CHAPTER 3

KEY ISSUES

Introduction

3.1        While only the TM Bill was referred to the committee, most submissions, and much of the evidence received, focused on the TPP Bill and the policy of plain packaging of tobacco products. The key issue raised in relation to the TM Bill was the Henry VIII clause in proposed new section 231A of the Trade Marks Act. In relation to the TPP Bill, and the policy of plain packaging of tobacco products, a number of issues were raised in submissions and by witnesses. These included:

• constitutional acquisition of property and compensation issues;
• consequences of plain packaging of tobacco products; and
• Australia's international obligations with respect to trade marks.

Purpose of TM Bill

3.2        In its submission, the Department of Health and Ageing (Department) outlined that the TM Bill (together with amendments to the TPP Bill) was drafted as a response to concerns raised during the consultation on the exposure draft of the TPP Bill.[1] Issues were raised by the International Trademark Association, the Institute of Patent and Trade Mark Attorneys and the International Association for the Protection of Intellectual Property - Australia, as well as by Professor Mark Davison, a member of an expert advisory group. Consequently clause 15 of the exposure draft of the TPP Bill was redrafted as clause 28 of the TPP Bill, and the TM Bill was also introduced.[2]

3.3        The Department stated:

The [TM Bill], together with section 28 of the [TPP Bill], is intended to ensure that the rights of trade mark owners and applicants are not diminished as a result of the operation of the [TPP Bill]. Owners of legitimate tobacco trade marks will continue to be able to register and protect their trade marks. This will ensure compliance with Australia's international obligations in relation to protection of intellectual property in trade marks. In addition, owners will continue to be able to use their tobacco trade marks in some circumstances - for example on letterhead and wholesale packaging.[3]

3.4        The Department listed two purposes for which the regulation-making power in proposed new section 231A of the Trade Marks Act might be exercised. The first is to effectively deal with any future amendments to the Trade Marks Act to ensure that section 28 of the TPP Bill, when enacted, continues to operate. The second purpose is to ensure that the Australian Government can act quickly to address any unintended consequences which arise from 'the practical operation of the TPP Bill and its interaction with the Trade Marks Act':

Section 28 of the [TPP Bill] is intended to address the effect of the [TPP Bill] on the operation of the [Trade Marks Act] and should be effective to do so in all circumstances that are currently anticipated. However, the provisions of the TM Bill provide additional assurance that the rights of trade mark owners can be protected in an expeditious way should unanticipated circumstances arise.[4]

3.5        However other perspectives on the purpose of the TM Bill were also raised in submissions. For example, BATA considered the Henry VIII clause in the TM Bill 'should be seen for what it really is - mere cover to permit the Government to re-craft the [tobacco plain packaging] scheme when it is struck down'.[5] Mr David Crow from BATA argued that the TM Bill could not be viewed in isolation and is 'fallback legislation intended to protect the government in the event the [TPP Bill] is struck down by the courts'.[6]

Henry VIII clause

3.6        The Department confirmed that proposed new section 231A will operate as a Henry VIII clause, stating that '[p]roposed new section 231A will allow regulations to be made, in relation to the effect of the proposed [TPP Bill] and any regulations made under it, on the [Trade Marks Act] or a regulation made under that Act, that may be inconsistent with the [Trade Marks Act], and prevail over that Act'. The Department commented:

The proposed amendment gives the Government flexibility and an efficient way to ensure that, if necessary, the Government can quickly remedy any unintended interaction between the [TPP Bill] and the [Trade Marks Act] that may adversely affect the rights of legitimate trade mark owners and which cannot be dealt with under the existing provisions of the [TPP Bill].[7]

3.7        At the hearing, the Department made a joint statement, also on behalf of the Attorney-General's Department, the Department of Foreign Affairs and Trade and IP Australia, which expanded on the need for the Henry VIII clause to address any 'unintended interactions' between the TPP Bill and the Trade Marks Act:

First, trademark law is complex; new and idiosyncratic trademark disputes often arise. And when new legislation is introduced affecting the operation of trademark law, the practical interpretation of that legislation in the courts, as applied to an idiosyncratic trademark dispute, cannot always be foreseen. Were a dispute over a tobacco trademark to arise in the courts and the courts interpreted the interaction of the [TPP Bill] and the Trade Marks Act in the way that was not intended, the regulation-making power in the [TM Bill] could be used quickly to restore appropriate protections or rights to trademark owners and/or applicants.[8]

