Global health governance at a crossroads: trademark protection v. tobacco control in international investment law."As it is unhealthy, I will never smoke again, but now I smoke the last cigarette"
Italo Svevo, La Coscienza di Zeno (1923).
According to the World Health Organization, tobacco consumption causes the death of five million people each year. Countries have increasingly adopted regulations aimed at diffusing public awareness and have massively adhered to the World Health Organization Framework Convention on Tobacco Control, which has established a cognitive and normative consensus for promoting global public health through tobacco control. Despite these successful approaches, the tobacco business has been facilitated by foreign investment protection, which has increased competition and lowered tobacco prices. By extensively protecting investor's rights to promote foreign direct investment and to foster economic development, international investment governance risks undermining the fundamental goals of tobacco control. This article investigates the relationship between international investment law and tobacco regulation.
As investment agreements broadly define the notion of investment, tension exists when a State adopts tobacco control measures interfering with foreign investments, as regulation may be considered tantamount to expropriation under investment rules, in addition, investment treaties provide foreign investors with direct access to investment arbitration. Thus, foreign investors can directly challenge national measures aimed at protecting public health and can seek compensation for the impact on their business of such regulation. As a result, the mere threat of an investor-state dispute may have a chilling effect on policy-makers. Several questions arise in this context. Are investment treaties compatible with states' obligations to protect public health? Is investor-state arbitration a suitable forum to protect public interests? Are there any limits to the power of states to enact public health regulations?
In the light of parallel developments before other international law fora, this article critically assesses the clash between public health law and international investment law before investment treaty tribunals and offers a systematic and updated analysis of the recent case law. The article then concludes with some policy options that may help policy makers and adjudicators reconcile the different interests at stake.
INTRODUCTION I. GLOBAL HEALTH GOVERNANCE AND THE FRAMEWORK CONVENTION ON TOBACCO CONTROL II. THE "TOBACCO WARS": CASE STUDIES IN INTERNATIONAL INVESTMENT LAW 2.1 Expropriation 2.2 Non-Discrimination 2.3 Fair and Equitable Treatment 2.4 The Prohibition of Unreasonable Measures III. RECONCILING INVESTOR RIGHTS AND TOBACCO CONTROL IN INVESTMENT LAW 3.1 Interpretation 3.1.1 Textual Interpretation 3.1.2 Teleological Interpretation 3.1.3 Subsidiary Sources of International Law 3.1.4 Systemic Interpretation 3.2 Stipulating ad hoc Safeguards CONCLUSIONS
Tobacco control is an important aspect of contemporary public health governance. Whatever its conceptualization, be it considered a human rights issue (1) or a mere public policy objective, (2) the legitimacy of such a goal is uncontested. It is estimated that tobacco use causes the death of more than five million people a year and that this figure could rise to more than eight million by 2030 unless measures are taken to control the tobacco epidemic. (3) In addition to the fundamental humanitarian concerns raised by the tobacco epidemic, the economic literature provides further ground for tightening tobacco control measures: a World Bank study examines the long-term costs of treating tobacco illness vis-a-vis the short-term economic benefits derived from tobacco production and trade. (4) In the light of these public policy concerns, countries have increasingly adopted regulations aimed at raising public awareness and have massively adhered to the World Health Organization Framework Convention on Tobacco Control (FCTC), (5) which has established a "cognitive and normative consensus" for promoting global public health through tobacco control. (6)
However, international trade law risks undermining the goal of tobacco control by significantly reducing tariff and non-tariff trade barriers, lowering the prices of tobacco products and thus causing an increase in cigarette smoking, particularly in low income countries. (7) In parallel, investment treaties have furthered foreign direct investment in the tobacco business, thus increasing competition and lowering tobacco prices. (8) While most doctrinal contributions on the subject have focused on the complex interplay between tobacco control and trade, (9) this article explores the less studied linkage between tobacco control and investment treaty guarantees. As investment treaties broadly define the notion of investment, a potential tension exists when a State adopts tobacco control measures that interfere with foreign investments because such regulation may be considered a violation of investment treaty provisions protecting the trademarks of tobacco companies. Moreover, because investment treaties provide foreign investors with direct access to investment arbitration, foreign investors can directly challenge national measures aimed at tobacco control and can seek compensation for the impact of such regulation on their business. Indeed, a number of investor-state arbitrations have dealt with tobacco control measures and the time is ripe for a comprehensive analysis and critical assessment.
For instance, in a recent move to tighten its tobacco control regulation, Australia has adopted plain packaging, a packaging regime that requires the removal of colors, designs, and logos from cigarette packs while allowing the brand name to be displayed in a standard font. (10) Allegedly, plain packaging aims to reduce the incidence of smoking by making cigarette packets less appealing: The Bill will require all cigarettes to be sold in unattractive olive-green packs. (11) Health warnings depicting mouth cancer and other effects of smoking will cover seventy- five percent of the packs' fronts. (12)
Confronted with this groundbreaking initiative, Philip Morris Asia Limited, which is based in Hong Kong and owns the Australian affiliate Philip Morris Limited, (13) filed a notice of investor-state arbitration, (14) arguing that the legislation violates the Australia-Hong Kong bilateral investment treaty. [hereinafter BIT]. As the BIT protects intellectual property such as trademarks, the company argues that plain packaging is affecting the value of the company's trademark. (15) Although Australia is a relatively small tobacco market, tobacco companies fear that the adoption of plain packaging by the Australian government will set a landmark precedent that could be emulated by other countries in a sort of domino effect. (16) However, the Australian government has not stepped back. The Australian Prime Minister, Julia Jillard, stated: "We're not going to be intimidated by big tobacco tactics, whether they're political tactics, whether they're public affairs kind of tactics out in the community or whether they are legal tactics ... We're not taking a backward step. We've made the right decision and we'll see it through." (17) She also reaffirmed that "We are confident of our reforms---confident we can deliver them and confident that they will make a difference to the number of people who smoke...." (18) The outcome of the arbitration, however, is uncertain given the unique nature of the challenge: Never before has an arbitral tribunal been asked to rule on plain packaging. (19)
The threat of an investment dispute, however, may prove potent in less industrialized countries where it may have a chilling effect on policy makers. (20) When three subsidiaries of Philip Morris lnternational (PMI) filed an arbitration claim against Uruguay because of its tobacco control regulation, it was reported that Uruguay was going to water down tobacco control legislation. (21) Uruguay's gross domestic product is half the size of the company's $66 billion in annual sales. (22) Serendipitously, in November 2010, Mayor Michael R. Bloomberg of New York pledged his financial assistance to the state's legal defense. (23) The Uruguayan legislation differs from the Australian legislation in that it adopts more traditional tools of tobacco control, albeit expanding their scope significantly. (24)
In what has become a massive clash between government and corporate interests, such investor-state arbitrations represent a laboratory of confrontation between public health and investors' rights in international investment law and arbitration. An analysis of the relevant legal issues raised by these cases may have significant ramifications both for tobacco control regulation and, more broadly, for the development of international investment law and its interplay with general international law. (25) While public health law acknowledges the fundamental and irreconcilable conflict between the tobacco industry's interests and public health policy interests, (26) only a few investment treaties provide for general exceptions for public health reasons. (27) Interestingly, in the pending PMI v. Uruguay arbitration, the claimants "do not challenge the Uruguayan Government's sovereign right to promote and protect public health," (28) but claim that "the Government cannot abuse that right and invoke it as a pretext for disregarding the Claimants' legal rights." (29) Several questions arise in this context. Are investment treaties compatible with states' obligations to protect public health? Is investor-state arbitration a suitable forum to protect public interests? Are there any limits to the power of states to enact public health regulations?
In addressing these questions, this article argues that excessive protection of investment treaty guarantees may negatively affect tobacco control policies. However, the existing customary canons of treaty interpretation may help interpreters reconcile the competing demands of investment and public health concerns. First, according to the canon of literal interpretation, there is no manifest inconsistency between the two sets of norms. To the contrary, some recent BITs expressly mention the need to protect public health in their text. Second, according to the canon of systemic interpretation, investment treaties should not be considered self-contained regimes, but rather an important component part of public international law. As investment law is part of international law, the former must be consistent with the norms of the latter and be interpreted in accordance with the customary rules of treaty interpretation. Accordingly, arbitrators should adopt a holistic approach, taking public health law into account when they interpret relevant investment treaty provisions. Third, commentators increasingly suggest that guarantees protecting intellectual property should be interpreted purposively. (30) Property advances the collective good of the society that has recognized it. While the concept of equity requires that a property owner not be compelled by the state to bear a greater burden vis-a-vis society at large, the telos of property encapsulates both private rights and the public interest in property guarantees. At the same time, the experience of national and regional courts and tribunals has highlighted the limited nature of property rights, stressing that certain types of public health regulations may be viewed as an intrinsic limit to property.
Finally, given the recent rise of international disputes concerning tobacco control measures before arbitral tribunals, it may be prudent to introduce specific clauses into investment treaties clarifying that tobacco control measures in conformity with international standards are not to be considered a form of expropriation. The use of ad hoc clauses would preventatively settle potential conflicts of interest between the host state and the investor. In addition, such clauses might constitute a useful compass for the arbitrators in eventual investment treaty disputes.
This argument will proceed in three parts. First, the international law instruments concerning tobacco control will be sketched. Second, this article will explore the conflict areas between investment law and tobacco control, examining some recent cases. This survey will show that, in some cases, the regime established according to investment treaties does not strike an appropriate balance between the different interests concerned. Lastly, this article offers a series of legal tools available to policy makers and adjudicators for reconciling the different interests at stake.
I. GLOBAL HEALTH GOVERNANCE AND THE FRAMEWORK CONVENTION ON TOBACCO CONTROL
Tobacco control epitomizes a typical public health issue as it highlights the special responsibility of states in public health matters and requires regulation of individuals who may pose a risk to the public health. (31) Tobacco control is also a public good. (32) In general terms, scholars define public health as a public good; (33) by its nature it "cannot easily be provided by the 'invisible hand' of the market and therefore [requires] government to overcome the failures of the market in order to achieve efficient allocation of essential resources." (34) Public health law thus constitutes an intermediate public good, contributing to the provision of public health. (35) As a part of public health, tobacco control shares in its nature as a public good.
Globalization has brought international tobacco control efforts within the domain of global public goods. (36) While states have been adopting tobacco control policies for decades, (37) the global nature of the tobacco pandemic required a global health governance mechanism to effectively address the pandemic. (38) When the World Health Organization adopted the Framework Convention on Tobacco Control (FCTC), this move represented a major breakthrough in international public health law, (39) as the WHO had never before adopted conventions, only soft law instruments such as recommendations and regulations. (40) The Convention reflects scientific consensus on the lethal effects of tobacco smoke (41) and advances global cooperation for tobacco control.
The structure of a framework convention was adopted "[d]ue to the uncertain political viability of obtaining consensus on a conventional treaty structure...." (42) Framework conventions institute a structure for a further course of action (43) and are characterized by an incremental process of lawmaking. (44) The process begins with the framework convention that establishes a system of governance for an issue area in order to facilitate the development of consensus about the relevant facts and the appropriate international response. (45) This is followed by the development of more specific commitments in subsequent protocols, which supplement the original convention and require states to undertake specific legal obligations. (46)
As an international treaty, the FCTC is legally binding on the states that have ratified it. Because of the specific binary framework/protocol approach, framework conventions set general objectives and are to be supplemented by specialized protocols. (47) Thus, in case of conflict with other treaty regimes, one might legitimately wonder whether it would be difficult for adjudicators to identify the extent of a state's obligations under a framework convention. This concern holds true for a number of provisions of the FCTC, which use non obligatory language (48) and whose open-ended nature may make it harder for a state to argue that it is limiting investor rights in accordance with the convention.
