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Philip Morris threatens court over plain pack -

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ALI MOORE, PRESENTER: Tobacco giant Philip Morris has initiated legal action over the Australian
Government's plans to introduce plain cigarette packaging.

The company is threatening to take the Australian Government to an international court and says
that removing brands from cigarette packs will lower the value of its trademark and intellectual
property.

The federal Health Minister says the Government can withstand an attack from big tobacco, but legal
experts say this is just the start of a global legal campaign.

John Stewart reports.

JOHN STEWART, REPORTER: Plain cigarette packaging is due to be phased into Australia from January
2012. It's a world first and the tobacco industry wants to stop it.

Philip Morris Asia says the new laws will breach Australia's investment treaty with Hong Kong,
where the company is based. It argues that removing brands from packages will take away its
intellectual property and unfairly reduce its cigarette prices and profits.

ANNE EDWARDS, PHILIP MORRIS: I think most people know that brands have value; it's essentially the
same thing, anybody walks into the supermarket, you can choose between generic brands are brands
with brands.

Everybody knows that generic brands are cheaper. And brands really do have value, and that's why
we're pressing forth with this.

JOHN STEWART: The federal Health Minister says the Government is not intimidated by the legal
challenge and that international laws allow nations to act in the interest of public health.

NICOLA ROXON, HEALTH MINISTER: The World Health Organisation makes clear and recommends in its
tobacco control convention that states should consider taking this step of introducing plain
packaging for the sale of tobacco products.

JOHN STEWART: The legal action by Philip Morris opens up a three-month negotiation period between
the two sides. If that fails, an international court will hear the company's compensation claim.

ANNE EDWARDS: We estimate that it would be - it may be in the billions. We haven't got a final
figure yet and ultimately it's going to be up to the UN trade law court that will hear this.

JOHN STEWART: The dean of Law at Sydney University, Professor Gillian Triggs, says the size of the
cigarette market in Australia is tiny compared to other parts of the world and that Philip Morris
is more concerned about other countries following Australia's lead.

GILLIAN TRIGGS, DEAN OF LAW, SYDNEY UNIVERSITY: Yes, it is a global matter because they are
protecting their intellectual property and the brand globally in very big markets - China,
Indonesia, India, Vietnam and other parts of the world, the Middle East, and parts of Latin
America.

So, if they were to lose the fight - if they were to lose on the basis that Australia can impose
its own health policy in this area, then that is a profound threat to their capacity to market the
brand in other jurisdictions.

JOHN STEWART: Philip Morris has also launched a legal challenge against the small South American
country of Uruguay for damaging its business prospects. Uruguay has a population of just three and
a half million people and is a relatively tiny cigarette market, but it's been tough on smoking and
has placed health warnings on cigarette packs.

GILLIAN TRIGGS: They are currently bringing a very similar action against Uruguay on the basis of a
similar treaty, a bilateral investment treaty in that case between Switzerland and Uruguay. But the
argument is broadly the same.

JOHN STEWART: Other cigarette companies are also considering taking legal action against the
Australian Government, but some legal experts see a problem with Philip Morris' challenge.

DON ROTHWELL, ANU: Philip Morris would have to be able to indicate that they are suffering damage
or detriment as a result of the actions of the Australian Government through the enactment of
legislation, and I don't believe that at this point in time they can conclusively point to that.

GILLIAN TRIGGS: I think the better part of this global debate is going to be that health policy
will trump the rights to intellectual property protection and branding in this case.

JOHN STEWART: The new plain packaging legislation is due to be introduced into Parliament next
month.

John Stewart, Lateline.