectation for economic benefit cannot be realized.6 It is indeed for this purpose that 
business invests money and resources to develop a brand: to earn more pro fits through its use.7  
9. Second, the complainants argue that the provisions of the TRIPS Agreement support their 
position. For example, Dominican Republic pursues an article by article legal analysis and reaches 
the conclusion that the text of Articles 1 5.4, 16.1, 16.3 and 20 of the TRIPS Agreement implies a 
right to use for the trademark owners.8  Hence, for the complainants, Australia 's argument that 
TRIPS provisions do not include any positive right to use is baseless and should be rejected.9  
10. Turkey is of the view that when considering whether the TRIPS Agreement comprises of a 
right to use for trademark owners or not, all relevant factors, including the context of the 
trademark chapter in the TRIPS Agreement, should be taken into account. It is a matter of fact 
that "use" is an inseparable part of trademark regimes. Without use, the ultimate function of a 
trademark – to distinguish a product from others with an expectation for economic benefit - cannot 
be realized.10 In this context, it is no surpri se that many WTO Members, including Turkey, have an 
actual use requirement in order to be eligible for the rights attached to trademark registration. 
Indeed, registration without use creates an unnecessary barrier for new registrations and without 
use, mon ey and other resources spent on the registration and promotion of a trademark become 
meaningless.  
11. This has been highlighted in the Intellectual Property Handbook prepared by World 
Intellectual Property Organization (WIPO):  
 "Trademark protection is no t an end in itself. Even though trademark laws 
generally do not require use as a condition for the application for trademark 
registration, or even the actual registration, the ultimate reason for trademark 
protection is the function of distinguishing the g oods on which the trademark 
is used from others. It makes no economic sense, therefore, to protect 
trademarks by registration without imposing the obligation to use them. 
Unused trademarks are an artificial barrier to the registration of new marks. 
There i s an absolute need to provide for a use obligation in trademark law. "11 
 
12. In the light of the above, for Turkey, there are strong grounds to believe that the right to 
use for a trademark owner is a right inherent in the registration of a trademark. Turk ey is of the 
view that the provisions of the TRIPS Agreement are in line with this understanding.  
13. The right to use of a trademark for a trademark owner is assumed and implicitly recognized 
in trademark -related provisions of the TRIPS Agreement. Partic ularly, the very existence of 
Article  20 indicates that trademark owners have an inherent right to use their trademarks attached 
                                                
5  Dominican Republic 's First Written Submission, para 236  
6 Dominican Republic 's First Written Submission, para 239 -240 
7 Honduras ' First Written Submission, para 167  
8 Dominican Republic 's First Written Submission, para 248 -260 
9 Honduras ' First Written Submission, p ara 165 -175; Cuba 's First Written Submission, para 317 -320; 
Indonesia 'a First Written Submission, para 137 -146 
10 See WIPO (2013) World Intellectual Property Report 2013, p 81-87 for a detailed discussion on the 
effects of use of trademarks in the course o f trade.  
11 WIPO, WIPO Intellectual Property Handbook , 2nd edition (World Intellectual Property Organization, 
2008) ( "WIPO IP Handbook "), para. 2.390  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
- C-72 - 
 
 to their registration. Article 20 of the TRIPS Agreement mandates that "the use of a trademark in 
the course of trade shall not  be unjustifiably encumbered by special requirements ".  
14. Thus, in Turkey 's view, the general practice regarding trademark regimes as well as the 
provisions of the TRIPS Agreement sufficiently allow us to conclude that the use of trademark is a 
right of the trademark owner inherent in the registration of a trademark. This, however, does not 
mean that the use of a trademark by a trademark owner is an absolute right. WTO Members have 
the right to regulate markets, and use trademark in the course of trade fo r fulfilling various 
legitimate policy objectives.12  
15. Indeed, Article 8.1 of the TRIPS Agreement clearly recognizes Members ' right to regulate. 
The Article provides:  
Members may, in formulating or amending their laws and regulations, adopt 
measures nec essary to protect public health  and nutrition, and to promote the 
public interest in sectors of vital importance to their socio -economic and 
technological development, provided that such measures are consistent with 
the provisions of this Agreement. (empha sis added)  
 
16. Accordingly, Article 8.1 recognizes protection of public health and nutrition and promotion of 
public interest in sectors of vital importance to Members ' socio-economic and technological 
development as the two legitimate public policy objec tives. Nevertheless, the Article also requires 
that any measure to fulfill those objectives should be consistent with the provisions of the 
Agreement.  