However, as an "evidence-based instrument," (49) "the FCTC is unusually specific--for a "framework" convention--concerning duties and deliverables." (50) Some provisions set forth minimum tobacco control measures followed by encouragement of panics to adopt additional measures beyond those listed. (51) Other provisions set precise obligations to be complied with by given deadlines. For instance, Article 11 of the FCTC requires states to adopt and implement detailed tobacco packaging and labelling measures within three years after the entry into force of the FCTC for that party. (52) Furthermore, the Conference of the Parties (COP) has adopted a number of guidelines (53) to aid countries in implementing their legal obligations by offering, for example, best-practice recommendations or case studies. (54) Although the guidelines are not part of the treaty text, they form part of the context of the FCTC and thus matter when interpreting the relevant provisions of the FCTC under customary rules of treaty interpretation. Whatever their legal status, they "become a benchmark for judging State Party compliance." (55) In conclusion, in some cases the FCTC is "probably too detailed to justify the negotiation of further protocols," (56) and thus adjudicators may find useful guidance in its provisions and the relative guidelines. However, as the provisions of the FCTC present both general and specific elements, (57) arbitrators may question the legal weight of its nonetheless binding provisions. (58)
The main objective of the FCTC is to protect present and future generations from the health, social and economic consequences of tobacco use. (59) The Convention covers a wide range of issues, including measures relating to the reduction in the demand for and supply of tobacco. Among the measures aimed at reducing the demand for tobacco are: price and tax measures; regulation and disclosure of the contents of tobacco products, packaging, and labelling; education; and bans or restrictions on tobacco advertising. For instance, parties are required to take "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 about its characteristics, health effects, hazards or emissions...." (60) Each unit package should also carry a health warning of the prescribed size and visibility. (61) In addition, the parties are required to "apply restrictions on all tobacco advertising, promotion and sponsorship." (62) Among the measures aimed at reducing the supply of tobacco are the elimination of the illicit trade of tobacco products, restriction on sales to and by minors, and technical and financial assistance for tobacco growers and workers to move to alternative occupations. In addition, the FCTC encourages parties to "implement measures beyond those required by [the] Convention." (63)
The Convention also includes a monitoring mechanism based on periodic national reporting. Where a dispute arises among parties concerning the interpretation and application of the FCTC, the parties should make a good faith attempt to settle it through negotiation. If negotiation fails, the parties might submit the dispute to ad hoc arbitration. (64) On the enforcement issue, the FCTC provides that "the Parties shall consider taking legislative action ... to deal with criminal and civil liability, including compensation where appropriate." (65)
As the regulation of the manufacture and advertising of tobacco products necessarily involves both free market and public health concerns, the FCTC provides a conflict clause to discipline its relationship with other international agreements and legal instruments:
The provisions of the Convention and its protocols shall in no way affect the right of Parties to enter into bilateral or multilateral agreements, including regional or sub-regional agreements, on issues relevant or additional to the Convention and its protocols, provided that such agreements are compatible with their obligations under the Convention and its protocols. (66)
The FCTC, which furthers a process of international harmonization by identifying and listing the existing tools of tobacco control, is one of the most widely supported treaties in the history of the United Nations. (67) In the case of disputes concerning the linkage between tobacco control regulation and the protection of foreign investments, will international adjudicators take into account the provisions of the FCTC? If the FCTC is not applicable to the parties, (68) it may be questioned whether its existence amounts to scientific evidence or consensus over the lethal effects of tobacco. One can also wonder whether the FCTC might be considered evidence of an emerging opinio juris, which if backed by state practice, can lead to the crystallization of customary international law that would be binding on non-parties. (69) Another interesting question is whether adjudicators would consult the World Health Organization on the matter.
II. THE "TOBACCO WARS": CASE STUDIES IN INTERNATIONAL INVESTMENT LAW
The recent liberalization of the tobacco trade through trade agreements has significantly reduced tariff and non-tariff trade barriers, driving the prices of tobacco products down and determining an increase in cigarette smoking, particularly in low income countries. (70) In parallel, investment treaties have facilitated the tobacco business by protecting related trademarks as a form of investment. For instance, Article 1 of the US Model BIT defines "investment" as "every asset that an investor owns or controls, directly or indirectly, that has the characteristics of an investment, including such characteristics as the commitment of capital or other resources, the expectation of gain or profit, or the assumption of risk." (71) This provision also lists intellectual property rights as a type of investment. Although trademarks are not expressly mentioned, the provisions of the BIT protect them since they are a type of intellectual property right. Other BITs expressly include trademarks among the types of investment. (72)
As countries gradually implement tobacco control measures, a number of disputes have arisen with regard to these regulations. Tobacco control policies may affect the economic value of a trademark in a number of ways. This section explores the clash between trademark protection and tobacco control, analyzing the relevant arbitrations according to the types of claims that can be (and have been) raised by foreign investors.
Preliminarily, four types of investment dispute concerning tobacco may be outlined. First, although it may be very difficult to prove, an affected IP owner may claim that an unlawful expropriation has taken place. Trademark owners may argue that labelling regulations that impose the use of certain warning phrases or images reduce the economic value of their trademark. In addition, the compulsory disclosure of ingredients may be deemed to be a violation of a trade secret. (73) Second, an IP owner may also allege a violation of the principles of fair and equitable treatment. Third, a claimant may contend that certain tobacco control measures are unreasonable or unreasonably conflict with the normal exploitation of the trademark. Fourth, some claims may concern alleged discrimination suffered by a foreign investor. Should a host state argue, for example, that foreign cigarettes are more harmful than national cigarettes, adjudicators would need to decide whether the discriminatory regulation is justified by public health objectives.
With regard to the first type of claim, the arbitration will be concerned with determining which acts of the state amount to a taking and under what circumstances would such a taking be considered lawful. Treaty provisions lack a precise definition of indirect expropriation and their language encompasses a potentially wide variety of state activity that may interfere with an investor's property rights in her investment. (74) Crucially, even regulatory measures may be deemed to amount to indirect expropriation.
When Canadian health officials contemplated issuing a new regulation on cigarette labelling, a U.S. tobacco company threatened to use the NAFTA investment chapter to challenge the proposed restrictions on the packaging of cigarettes. In particular, the company insisted that the terms "light," "mild," and "low" were incorporated into cigarette names and communicated differences of taste to consumers. Banning these descriptors would not only destroy valuable trademarks and the good will they represent, but would also be tantamount to indirect expropriation. (75) This threat of a NAFTA claim "is widely believed to have deterred the government from taking legislative action on plain packaging prior to the [Canadian Supreme] Court's ruling." (76) In the end, Canadian measures to ban "light" and "mild" descriptors on tobacco packs were implemented through court enforceable agreements within the industry, notwithstanding the initial opposition of the industry to such measures. (77)
More recently, three PMI subsidiaries have filed an arbitration claim against the Republic of Uruguay, alleging, inter alia, expropriation of their intellectual property rights under the Switzerland-Uruguay Bilateral Investment Treaty. While tobacco control "was already part of the ... [country's] regulatory culture," (78) Uruguay has steadily increased its regulation since its ratification of the FCTC. Presidential Decree No. 287/009 requires that at least eighty percent of each side of cigarette boxes be covered by graphic images of the possible detrimental effects of smoking (79) and extends the prohibition on the use of deceptive product names (such as "light" and "mild") to restrict the use of different shades or colors on tobacco packaging. (80) To implement the decree, the Ministry of Public Health issued Ordinance 514, which requires each cigarette brand to have a single presentation and prohibits different packaging or presentations for cigarettes sold under a given brand. (81)
Although the claimants do not contest the sovereign right of the host state to "promote and protect" public health, (82) they claim that in the alleged furtherance of public health objectives, "the Government cannot abuse that right and invoke it as a pretext for disregarding the Claimant's legal rights." (83) Inter alia, the claimants contend that the "combined effect" of the enacted regulations "amounts to an indirect expropriation." (84) The claimants argue, moreover, that Uruguay's actions did not follow due process requirements or include sufficient compensation and thus were illegal under the Switzerland-Uruguay BIT. (85)
The claimants further contend that the pictograms that depict the adverse health effects of smoking "in fact go beyond this purpose" as "they are highly shocking images that are designed specifically to invoke emotions of repulsion and disgust, even horror." (86) According to the claimants, these "offensive images" which "operate so as to denigrate [the claimants'] products," (87) affect the goodwill associated with PMI trademarks, (88) "thereby depriving them of their commercial value." (89) According to the claimants, the eighty percent health warning coverage requirement "unfairly limits" PMI's use of its trademarks. (90) While "the Claimants do not contest the public health policy of warning of the health risks associated with tobacco consumption," they claim that "because of its size, the 80 per cent health warning prevents [them] from using the trademarks in their proper, legally protected form and therefore effectively deprives the Claimants of their right to use the trademarks." (91) Finally, the claimants allege that Ordinance 514 restricted the sale and manufacturing of cigarette products. (92) Thus, the claimants seek both damages and suspension of the application of Uruguay's legislation. (93)
In parallel, on the other side of the southern hemisphere, as Australia adopted its legislation requiting "plain packaging" for cigarettes, (94) Philip Morris filed a notice of claim on the federal government stating that it intends to file an investor-state arbitration over the legislation under the Hong Kong-Australia Bilateral Investment Treaty. (95) Plain packaging means that "trademarks, graphics and logos are removed from cigarette packs with the exception of the brand name which is displayed in a standard font." (96) The company contends that plain packaging will encroach on its trademark rights, constituting an indirect expropriation. Furthermore, the company argues that plain packaging could facilitate trade in counterfeit cigarettes.