3.8        The Department also emphasised that the regulation-making power in proposed new section 231A could also be used to rectify any 'flow-on' effects between the TPP Bill and the Trade Marks Act caused by another Henry VIII clause in the Trade Marks Act, section 189A. This section provides a regulation-making power to give effect to the Madrid Protocol on the International Registration of Trade Marks (Madrid Protocol).[9]

3.9        Mr Philip Noonan, Director General of IP Australia, noted that clauses of this kind are often used in intellectual property legislation:

When you are bringing a new concept to a system that is a century old, such as tobacco restrictions, nobody can really anticipate exactly how that will play out in every area. You can go through a public exposure process and get submissions, and that has all been done with this bill. There is still the possibility that something else would only come up in a court decision and that is the issue that would be addressed through the regulation-making power in the bill before the committee...[10]

Constitutionality

3.10      Some of the evidence received by the committee argued that the TM Bill and the Henry VIII clause could be found to be unconstitutional by the courts. For example, Mr Allan Myers AO QC, representing BATA, commented:

[T]he question with the [TM Bill] when you get to a constitutional level is this: can parliament delegate to the extent which it has in this case its legislative powers? Because it has handed over, in effect, to the executive the power to enact binding laws that are inconsistent with the Trade Marks Act.[11]

3.11      Imperial Tobacco Australia had the view that 'proposed section 231A is unconstitutional and beyond the powers of the [Trade Marks Act]'. It highlighted that Parliament was granted the power to make laws under section 51 (xviii) of the Australian Constitution which relates to intellectual property. Imperial Tobacco Australia argued that the 'power to overturn legislation is a power that should be reserved for Parliament' and regarded the 'purported delegation of this power to the Executive as a breach of the separation of powers'.[12]

3.12      JTI, part of the Japan Tobacco Group of Companies, acknowledged that the delegation of legislative power to the executive, while not expressly provided for in the Australian Constitution, has been accepted as valid by the High Court.[13] However, it stated:

It is at least arguable that the legislative power of the Parliament does not include the capacity to grant delegated legislative power otherwise than for purposes incidental or ancillary to, or consistent with, primary legislation enacted by the Parliament itself. JTI considers that proposed section 231A allows for regulations to be made which [are] inconsistent with the legislative scheme established by the [Trade Marks Act]. The trade marks regime set up by the [Trade Marks Act] and its validity would therefore be questionable.[14]

3.13      Professor Gabriël Moens and Adjunct Professor John Trone, in a paper prepared for Philip Morris, described Henry VIII clauses as 'constitutionally undesirable' and argued that there are several grounds on which this Henry VIII clause 'may be held to be unconstitutional':

The High Court has held that the Commonwealth Parliament may not abdicate its legislative powers. The Court's concept of abdication is excessively formalistic. It only prohibits an abdication or renunciation of the power of the Parliament to repeal or amend a statute. This narrow concept of abdication is ripe for reconsideration. Current doctrine could well be modified so that a delegation of power to amend statute law by regulation would constitute an abdication of legislative power.[15]

3.14      In contrast, Professor Simon Evans commented:

On current authorities, a Henry VIII clause—regardless of its breadth—would be valid. The High Court has not articulated a test for what amounts to an unconstitutional abdication of legislative power that would be necessary in order to find invalidity on current authorities. The High Court has never found such an abdication and has not enunciated a clear test to say when that would arise.[16]

3.15      Further, Dr Matthew Rimmer characterised the 'intellectual property power' in the Australian Constitution as 'sweeping':

Over the past decade, the Federal Government has been constantly amending and revising various regimes of intellectual property – including copyright law, patent law, and trade mark. The scope of subject matter is often addressed and finessed. The balance of rights and exceptions is often being recalibrated. The range of remedies is also a common matter of legislative refinement. The registration administrative schemes often need much revision.

