JT International SA v Commonwealth of Australia; British American Tobacco Australasia Ltd v Commonwealth of Australia: Plain Packing Decision

In JT International SA v Commonwealth of Australia; British American Tobacco Australasia Ltd v Commonwealth of Australia [2012] HCA 43 decided on 15 August 2012 the High Court made orders in two matters concerning the validity of the Tobacco Plain Packaging Act 2011 (Cth) (the Plain Packaging Act).

On 5 October 2012 the High Court delivered its reasons in those matters.  By a majority the Court held that the Plain Packaging Act was valid as it did not amount to an acquisition of property and therefore did not breach the Constitution s 51(xxxi) which requires any acquisition of property brought about by a Commonwealth law to be on “just terms” or in other words compensated.

The Plain Packaging Act imposed restrictions on the appearance, colour, shape and finish of tobacco product retail packaging and restricted the use of trademarks on such packaging. The plaintiffs challenged the validity of the Plain Packaging Act by arguing that the Commonwealth had acquired their intellectual property rights and goodwill otherwise than on just terms.

The majority of the High Court held that for s 51(xxxi) to apply an acquisition must involve the accrual to some person of a proprietary benefit or interest. In this case while the Act regulated the plaintiffs' intellectual property rights and imposed controls on the packaging and presentation of tobacco products, it did not give proprietary benefit or interest to the Commonwealth or any other person. Because of this neither, the Commonwealth nor any other person acquired any property and s 51(xxxi) did not apply.

In reaching its decision the court considered the following terms and discussed their meaning: "acquisition of property", "intellectual property", "just terms" and "trade marks".  

The following legislation was discussed:

• Constitution, s 51(xxxi).

• Tobacco Plain Packaging Act 2011 (Cth), ss 15, 18-27, 30-48.

• Competition and Consumer (Tobacco) Information Standard 2011 (Cth), ss 1.5, 3.1, 4.1, 9.13, 9.19-19.20.

• Tobacco Plain Packaging Regulations 2011 (Cth), Divs 2.1-2.4, 3.1.

Stay current, contact TimeBase for a free trial of our Intellectual Property Point-in-Time product for Australian Legislation.