In an earlier case relating to tobacco control measures, the Grand River Tribunal deemed that such measures did not amount to an indirect expropriation. Grand River Enterprises Six Nations, Ltd. (a Canadian corporation) and members of Canadian First Nations filed a claim against the United States concerning the claimants' distribution and sale of tobacco products in the United States. (97) The claimants alleged that certain legislative measures taken by states relating to tobacco control inter alia amounted to indirect expropriation of their investment in violation of the NAFTA investment provisions. (98) The claimants argued that the tobacco settlements between U.S. states and large tobacco firms harmed their investment in the United States. As scientific evidence showed that cigarette smoking caused cancer and other diseases, the United States adopted a number of tobacco control policies, and most U.S. states entered into the Master Settlement Agreement (MSA). (99) The MSA required each company adhering to it to make cash payments to a central account in respect of each cigarette sold to pay state costs incurred in the treatment of indigent patients suffering from tobacco-related illnesses. (100) In exchange for payments, the states dropped all antitrust and consumer protection lawsuits. (101) In order to avoid free riding by competitors not participating in the initiative, firms that opted out had to contribute a percentage of their sales to nonrefundable escrow accounts to pay eventual lawsuits against tobacco companies. (102)
In general terms, the petitioners argued that the requirement to make payments into state accounts would constitute an expropriation in violation of NAFTA Article II10 because it would raise prices by an amount that would neutralize cost advantages and prevent small companies from offering meaningful price competition. (103) In addition, one of the claimants, Mr. Arthur Montour, who was a member of one of the First Nations in North America, alleged that his business activities involved trade among sovereign indigenous peoples. (104) On this basis, he alleged that he had a legitimate expectation that his business would not be governed by internal legislation. (105) Therefore, he claimed that the measures undermined his reasonable investment-backed expectations. (106) The U.S. contended, however, that public health regulation did not amount to expropriation, provided that "it [wa]s not a clear and discriminatory violation of the law of the State concerned ... [and] [wa]s not an unreasonable departure from the principles of justice recognized by the principal legal systems of the world...." (107)
The arbitral tribunal rejected the expropriation claim in its entirety, (108) determining that "[o]rdinarily, reasonable or legitimate expectations of the kind protected by NAFTA are those that arise through targeted representations or assurances made explicitly or implicitly by a state party." (109) Because "trade in tobacco products has historically been the subject of close and extensive regulation by U.S. states," the tribunal held that the investor should not have expected to engage in a large-scale tobacco business without being subjected to state legislation. (110) Relying on previous NAFTA cases, the tribunal also stated that NAFTA Article 1110 requires "a complete or very substantial deprivation of owners' rights in the totality of the investment." (111) As the claimant's business had remained "profitable," (112) the tribunal concluded that there was no expropriation. (113)
The Marvin Feldman Karpa case (114) concerned the application of certain tax laws by Mexico to the export of cigarettes by CEMSA, a company owned and controlled by Marvin Feldman Karpa, a U.S. citizen. In it, Mr. Karpa claimed that Mexico's refusal to rebate taxes on cigarettes exported by CEMSA constituted an indirect expropriation of his investment in breach of Article 1110 of NAFTA. (115)
The arbitral tribunal questioned whether the actions of the Mexican government constituted an expropriation stating that: "if there is a finding of expropriation, compensation is required, even if the taking is for a public purpose, non-discriminatory and in accordance with due process of law...." (116) However, it held that "non-discriminatory, bona fide general taxation does not establish liability," (117) and stated that "not every business problem experienced by a foreign investor is an indirect or creeping expropriation under Article 1110." (118) Thus, the tribunal finally dismissed the claim of expropriation. (119) The arbitral tribunal distinguished between general regulation and indirect expropriation in theory, considering good faith as a guiding principle for such an assessment: "[G]overments must be free to act in the broader public interest through the protection of the environment ... tax regimes ... and the like. Reasonable governmental regulation of this type cannot be achieved if any business that is adversely affected may seek compensation...." (120)
In ascertaining whether a tobacco control measure does amount to an indirect expropriation, arbitral tribunals will also have to question whether the police powers doctrine can shield such a measure from a finding of expropriation. The police power of a state stems from the concept that good governance aims at public welfare and may restrain private property for the protection of public safety and health. Where a deprivation of property or other economic loss arises out of bona fide general regulation aimed at preventing nuisance, it should be considered an acceptable exercise of the police power and therefore would be non- compensable. (121) Turning to the arbitral jurisprudence, in the Methanex case, the tribunal accepted as a principle of customary international law that a state is not responsible for bona fide regulation that falls within the scope of a generally recognized police power. (122) In Saluka v. Czech Republic, the arbitral tribunal accepted that "the principle that a state does not commit an expropriation and is thus not liable to pay compensation to a dispossessed alien investor when it adopts general regulations that are 'commonly accepted as falling within the police power of States' is part of customary law today." (123) The recent Chemtura award seems to confirm the applicability of the doctrine to public health-related investment disputes. (124) While the importance of protecting aliens in international law is incontestable, it is important to keep in mind that investment guarantees do not provide absolute protection and may be limited for legitimate reasons. There is no reason why tobacco control measures could not be deemed to be included in the police powers of the state. Such police powers, however, are not unbounded. In ascertaining whether large health warnings are mere restrictions of trademarks or deprivations of the same, an arbitral tribunal will have to balance all the different rights and interests in the case.
Both the national treatment standard and the Most-Favored-Nation Treatment as included in BITs aim to prevent discrimination based on the nationality of an investor. (125) Non-discrimination promotes efficient economic production and prevents the rise of disputes. (126) Ascertaining direct discrimination is a relatively easy task because it involves discriminating between companies on the basis of their nationality. Yet identifying indirect discrimination is more complex because it involves state measures that affect foreigners without making explicit reference to their nationality. Disguised discrimination is more difficult to spot than direct discrimination because it requires distinguishing between the legitimate exercise of government authority and discrimination.
For instance, in the Feldman Karpa case, Mexican law imposed a tax on the production and sale of cigarettes in the domestic market, and applied a zero percent tax rate to cigarette exports under certain circumstances. (127) In particular, rebates were applied only to cigarette producers but were denied to resellers such as CEMSA, (128) the company owned and controlled by Mr. Feldman Karpa. (129) CEMSA filed an Amparo action before the Mexican courts, alleging that these measures infringed upon the constitutional principle of tax equity. (130) The Mexican Supreme Court of Justice ruled in favor of CEMSA, finding unanimously that measures allowing rebates only to producers violated constitutional principles of "equity of taxpayers". (131) As Mexican authorities asked CEMSA to fulfill other requirements, (132) Mr. Feldman Karpa filed an arbitration request to the ICSID on behalf of his company. (133) Nor did the claimant believe that the Mexican government's policy of limiting cigarette exports was justified on public policy grounds, particularly in light of the stated purpose of the law, which was to encourage Mexican exports of tobacco products. (134) The Tribunal upheld the claim of discrimination. (135)
2.3 Fair and Equitable Treatment
Other claims of tobacco related investment disputes have involved the fair and equitable treatment (FET) standard. This standard requires that foreign investors be accorded a minimum standard of treatment "in accordance with international law." (136) There is no commonly accepted definition of this standard, and consensus on the function, scope, and content of the FET, as well as on the proper methodological approach in determining these aspects is far from being achieved. (137) However, the standard is thought to include access to justice, (138) due process (in judicial and administrative decision making), good faith, and the respect of the legitimate expectations of the investor. In this respect, if a state makes an explicit or implicit representation to a foreign investor which the investor relies on in making his or her investment, it would be considered a breach of the FET standard if the state were to frustrate the expectations it previously raised. (139) To be protected, the investor's expectations must be legitimate and reasonable at the time when the investment is made. In assessing whether legitimate expectations exist, arbitral tribunals have to scrutinize the relevant circumstances in the respondent country at the time the investment was made, including not only the facts surrounding the investment, but also the prevailing political, socioeconomic, cultural, and historical conditions in the host state.
In the Grand River case, the claimants argued that their investment was harmed by the U.S. Master Settlement Agreement (MSA) and alleged a violation of the FET standard. (140) As the individual claimants were members of the Six Nations of Native Americans, they argued that Article 1105 of NAFTA requires states to actively consult with indigenous peoples (141) before taking regulatory action that would substantially affect their interests. (142)
The tribunal, with the exception of one member, concluded that the "First Nations or tribal governments, particularly those in the United States whose regulatory authority is or may be implicated by application of the MSA, should have been included in these discussions." (143) Nonetheless, the tribunal held that "whatever unfair treatment was rendered [to the claimant] or his business enterprise, it did not rise to the level of an infraction of the fair and equitable treatment standard." (144)
Similarly, in PMI v. Uruguay, the claimants contend that "while a host State has the sovereign right to change its regulatory framework, including for the purpose of pursuing its public health policies, such changes must be fair and equitable in light of the investor's legitimate expectations." (145) In this case, the claimants argue that "the Respondent failed to maintain a stable and predictable regulatory framework consistent with [the claimants'] legitimate expectations." (146) According to the claimants, the host state not only failed to comply with its own laws protecting private property, (147) but also adopted measures incompatible with Uruguay's treaty obligations under both the TRIPS Agreement and the Paris Convention for the Protection of Industrial Property. (148)
It is still too early to predict how this case will be settled. However, if the Arbitral Tribunal upholds the arguments that the host states have to maintain a stable and predictable framework consistent with the claimants' expectations, then other cases may be filed against a number of countries adopting tobacco control measures. Only recently have tobacco control policies emerged in regulatory settings. The existence of international standards, such as guidelines elaborated under the aegis of the World Health Organization, would be factors to take into account, (149) One may wonder, however, whether such a predictability test would have to be in conformity with best regulatory practice in addition to investors' expectations. Regulatory efforts must adequately deal with new scientific evidence, and new regulatory techniques should not be dismissed a priori because they have never been tested before. Accepting such a line of argument would freeze regulation and isolate it from technological developments and new scientific evidence.
2.4 The Prohibition of Unreasonable Measures
Some BITs also prohibit the adoption of "unreasonable or discriminatory measures" that impair the "management, maintenance, use, enjoyment, or disposal" of foreign investments. (150) While "unreasonable" has been equated with "unfair" (151) and state regulatory measures have been scrutinized in the light of the more common FET standard, this line of argument would make a separate prohibition on impairment by unreasonable measures "superfluous." (152) But if such a provision is inserted into a BIT, it must have an autonomous raison d'etre. In this sense, some arbitral tribunals have assessed the conduct of states in light of the reasonableness standard, giving this provision an autonomous meaning. (153) Reasonable regulatory measures would surely include logical, consequential, and well-founded measures reflecting good governance. In this sense, "unreasonablness" is very close to "arbitrariness" which, under international law "involves a breach beyond the ordinary meaning of reason," and "an act which shocks, or at least surprises, a sense of juridical propriety." (154)
Despite the apparent simplicity of this concept, it poses a fundamental question: Should reasonableness be measured against the expectations of the investors or the best regulatory practices? In the BG Group v. Argentina case, the arbitral tribunal held that reasonableness should be measured against the expectations of the parties to the BIT. (155) For instance, it is unreasonable and a breach of the treaty to withdraw undertakings and assurances given in good faith to investors to induce them to invest. (156) The expectations of investors (and their home states), however, are not unqualified and must be legitimate. Exceptions and restrictions normally apply to the use of trademarks and would technically prejudice some interest of the trademark holder. For this reason, the reasonableness analysis begins by evaluating the extent to which the regulation interferes with the economic benefits that ordinarily would be realized by the trademark holder. However, the public interest needs to be taken into account as well. If reasonableness had to be measured against the best regulatory practices, the arbitral tribunals would need to rely on comparative surveys of best regulatory approaches. In conclusion, given the unsettled jurisprudence on the matter and the vagueness of reasonableness provisions in BITs, "the determination of reasonableness is in its essence a matter for the arbitrator' s judgment." (157)
In PMI v. Uruguay, the claimants contend that prohibiting the use of colors to identify and differentiate brand packs (158) constitutes a breach of the prohibition against unreasonable measures under the BIT. According to the claimants, the single presentation requirement "arbitrarily reduces the number of available product varieties without any rational public health justification." (159) Tobacco companies argue that colors are used to identify and differentiate different brand packs, not to communicate whether one product is less harmful than another. (160) The claimants also note that "no other jurisdiction has adopted [such] a single presentation requirement...." (161)
The claimants also allege that the "excessive eighty percent warning requirement" does not "bear any rational relationship to a legitimate governmental policy." (162) While the policy objective of these measures is the protection of public health, the claimants argue that it could have been achieved with a narrower and more tailored measure. (163) Finally the claimants contend that "pictograms specifically designed to associate [their] products and their trademarks with offensive and repulsive imagery are neither necessary nor justified to warn consumers of the health risks associated with smoking." (164)
In assessing the reasonableness of existing regulatory measures, the arbitral tribunal will have to ascertain the international law obligations of the host state under the FCTC. As a party to the FCTC, Uruguay is bound by its provisions. Health warnings are required by FCTC Article 11(1)(b). The same provision indicates that no less than 30 percent of the display area must be reserved for such purpose and that such areas "should take up 50 [percent] of the principal display area...." As a general clause, FCTC Article 2 encourages the parties to implement measures beyond those required by the FCTC. (165) The FCTC Guidelines urge the parties to "cover as much of the principal display areas as possible." (166) In addition, national courts have recognized the reasonableness of large sized health warnings. (167) Moreover, as one study shows, "no nation has compensated any company for the loss of brand identity in this process." (168)
Health warnings may be in the form of or include pictures or pictograms under FCTC Article 11. (169) Pictorial warnings whose images differ in their content but refer to the multiple negative effects of tobacco smoke are particularly effective as the pictures are hard to ignore and alert potential smokers to danger every time they look at a pack. These pictorial warnings may be especially effective in countries and communities with low literacy rates. (170) The World Health Organization has urged governments to require that all tobacco packages include pictorial warnings to show the sickness and suffering caused by tobacco use. (171) In 2010 almost 39 states had adopted pictorial warnings, (172) and the number is on the rise. (173)
Plain packaging is a more controversial measure. It requires removing all colors, brand imagery, corporate logos, and trademarks, and allows manufacturers to only print the brand name in a mandated size, font, and place alongside warnings and other legally mandated product information. (174) While the FCTC does not address plain packaging directly, article 11(1)(a) requires parties to "ensure that tobacco product packaging and labeling do not promote a tobacco product by any means that are ... likely to create an erroneous impression about its characteristics ... including any term, descriptor, trademark, figurative or any other sign that directly or indirectly creates the false impression that a particular tobacco product is less harmful than other tobacco products." (175) Read in conjunction with FCTC article 2, which encourages the parties to implement measures beyond those required by the FCTC, this provision can be interpreted as providing support for the plain packaging measures.
