Coalition letter to WHO re plain packaging

Today, a global coalition of 62 market-oriented independent or non-government think tanks and institutes sent a letter to the WHO. Three institutes from ASEAN countries were among the signatories — CIPS in Indonesia, IDEAS in Malaysia, and MGT in the Philippines.

Cover page re PP
Dr. Tedros Adhanom Ghebreyesus
Director-General
World Health Organization

December 01, 2017, marked the five-year anniversary of the full implementation of plain packaging in Australia. The removal of brands and trademarks from packaging remains a gross violation of intellectual property rights and has failed to achieve its intended goal. As a global coalition of sixty-two think tanks, advocacy groups and civil-society organizations that have been critical of plain packaging for any product, we write in response to proposed plain packaging tobacco control measures and to the announcements by several countries of their interest in pursuing these policies.

Intellectual property rights are human rights enshrined in the Universal Declaration of Human Rights: Article 17, the right to ownership; Article 19, the right to freedom of expression; and Article 27, the right to protection of material interests. In this regard, even if plain packaging is effective, it should still be repealed, as rights are inalienable and should not be discarded for political purposes.

International trade law, the UNDHR, and historic international treaties are designed to protect intellectual property for this very purpose. The innovation incentive created by trademarks fuels competition and produces amazing products demanded by consumers like affordable medical advances that save lives. Obviously, any loophole should be closed, not exploited….

After Australia implemented the policy, other industries have been targeted around the world: alcohol, sugary beverages, fatty foods, even toys. These industries employ millions and any regulation that would deny key IP assets would have a devastating global economic impact. The trademark value alone of only twelve companies associated with these sectors is estimated to be more than $1.8 trillion.

The costs of plain packaging are enormous: the loss of the innovation incentive to the economy and society are inestimable, the mutilation of established international IP law is unprecedented, and the market carve-out to illicit actors, including terrorists, is reprehensible. It is beyond reason that such a policy continues to be pursued, even after it has failed to achieve its intended goal.

We urge the WHO and governments around the world to stop infringing on intellectual property rights with plain packaging policies.

(Full letter and names of institute heads, co-signatories, see:
http://www.propertyrightsalliance.org/wp-content/uploads/2018/03/2018-Global-Plain-Packaging-Coalition-to-WHO.pdf, or
https://www.slideshare.net/Noysky/global-coalition-letter-to-who-vs-plain-packaging)

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Tobacco taxation, trademarks and plain packaging

* This is my column in BusinessWorld last November 30, 2017.

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Protection of private property rights — including physical and intellectual — is an important cornerstone of a free society. People can exclusively use, keep, sell, donate or give away their property if they want to.

There is a measurement of property rights protection worldwide being done annually by the Property Rights Alliance (PRA), a Washington DC-based think tank. It produces the annual International Property Rights Index report and partners with independent, nongovernment, and market-oriented think tanks and institutes from many countries. IPRI covers three major areas: (1) Legal and Political Environment, (2) Physical Property Rights (PPR), and (3) Intellectual Property Rights (IPR) that include protection of patents, trademarks and brands, copyrights and trade secrets.

In the IPR of several ASEAN countries, the gap is not very wide between say, Singapore and the Philippines or Indonesia (see table).

IPRScores_113017

Currently, there are IPR issues that are intertwined with taxation issues of some “sin products” like tobacco and alcohol.

In the Philippines, the sin tax law of 2012 or RA 10351 is turning five years old next month. The law has dual purposes of (a) reducing smoking and drinking incidence in the country by raising tobacco and alcohol taxes, and (b) raising more government revenues.

So far, both have been achieved but there are moves and legislative bills to further raise tobacco tax to twice or thrice their current rates.

In December 2012, Australia introduced a variant of this law aimed to further discourage smoking. Its plain packaging law required tobacco companies to remove the brand, trademark, and logos of its tobacco products and replace them with plain packs with graphic warnings.

Since some smokers may be unable to distinguish good brands from new and/or inferior brands, they are supposedly discouraged from stop smoking.

While the goal is good — to protect public health — the means and the policy leaves much to be desired.

Since it is assumed that consumers can no longer distinguish good brands from inferior ones, brand competition is precluded.

As a result, companies will now be forced to compete on the basis of prices alone, allowing players with poor but cheap products to gain advantage and attract more customers.

Which may then defeat the purpose of anti-tobacco initiatives because this may yet increase the incident of smoking.