17.  Article 20 of the TRIPS Agreement, read together with Article 8.1 mentioned above, lays 
down a clear  picture. As mentioned above, Article 20 mandates that "the use of a trademark in the 
course of trade shall not be unjustifiably encumbered by special requirements " and gives examples 
to those unjustifiable encumbrances. From this wording, it is self -evide nt that there are instances 
where the use of a trademark in the course of trade can be restricted "justifiably ". For Turkey, a 
justifiable restriction can only arise as a result of a regulation to fulfill a legitimate policy objective 
of a Member.  One of the natural candidates for such legitimate policy objectives is to protect 
public health and nutrition, as explicitly mentioned in Article 8.  
18. In other words, some of the measures taken by Members which have some level of 
restrictive effects on the use  of a trademark in the course of trade can be justified within the 
meaning of Article 20 while some of them cannot. In Turkey 's view, the policy objective connected 
to a measure has an important role in order to determine which measures can be justified an d 
which of them cannot be justified.  
19. However, for Turkey, a deeper analysis of the case is necessary in order to maintain a 
delicate balance with legitimate policy concerns of Members such as the protection of public health 
versus effective protection  of intellectual property rights. Turkey believes that this will be a key 
task before the Panel to resolve the current dispute.  
II. BURDEN OF PROOF UNDER ARTICLE 20 OF THE TRIPS AGREEMENT  
 
20. In their submissions while the complainants argue that the bu rden of proof that a measure 
unjustifiably encumbers the use of a trademark rests upon the respondent13, the respondent, 
Australia, contends that it rests upon the complainants.14   
21. Article 20 of the TRIPS Agreement provides as follows:  
The use of a t rademark in the course of trade shall not be unjustifiably 
encumbered  by special requirements, such as use with another 
trademark, use in a special form or use in a manner detrimental to its 
                                                
12 COTTIER, Thomas " The Agreement on Trade -Related Aspects of Intellectual Property Rights " in  
MACRORY, Patrick F.J.; APPLETON, Arthur; PLUMMER, Micheal G. (eds. ) The World Trade Organization: Legal, 
Economic and Political Analysis Vol 1, 2005,  p 1046 -1047 
13 Dominican Republic 's First Written Submission, para 369 -375 
14 Australia 's First Written Submission , para. 430  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 capability to distinguish the goods or services of one undertakin g from 
those of other undertakings….(emphasis added)  
 
22. It is well established by the Appellate Body in US -Wool Shirts and Blouses that  
…the burden of proof rests upon the party, whether complaining or 
defending, who asserts the affirmative of a partic ular claim or defence . If 
that party adduces evidence sufficient to raise a presumption that what is 
claimed is true, the burden then shifts to the other party, who will fail 
unless it adduces sufficient evidence to rebut the presumption15. 
(emphasis added ) 
 
23. Since then this approach has been followed in many Panel and Appellate Body reports.16 
Thus, consistent with this approach, depending on the provision, whether it sets a positive 
obligation or defence, the burden rests upon a party or the other. Fur thermore, it is also important 
to look at the party who sets forth a provision either by asserting a particular violation of a 
provision or defending against an allegation of a violation. Therefore, the key question before the 
Panel is first to determine w hether Article 20 of the TRIPS Agreement is an affirmative obligation 
or an exception. Second, the Panel should also take into account the Party who asserts the 
provision.  
24. Concerning the first question, Turkey considers that the obligation in Article 20 is of an 
affirmative nature rather than exceptional one.  The fact that the word "unjustifiably " exists in 
Article 20 does not change the affirmative nature of the obligation. Turkey believes that the logic 
in Article 2.2 of the Agreement on Technical B arriers to Trade (TBT) can similarly apply to 
Article  20 of the TRIPS Agreement. TBT Agreement in general and the preamble of the Agreement 
in particular  recognize that  WTO Members may take measures for the protection of the human, 
animal or plant life o r health, which are among the legitimate policy objectives that the Agreement 
identifies. Nevertheless, Article 2.2 of the TBT Agreement provides that technical regulations shall 
not be applied more trade restrictive than necessary to fulfil such legitimat e objectives.  
25. With regard to the burden of proof issue, the Panel in US -Clove Cigarettes established that 
the burden of proof rests upon the Party alleging violation of Article 2.2 of the TBT Agreement17. 
Turkey believes that this approach would shed light on the determination of the burden of proof 
under Article 20 of the TRIPS Agreement. As highlighted before in this submission, Article 8.1 of 
the TRIPS Agreement allows Members to take measures for fulfilling various legitimate policy 
objectives, pro vided that such measures are consistent with the provisions of the Agreement. 