While plain packaging is not mentioned in the treaty text of the FCTC, it is addressed in the guidelines to articles 11 (Packaging and Labelling of Tobacco Products) and 13 (Tobacco Advertising, Promotion and Sponsorship) of the FCTC. (176) The guidelines recommend that Parties consider plain, generic packaging "to eliminate the effects of advertising or promotion on packaging" and that "[p]ackaging ... should carry no advertising or promotion, including design features that make products attractive." (177) Indeed, because colors and attractive packaging captivate consumers, plain packs can, on the contrary, "reduce the flair and appeal associated with smoking." (178)
III. RECONCILING INVESTOR RIGHTS AND TOBACCO CONTROL IN INVESTMENT LAW
Having examined the conflict area between international investment law and tobacco control measures, it seems that investment protection and public health are not incompatible or irreconcilable. None of the provisions of the BITs are inherently inconsistent with respect to public health. Therefore, as the real issue is the co-ordination between international investment law and the FCTC, the different norms arising from these different treaty regimes need to be reconciled through a series of legal and interpretative tools. The remainder of this article illustrates two different methods: interpretation and legal drafting.
Customary rules of treaty interpretation, as restated by the Vienna Convention on the Law of Treaties (VCLT), offer adjudicators the conceptual and legal framework to settle disputes "in conformity with the principles of justice and international law." (179) Customary rules of treaty interpretation are applicable to investment treaties because investment treaties are international law treaties. Furthermore, some investment treaties expressly mention these rules. (180)
According to the VCLT's general rule of interpretation, which comprises several sub-norms, "[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." (181) The legal canons of treaty interpretation are complementary and may be used cumulatively. As a matter of convenience, the following analysis will follow the order in which these norms generally appear.
3.1.1 Textual Interpretation
According to the principle of textuality, treaties are to be interpreted on the basis of their actual text. Looking at the literal terms of treaty norms, the Preamble of the FCTC states that the contracting parties are determined "to give priority to their right to protect public health." (182) In investment treaties there is no black letter norm that requires foreign investors not to consider consumer protection. On the contrary, recent free trade agreements that include chapters on investments expressly provide general clauses allowing public health measures. For instance, NAFTA article 1114 (2) concisely states that:
The parties recognize that it is inappropriate to encourage investment by relaxing domestic health, safety or environmental measures. Accordingly, a party should not waive or otherwise derogate from, or offer to waive or otherwise derogate from, such measures as an encouragement for the establishment, acquisition, expansion, or retention in its territory of an investment of an investor. If a Party considers that another party has offered such an encouragement, it may request consultations with the other party and the two parties shall consult with a view to avoiding any such encouragement. (183)
In a more detailed fashion, annex 10-C(4)(b) of the Central America Free Trade Agreement (hereinafter CAFTA) expressly states: "Except in rare circumstances, non-discriminatory regulatory actions by a party that are designed and applied to protect legitimate public welfare objectives, such as public health, safety and the environment, do not constitute indirect expropriations." (184)
With regard to intellectual property, investment treaties usually build upon the relevant provisions of the TRIPS Agreement. For instance, while CAFTA does not expressly include a public health exception with regard to intellectual property, it makes clear reference to the TRIPS Agreement when it states that "the parties affirm their existing rights and obligations under the TRIPS Agreement...." (185) Thus, CAFTA incorporates the relevant provisions of the TRIPS Agreement which are applicable or may provide guidance in the context of investment disputes.
In particular, Article 20 of the TRIPS Agreement provides that use of a trademark in the course of trade is not to be unjustifiably encumbered by special requirements such as its use in a manner detrimental to its capacity to distinguish the goods or services of one company from those of its competitors. The purpose of this provision is to stop rules that unjustifiably require a trademark to be used with another trademark, or in a way that harms its distinctiveness. Therefore, Article 20 of the TRIPS Agreement "presents no obstacle to the requirements to print large health warnings on cigarette packets." (186)
With regard to plain packaging, however, one may wonder whether this regulatory option may infringe upon Article 20 of the TRIPS Agreement. It has been argued that plain packaging would be a "special requirement" that would unjustifiably encumber the use of trademarks in a manner detrimental to the trademarks' capacity to distinguish the goods or services of one company from those of its competitors. (187) Exporting countries and tobacco companies contest that use of plain packaging is not based on uncontroversial scientific evidence, (188) will be ineffective, and will lead to more counterfeiting. (189) By restricting the use of trademarks, plain packaging seems to strike one of the basic functions of trademarks, the origin function which clarifies the link between a producer and its products. In parallel, plain packaging seems to twist the quality or guarantee function of trademarks, which prevent the public from purchasing goods of inferior quality. Thus plain packaging seems to compress certain brand's features thus making the consumer's choice more difficult.
However, the adoption of plain packaging coupled with visual health warnings can emphasize health warnings and thus amplify public information on the effects of smoking. While studies have warned that sophisticated pack designs can reduce the visibility and effectiveness of health warnings, (190) plain packaging can, on the contrary, increase visual attention to health warnings on cigarettes packs. (191) As Nicola Roxon, Australia's Health Minister, has pointed out, the legislation is designed "to remove the last vestige of glamour from tobacco products" and to make the pack "a stark reminder of the devastating health effects of smoking". (192) It remains to be seen whether such encumbrance will be deemed justifiable in light of the FETC. (193)
More generally, "one of the key goals of the TRIPS Agreement was a balance between the intellectual property rights created by the Agreement and other important socio-economic policies of WTO Member governments." (194) Article 8 of the TRIPS Agreement elaborates the socio-economic policies in question, paying particular attention to public health. Article 8 of the TRIPS Agreement states that members may take "measures necessary to protect public health and nutrition," and promote "the public interest" in areas that are important to "socio-economic and technological development," so long as the measures taken are consistent with TRIPS. (195) Furthermore, the Doha Declaration on the TRIPS Agreement and Public Health has clarified that member states can make use of the flexibility in the TRIPS Agreement to address public health. (196)
Article 8 seems to provide space for reconciliation between private and public interest in IP regulation. It also presents some limits. In particular, the measures to be adopted must be consistent with the TRIPS Agreement. On its face, this clause may be interpreted as favoring intellectual property over other interests. But, at a closer glance, it merely requires taking the whole agreement into account when adopting measures necessary to protect public health. In a sense, it reaffirms the need for interpreting the treaty "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." (197)
3.1.2 Teleological Interpretation
The method of teleological interpretation searches for the purpose of a norm to clarify uncertainties in its exact content. Trademarks can be seen as serving two main purposes. (198) Their first function, an origin function, is to indicate the producer so that the linkage between a producer and its product is clear. The second function, which is strictly related to the first one, is to protect the consumers from deception; that is, to prevent the public from purchasing inferior goods in the mistaken belief that they originate from another trader--a quality or guarantee function. By knowing that a product is produced by a certain company, the consumer immediately assumes certain product qualities or characteristics. In other words, the trademark reassures the consumer about the quality of the product. Some authors have identified a third function of trademarks, the investment or advertising function. According to these authors, trademarks advertise a certain product or service, helping the efficiency of the consumer's choice and creating an incentive for trademark holders to invest in quality to create reputation. (199)
In protecting trademarks as investments, there is a risk of overemphasizing the identifying function of trademark protection while diminishing the worth of the consumer protection function. (200) In other words, adjudicators "seem to be replacing the traditional rationale for trademark law with a conception of trademarks ... in which 'trademark owners' are given strong rights over the marks without much regard for the social costs of such rights." (201)
Like other intellectual property rights, however, trademarks embody an intrinsic dichotomy between private and public interests. Although these interests often go hand in hand--high quality products build the producer's reputation--in some contexts there may be a divergence between these polarities. In fact, the object of trademark protection presents a dichotomy between property rights and other external values such as free speech, (202) competition, and public health. If one puts too much emphasis on the proprietary aspects of trademarks, the risk is that the other values will be jeopardized. According to Articles 7 and 8 of the TRIPS Agreement, (203) private remuneration should not be given more weight than social welfare, but a harmonious balance between different interests needs to be struck. The Committee on Economic, Social and Cultural Rights has stressed that "[t]he end which intellectual property protection should serve is the objective of human well-being, to which international human rights instruments give legal expression." (204) Thinking about trademarks in the context of human rights reveals the "paradox of property;" that is, the search for balance between private and public interests. (205)
Finally, in intellectual property terminology, trademarks do not offer their owners positive rights to actually use the sign, but just ajus excludendi alios, that is, a negative right to prevent third parties from using the asset in question. (206) With regard to plain packaging, some authors have suggested that this form of packaging does not infringe trademarks "as no positive right to use trade marks is offered by TRIPS to trade mark holders." (207)
3.1.3 Subsidiary Sources of International Law
The instrumental or functional conceptualization of property has been adopted by a variety of courts at both national and regional levels. This case law may provide a rich source of comparative understanding regarding the linkage between tobacco control and the investment treaty regime. (208) Although there is no binding precedent in international law and, according to the ICJ Statute, judicial decisions are recognized only as subsidiary means of interpretation, (209) in most cases, precedent can be persuasive. A systematic study of the case law of international tribunals suggests the "tendency to chart a coherent course within international law," (210) and highlights a path coherence by which arbitrators look at previous arbitral awards and the jurisprudence of other international courts and tribunals. (211) In particular, reference is made not only to the International Court of Justice jurisprudence and the World Trade Organization panels and Appellate Body case law, which have dealt with the protection of foreign investments and international trade law respectively, but also to the case law of regional human rights courts.