Five years after introducing its plain packaging scheme, has Australia been able to meet its goal?

The Australian government collects data on national smoking incidence every three years as part of its National Drug Strategy Household Survey (NDSHS).

Based on 2016 data — its most recent — there has been no statistically significant decline in the overall daily smoking rate between 2013 (12.8%) and 2016 (12.2%).

So the plain packaging scheme is a failure in Australia.

Moreover, the plain packaging law has unwittingly succeeded in raising the consumption of illegal tobacco, estimated at 13.9% of total consumption in 2016. This results in an estimated excise tax loss of A$1.6 billion for the government last year.

Furthermore, Australia is also facing a dispute resolution panel at the WTO for implementing the law that disrespects IPR laws on trademark and branding.

France and the UK have also introduced the plain packaging scheme in recent years. One unintended result in France is the rise in illicit tobacco coming from some terrorist groups and criminal syndicates while the French government suffered an excise tax loss of approximately €2 billion in 2016. This illicit trade was linked to jihadists traveling to Syria and Iraq and terrorist attacks in France. Counterfeit cigarettes are also among the most investigated IP-crime in the UK and are linked directly to criminal organizations.

In Asia, there are plans to introduce plain packaging legislation in Singapore, Malaysia, Taiwan, Sri Lanka, and Nepal.

This may a dangerous precedent.

Soon, other “sin products” will be targeted — alcohol, sugary drinks and beverages, fatty foods, even toys.

I am a non-smoker and have never been a fan of smoking. I am just a fan of individual liberty and people having the freedom what to do with their own body and life, also a fan of the rule of law and people’s right to private property.

The plain packaging scheme is dangerous because (a) it disrespects private property rights and IPR laws, (b) encourages the production of illicit items from illicit and possibly criminal players who can easily play with price competition, (c) it encourages more consumption because very cheap products with no brands are more easily available, and (d) it reduces government potential excise tax revenues, which might result in creating new taxes elsewhere.

Recent IP developments in some ASEAN countries

Property rights protection of both physical and non-physical/intellectual — trademark/logo, copyright, patent, etc. — is among the cornerstones of dynamic, mature and market-friendly economies. Individuals and enterprises develop new products and services via innovation and they create new value, new wealth for society.

I am reposting some developments on IPR in the ASEAN. Thanks to the Property Rights Alliance (PRA) for the bi-weekly IP updates.
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Intellectual property protection a ‘key element of Thailand 4.0’
The Nation, October 02, 2017

There’s a role for intellectual property protection in the Thailand 4.0 vision and initiative, and the national government’s Intellectual Property Department sees a role for itself promoting innovation through offering increased knowledge sharing and more convenient services.

“We are a key mechanism in protecting new technology and innovation vital to economic development, and we do this by motivating new developments,” said Thosapone Dansuputra, director-general of the department.

Thailand to accede to the Madrid Protocol
Lexology, October 04, 2017

As of November 2017, Thailand will accede to the so-called Madrid Protocol as member no. 99. This entails cost savings compared to previously when trademark proprietors are to register their trademarks in Thailand. The Madrid Protocol is an international system through which trademark proprietors may apply for protection in several countries through one basic registration.

Website blocking in Malaysia has reduced online piracy, says film makers body
The Edge Markets, October 10, 2017

Website blocking in Malaysia has significantly reduced online piracy, with a 74% fall in traffic to pirate websites recorded in the six months after the government initiated its sixth effort to block such sites in June 2016, says the Motion Picture Association (MPA). As pirate websites generate income through advertising revenue, a disruption to their business model can help stop online piracy, said Oliver Walsh, regional director at the Asia-Pacific hub for Motion Picture Association International (MPA-I).

Trademark protection awareness, registration remain low in Laos
XinhuaNet, September 19, 2017

The number of trademark registrations is lagging in Laos as many businesses lack understanding of their rights and fail to register to protect their intellectual property, according to the Intellectual Property (IP) Department under Ministry of Science and Technology on Monday.

Laos Struggling with Trademark Protection
PRA, October 6, 2017

According to a study by the Intellectual Property (IP) Department of the Ministry of Science and Technology, only about 40,500 trademark applications have been filed in the Southeast Asian country since 1991. This is a relatively low number of applications for trademark protections for a country of 7 million and an economy with a GDP of $37.3 billion.