In this context, the proposal in respect of the plain packaging of tobacco products is decidedly modest and minor – in the larger scheme of the dynamic area of intellectual property.[17]

Scope

3.16      Submissions opposed to the plain packaging scheme questioned the scope of the Henry VIII clause and argued that it would create uncertainty for tobacco companies. BATA believed the 'imprecise and overbroad wording' of the Henry VIII clause in the TM Bill is 'far broader than is required to accomplish the narrow goals enunciated in the Explanatory Memorandum and that those goals could be accomplished by amending the [Trade Marks Act] to directly address those narrow changes'.[18] BATA argued that the Henry VIII clause in the TM Bill would create an 'excruciating degree' of uncertainty for tobacco companies:

Given this, the [TM Bill] permits the Government to endlessly modify the TPP scheme after it has been struck down as breaching Australia's international obligations, or acquiring tobacco companies' intellectual property, leaving BATA and other tobacco companies in limbo as to their rights and obligations in Australia.[19]

3.17      Similarly, Business Civil Liberties considered that the TM Bill grants the Minister 'virtually unfettered discretion to adopt regulations regarding the effect of the [TPP Bill] on the Trade Marks Act'. This 'set[s] an extremely dangerous precedent that calls into question the ability of trademark owners to rely on existing trademark protections'.[20] Business Civil Liberties stressed:

[N]othing in the language of new Section 231A would limit regulations to the subject matter described in the Explanatory Memorandum. Regulations issued under Section 231A could, for example, prohibit the display of tobacco companies' trademarks in formats not now prohibited by statute.[21]

3.18      Imperial Tobacco Australia highlighted the broad scope of regulations which could be made under subsection 231(2) which 'may "state the effect of the operation" of the (proposed) [TPP Bill] on the [Trade Marks Act], including by taking or deeming: something to have (or not to have) happened; or something to be (or not to be) the case; or something to have (or not to have) a particular effect'.[22] It argued that this would allow for determinations of fact and law by the executive:

In the event that provisions of the [TPP Bill] are inconsistent with the current [Trade Marks Act], this should be properly addressed by the Parliament in the primary Act and not by a "back door" method. Alternatively, a finding of inconsistency is more appropriately made by a Judicial Officer of the Federal Court of Australia, who is bound by principles of statutory interpretation. It is not the role of the Executive to make delegated legislation to address any defects of the primary Act....

The terms of proposed section 231A would similarly allow for determinations in respect of any aspect of trade mark law as it applies to trade mark owners for tobacco products, inclusive of their removal, to be made by the Executive. [Imperial Tobacco Australia] is of the view that this delegation of power is unlawful, unconstitutional and must be prevented.[23]

3.19      In contrast, others did not view the scope of the Henry VIII clause as inappropriately broad.[24] Dr Matthew Rimmer described the clause as 'very narrow in its operation and focus[ed] on tobacco and related products'. He noted that it was 'far narrower' than the current Henry VIII clause in the Trade Marks Act relating to the Madrid Protocol 'because it deals with just one of the classes of goods and services covered by the trademarks regime'.[25]

3.20      Similarly, Mr Philip Noonan, from IP Australia commented:

[A] key element there is that the regulations that can be made under the clause can only make provision in relation to the effect of the operation of the [TPP Bill]. So that is quite a narrowly focused restriction...

It is not a very prescriptive clause within that constraint, but that is in the nature of these kinds of provisions that, since you cannot anticipate the particular issue you would need to address, you need to leave them fairly broad and to rely upon the parliament's capacity to disallow regulations that seem offensive to it.[26]

3.21      The Department also explained that 'the scope of the regulation-making power is narrow, limited only to "the effect of the operation of the [TPP Bill] and its regulations"'. It noted that the EM to the TM Bill states that the regulations 'are not intended to have any effect...in relation to goods or services not governed by the [TPP Bill] and its regulations'.[27] In particular, the EM to the TM Bill notes:

Owners of trade marks in relation to tobacco products will be able to use their trade marks, other than on retail packaging and the products themselves, in ways that do not contravene the Tobacco Advertising Prohibition Act 1992 or other laws, for example on business correspondence.[28]