In this sense, a review of the jurisprudence of the European Court of Justice (ECJ) concerning tobacco control may provide some useful guidance. The ECJ stated in the famous Tobacco Products Judgment that the right to property is not absolute and that "[i]ts exercise may be restricted, provided that those restrictions in fact correspond to objectives of general interest ... and do not constitute a disproportionate and intolerable interference, impairing the very substance of the rights guaranteed." (212) The case concerned some provisions of Directive 2001/37, which required cigarette packets to indicate the level of harmful substances in cigarettes, (213) and required larger health warnings on packets. (214) Some tobacco companies claimed that the large size of the new health warnings required by Article 5 of the Directive constituted a serious infringement of their intellectual property rights. (215) These warnings would restrain or even prevent the use of their trademarks by affecting the overall look of tobacco packaging. (216) According to the companies, the prohibition on the use of qualifiers such as "mild" or "light" constituted a trademark infringement, as these terms were a component of the trademark. (217) The claimants also lamented the infringement of Article 20 of the TRIPS Agreement, which provides that use of a trademark in the course of trade is not to be unjustifiably encumbered by special requirements such as requirements that would hinder its capacity to distinguish the goods or services of one company from those of its competitors. (218)
The Court found that the imposed measures did not jeopardize the essence of companies' trademarks, but rather constituted a proportionate restriction on their use to ensure a high level of health protection. (219) In particular, the prohibition on using a trademark incorporating "mild" or similar descriptors did not prevent tobacco companies from distinguishing their products by using other distinctive signs. (220) The restrictions on the trademark right caused by the Directive "d[id] in fact correspond to objectives of general interest pursued by the Community and d[id] not constitute a disproportionate and intolerable interference, impairing the very substance of that right." (221)
The ECJ decision fully conforms to the trademark protection rationale. As mentioned above, trademarks can be conceived as tools of information about ownership or origin, but also as instruments of consumer protection. (222) As light cigarettes are as harmful as regular cigarettes, the use of descriptors such as "light" on tobacco product packaging would mislead smokers to believe that these products are less harmful than others. In this sense, public health considerations help overcome the dysfunctions of the trademark system, especially when the system is used contrary to its rationale. (223) Furthermore, notwithstanding the fact that the Court did not adjudicate on Article 20 of the TRIPS Agreement, a closer investigation shows that the purpose of this article is to stop rules that unjustifiably require a trademark to be used with another trademark or in a way that harms its distinctiveness. Therefore, Article 20 of the TRIPS Agreement "presents no obstacle to the requirements to print large health warnings on cigarette packets." (224)
In a more recent case, the European Court of Justice dismissed an action brought by Germany for the annulment of two articles of the directive on banning tobacco advertising in the press and tobacco sponsorship in radio programs. (225) In its judgment, the Court clarified that the prohibition of tobacco advertisement did not constitute a disproportionate restriction of the freedom of the press. (226) The Court was not swayed from this opinion by the argument that the ban would result in decreased advertising income. (227) The court noted, moreover, that proportionate limits on freedom of expression could be "justified by a pressing social need." (228)
In the Swedish Match cases, (229) the ECJ recognized that the prohibition of the marketing of tobacco for oral use restricted the freedom to pursue a trade (230) but stressed that such a regulation pursued a high level of protection of health, which is an objective of general interest. (231) The ECJ considered that in the exercise of the power conferred by Article 95 of the EC Treaty, the Community legislature must adopt a high level of health protection. (232) As scientific evidence has shown that tobacco products for oral use can cause cancer of the mouth and these products contain nicotine, which is addictive and toxic, the Court held the Legislature fully entitled to prohibit the commercialization of these new products. (233) The Court also noted that the measure was necessary and appropriate because tobacco products for oral use are particularly attractive to young people and the risk of their developing an addiction to nicotine is high. (234)
The United States Supreme Court adopted an almost identical approach in Austin v Tennessee. (235) In this seminal case, the Court held: "Without undertaking to affirm or deny their evil effects, we think it within the province of the legislature to say how far [cigarettes] may be sold or to prohibit their sale entirely ... and there be no reason to doubt that the act in question is designed for the protection of public health." (236)
3.1.4 Systemic Interpretation
If referring to the object and purpose of the treaty does not help, another criterion of treaty interpretation requires adjudicators to take into account "any relevant rules of international law applicable in the relations between the parties." (237) In this regard, the ICJ has recognized that an adjudicator's interpretation cannot remain unaffected by subsequent developments of law, and "an international instrument has to be interpreted and applied within the framework of the entire legal system prevailing at the time of interpretation." (238) Thus, as Philippe Sands puts it, "[T]hose charged with interpreting and applying treaties on the protection of foreign investment need to take into account the values that are reflected in norms that have arisen outside the context of the investment treaty which they are applying." (239)
Many public health principles from national constitutions have already been translated in international law. Some of these norms have become rules of customary international law; others have been codified in a series of international treaties and are binding on the states that ratified them. If the state parties to the BIT were also parties to the FCTC, the provisions of the FCTC could be examined and taken into account by the arbitrators when adjudicating an investment dispute. A harmonious interpretation of the FCTC and the relevant BIT can prevent regime collisions and conflicts of norms. If the applicable law was the law of the host state, and the host state was a party to the FCTC, this Convention again would become relevant regardless of whether the home country of the investor is a party to the FCTC. (240) It is also worth recalling that Article 18 of the VCLT requires the signatories to a treaty not to defeat the object and purpose of a treaty prior to its entry into force. (241) Thus, the FCTC is of relevance also for those states which have signed but not ratified it. (242) Furthermore, as Weiler points out, the home state of the investor "could make its views about the interpretation of both the BIT and the FCTC known to an [arbitral] tribunal ... either by way of an amicus submission to the Tribunal or by agreeing to an exchange of diplomatic notes between itself and the [host country] agreeing to a shared interpretation of the mutual obligations under the BIT and the FCTC." (243) Although arbitral tribunals cannot issue a finding of compliance or noncompliance with the FCTC or the TRIPS Agreement because this ultimately falls outside their mandate, they can evaluate the legitimacy and good faith character of a given regulatory measure in the light of international "objective standards" such as those elaborated in the FCTC.
3.2 Stipulating ad hoc Safeguards
Having analysed the ex post approach to the interplay between tobacco control and international investment governance in the context of litigation, this section scrutinizes an ex ante or legislative approach to tobacco control in investment treaties. (244) Both approaches--the preventive and the jurisprudential one--can be used cumulatively, as they aim to achieve the same objective: reaching an equilibrium between the protection of foreign direct investment and public health. (245)
In general, public health goals are more directly achievable through the political and legal processes than through litigation. Therefore, it is crucial to critically assess the impact that investment treaties may have on public policy measures before signing or ratifying them. Such a critical assessment may prevent a country from adhering to certain international obligations and can lead the parties to introduce new terms and safeguard clauses in their conventional practice. While a number of BITs already mention public health in their preambles, there is no certainty as to the legal meaning of such provisions. (246) As investment treaties are periodically renegotiated, the discretion and uncertainty of arbitral tribunals may be narrowed through the use of much more detailed treaty language. For instance, at the European level, the Treaty Establishing a Constitution for Europe expressly referred to tobacco regulation. (247) While the Constitution never came into force, it paved the way for the Treaty of Lisbon, (248) which similarly includes a provision on tobacco control.
Should tobacco products simply be excluded from investment treaties? Setting up an exception to investment protection for the tobacco trade would be a feasible option. This approach has already been adopted in the context of the US-Vietnam Free Trade Agreement, which excludes tobacco from its tariff regulation and reduction scheme. (249) In parallel, investment treaties might exclude the tobacco trade from their application scope. According to such an exemption, if an investor invokes dispute settlement to challenge any regulatory measure taken by the State under this provision, an arbitral tribunal would not have jurisdiction.
Should investment treaties recognize the need to promote policy regulation aimed at tobacco control? Theoretically, there is no need for such a specific provision, as protecting public health is a traditional police power of a given state. The police power of a state stems from the concept that good governance aims at public welfare and it may restrain private property for the protection of public safety and health. Where a deprivation of property or other economic loss arises out of bona fide general regulation aimed at preventing nuisance, it should be considered within the boundaries of acceptable exercise of police powers and would be non compensable. (250) Furthermore, in examining most constitutional traditions and regional treaties, (251) it appears that property rights are not absolute, rather their owners can enjoy them within the limits established by the law. (252) Trademarks, which are a type of intellectual property rights, are no exception to this general understanding of property.
However, as regulation can effectively reduce or destroy the use of private property, the notion of indirect expropriation has been developed to include those state measures that, albeit not materially seizing property, still deeply diminish its value. In this context, the conceptual distinction between police power and expropriation becomes vague. As the concept of indirect expropriation in investment agreements is very broad, a detailed provision clarifying that tobacco control measures in conformity with the Framework Convention on Tobacco Control will not be considered as measures tantamount to expropriation would help arbitrators to issue consistent decisions.
While most doctrinal contributions on the subject have focused on the complex interplay between tobacco control and trade, this article has attempted to explore the linkage between tobacco control and investment treaty guarantees. Recent case studies show that excessive protection of investment treaty guarantees may negatively affect tobacco control policies as investors may claim that tobacco control measures infringe their rights.
The existing customary canons of treaty interpretation may help interpreters to avoid conflicts of norms. As investment law is part of international law, the former must be consistent with the norms of the latter and be interpreted in accordance with the customary rules of treaty interpretation. Although examined in a separate manner, the legal canons of treaty interpretation are complementary and may be used cumulatively. First, according to the canon of literal interpretation, there is no manifest inconsistency between the two sets of norms. On the contrary, some recent BITs expressly mention the need to protect public health in their text.
Second, according to the canon of systemic interpretation, investment treaties should not be considered as self-contained regimes, but as an important component part of public international law. Accordingly, arbitrators should adopt a holistic approach, taking human rights treaties, public health treaties and relevant customary law into account when they interpret relevant investment treaty provisions. Before discussing the investment law-legality of any tobacco control measure, it may first be necessary to consider whether and why the value of public health would not necessarily be of greater importance than that of investment protection and should therefore be given priority when serious health risks arising from smoking have been widely reconfirmed. (253)
Third, international law instruments and commentators increasingly suggest that guarantees protecting intellectual property should be interpreted purposively. (254) Professor Jakob Cornides points out that "property is not an end in itself. Obviously, it must be used in a way that contributes to the realisation of the higher objective of human society." (255) Other scholars similarly point out that articles 7 and 8 of the TRIPS Agreement, which embody the objectives and principles of the Agreement acknowledge the public interest implicit in the intellectual property regime. (256) Intellectual property is a form of property. Notably, as Professor Gregory Alexander highlights, "Property is individually owned ... but the basic reason why the institution of property is recognized is to advance the collective good of the society which has recognized it." (257) While the concept of equity requires that a property owner not be compelled by the state to bear a greater burden vis-a-vis society at large, the telos of property encapsulates both private rights and the public interest in property guarantees. Clearly, the international law protection of foreign property presents additional goals that go beyond those underpinning the protection of property in the national framework. For instance, the fair and equitable treatment standard requires an absolute standard of treatment that is detached from the national standards. At the same time, the experience of national and regional courts and tribunals has highlighted the limited nature of property rights, stressing that certain types of public health regulations may be viewed as an intrinsic limit to property.
Finally, given the recent rise of international disputes concerning tobacco control measures before international economic law fora, (258) it would be feasible to introduce specific clauses in investment treaties that clarify that tobacco control measures in conformity with international standards are not a form of expropriation. While due consideration to public health may be considered an implicit requirement of any economic activity, contemporary public health includes not only classical elements such as the prevention of infectious diseases, but also less traditional components such as tobacco control. Through accurate treaty clauses, the host state may ensure that foreign investors are made aware of the selected level of public health protection. The use of ad hoc clauses would preventatively settle potential conflicts of interests between the host state and the investor. In addition, such clauses might constitute a useful compass for the arbitrators in eventual investment treaty disputes.