Brunei’s Patent Examination System to Increase Efficiency Through Agreement with Japan
Lexology, October 11, 2017

On August 28, 2017, the Brunei Intellectual Property Office (BruIPO) signed an agreement to introduce a new patent examination initiative – the Patent Prosecution Highway Plus (PPH+) – with the Japan Patent Office (JPO), which commenced on October 1, 2017. Using this PPH+ system, patent prosecution procedures in Brunei are accelerated by allowing BruIPO to reuse the search and examination results of corresponding patent applications filed in Japan – thus reducing examination workload and time, minimizing costs, and improving patent quality.

Property rights, trademarks and consumer protection

* This is my article in BusinessWorld last September 18, 2017.

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Private property rights that people and businesses enjoy are among the cornerstones of a free and dynamic society. People have exclusive rights on what to do with their private properties — use them, sell, rent out, or donate.

However, when rights to private property — both physical and intangible assets — are unprotected, society can quickly degenerate into disorder. As a result, consumers will be unable to recognize which among manufacturers and service providers are trustworthy and which are suspicious.

Measuring the extent of property rights protection across many countries is done annually by the Property Rights Alliance (PRA), a Washington DC-based think tank. It produces the International Property Rights Index (IPRI) annually and partners with independent, nongovernment, and market-oriented think tanks and institutes from many countries.

IPRI is derived by getting the score (1 to 10, 10 being the highest) of each country covered in three major areas:

  1. Legal and Political Environment (LP), covers judicial independence, rule of law, control of corruption, and political stability of a country or economy.
  2. Physical Property Rights (PPR), includes registration and protection of physical properties, access to loans.
  3. Intellectual Property Rights (IPR), includes protection of patents, trademarks and brand, and copyrights.

Countries with high scores in two or all three of these areas will have a high IPRI overall score and global rank (see table).

o2_091817

Among the important insights in the above numbers are: One, the more developed the economies are like Singapore and Japan, the higher the IPRI score and global rank. Which implies that as private property is better recognized and protected, there are more economic activities and innovations that occur.

Two, the Philippines experienced some improvement in its global rank, from 77th out of 131 countries in the 2013 report. It rose to 64 out of 127 countries in 2017. Its low score in legal and political environment was compensated by its high score in physical property rights.

One emerging issue in IPR non-protection is plain packaging (PP) of tobacco products purportedly for health reasons. Besides being slapped with high taxes, tobacco products also feature graphic warnings on packaging. Advertising tobacco products have also been restricted and smoking in may areas have been disallowed, which are part of several moves to deter people from lighting up.

These have been tried in many countries but smoking incidence does not seem to significantly decline as people shift to cheaper and often, illegal, illicit products. So the next step is to prohibit the use of a tobacco brand, logo, or trademark. This has been done in Australia and there are plans to introduce legislation in Singapore, Malaysia and Taiwan.

This plan does not appear to be right because a brand or logo of a company represents how effective it is in developing consumer loyalty and service. Imagine also if all ice cream, all soft drinks, all beer, all wine, etc. will simply be labeled as “ice cream,” “soda,” “beer,” etc. with no brand recognition of who produced or manufactured the products.

Or all government departments and agencies (DoH, DoF, DPWH, NEDA, etc.) will lose their logo and will simply have a generic brand “Philippine government,” it would not seem right.

I have never been a smoker nor have I been a fan of smoking but was once a fan of tobacco ads in cycling or in the F1 race. But I will not recommend the scrapping of a brand or trademark of companies in a particular industry. People who hate the companies should attack them as such and they may even use the company brand for their attacks.

Intellectual property rights like medicine patents, song copyrights, company brand or trademarks, play an important role of recognizing efficiency and innovation. Consumers look up to these brands and decide which ones to support and patronize and which ones to reject based on their specific needs and interests.

Governments therefore, should respect and protect these IPRs the same way it should respect and protect physical private properties. Moreover, people own their bodies and not the state nor NGOs.

After rising taxes, health warnings, and business regulations are in place, governments should leave individuals and allow them to seek their own happiness without harming other people.

Bienvenido S. Oplas, Jr. is the president of Minimal Government Thinkers, which is a member of EFN Asia and the Property Rights Alliance (PRA).