Similar to the situation under 2.2 of the TBT Agreement, Members ' right to take measures under 
Article 20 of the TRIPS Agreement in regard to the use of a trademark is not an abs olute right. 
Such measures shall not unjustifiably encumber the use of a trademark. If a party sets forth an 
allegation that such an unjustifiable encumbrance occurs, in Turkey 's view, that Party has 
the burden  of proof of its allegations.  
26. As regards t he second question, in US -Wool Shirts and Blouses the Appellate Body 
emphasized that "…the burden of proof rests upon the party, whether complaining or defending, 
who asserts the affirmative of a particular claim or defence… "18 (emphasis added.) Turkey 
understands from this wording that not only the nature of the provision but also the owner of the 
particular claim or the defense is also an important factor in deciding who bears the burden of 
proof.  
                                                
15 Appellate Body Report, United States – Measure Affecting Imports of Woven Wool Shirts and Blouses 
from India , WT/DS33/AB/R, adopted 23 May 1997, and Corr.1, DSR  1997:I, 323,  ( US – Wool Shirts and 
Blouses  ), p 14  Australia 's First Written Su bmission, para. 427 -440 
16 For instance, Appellate Body Reports, United States – Certain Country of Origin Labelling (COOL) 
Requirements, WT/DS384/AB/R / WT/DS386/AB/R, adopted 23 July 2012, para 379, Appellate Body Report, 
United States – Countervailing D uties on Certain Corrosion -Resistant Carbon Steel Flat Products from 
Germany, WT/DS213/AB/R and Corr.1, adopted 19 December 2002, DSR 2002:IX, 3779, para 4.484 -496 or 
Panel Report, China – Measures Affecting Trading Rights and Distribution Services for Cer tain Publications and 
Audiovisual Entertainment Products, WT/DS363/R and Corr.1, adopted 19 January 2010, as modified by 
Appellate Body Report WT/DS363/AB/R, DSR 2010:II, 261, para 174  
17 Panel Report, United States – Measures Affecting the Production and Sale of Clove Cigarettes, 
WT/DS406/R, adopted 24 April 2012, as modified by Appellate Body Report WT/DS406/AB/R, para 7.381  
18 Appellate Body Report, US – Wool Shirts and Blouses  , p 14.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 27. Having said that, as noted by the Panel in Argentina - Import Measures, Turkey would also 
like to underline that "[c]ollaboration from parties to a dispute is essential for a panel to be able to 
discharge its func tion of making "an objective assessment of the matter before it ".19  
III. CONCLUSION  
 
28. Turkey appreciates this opportunity to present its views to the Panel. Turkey requests that 
this Panel review the comments stated in this submission, in interpreting  the TRIPS Agreement.  
 
                                                
19 Panel Report in Argentina – Measures Affecting the Importation of Goods, 
WT/DS438/RWT/DS444/RWT/DS445/R,  adopted 26 January  2015, para 6.31  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 ANNEX C -22 
EXECUTIVE SUMMARY OF  THE ARGUMENTS OF URU GUAY* 
1.  This dispute relates basically to the regulatory capacity of the State in pursuit of a public policy 
objective and the limits to that capacity in the light of the interna tional obligations assumed by the 
State. Another focus of the dispute concerns the scope and the type of right generated for the use 
of a trademark in the light of the terms of the World Trade Organization (WTO)  agreements.  
2.  One outstanding feature of t his case is the low level of trade involved, since of the 
four complaining Members, only one, Indonesia, has a high volume of exports to the Australian 
market. In fact, in the recent period and according to the statistics consulted by Uruguay, exports 
of tobacco products from three of the complainants to Australia have been negligible since well 
before Australia brought the measure into force.  
3.  Taking into account the state of bilateral trade in these products between Australia and the four 
complainants in recent years, it cannot be assumed that there is a case of nullification or 
impairment as described in Article 3.8 of the Dispute Settlement Understanding (DSU). There 
could be a negative trade impact of negligible scale or there could be an indirect ef fect in 
third markets where the Australian measures are not applied and where Australia has no 
jurisdiction. The specific trade effects in Australia and possibly in third markets are a matter on 
which the complaints remain silent or say very little, but th ey implicitly underpin some of the 
arguments presented.  
4.  The plain packaging measure contained in the legislation known as the "TPP Act and 
TPP Regulations " forms part of a coherent set of measures that have been applied by Australia for 
some time, toge ther with a policy to curb the tobacco epidemic. Uruguay has followed a very 
similar path which is described in the presentation made before the Panel. It is noteworthy that 
the plain packaging measure is the only one that is challenged, there being no cha llenge to any of 
the previous measures introduced by Australia. Moreover, as can be seen in the submission to the 
Panel from the World Health Organization (WHO) and the WHO Framework Convention on Tobacco 
Control (FCTC), tobacco consumption is a global epi demic that has serious effects on human 
health, and  the plain packaging measure is an FCTC guideline.  