(1) See Virginia Leary, Concretizing the Right to Health: Tobacco Use as a Human Right Issue, in RENDERING JUSTICE TO THE VULNERABLE: LIBER AMICORUM IN HONOUR OF THEO VAN BOVEN 161, 161 (Fons Coomans et al. eds., 2000). The exponents of the theory which subsumes tobacco control under the umbrella of the right to health stress that, on the one hand, this conceptualization concretizes the right to health. On the other hand, it "contributes to advancing human well-being beyond what could be achieved through an isolated health or human rights based approach," bringing "considerable attention and rhetorical force to the issue." Id. at 163, 169. Some authors even argue that there would be an emerging human right to tobacco control. See C. Dresler & S. Marks, The Emerging Human Right to Tobacco Control 28 HUM. RTS. Q. 599, 650 (2006) (contending that "tobacco control is not only a valid approach to fulfilling the right to health but it is so crucial that a human right to tobacco control is emerging in the practice of states and international institutions"). Whatever the position adopted on this issue, there is an increasing jurisprudential trend towards linking this to human rights. R. De Silva de Alwis & R. Daynard, Reconceptualizing Human Rights to Challenge Tobacco, 17 MICH. ST. J. INT'L L. 291, 354 (2008-2009) (defining and developing a rights-based approach to tobacco control and examining the relevant jurisprudence).
(2) See Benjamin M. Meier, Breathing Life into the Framework Convention on Tobacco Control: Smoking Cessation and the Right to Health, 5 YALE J. HEALTH POL'Y L. & ETHICS 137, 160-61 (2005) (explaining that tobacco control is a part of public health law dedicated to preventing and controlling the use of tobacco, thus limiting the illness and mortality it causes. Scientific evidence has proven that tobacco use is not a mere behavioural choice, but constitutes a physiological addiction largely outside the control of the individual); see also A. Weale, Invisible Hand or Fatherly Hand? Problems of Paternalism in the New Perspective on Health, 7 J. HEALTH POL. POL'Y & L. 4, 784-807 (1983) (explaining that, as tobacco consumption harms not only active smokers, but also the passive ones, tobacco control should not be considered a paternalistic issue adopted by "nanny states", but a public good, which requires public action both at the national and international levels).
(3) WHO, Tobacco Fact Sheet No. 339 (July 2011), http://www.who.int/mediacentre/factsheets/fs339/en/index.html.
(4) See WORLD BANK, CURBING THE EPIDEMIC: GOVERNMENTS AND THE ECONOMICS OF TOBACCO CONTROL 1 (1999) (stating that "many governments have avoided taking action to control smoking ... because of concerns that their interventions might have harmful economic consequences. For example, some policymakers fear that reduced sales of cigarettes would mean the permanent loss of thousands of jobs; that higher tobacco taxes would result in lower government revenues; and that higher prices would encourage massive levels of cigarette smuggling.") The Report also demonstrates that "the economic fears that have deterred policymakers from taking action are largely unfounded," id. at 2, and describes the health and financial costs imposed by smoking. Id. at 32-33.
(5) WHO Framework Convention on Tobacco Control, Feb. 27, 2005, 2302 U.N.T.S. 166, available at http://www.who.int/fctc/signatories_parties/en/index.html [hereinafter FCTC]. The Convention has 174 parties as of 2 November 2011. Id.
(6) Meier, supra note 2, at 137.
(7) See Allyn Taylor et al., The Impact of Trade Liberalization on Tobacco Consumption, in WORLD BANK/WORLD HEALTH ORGANIZATION, TOBACCO CONTROL IN DEVELOPING COUNTRIES 343 (2000) ("The recent trend towards the increased liberalization of trade in most goods and services has significantly reduced high-tariff and non-tariff barriers to trade in tobacco and tobacco products and contributed to the sharp increase in tobacco use in many low-income and middle- income countries. Over the past two decades, the various bilateral, regional, and multilateral trade agreements that many nations have adopted have led to significantly greater competition in domestic tobacco markets. This increased competition has almost certainly been accompanied by reduced prices for tobacco products and dramatic increases in the advertising and promotion of these products.")
(8) See Cynthia Callard et al., Why Trade and Investment Liberalization May Threaten Effective Tobacco Control Efforts, 10 TOBACCO CONTROL 68, 68 (2001) (explaining that, according to public health scholars, foreign investment "may also increase smoking rates by introducing 'smoother' brands that are more attractive to new smokers, and by creating a powerful political lobby against tobacco control measures").
(9) See generally, e.g., E. R. Schaffer et al., International Trade Agreements: A Threat to Tobacco Control Policy, 14 TOBACCO CONTROL 2, 19-25 (2005) (deeming that "[t]rade agreements provide the industry with additional tools to obstruct control policies in both developed and developing countries"); A. Woo, Health versus Trade. The Future of the WHO's Framework Convention on Tobacco Control, 35 VANDERBILT J. TRANSNAT'L L. 1731, 1731 (2002) (examining the ways in which domestic measures implementing the FCTC can be litigated before the World Trade Organization's dispute settlement system); David Fidler, Neither Science Nor Shamans. Globalization of Markets and Health in the Developing World, 7 IND. J. GLOBAL LEGAL STUD. 191, 191 (1999) (focusing on the impact of the globalization of markets on public health and health care in developing countries).
(10) The Tobacco Plain Packaging Bill fully mandates plain packaging of tobacco by 1 December 2012. Tobacco Plain Packaging Bill 2011 (Cth) (Austl.), http://www.aph.gov.au/house/committee/haa/billtobaccopackage/documents/ doc01.pdf. The Bill passed through the House of Representatives in late August and the Senate on 10 November 2011. See Press Release, Australian Government Department of Health and Ageing, Senate Passes World First Plain Packaging of Tobacco Legislation (Nov. 10, 2011) available at http://www.health.gov.au/internet/ministers/publishing.nsf/Content/mr_yr11- nrnr238.htm.
(11) Australia Plans Plain Packaging for Cigarettes, THE GUARDIAN (Jul. 6, 2011), http://www.guardian.co.uk/world/2011/jul/06/australia-plain-packaging- cigarettes?INTCMP=ILCNETTXT3487 [hereinafter Australia Plans Plain Packaging].
(14) Chris Kenny, Big Tobacco Ignites Legal War, THE AUSTRALIAN, June 27, 2011, at 1.
(15) Australia Plans Plain Packaging, supra note 11.
(17) Julia Gillard Stands Firm on Cigarette Plain Packaging, HERALD-SUN (June 27, 2011), http://www.heraldsun.com.au/news/breaking-news/julia-gillard-stands-firm-on- cigarette-plain-packaging/story-e6frf7jx-1226082603294.
(18) Philip Morris Launches Legal Battle Over Australian Cigarette Packaging, 15 BRIDGES WKLY. TRADE NEWS DIG. 4, 6 (June 29, 2011).
(19) See Ainslie Van Onselen, Rush to be First on Plain Packaging on Tobacco, THE AUSTRALIAN (Jul. 29, 2011), http://www.theaustralian.com.au/business/legal-affairs/rush-to- be-first-on-plainpackaging-on- tobacco/story-e6frg97x-1226103789471. The case could also have implications for international trade law. At the World Trade Organization's Technical Barriers to Trade Committee Meeting in Geneva on June 15-16, 2011, Australia's bill was discussed at length. Fourteen members, including the European Union, raised concerns, arguing that the legislation could create an unnecessary barrier to trade because it was more restrictive than necessary to achieve its stated objectives. Other members argued that Australia had not provided adequate scientific evidence linking tobacco plain packaging to a decrease in tobacco consumption. See also Tania S. Voon & Andrew Mitchell, Implications of WTO Law for Plain Packaging of Tobacco Products, in PUBLIC HEALTH AND PLAIN PACKAGING OF CIGARETTES: LEGAL ISSUES (Andrew Mitchell et al. eds., 2012) (examining the claims that plain packaging would breach various agreements of the World Trade Organization and explaining that the legislation is consistent with the TRIPS Agreement, the TBT Agreement,and the GATT 1994, and not covered by the SPS Agreement).
(20) See E. Sebrie et al., Tobacco Industry Successfully Prevented Tobacco Control Legislation in Argentina, 14 TOBACCO CONTROL 2 (2005) (describing how transnational tobacco companies influenced tobacco control policies in Argentina).
(21) David Elward, Uruguay to Relax Tobacco Laws to Combat Philip Morris Claim, GLOBAL ARBITRATION REVIEW (Jul. 28, 2010), http://www.globalarbitrationreview.com/news/article/28610.
(22) Duff Wilson, Cigarette Giants in Global Fight on Tighter Rules, N.Y. TIMES, Nov. 13, 2010, at A1.
(23) Duff Wilson, Bloomberg Backs Uruguay's Anti-smoking Laws, N.Y. TIMES (Nov. 15, 2010), http://prescriptions.blogs.nytimes.com/2010/11/15/bloomberg-backs- uruguays-anti-smoking-laws.
(24) Pres. Dec. No. 287/2009, Ministry of Public Health, 5.6.2009 (Um.) (requiring that at least 80 percent of each side of cigarette boxes be covered by graphic images of the possible detrimental effects of smoking, and extended the prohibition on the use of deceptive product names (such as 'light' and 'mild'), to restrict the use of different colors on tobacco packaging. To implement the decree, the Ministry of Public Health issued Ordinance 514 which required each cigarette brand to have a single presentation and prohibited different packaging or presentations for cigarettes sold under a given brand). See infra section 2.1.
(25) Notable contributions have been written in the past few years in the attempt to clarify the complex interplay between international investment law and international law. See generally, HUMAN RIGHTS IN INTERNATIONAL INVESTMENT LAW AND ARBITRATION (Pierre-Marie Dupuy et al. eds., 2009) (offering a comprehensive and systematic analysis of the interplay between international investment law and other subsets of international law); INTERNATIONAL INVESTMENT LAW AND GENERAL INTERNATIONAL LAW (Rainer Hofmann & Christian J. Tams eds., 2011) (scrutinizing the interplay between international investment law and general international law); Bruno Simma, Foreign Investment Arbitration: A Place for Human Rights?, 60 INT'L & COMP. L.Q. 573 (2011) (questioning whether and how human rights considerations can be integrated within international investment law and arbitration); Bruno Simma & Theodore Kill, Harmonizing Investment Protection and lnternational Human Rights: First Steps Towards a Methodology, in INTERNATIONAL INVESTMENT LAW FOR THE 21ST CENTURY: ESSAYS IN HONOUR OF CHRISTOPH SCHREUER (Christina Binder et al. eds., 2009) (proposing a methodology for harmonizing investment protection and human rights).
(26) U.N. FCTC, 3rd Sess., 2nd mtg., U.N. Doc. FCTC/COP/3/4 (Nov. 18, 2008), art. 6.
(27) For a fuller discussion, see infra Part 3.1.2.
(28) FTR Holding S.A. (Switz.), Philip Morris Products S.A. (Switz.) and Abal Hermanos S.A. (Uru.) v. Oriental Republic of Uru., ICSID Case No. ARB/10/7, Request for Arbitration, [paragraph] 7 (Feb. 19, 2010) [hereinafter PMI v. Uruguay, Request for Arbitration].