Parliamentary scrutiny

3.22      An argument was made that the Henry VIII clause in the TM Bill would enable the Australian Government to avoid appropriate scrutiny by the Parliament of any changes made to the plain packaging scheme. Imperial Tobacco Australia argued that '[b]y proposing the [TM Bill] in its current form, the Government is attempting to avoid the necessary rigour and scrutiny of legislation'.[29] Similarly JTI highlighted earlier criticism of the use of Henry VIII clauses, which it considered 'manifestly contravene[s] the principle of the separation of powers between the Legislature and the Executive'.[30]

3.23      BATA argued that the 'unfettered regulation-making authority granted under the Henry VIII clause contemplated by the [TM Bill] is for an improper purpose, creates undue uncertainty, and is overbroad and subject to mischief'. Further, it considered that '[i]n the [TM Bill], the Government seeks the authority through the Minister to make unilateral revisions to the [Trade Marks Act], without the input or approval of the Parliament through the introduction to the [Trade Marks Act] of a Henry VIII clause'.[31] Mr Allan Myers AO QC, representing BATA, commented:

One asks why amendments to the Trade Marks Act, if deemed necessary to take into account the effect of the plain packaging bill, could not have been made in the usual way by the introduction of relevant amending legislation; There is no real answer to that.[32]

3.24      Similarly, the International Trademark Association noted that '[r]egulations can be amended more easily than an Act and without the same parliamentary scrutiny required to amend an Act of Parliament'. It argued that the TM Bill would provide the 'Minister of the day with an ability to alter regulations potentially without concern to the primary piece of legislation'.[33]

3.25      The Department commented that, '[i]f the Parliament believes any regulation made under proposed section 231A inappropriately modifies the operation of the Trade Marks Act 1995, the Parliament will have the opportunity to disallow that regulation'.[34]

3.26      It was also suggested that the extensive use of regulations in relation to trade mark law is routine. Dr Matthew Rimmer noted that there were 215 pages of regulations under the Trade Marks Act and highlighted that the Trade Marks Act currently 'relies heavily upon the regulations associated with it – for instance, quite important things are listed there, like the classes for goods and services, and subject matter that is excluded from the definition of the signs'. He also noted:

IP Australia, and other trade mark offices around the world, often rely upon regulations and administrative rules to deal with particular kinds of marks (for instance, the current regulations have detailed prescriptions about defensive marks, certification marks, collective marks, and protected marks under the Madrid protocol).[35]

Other Henry VIII clauses

3.27      The EM to the TM Bill notes that an equivalent provision already exists in subsection 189A(3) of the Trade Marks Act:

Section 189A authorises the making of regulations to give effect to the Madrid Protocol Relating to the Madrid Agreement concerning the International Registration of Marks (Madrid Protocol). Allowing such regulations to be inconsistent with, and prevail over, the Trade Marks Act ensures that Australia can comply with its obligations under the Madrid Protocol. Regulations under section 189A may, for example, provide that provisions of the Trade Marks Act apply in modified form to matters covered by the Madrid Protocol.[36]

3.28      Dr Matthew Rimmer also highlighted the previous use of a Henry VIII clause in the Trade Marks Act. He noted that when section 189A had been introduced in 2000, the then Parliamentary Secretary to the Minister for Industry, Science and Resources, the Hon Warren Entsch MP, had argued that a Henry VIII clause was necessary as the Australian Government 'needed to be flexible, [putting] most of the detail of the Madrid protocol procedures into trademark regulations'. Dr Rimmer pointed out that Mr Entsch had also stated that 'Parliament always has the opportunity to disallow regulations if it believes that the subject matter exceeds permissible boundaries for the regulation'.[37]

3.29      Submissions opposed to the plain packaging legislation did not view subsection 189A(3) as an appropriate precedent. For example, the International Trademark Association stated:

These previous clauses have applied across trademark owners without exception; however, the present legislation targets one industry in particular. Singling out one industry presents the danger that the government of the day can unduly burden these trademark owners with new and unexpected regulations and would be a deviation from good legislative practice.[38]

Justified uses of Henry VIII clauses

3.30      In 1997, the Scrutiny of Legislation Committee of the Queensland Parliament conducted an extensive examination of the use of Henry VII clauses in that jurisdiction. The final report of that committee urged the Queensland Parliament 'to firmly oppose the introduction of Henry VIII clauses into legislation unless they occur in limited circumstances and are justified'.[39] Possible justifiable uses of Henry VIII clauses were limited the following circumstances:

• facilitation of immediate executive action;
• facilitation of the effective application of innovation legislation;
• facilitation of transitional arrangements; and
• facilitation of the application of national schemes of legislation.[40]

3.31      In the context of the TM Bill, Imperial Tobacco Australia argued that the Australian Government has not made the case for any of these justifiable uses.[41] Similarly, JTI noted that Henry VIII clauses 'are at times sought to be justified by the needs of urgency, the requirement of transitional periods and technical complexity'; but JTI did not consider that these justifications exist in respect of the TM Bill.[42] In particular, JTI noted that there is no external time pressure on the implementation of the plain packaging legislation and it is therefore 'entirely inappropriate' to use a Henry VIII clause as a 'quick' method of addressing anticipated problems with the initiative. JTI also emphasised that proposed new section 231A contains no time limit and that the issues raised by the legislation 'will not be so technical in nature as to justify Henry VIII clauses'.[43]

3.32      In response to such arguments, the Department outlined a number of reasons for the use of a Henry VIII clause in the TM Bill:

The use of a Henry VIII clause in this case is preferred to: avoid the need to amend the [Trade Marks Act] itself, in recognition of the need for robustness and clarity in the [Trade Marks Act] and regulations; and to ensure that legislative action to protect the rights of trade mark owners can be taken quickly should the need arise. The regulation making power avoids the complexity that would arise should the [Trade Marks Act] be amended to include provisions that only operate in relation to trade marks used for tobacco products. Instead any such provisions, which would deal only with trade marks for tobacco products in very specific circumstances, will be contained in regulations.[44]

Acquisition of property

3.33      Section 51(xxxi) of the Australian Constitution empowers the Commonwealth to make laws with respect to 'the acquisition of property on just terms from any State or person for any purpose in respect of which the Parliament has power to make laws'. The provisions of the TPP Bill appear to anticipate a constitutional challenge to the plain packaging scheme on this basis. The Explanatory Memorandum for clause 15 of the TPP Bill notes:

The Bill has been drafted so as to avoid the potential for any acquisition of property other than on just terms that would be contrary to section 51(xxxi) of the Constitution. However, out of an abundance of caution, this clause provides that the Bill does not apply to the extent that it would cause an acquisition contrary to section 51(xxxi). More specifically, it provides that if preventing the use of trade marks on tobacco products or their packaging, without providing compensation, is contrary to section 51(xxxi) of the Constitution, the trade marks can be used. However, the regulations may prescribe restrictions (for example, on size and placement) for the purposes of this provision. Any other requirements for plain packaging of tobacco products will continue to apply.[45]

3.34      A number of submitters suggested that the plain packaging scheme introduced by the TPP Bill and the TM Bill may represent an acquisition of property by the Commonwealth which is not 'on just terms'. For example, BATA commented:

By virtue of the prohibition on the use of trade marks, markings and other intellectual property, the TPP Bill creates an entire class of intellectual property, in particular, graphical trade marks, that are for all intents and purposes utterly devalued and restricted to goods only in Class 34 for tobacco products, are rendered unusable. This is so, in spite of the years of investment made in that property.

The Government's awareness that the proposal is an acquisition of tobacco companies' property is clearly underlined by section 15 of the TPP Bill, which contemplates that in the event the plain packaging is held to be an acquisition of IP rights, it will not apply, thus forestalling the Department’s obligation to compensate tobacco companies on just terms for their acquired property under section 51(xxxi) of the Constitution.[46]

3.35      In contrast, Professor Simon Evans and Mr Jason Bosland argued that 'the plain packaging legislation appears likely to survive any constitutional challenge brought on the ground that it acquires property without providing just terms'.[47] Largely this is because 's51(xxxi), as interpreted to date, while protecting property rights against some incursions by the Commonwealth, limits that protection to protection against 'acquisitions' that provide direct and proprietary benefits to the Commonwealth or third parties'.[48]

3.36      At the hearing, Professor Evans emphasised that 'the [TPP Bill] does not affect an acquisition...because the Commonwealth does not get anything; there is no transfer from the trademark owners to the Commonwealth'. Consequently, his analysis was that there was 'no acquisition of property requiring compensation under the Constitution'.[49] He further explained:

[O]n current authority, there is very little prospect that the High Court would conclude that the plain packaging legislation effects an acquisition of those property rights. That is because the High Court's jurisprudence on section 51(xxxi) draws a distinction between an acquisition and a regulation or deprivation of property....[50]

Consequences of plain packaging

3.37      A number of submissions expressed the view that the committee should consider both the TM Bill and the TPP Bill.[51] Some submissions directed their commentary wholly in relation to the TPP Bill or the policy of plain packaging of tobacco products. In particular, the committee received a number of submissions from a diverse range of overseas jurisdictions which were opposed to the plain packaging initiative.

3.38      Submissions opposed to the policy of plain packaging of tobacco products raised similar issues and concerns, such as:

• plain packaging will cause an increase in counterfeit tobacco products which will harm legitimate producers and retailers, encourage unregulated activity (particularly access to cigarettes by those underage), reduce tobacco prices (increasing rates of smoking) and decrease tax revenue;[52]
• plain packaging will cause producers to focus on price competition making tobacco products more affordable and potentially increasing rates of smoking;[53]
• plain packaging infringes the commercial rights of producers of legal tobacco products to use trade marks to differentiate their wares in the market and the rights of consumers to choose different products;[54]
• plain packaging will create a number of difficulties for retailers, particularly additional cost and regulatory burdens;[55]
• plain packaging of tobacco products sets a precedent for similar regulation of other products;[56]
• plain packaging will call into question the protection of intellectual property in Australia and discourage investment;[57]
• plain packaging will effectively prevent the importation of premium handmade cigars;[58]
• there is a lack of evidence for the intended effect of plain packaging on smoking rates[59]; and
• plain packaging will create a two-tier trade mark system and will infringe long standing principles of trade mark law, for example, by allowing trade marks to be registered without any obligation of use.[60]

3.39      Mr David Crow from BATA also argued that, in the event the plain packaging scheme is enacted, the tobacco industry would 'not be able to comply with the legislation within the short timeframes provided'. He suggested that at least a 12-month preparation period, as well as a minimum six-month 'flush-through' period, would be necessary 'to ensure the legitimate market can adapt to the new regulatory regime'.[61]

3.40      In contrast, the benefits of the plain packaging scheme were summarised by the Department as follows:

Tobacco smoking remains one of the leading causes of preventable death and disease among Australians, killing over 15,000 Australians every year. The social costs of smoking (including health costs) are estimated at $31.5 billion each year. Although the number of daily smokers in Australia has fallen by more than half a million in the last decade, approximately three million Australians still smoke.

The [TPP Bill] will prevent advertising and promotion on tobacco products and retail tobacco product packaging in order to:

- reduce attractiveness and appeal of tobacco products to consumers, particularly young people;

- increase the noticeability and effectiveness of mandated health warnings;

- reduce the ability of the tobacco product packaging to mislead consumers about the harms of smoking; and

- through the achievement of these aims in the long term, as part of a comprehensive suite of tobacco control measures, contribute to efforts to reduce smoking rates.[62]

International obligations

3.41      The committee received conflicting evidence regarding the issue of the plain packaging scheme's compliance with Australia's international obligations in relation to trade and intellectual property. A number of submissions, including many from overseas industry and intellectual property protection organisations, asserted that the plain packaging scheme would breach a number of Australia's obligations under trade and intellectual property treaties. Frequently mentioned treaties include:

• the World Trade Organisation's (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement);
• the Paris Convention of Industrial Property (Paris Convention); and
• the WTO Agreement on Technical Barriers to Trade (TBT).[63]

3.42      However, alternative interpretations regarding Australia's international treaty obligations were also outlined by other submissions, such as from Professor Simon Evans and Mr Jason Bosland in relation to the TRIPS Agreement,[64] and by those received by the House of Representatives Standing Committee on Health and Ageing's inquiry.[65]

Framework Convention on Tobacco Control

3.43      The EM to the TPP Bill notes that the plain packaging scheme is one of the means by which the Australian Government will give effect to its obligations under the World Health Organisation (WHO) Framework Convention on Tobacco Control (FCTC).[66] Dr Matthew Rimmer commented:

The Australian Government's proposal for the plain packaging of tobacco products would appear to be an effective means of implementing some of its obligations under Article 11 and Article 13 of the WHO Framework Convention on Tobacco Control, and the accompanying guidelines; indeed, it may well represent best practice.[67]

3.44      However, this was disputed by a number of submissions and witnesses opposed to the plain packaging of tobacco products.[68] For example, the Government of Nicaragua stated:

[N]othing in [the] provisions of the FCTC oblige Australia to adopt such measures. The FCTC does not even mention plain packaging and no other country party to the FCTC has adopted plain packaging measures, thus confirming that plain packaging is clearly not necessary to give effect to any of the obligations of the FCTC. The FCTC Guidelines merely propose that countries "consider" adopting plain packaging.[69]

Committee view

3.45      In the view of the committee, the key issue regarding the TM Bill is the nature of the Henry VIII clause in proposed new section 231A of the Trade Marks Act. The committee acknowledges the concerns expressed by tobacco companies and others in relation to the status of the Henry VIII clause in the TM Bill. Nonetheless, Henry VIII clauses are not unprecedented in Australian legislation, or even in the Trade Marks Act itself. In this context, the committee notes the evidence of Professor Simon Evans who stated that, on current authorities, a Henry VIII clause, regardless of its breadth, would be constitutionally valid.[70]

3.46      The Henry VIII clause in the TM Bill is limited in scope by the fact that it provides that regulations may only be made in relation to 'the effect of the operation' of the TPP Bill, and by the explanation in the EM to the TM Bill which clarifies that its objective is to ensure applicants for trade marks and registered owners of trade marks are not disadvantaged. As the Department has highlighted, the TM Bill was drafted in response to issues raised by submissions during the public consultation and is intended to provide 'an additional level of assurance for trade mark owners that the government will be able to act quickly to address any unintended consequences arising out of the regulation of trade marks intended for use on tobacco products and their retail packaging'.[71]

3.47      The committee agrees that Henry VIII clauses are, in general, undesirable in legislation and should only be used in limited circumstances. However, in the view of the committee, the Henry VIII clause in the TM Bill falls within the set of limited circumstances where such a clause may be justifiably used. The committee holds this position for a number of reasons, including that the TM Bill amendments will facilitate immediate Australian Government action to protect trade mark owners affected by the plain packaging scheme, and will maintain Australia's international obligations under the Madrid Protocol. Reflecting the categories of justifiable use identified by the Queensland Parliament's Scrutiny of Legislation Committee, the committee considers that the Henry VIII clause in the TM Bill facilitates 'the effective application of innovative legislation' and the 'transition arrangements' of the implementation of this new legislative scheme.

3.48      The committee acknowledges that legitimate concerns were raised regarding the level of parliamentary scrutiny for amendments to legislation enabled by a Henry VIII clause. Significant proposed amendments to law should, in most cases, be introduced to the Parliament as primary legislation in order to maximise appropriate parliamentary scrutiny. However, the committee also notes that scrutiny of regulations and legislative instruments is regularly undertaken by the Parliament, in particular by the Senate Standing Committee on Regulations and Ordinances (R&O Committee). All legislative instruments stand referred to the R&O Committee for scrutiny and recommendation as to any further parliamentary action, including disallowance. Established under the Senate's Standing Orders, this long-standing parliamentary committee, assisted by independent legal advice, scrutinises each legislative instrument to ensure:

(a) that it is in accordance with the statute;

(b) that it does not trespass unduly on personal rights and liberties;

(c) that it does not unduly make the rights and liberties of citizens dependent upon administrative decisions which are not subject to review of their merits by a judicial or other independent tribunal; and

(d) that it does not contain matter more appropriate for parliamentary enactment.[72]

3.49      In the view of the committee, such scrutiny of any new regulations enabled by the TM Bill, as well as the capacity of the House of Representatives and the Senate to disallow regulations, will provide sufficient parliamentary oversight in order to safeguard the interests of those affected by the tobacco plain packaging scheme.

Recommendation 1

3.50      The committee recommends that the Senate should pass the Bill.

 

Senator Trish Crossin
Chair

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