5.  The lengthy arguments of the complainants concerning the provisions of Article 20 of the 
Agreement on Trade -Related Aspects of Intellectual Property R ights (TRIPS) cannot have various 
readings. A Member 's right and obligation to protect public health through different instruments 
cannot be completely limited by the obligation to protect intellectual property rights. These are 
different obligations, and although they may be connected, they cannot and must not be mutually 
conflicting. The goods they protect are different and of a different type. One is a public policy 
objective which covers the whole of society, and it may even take some time until the mea sure 
begins to produce effects. The other is the use of a commercial -type instrument such as a 
trademark which has exclusive use protection in relation to other commercial users.  
6.  Moreover, for Uruguay the direct effect should be quantifiable or measura ble, and there is no 
question of an indirect effect in third markets, since Australia, of course, exercises neither control 
nor jurisdiction outside its territory.  
7.  The measures limit the use of the mark and have a practical impact on consumption; 
moreo ver, there are no measurable alternatives with the same efficacy. The alternatives proposed 
by some of the complainants suggest a tax increase, a measure that Australia has already applied; 
they also suggest a lack of familiarity with the market situation and the anti -tobacco programme 
that Australia has been applying for some time, and they are mutually contradictory.  
8.  The measure is justified on the basis of TRIPS Article 20. The complainants themselves, such as 
Honduras and the Dominican Republic, do not dispute a Member 's right and - we would add - 
obligation to adopt measures for the protection of public health. The type of right protected for the 
owners of the mark is its exclusive use against third parties, which is typically the protection of a 
                                                
* Original Spanish.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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  right with commercial value in the private sphere; the scope is delimited in Article  17 of the 
TRIPS  Agreement.  
9.  In Uruguay 's opinion, no violation of the rules is proved in the documents submitted by the 
complainants. An argument is made for a distorting  effect caused by the Australian measure in the 
Australian market, which generates a shift in consumption towards products in the lower -end and 
lower -cost segment. However, the complaints hardly refer to the price segmentation of products in 
the Australian  market. What the complainants describe is a specific prejudice to the Australian 
market caused by this trend in consumption towards the lower -end segment (in terms of price and 
quality), but this cannot be assessed or estimated since, as was mentioned pre viously, there is 
very little trade. This argument, which is an economic one, seeks to present a commercial 
prejudice which is indemonstrable on the part of the complainants, although in any case Australia 
hopes that trade and imports will grow in the comi ng years.  
10.  According to the complainants, the measures generate a disadvantage for premium brands 
which are differentiated by their better quality in the case of both cigarettes and cigars (including 
geographical indications in the latter category). Ho wever, the concept of quality or premium 
products is hardly elaborated upon and price appears to be the sole determinant in establishing a 
distinction between products of higher and lower quality.  
11.  It is important to emphasize that from the public heal th standpoint there are no cigarettes of 
higher or lower quality, since they all cause sickness and death because of the carcinogenic and 
toxic substances they contain.  
12.  Of the four complainants, only Cuba and the Dominican Republic have geographical 
indications for cigars and therefore this issue is not raised in respect of cigarettes. The arguments 
are similar to those used for restrictions on the use of the mark and are based on the adverse 
effects on competition in the Australian market, the effect of the shift in consumption towards 
lower priced products and the alternative of less restrictive measures on the use of the trademark, 
which would allegedly be more effective, although this is hypothetical.  
13.  The legal arguments focus on the provisions  of the TRIPS Agreement and the Agreement on 
Technical Barriers to Trade (TBT), but are limited to restrictions on the use of the trademark and 
to characterizing the plain packaging measure as a technical regulation, the objective of which is 
not challenge d, although it is affirmed that there are alternatives to the measure that could have 
less effect on trade. At no point is there any mention of the fact that the WHO Framework 
Convention recommended plain packaging measures, for good reasons, as an effecti ve instrument 
under a broader policy and a battery of measures to reduce consumption.  
14.  However, the connection between the obligations laid down in the agreements means that the 
measure in force must contribute to the defined objective which, in this c ase, is to protect public 
health, and must do so with the least possible impact on the rights of other Members. In the 
relevant documentation, Australia has demonstrated the reduction in consumption and an increase 
in the understanding of tobacco impacts o n health, and the consequent correlation and causal link 
between the measures and tobacco consumption.  