(30) Purposive or teleological interpretation focuses on the telos or purpose of a specific provision. Under purposive interpretation, intellectual property is conceived as a tool rather than as an end in itself. For such an instrumental conception of intellectual property, see PETER DRAHOS, A PHILOSOPHY OF INTELLECTUAL PROPERTY 223 (1996) ("Instrumentalism would require an old-fashioned way of talking: the language of property rights would be replaced by the language of monopoly privileges. The grant of these monopolies would be tied to the idea of duty. Duty-bearing privileges would form the heart of an instrumentalism of intellectual property. Under instrumentalism intellectual property would be located in the context of some broader moral theory and set of values. Property rights would be morality's servants and not its drivers."). As Van Caenegem puts it, "[Drahos] calls for an instrumentalist (property as tool) rather than proprietarian (property as right) approach to developing questions in intellectual property law." William Van Caenegem, A Philosophy of Intellectual Property by Peter Drahos, 8 BOND L. REV. 217, 218 (1996).
(31) Public health law studies "the legal powers and duties of the state to assure the conditions for people to be healthy ... and the limitations on the power of the state to constrain the autonomy ... proprietary, or other legally protected interests of individuals for the protection or promotion of community health." LAWRENCE O. GOSTIN, PUBLIC HEALTH LAW: POWER, DUTY, RESTRAINT 4 (2d ed. 2008).
(32) David Woodward et al., Globalization, Global Public Goods and Health, in TRADE IN HEALTH SERVICES 3, 9 (Nick Drager & Cesar Vieira eds., 2002) ("A public good is a good ... that is non-excludable and nonrivalrous in consumption: once provided it is available to all, and consumption by one person does not prevent others from consuming it. The classic historical example is the service provided by a lighthouse, but the concept subsequently extended to such public health services as ... health education....").
(33) See, e.g., Lincoln C. Chen et al., Health as a Global Public Good, in GLOBAL PUBLIC GOODS 284, 284-85 (Inge Kaul et al., eds., 1999).
(34) Inge Kaul et al., Defining Global Public Goods, in GLOBAL PUBLIC GOODS, supra note 33, at 2, 14 ("Public goods are essentially defined by the existence of a provision problem; by their nature, they cannot easily be provided by the 'invisible hand' of the market").
(35) Id. at 13 ("Intermediate global public goods, such as international regimes, contribute towards the provision of final global public goods").
(36) Allyn L. Taylor & Douglas W. Bettcher, WHO Framework Convention on Tobacco Control: A Global "Good" for Public Health, 78 BULL. WORLD HEALTH ORG. 920, 925 (2000).
(37) See Donly T. Studlar, Tobacco Control Policy Instruments in a Shrinking World: How Much Policy Learning? 29 INT'L J. PUB. ADMIN. 367, 367-8 (2006); see also Taylor, supra note 36, at 920 (Noting that "[t]he present tobacco epidemic poses a range of transnational challenges that are best addressed through coordinated action" and that the "WHO Framework Convention on Tobacco Control provides a case study of how transnational public health problems can be addressed by an international legal approach.").
(38) Jeff Collin et al., The Framework Convention on Tobacco Control: The Politics of Global Health Governance, 23 THIRD WORLD Q. 265, 265 (2002).
(39) See Allyn Taylor, Global Health Governance and International Law, 25 WHITTIER L. REV. 253, 282 (2003).
(40) See Maya Prabhu & Sumudu Atapattu, The Tobacco Convention: When the WHO Meets the WTO, in SUSTAINABLE JUSTICE: RECONCILING ECONOMIC, SOCIAL & ENVIRONMENTAL LAW 365, 367 (Marie-Claire Cordonnier Segger & C.G. Weeramantry eds., 2005) (describing the "soft law ethos" of the WHO).
(41) Kenji Shibuya et al., WHO Framework Convention on Tobacco Control: Development of an Evidence-Based Global Health Treaty, 327 BRIT. MED. J. 154, 154-55 (2003).
(42) Melissa E. Crow, Smokescreens and State Responsibility: Using Human Rights Strategies to Promote Global Tobacco Control, 29 YALE J. INT'L L. 209, 213 (2004).
(43) See Benjamin C. Adams, The WHO Framework Convention on Tobacco Control and Trade Related Protocols, in RECONCILING ENVIRONMENT AND TRADE 133, 141 (Edith Brown Weiss & John H. Jackson eds., 2001).
(44) John K. Setear, An Iterative Perspective on Treaties: A Synthesis of International Relations Theory and International Law, 37 HARV. INT'L L.J. 139, 217 (1996).
(47) Framework Conventions are regularly used in the international environmental and human rights systems, establishing a discourse on a specific issue, setting general objectives and instituting a structure for a further course of action. For instance, in 1992 the United Nations adopted the Framework Convention on Climate Change (UNCCC) under which Member States agreed upon a common but very general approach to the problems associated with the global climate change. United Nations Framework Convention on Climate Change, May 9, 1992, S. Treaty Doc No. 102-38, 1771 U.N.T.S. 107. Specific commitments on the reduction of greenhouse gases were negotiated later and led to the inception of the Kyoto Protocol. Kyoto Protocol to the United Nations Framework Convention on Climate Change, Dec. 10, 1997, U.N. Doe FCCC/CP/1997/7/Add.1, 37 LL.M. 22 (1998) (committing parties to a specific percent reduction of greenhouse gas emmissions).
(48) See, e.g., FCTC, supra note 5, arts. 14-16.
(49) Rebecca L. Haffajee & M. Gregg Bloche, The FCTC and the Psychology of Tobacco Control, 5 ASIAN J. WTO & INT'L HEALTH L. & POL'Y 87, 92 (2010).
(50) Id. at 94; see also Chang-fa Lo, Establishing Global Governance in the Implementation of FCTC. Some Reflections on the Current Two-Pillar and One-Roof Framework, 1 ASIAN J. WTO & INT'L HEALTH L & POL'Y 569, 580-81 (2006) (arguing that the Convention has some provisions that are so specific as to be immediately implemented, but other provisions are not specific enough).
(51) See, e.g., FCTC, supra note 5, art. 13(5) (stating that "[p]arties are encouraged to implement measures beyond the obligations set out in..." the previous paragraph (4) describing obligations regarding advertising, promotion, and sponsorship).
(52) Id. art. 11.
(53) The legal status of the Guidelines is a matter of debate. While the Convention is binding, Guidelines are non-binding "recommendations." See Guidelines for Implementation of Article 5.3 of the WHO Framework Convention on Tobacco Control, FCTC COP, 3d Sess., Nov. 17-24, 2008, FCTC/COP3(7). Because the Guidelines are adopted unanimously by the COP, they can constitute a subsequent agreement. Sam Foster Halabi,
The Worm Health Organization "s Framework Convention on Tobacco Control. An Analysis of Guidelines Adopted by the Conference of the Parties 39 GA. J. INT'L L. & COMP. L. 121, 163 (2010). Other authors question whether the guidelines may become customary international law, whether they already constitute international soft law and whether they are legally enforceable. See Haffajee, supra note 49, at 96.
(54) Articles 7 and 9 of the FCTC require the Conference of the Parties (COP) to propose guidelines for the implementation of a number of the key substantive provisions of the Convention including Article 8 and Article 13. See FCTC, supra note 5, arts. 7, 9.
(55) Haffajee, supra note 49, at 97.
(56) Gregory F. Jacob, Without Reservation, 5 CHI. J. INT'L L. 276, 299 (2004).
(57) Haffajee, supra note 49, at 94 ("[T]he FCTC is at the same time (and often in the same articles) specific and general....").
(58) Id. at 94-95.
(59) See generally Nathalie Devillier, La Convention-cadre pour la lutte anti- tabac de l'Organisation Mondiale de la Santo, 38 REVUE BELGE DE DROIT INT'L 701 (2005) (describing the main features of the FCTC).
(60) FCTC, supra note 5, art. 11.1 (a).
(61) FCTC, supra note 5, art. 11.1(b).
(62) FCTC, supra note 5, art. 11.3.
(63) FCTC, supra note 5, art. 2.1.
(64) FCTC, supra note 5, art. 27.
(65) FCTC, supra note 5, art. 19.1; see Sean D. Murphy, Liability and the WHO Framework Convention on Tobacco Control, 5 INT'L L. F. DU DROIT INT'L 62, 71 (2003) ("[I]t [is] unlikely that an effective widely adhered to liability regime could be established ... [but] the current approach of the FCTC to the issue of liability seems just about right.").
(66) FCTC, supra note 5, art 2.2.
(67) The FCTC has 174 parties and 168 signatories. Parties to the WHO Framework Convention on Tobacco Control, FCTC, http://www.who.int/fctc/signatories_parties/en/index.html (last updated Oct. 24, 2011).
(68) Besides the states that have never signed the Convention (Argentina, Cuba, the Czech Republic, El Salvador, Ethiopia, Haiti, Morocco Mozambique), the United States and Switzerland signed but never ratified the Convention. Id.
(69) The provisions of multilateral treaties can evolve into universally applicable norms of customary international law when supported by widespread state practice upholding those norms. See generally Anthony D'Amato, Treaty-Based Rules of Custom, in INTERNATIONAL LAW ANTHOLOGY 94 (A. D'Amato ed., 1994). A number of treaties are deemed to embody customary international law and have contributed to its crystallization. See, e.g., United Nations Convention on the Law of the Sea, Dec. 10, 1982, 1833 U.N.T.S. 397 (UNCLOS was adopted on 10 December 1982, and entered into force on 16 November 1994).
(70) See Allyn Taylor et al., The Impact of Trade Liberalization on Tobacco Consumption, in TOBACCO CONTROL IN DEVELOPING COUNTRIES 343, 343 (2000).
(71) 2004 U.S. Model Bilateral Investment Treaty, art. 2, http://www.state.gov/documents/organization/117601.pdf.
(72) See, e.g., Bilateral Investment Treaty, Switz.-Pak., art. 1, Jul. 11, 1995, available at http://www.unctadxi.org/templates/doesearch.aspx?id=779; see also Bilateral Investment Treaty, Fin.-Uzb., art. 1, Oct. 1, 1992; Bilateral Investment Treaty, It.--China, art. 2.1, Aug. 28, 1987.
(73) There is no global law of trade secrets or even a definition of what constitutes a trade secret. However, Article 39 of the TRIPS Agreement and relevant provisions of investment treaties protect trade secrets. Agreement on Trade-Related Aspects of Intellectual Property Rights, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1C, 1869 U.N.T.S. 299 [hereinafter TRIPS Agreement].
(74) See Steven R. Ratner, Regulatory Takings in Institutional Context: Beyond the Fear of Fragmented International Law, 102 AM. J. INT'L L. 475, 506 (2008).
(75) Steven Chase, Tobacco Firms Warns "Mild" and "Light'" Cigarette Ban May Violate NAFTA, GLOBE & MAIL (Toronto), Mar. 16, 2002, at A6; see also DAVID SCHNEIDERMAN, CONSTITUTIONALIZING ECONOMIC GLOBALIZATION: INVESTMENT RULES AND DEMOCRACY'S PROMISE 122-29 (2008) (describing the incident in detail).
(76) Matthew C. Porterfield and Christopher R. Byrnes, Philip Morris v. Uruguay: Will Investor-State Arbitration Send Restrictions on Tobacco Marketing up in Smoke? 4 INVESTMENT TREATY NEWS 1, 3 (2011).
(78) See TODD WEILER, PHILIP MORRIS V. URUGUAY: AN ANALYSIS OF TOBACCO CONTROL MEASURES IN THE CONTEXT OF INTERNATIONAL INVESTMENT LAW 3 (2010), available at http://www.smoke-free.ca/eng_home/2010/PMIvsUruguay/Opinion-PMI- Uruguay.pdf.
(79) Pres. Dec. No. 287/009, supra note 24; see also PMI v. Uruguay, Request for Arbitration, supra note 28, [paragraph] 34.