On tobacco plain packaging proposal in Singapore

This is my letter to the HPB yesterday. The auto reply said they have received it and will look into it.
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Subject: Singapore’s plan on “Standardized packaging” of tobacco products
To: HPB_Mailbox@hpb.gov.sg

Health Promotion Board
3 Second Hospital Avenue,
Singapore 168937

Dear Sir/Madam,

I have read your campaign to control tobacco use and promote good health among Singapore citizens, it is a good objective. But I notice that you also plan to introduce or legislate “standardized packaging” or “plain packaging” in tobacco products, and I think it can adversely affect Singapore’s good image on protecting intellectual property rights (IPR).

It is true that smoking is dangerous to one’s health. I myself am not a smoker, never smoked a single stick in my whole life, never worked for the tobacco industry or its allied industries. But I think people have a choice for their body. They recognize the danger of smoking — and drinking, drugs, over-eating, sedentary lifestyle, etc. — and still they do it. They compare the health risks with the pleasure of those actions then they decide whether to continue doing it or not; if they continue, whether to smoke 1 or 20 sticks a day, drink 1 or 10 bottles of beer a day, etc.

Plain packaging (PP) is wrong for the following reasons.

  1. Singapore is known for its clear and strong property rights protection, both physical and intellectual property. Abolition or significant reduction of the trademarks and corporate logo of tobacco companies via PP will dent this image and put Singapore’s adherence to IPR protection in a question mark.
  1. If Singapore is to be consistent in its policy, then it will be pressured in the near future to also introduce PP for alcohol products like beer and whiskey, soda, chocolate bars, other high sugar, high fat content meals and snacks.
  1. People who derive pleasure in smoking will continue to smoke despite PP and they will likely shift to cheaper and illicit products. Overall smoking incidence can either flatline or even increase because tobacco companies will produce cheaper but cool-tasting products, which will attract new  smokers or entice the few-sticks-a-day smokers to become one pack a day smokers. PP will only adversely affect the sale of known and premium products of the big multinational tobacco  companies but not the cheap products of lesser known companies.
  1. If drawn in a graph, the supply curve of cheap cigarettes will move to the right as manufacturers of premium brands will soon produce lots of plain pack but cheap cigarettes. Equilibrium price goes down while equilibrium quantity goes up, even if the demand curve does not move.

Discouraging the people from smoking can be done via more public education. The graphic health warnings, campaigns by the  Ministry of Health and health NGOs or groups are part of such public education.

But some people will continue to  smoke – and over-drink, over-eat, over-sit in  sedentary lifestyle – despite learning more and new things  about the dangers of smoking, over-drinking, and so on. Government cannot micro-manage the lives of people all the  time. What Singapore should continue protecting is its image  as the bastion of IPR  protection, whether companies are in  IT, pharma, healthcare, hotels, food,  alcohol or tobacco.

Thank you very much.

Sincerely,

Bienvenido Oplas, Jr.
President, Minimal Government Thinkers
Manila, Philippines
https://ipinasia.wordpress.com/
http://funwithgovernment.blogspot.com/

TPP, medicines patent and tobacco trademark

After the 4th Asia Liberty Forum (ALF) ended in Kuala Lumpur on February 20, SEANET organized a small group discussion on “business friendly regulations”, same hotel venue. I was one of those invited. Below, Wan Saiful Wan Jan, CEO of IDEAS and Director of SEANET, spoke to explain once again what the meeting-seminar was all about.

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Aside from independent think tank leaders from some ASEAN countries, some friends outside the region were also there, like Barun Mitra, Cris Lingle, Julian Morris, Lorenzo Montanari.

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I gave a brief presentation. Brief as in 8 minutes or less.

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TPP’s liberalization agenda will:

  1. Force open members’ economic sectors such as agriculture, affect poor peasants, women
  1. Further push them into poverty, compete with giant agricultural corporations from more developed countries
  1. Increase corporations’ access to indigenous people’s lands and territories for resource extraction without their free prior informed consent (FPIC)
  1. Undermine country’s right to reject genetically modified

organisms (GMOs), subject those GMOs to prior risk assessment; ensure uninterrupted trade for GMOs to the benefit of major GMO producers and exporters like the US and Canada

  1. Permit corporations to violate labor rights by making it easier to offshore jobs to countries with lower labor standards
  1. Encourage more inflows of migrants who later forced to become undocumented migrants  to add more cheaper and docile labor

02
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  1. Endanger people’s right to quality and affordable healthcare due to strict intellectual property rights (IPR) on patents, data monopolies to medicines
  1. Make educational materials become expensive with strict IPR
  1. Violate internet users’ privacy rights and will stifle creativity and freedom of expression through severe copyright rules
  1. Mean death to democracy, allow corporations to use investor-state dispute settlement (ISDS) to attack public interest laws to increase their profits; corporations suing governments over living wages, environmental protection , people’s access to public utilities
  1. Have knock-on effects on the whole region, have potential to be the standard that all future trade deals will follow
  1. Promote the hegemony of corporations, neoliberal regimes and political and economic dominance of the US and other powerful States over the developing and underdeveloped economies of the world.