15.  For various reasons, Uruguay has a substantial interest in this proceeding in accordance with 
the provisions of Article 10.2 of the Dispute Settleme nt Understanding. It is important to point out 
that Uruguay has for some time been conducting a programme to combat the tobacco epidemic 
which has become a serious public health problem in our country and which generates an 
enormous cost in terms of medica l treatment and premature deaths.  
16.  Above all, Uruguay wishes to reaffirm that the protection of public health is a responsibility 
and power under the sovereign authority of States, and each Member has the right and obligation 
to legislate and regulate in the public interest with a view to protecting a legitimate public health 
objective. Within the WTO system, this right is recognized in the TRIPS Agreement, the 
TBT Agreement and the GATT 1994. It is also recognized by other bodies of international law, such 
as the WHO Framework Convention on Tobacco Control (FCTC); moreover, and no less 
importantly, it is provided for in the national legislation and regulations of numerous States that 
are Members of the WTO and the WHO.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 ANNEX C -23 
EXECUTIVE SUMMARY OF  THE ARGUMENTS OF ZAMB IA 
1.  Zambia hereby submits its Executive Summary of its written submission in the dispute over 
Australia 's tobacco plain packaging measure.  
2.  The Tobacco Plain Packaging Act 2011, Tobacco Plain Packaging Regulations 2011 and 2012 
and the Trade Marks Amendment (Tobacco Plain Packaging) Act 2011 , which prohibit the use of 
registered trademarks and impose strict packaging, labelling and product requirements, 
raise serious concerns for Zambia under the World Trade Organization ( "WTO") Agreement on 
Technical Barriers to Trade ( "TBT Agreement ") and the WTO Agreement on Trade -Related Aspects 
of Intellectual Property Rights ( "TRIPS Agreement "). The resolution of these issues is critical to 
ensure that Members comply with their obligations an d do not impose measures that unduly 
restrict trade with a particular impact on developing and least -developed country Members.  
3.  Zambia emphasizes at the beginning the importance of tobacco in its economic development 
and wishes to place this dispute in  context by briefly describing the importance of tobacco growing 
and trade in Zambia as well as Zambian policies to limit tobacco consumption and prevalence. 
Zambia is a land -locked southern African country endowed with ample land and abundant water 
resour ces. The agricultural sector is the backbone of the Zambian economy, contributing 
to economic growth and export diversification. Primary agriculture contributes to about 35 percent 
of the country 's non -traditional exports (i.e., exports other than copper a nd cobalt), and it 
comprises around 10 percent of export earnings. The vital agricultural sector provides for about 
70 percent of total employment and is a government priority to ensure food security and income 
generation, create employment and reduce pove rty. 
4.  Tobacco is a strategic agricultural crop in Zambia, which is 7.5 times more profitable per 
hectare than maize production and 14 times more profitable than cotton. Over 26,000 Zambian 
farmers grow tobacco, and 40,000 workers are employed in the sec tor. The majority works on 
small farms of less than 5 hectares. Tobacco production – largely unaffected by important price 
fluctuations that have impacted other crops – is essential to guarantee a minimum income to 
farmers, given that 70 percent of the rur al population lives below the poverty line. The full tobacco 
value chain provides direct and indirect employment to close to 450,000 people.  
5.  Tobacco also significantly contributes to Zambian export earnings as it was the fifth most 
exported commodity i n 2013, amounting to USD 180 million. Zambia has begun leaf processing 
and cigarette manufacturing with USD 20 million of cigarette exports in 2013. Zambian tobacco is 
recognized to be of high quality. The Australian plain packaging measures will certainly  have a 
negative impact on the value of tobacco produced and exported by Zambia as manufacturers will 
no longer be willing to pay a premium price for quality leaf. Since price is the main distinguishing 
factor for tobacco, manufacturers will have to reduce  their selling prices or opt to use lower quality 
and lower -priced leaf to remain competitive.  
6.  Zambia is also committed to tobacco control policies. It implemented the Public Health 
Regulations in 2002 and became a party to the World Health Organizatio n ("WHO") Framework 
Convention on Tobacco Control ( "FCTC") in 2008. Zambia submits that WTO Members that are 
party to the FCTC can fully comply with their WTO and FCTC obligations at the same time. 
Contrary to Australia 's assertion, the Guidelines for FCTC  Articles 11 and 13 do not constitute 
international standards within the meaning of Article 2.5 of the TBT Agreement, nor do they 
mandate FCTC parties to impose plain packaging.  
7.  Turning to the TBT Agreement, Zambia recalls that it expressed its serious  concerns about the 
consistency with Article 2.2 of the TBT Agreement of Australia 's measure in the TBT Committee in 
November 2011. Zambia noted that the TBT Agreement forbids unnecessary obstacles to trade, 
which are more trade -restrictive than necessary to fulfil a legitimate objective. Zambia considered 
that plain packaging was a disproportionate response to the health objectives and was not 
supported by credible evidence that it would achieve Australia 's legitimate objective. Almost four 
years after its  initial exchanges with Australia and over two years after the implementation of 
Australia 's plain packaging measures, Zambia 's concerns are confirmed.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 8.  The packaging, labelling and product requirements Australia imposes are highly 
trade -restrictive. Th ese stringent product, packaging and labelling requirements render the 
production of tobacco products for the Australian market more onerous and costly and have a 
detrimental impact on the competitive opportunities of imports.  
9.  Zambia does not question the objective stated by Australia; indeed this legitimate public health 
objective is shared. Zambia, however, fails to see the contribution of the plain packaging measures 
and their objective. After two years of plain packaging, no evidence shows that it r educes smoking 
prevalence or changes in smoking behavior, other that which indicates the measure is not working 
such as a commoditization of the market and consumers down -trading to cheaper products. 
The qualitative and quantitative evidence placed before the Panel shows the absence of 
contribution to the fulfilment of Australia 's stated objective and thus that there is no reason to 
expect any effect of the measure in the future. Consequently, the plain packaging measures 
cannot be found to contribute to Au stralia 's stated objective.  
10.  Zambia further believes that alternative and WTO -consistent regulatory solutions as discussed 
by the Complainants could better achieve the stated objective. Thus, Zambia considers that plain 
packaging constitutes a clear vi olation of Article 2.2 of the TBT Agreement that harms the rights of 
all tobacco producing Members.  
11.  Zambia has also previously raised its concerns on the intellectual property aspects of the 
measures in the Council for TRIPS. Zambia recognizes the imp ortance to trade and competition of 
trademarks and geographical indications, which allow producers to differentiate their goods in the 
market and which allow consumers to make informed choices about those goods.  
12.  In light of the role that intellectual property rights play in the commercial process, Zambia 
considers that Australia 's measures are an unjustifiable encumbrance under Article 20 of the 
TRIPS  Agreement. Plain packaging imposes drastic "special requirements " on the few remaining 
word marks and prohibits all other trademark use entirely. They thus impose the "ultimate 
encumbrance " on the use of trademarks.  
13.  Zambia fails to see any justification for plain packaging, in light of the evidence mentioned 
above and the failure of the measure to con sider each trademark individually. The application to all 
trademarks based on the nature of the goods is an unreasonable and disproportionate requirement 
that is "detrimental to [a trademark 's] capability to distinguish the goods or services of one 
underta king from those of other undertakings. " This is the case under the "necessity " test of 
Article 20. Australia 's argument that justifiability under Article 20 is based on a "rational 
connection " is not supported by the text of the TRIPS Agreement and would e ffectively remove any 
discipline on trademark restrictions under Article 20 of the TRIPS Agreement as any measure with 
some tenuous connection to a legitimate objective would meet this low threshold no matter how 
restrictive it may be on trademark use.  
14.  Zambia believes that the object and purpose of the TRIPS Agreement is based on the 
legitimate expectation of owners to exercise their ability to make use of trademarks in the course 
of trade, which must be considered in the analysis of Complainants ' claims of violation of 
Articles  15 and 16 of the TRIPS Agreement.  
15.  This dispute raises a number of important systemic issues on the role of trademarks in a 
global economy and the balance between policy considerations and trade -restrictive measures. 
A measu re that goes against the essence of the intellectual property rights and that has 
disproportionate trade effects and is not proven to contribute to the stated objective cannot be 
found to be consistent with the provisions of the TBT and TRIPS Agreement.  
16.  Zambia invites the Panel to consider these remarks which taken into account the importance 
of this product for many developing and least -developed Members in its analysis of the claims 
in this dispute.  
 WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 ANNEX C -24 
EXECUTIVE SUMMARY OF  THE ARGUMENTS OF  ZIMBABWE  
1.  This Executive Summary of Zimbabwe reviews the arguments in this dispute made in 
Zimbabwe 's Third Party Written Submission of 10 April 2015 and its Oral Statement at the 
Third Party Session of the First Panel Hearing of 3 June 2015. Zimbabwe appreciates the 
opportunity to make known its views on the WTO -inconsistency of the Australian tobacco plain 
packaging measure.  