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Among the prominent arguments why people hate the TPP and other FTAs with the US and EU is that stronger IPR protection would mean more expensive medicines, affecting even off-patent, generic drugs. Is this true?

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No. Perhaps all TRIPS flexibilities with regards to newly-invented medicines were respected by the TPPA. Like these texts, the red comments on the right are mine.

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Then I added another aspect of IPR infringement, the abolition of trademarks and brand logo for cigarettes.

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Concluding Notes:

  1. Joining the TPP has more gains than pains for member-countries, especially in exports and overall GDP expansion.
  1. IPR health provisions in TPP not scary, apply only to newly-invented medicines and not to cheaper generic drugs. Existing TRIPS flexibilities for new meds are maintained.
  1. Possible that generic pharma lobby + anti-capitalism, anti-globalization NGOs created more fear than what the TPPA actually provides.
  1. More to fear in government taxation of medicines, mandatory drug price discounts and price controls, than IPR protection.Brief presentation, I think I spoke for only 7-8 minutes, then the others gave their own inputs and insights on other topics. The full 14-slides presentation is available in slideshare.

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Meanwhile, the debate seems raging in Malaysia now regarding their government’s plan to introduce plain packaging in tobacco products too. All these news reported since last week.

plain pack

It’s now a Singapore-Indonesia-Malaysia triumvirate of tobacco plain packaging legislation. Soon it will infect the governments and stakeholders in the Philippines, Thailand, Vietnam, etc. And if they succeed, next would be beer, whiskey, other alcohol products? Then chocolate bars, soda and cola. The WHO should be involved in this new government initiatives. I will follow this development.

Plain packaging and trademark busting

Trademarks and brand logo are important to distinguish companies and producers from each other. A customer can say, “I don’t want to ride airline X because they are frequently late/delayed, nor airline Y too because they are expensive, I prefer airline Z because their fares are cheap they mostly fly on time.” That is branding from the perspective of customers.

When government or many groups dislike or hate something, this is how regulations and later prohibitions look like:

  1. Raise the tax, make it more expensive.
  2. Restrict or prohibit advertising to certain events.
  3. Mandate graphic warnings, like “Smoking kills” and show ugly pictures of dilapited lungs and mouth.
  4. Actual product restrictions to certain consumers, like “for people above 21 years old” and so on.
  5. Ultimately, plain packaging. Like all tobacco products, all beer and wine products, all  chocolate bars, etc. to be labelled as plain “cigarettes” or “beer” or “red wine” or “chocolate”.

Boring and lousy, right?

Of course smoking — and drinking lots of alcohol, and taking lots of soda, ice cream, eating lots of fatty, salty, preserved food, sedentary lifestyle, etc. etc — is bad for people’s health.

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But people — not the state or media or the health NGOs, etc. — own their body. People recognize the risks of smoking, drinking, drugs, etc. and they compare such health risks with the pleasure of smoking and drinking. Then they decide whether to continue doing it or stop; if they continue, whether to smoke 1 or 20 sticks a day, drink 1 or 6 bottles of beer a day, etc.

Too much nannyism by the state purportedly to “protect public health” is wrong, and is a clear smoke screen and excuse for more taxation, more regulations, prohibitions, more government.

Plain packaging of tobacco, beer, whiskey, chocolates, etc. in the Philippines, I do not think this kind of legislation will prosper here. Mainly because legislators themselves are among the big fans of branded tobacco, beer, wine, etc. But it is an opportunity for big time extortion by health regulators and/or legislators.

Meanwhile, the graphic photos law against tobacco consumption, the implementing rules and regulations (IRR) to be signed soon,http://www.interaksyon.com/article/123786/doh-implementing-rules-for-cigarette-graphic-health-warnings-out-before-march