2.  The Australian measure prohibits the use of registered trademarks and imposes strict 
requirements on packaging and labelling  and as such raises serious concerns under the 
World  Trade Organization 's ("WTO") Agreements on Trade -Related Aspects of Intellectual Property 
Rights ( "TRIPS Agreement ") and on Technical Barriers to Trade ( "TBT Agreement "), as well as 
causing great detrime ntal impact on Zimbabwe 's economic opportunities and development.  
3.  Zimbabwe recently acceded to the World Health Organization 's Framework Convention on 
Tobacco Control and thus supports the legitimate public health objective of Australia. Zimbabwe 
desires that such goals be pursued through well -designed measures that actually contribute to the 
objective and are within the bounds of Members ' WTO obligations.  
4.  Zimbabwe is a small, landlocked and low -income developing country with an economy 
dependent on  a few agricultural commodities. Tobacco is the largest agricultural product produced 
in Zimbabwe after corn and cotton, and it has a much greater yield than those crops, providing 
greater financial stability for farmers. Zimbabwean Virginia leaf is of hig h quality and is exported 
to customers around the world, making tobacco Zimbabwe 's largest agricultural export by volume 
and value and its third largest overall export by value. Tobacco accounted for about 15% of 
Zimbabwe 's GDP in 2013, with substantial in creases in 2014 and further projected increases 
for 2015.  
5.  The tobacco sector directly provides an estimated 350,000 jobs and indirectly supports up to 
five million people. Tobacco is expected to be the major contributor to the growth and recovery 
projected for the Zimbabwean agricultural sector, as well as for the country at large as it leads 
to investments in infrastructure and jobs.  
6.  Since the tobacco sector is increasing its focus on sourcing high -quality Virginia tobacco leaf, 
which Zimbabwe is w ell-placed to provide, the imposition of a generic form of packaging, which 
limits the means consumers have to make informed choices regarding the product quality, will 
devalue superior Zimbabwe -produced Virginia tobacco. Such a devaluation would directly threaten 
the livelihood of 120,000 farmers and their families who depend on tobacco production; of millions 
Zimbabweans who indirectly depend on tobacco and tobacco production for jobs and income; 
and of the prospects for the overall economic development o f the country.  
7.  Under Article 2.2 of the TBT Agreement, a technical re gulation must not be more 
trade -restrictive than necessary to fulfil a legitimate objective, and equally effective but less trade -
restrictive alternative measures should be preferred.  A trade restriction that is not contributing to 
the fulfilment of a legitimate objective or that goes beyond what is necessary to achieve the 
objective cannot be justified. These basic obligations are an expression of the principle of good 
faith implement ation of a Member 's WTO obligations in the international trading system, which 
require that they avoid ineffective, disproportionate and unnecessarily restrictive regulations.  
8.  Zimbabwe notes that it is uncontested that the form or physical requirements  of the measure 
fall within the definition of a "technical regulation, " though Australia contends that the trademark 
requirements are not covered by the definition of a technical regulation. Zimbabwe is of the view 
that all of the measure 's aspects provide  for "mandatory " requirements "which lay down product 
characteristics " with respect to "symbols, packaging, marking or labelling requirements " and apply 
to an identifiable group of products. Thus, the attempt to distinguish the types of requirements is 
not meaningful as all aspects of the challenged measure are covered by the disciplines of the 
TBT Agreement.  WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
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 9.  The plain packaging measure is also highly trade -restrictive. The adaptation and compliance 
costs associated with the plain packaging requirements  constitute a major disincentive to export, 
particularly for developing countries such as Zimbabwe.  
10.  Further, the possible imposition of plain packaging by Members other than Australia which are 
very important export markets for Zimbabwe, would furthe r restrict trading opportunities. 
In recent years, using its quality Virginia tobacco leaf, Zimbabwe has developed the manufacturing 
of tobacco products. Exports of tobacco products, however, have been declining since 2012. 
This trend could continue if Mem bers were granted the right to impose plain packaging and other 
trade -restrictive measures.  
11.  Regarding Australia 's objective to reduce smoking prevalence among its populations, 
Zimbabwe agrees that it is legitimate. However, Zimbabwe is not convinced t hat the measure can 
actually contribute to that objective. In this regard, Zimbabwe points to the expert reports by 
Professor Klick and the Institute for Policy Evaluation ( "IPE"), which find that Australia 's measure is 
not having its intended effect by an alyzing Australia 's post -implementation circumstances 
in relation to a counterfactual jurisdiction (New Zealand in Prof. Klick 's report) and in relation to 
trends in Australia over time (in the IPE report). These reports support the other reports and 
argum ents regarding the measure 's design, architecture, and structure and reveal that plain 
packaging is not likely to reduce and in fact is not reducing smoking prevalence. The data from the 
Australian market confirms that the measure may have the opposite of its intended effect.  
12.  The removal of trademarks and standardization of packaging will have the effect of greatly 
restricting the possibility to differentiate between products on the basis of quality. This results in 
the "commoditization " of these produ cts and a downward pressure on prices. By preventing 
quality -based distinctions, the plain packaging measures will undoubtedly negatively impact trade 
of high -quality Virginia tobacco leaf such as that produced by Zimbabwe. Increased price 
competition will  have a downward effect on prices of tobacco leaf as manufacturers of tobacco 
products will be attempting to safeguard their profit margins by sourcing cheaper raw materials. 
A decline in prices of tobacco leaf would have devastating consequences for the e conomy of 
Zimbabwe as a whole because of the importance of tobacco as well as for small farmers and their 
families who are subsisting by growing tobacco. Zimbabwe cannot afford a decline in prices 
of tobacco leaf and has no viable alternatives to continuin g to grow tobacco.  
13.  The Panel is invited to strictly enforce the provisions of Article 2.2 of the TBT Agreement in 
the present disputes. These regulatory requirements are detrimental to Zimbabwe as its economic 
development is dependent on increasingly regulated products, including tobacco products, and the 
livelihood of most of its population remains directly or indirectly reliant on the tobacco sector. 
The trade and economic effects of plain packaging on tobacco products as well as on tobacco leaf 
and other raw materials concerned by the measures adopted by Australia must be taken into 
account by the Panel.  
14.  Zimbabwe considers that the plain packaging measure significantly weakens intellectual 
property rights by prohibiting all trademarks from appea ring on tobacco products, but for certain 
brand names and origin marks. Plain packaging also diminishes the protection that geographical 
indications enjoyed in Australia.  
15.  Trademarks are key to differentiating products and ensuring fair competition in the 
marketplace. They are recognized as essential to open up new markets, thereby supporting 
competition and the international trade of products. From the perspective of consumers, 
trademarks provide information about the quality of and differences between  products and allow 
them to distinguish products available on the market. Trademarks fulfill these functions by their 
use on products and their packaging. A prohibition on the use of trademarks on lawful products 
gives no consideration to the purpose and b enefit of marks to consumers and manufacturers in 
developing countries to build strong and well -known brands. The absence of distinction that results 
from the imposition of plain packaging will undoubtedly have a negative impact on the price 
of tobacco and  significantly affect producers of superior quality leaf.  
16.  Zimbabwe, like many WTO Members, provides for protection of the right to use trademarks in 
its national law. Zimbabwe considers that the use of trademarks is protected under international 
law, in particular in Articles 16 and 20 of the TRIPS Agreement as explained in the expert report WT/DS435/R/Add.1 • WT/DS441/R/Add.1 • WT/DS458/R/Add.1 • WT/DS467/R/Add.1  
 
- C-81 - 
 by Professor Dinwoodie. Therefore, Zimbabwe considers that Australia violates its obligations 
under the TRIPS Agreement by prohibiting the legitimate commercial us e of trademarks 
on tobacco products.  
17.  Additionally, geographical indications are important indicators of the geographical origin of 
goods and the quality, reputation or characteristics essentially attributable to their origin. 
Yet Australia 's measure p revents the use of a word geographical indications other than the name 
of the country at the expense of producers and consumers. Thus, the restrictions that the plain 
packaging measure imposes on geographical indications diminish the protection of geograph ical 
indications that existed in Australia before the entry into force of the WTO Agreement and do not 
provide any means to prevent the use of geographical indications, in violation of Articles 24.3 and 
22.2(b) of the TRIPS Agreement.  
18.  In light of the foregoing, Zimbabwe considers that Australia 's plain packaging measures 
violate its obligations under the TRIPS Agreement, including Articles 2.1, 15, 16, 20, 24.3 and 
22.2(b).  
19.  Tobacco leaf and tobacco products are vital for the economic and social de velopment of 
Zimbabwe. As millions of Zimbabweans depend on tobacco for their livelihood, the Panel should in 
addition to considering the arguments put forward by the Parties fully take into account the actual 
and potential negative effects of the plain pa ckaging measures adopted by Australia on developing 
and least -developed country Members.  
20.  Given the lack of scientific evidence to show that the plain packaging measure at issue 
contributes to the stated public health objective, the extreme and unjusti fiable restrictions on 
trademark rights, and the existence of alternative measures that would be more effective and less 
restrictive of trade and trademarks, Zimbabwe submits that the Panel find that the measure is 
inconsistent with Australia 's obligations  under the TBT and TRIPS Agreements.  
 
__________