(80) Pres, Dec. No. 287/009, supra note 24, art. 12 ("The use of terms, descriptive features, trademarks, figurative signs or signs of any other kind such as colors or combination of colors, numbers or letters which may have the direct or indirect effect of creating the false impression that a certain tobacco product is less harmful than another is forbidden."); see also PMI v. Uruguay, Request for Arbitration, supra note 28, at [paragraph] 21.
(81) Ministry of Public Health Ordinance No. 514 was issued on 18 August 2009 and entered into force on 14 February 2010. Article 3 of Ordinance 514 reads as follows: "Each brand of tobacco products shall have a single presentation, such that it is forbidden to use terms, descriptive features, trademarks, figurative signs or signs of any other kind such as colors or combinations of colors, numbers or letters, which may have the direct or indirect effect of creating a false impression that a certain tobacco product is less harmful than another ... "PMI v. Uruguay, Request for Arbitration, supra note 28, at [paragraph] 24.
(82) PMI v. Uruguay, supra note 28, at [paragraph] 7.
(84) Id. [paragraph] 82.
(85) Id. [paragraph] 83.
(86) Id [paragraph] 4.
(87) Id. [paragraph] 48.
(88) Id. [paragraph] 4.
(89) Id. [paragraph] 48.
(90) Id.[paragraph] 5.
(91) Id. [paragraph] 47.
(92) For instance, the sale and manufacturing of Marlboro Gold, Marlboro Green and Marlboro Blue were discontinued, leaving only the Marlboro Red variant on the market. Id. [paragraph] 44.
(93) See Luke Erie Peterson, Philip Morris Files First-Known Investment Treaty Claim against Tobacco Regulations, INVESTMENT ARB. REP. (Brooklyn), Mar. 3, 2010, http://goodhealth.freeservers.com/World_Bank_ICSID_Luke-Peterson-on-Philip- Morris-v-Uruguay-arbitration-3-Mar-2010.pdf.
(94) While Australia is the first government to have adopted such a controversial policy, other states such as the United Kingdom, Canada, and New Zealand are also considering proposals to make this marketing restriction mandatory. Tobacco Plain Packaging Bill 2011, (Cth) (Austl.), http://www.yourhealth.gov.au/internet/yourhealth/publishing.nsf/ Content/C550AA264BA53F7ACA25 786B0001B34A/$File/Tobacco%20Plain%20Packaging%20Bill%202011%20- %20Exposure%20Draft%20-%2031%20March%202011.pdf.
(95) Chris Kenny, Big Tobacco Ignites Legal War, AUSTRALIAN (Surry Hills) (June 27, 2011), http://www.theaustralian.com.au/national-affairs/big-tobacco-ignites-legal- war/story-fn59niix-1226082403380.
(96) Alberto Alemanno & Enrico Bonadio, Intellectual Property: The Case of Plain Packaging of Cigarettes, 3 EUR. J. RISK REG. 268, 268 (2010).
(97) Grand River Enterprises Six Nations Ltd. et al. v. United States, Award (ICSID Jan. 12, 2011), http://www.state.gov/documents/organization/156820.pdf [hereinafter Grand River, Award].
(98) Id.[paragraph] 7.
(99) In 1998, 46 U.S. states entered into the Master Settlement Agreement (MSA) with major tobacco companies to settle legal claims that the states had filed seeking to recoup medical expenses incurred for treating smoking-related illnesses of indigent smokers and to pay for smoking reduction programs. Master Settlement Agreement (Nov. 23, 1998), available at http://www.naag.org/ backpages/naag/tobacco/msa.
(100) See Valentina Vadi, When Cultures Collide: Foreign Direct Investment, Natural Resources and Indigenous Heritage in lnternational Investment Law 42 COLUM. HUM. RTS, L. REV. 797, 842 (2011).
(103) Grand River, Award, supra note 97, at [paragraph][paragraph] 18, 126.
(104) Id. [paragraph] 128.
(106) Id. [paragraph][paragraph] 127-28.
(107) Grand River Enterprises Six Nations Ltd. et al. v. United States, United States Counter-Memorial 160 (Dec. 22, 2008), http://www.state.gov/documents/organization/114065.pdf (quoting Louis B. SOHN & R. R. BAXTER, CONVENTION ON THE lNTERNATIONAL RESPONSIBILITY OF STATES FOR INJURIES TO ALIENS, FINAL DRAFT WITH EXPLANATORY NOTES, Art. 10(5), reprinted in F. V. GARCIA-AMADOR ET AL., RECENT CODIFICATION OF THE LAW OF STATE RESPONSIBILITY FOR INJURIES TO ALIENS 204-205 (1974)).
(108) The Tribunal held that it did not have jurisdiction over the claims of Grand River Enterprises Six Nations, Ltd., Jerry Montour, and Kenneth Hill because these claimants did not have an investment in the United States. With regard to the claims of Arthur Montour Jr., the Tribunal held that the legislative measures in question did not constitute an expropriation of his investment. Grand River, Award, supra note 97, at [paragraph][paragraph] 5-7.
(109) Id. [paragraph] 141.
(110) See id. [paragraph][paragraph] 144-45.
(111) Id. [paragraph] 148.
(112) Id. [paragraph] 153.
(113) See id. [paragraph] 155.
(114) Marvin Roy Feldman Karpa v. United Mexican States, ICSID Case No. ARB/99/1, Award (Dec. 16, 2002), 18 ICSID Rep. 488 (2003).
(115) See id. [paragraph] 1.
(116) Id.[paragraph] 98.
(117) Id. [paragraph] 106.
(118) Id. [paragraph] 112.
(119) See id. [paragraph] 153.
(120) Id. [paragraph] 103.
(121) J. Martin Wagner, lnternational Investment, Expropriation and Environmental Protection, 29 GOLDEN GATE U. L. REV. 465, 466 (1999) ("As this doctrine of "indirect expropriation" has developed, international tribunals and legal scholars have cautioned that the obligation to compensate does not extend to regulations imposed pursuant to the exercise of legitimate government police powers, such as taxation and protection of human health and welfare.").
(122) Methanex Corp. v. United States, Final Award on Jurisdiction and Merits (Aug. 3, 2005) 44 I.L.M. 1345 (2006) at Part IV, Ch. D, p. 4, [paragraph] 7 ("But as a matter of general international law, a non-discriminatory regulation for a public purpose, which is enacted in accordance with due process and, which affects, inter alios, a foreign investor or investment is not deemed expropriatory and compensable unless specific commitments had been given by the regulating government to the then putative foreign investor contemplating investment that the government would refrain from such regulation.").
(123) Saluka Investments BV v. Czech Republic, Partial Award (Neth. v. Czech), (Perm. Ct. Arb. Mar. 17, 2006) at [paragraph] 262 (citation omitted).
(124) The Chemtura case was related to the question of whether the Government of Canada should pay compensation to a U.S. agricultural pesticide manufacturer for its ban on lindane, a pesticide used in the production of canola. The Tribunal held that the State measures constituted a valid exercise of the Respondent's police powers. See Chemtura Corp. v. Government of Canada, Award (Ad hoc NAFTA Tribunal, Aug. 2, 2010), [paragraph] 266, http://italaw.com/documents/ChemturaAward.pdf ("[Canada's Pest Management Regulatory Agency] PMRA took measures within its mandate, in a non-discriminatory manner, motivated by the increasing awareness of the dangers presented by lindane for human health and the environment. A measure adopted under such circumstances is a valid exercise of the State's police powers and, as a result does not constitute an expropriation."). See generally Valentina Vadi, Overlapping Regulatory Spaces." The Architecture of NAFTA Chapter Il and the Regulation of Toxic Chemicals, EUR. J. RISK REG. 586 (2011) (scrutinizing and critically assessing the Chemtura award).
(125) See Andreas R. Ziegler, Most-Favored-Nation (MFN) Treatment, in STANDARDS OF INVESTMENT PROTECTION 59 (August Reiniseh ed., 2008) (stating that both NT and MFN "do not specify the exact treatment to be accorded but rather create a non- discrimination obligation to nationals or individuals of other nations"). See generally ANDREW NEWCOMBE & LUIS PARADELL, LAW AND PRACTICE OF INVESTMENT TREATIES 148 (2009).
(126) OECD Global Forum on lnternational Investment: Conference on Foreign Direct Investment and the Environment, Feb. 78, 2002, Discrimination and Non-Discrimination in Foreign Direct Investment Mining Issues, 45 ("The justification for eliminating discrimination with respect to investment lies in the increased efficiency of the allocation of a scarce resource--capital--and in making risk and return more reliably calculable, subject to market forces.").
(127) Marvin Roy Feldman Karpa v. United Mexican States, supra note 114, at [paragraph] 7.
(128) Id. [paragraph] 10.
(129) Id. [paragraph] 9.
(130) Id. [paragraph] 11.
(131) See id.
(132) Id. [paragraph] 17.
(133) Id. [paragraph]24.
(134) Id. [paragraph]89.
(135) See id. [paragraph] 187.
(136) See North American Free Trade Agreement, U.S.-Can.-Mex., Dec. 17, 1992, 32 I.L.M. 289 (1993), art. 1105 ("Each Party shall accord to investments of investors of another Party treatment in accordance with international law, including fair and equitable treatment and full protection and security....").
(137) See generally IOANA TUDOR, THE FAIR AND EQUITABLE TREATMENT STANDARD IN THE INTERNATIONAL LAW OF FOREIGN INVESTMENTS (2008).
(138) Access to justice can be defined as the "individual's right to obtain the protection of the law and the availability of legal remedies before a court or other equivalent mechanism of judicial or quasi-judicial protection." Francesco Francioni, Access to Justice, Denial of Justice and International Investment Law, 20 EUR. J. INT'L L. 729, 729 (2009).
(139) See, e.g., Glamis Gold, Ltd. v. United States, Award (Ad hoc NAFTA Tribunal, Jun. 8, 2009) at [paragraph] 22, http://www.state.gov/documents/organization/125798.pdf (observing that breach of art. 1105 of the NAFTA "may be exhibited by a 'gross denial of justice or manifest arbitrariness falling below acceptable international standards;' or the creation by the State of objective expectations in order to induce investment and the subsequent repudiation of those expectations").
(140) See Grand River Enterprises Six Nations Ltd., et al. v. United States, Particularized Statement of Claims, [paragraph] 156 (UNCITRAL & NAFTA), http://www.state.gov/documents/organization/49666.pdf.
(141) See Grand River Enterprises Six Nations Ltd., et al. v. United States, Statement of Claimants' Claims Arising from Allocable Share Amendments, [paragraph] 97 (UNCITRAL & NAFTA), http://www.state.gov/documents/organization/75752.pdf ("In any given case, the standard of treatment owed by a government will be informed by all sources of international law, including treaties, general principles and customary international law.").
(142) See Grand River Enterprises Six Nations Ltd., et al v. United States, Claimants Memorial, Merits Phase, [paragraph][paragraph] 188-189 (UNCITRAL & NAFTA), http://www.state.gov/documents/ organization/ 120621.pdf.
(143) See Grand River, Award, supra note 97, [paragraph] 185.
(144) Id. [paragraph] 187.
(145) PMI v. Uruguay, Request for Arbitration, supra note 28, [paragraph] 84.
(148) See id. at [paragraph] 86; see also TRIPS Agreement.
(149) See generally Piet Eeckhout, The Scales of Trade--Reflections on the Growth and Functions of the WTO Adjudicative Branch, 13 J. INT'L ECON. L. 3 (2010) (discussing the need for comparative surveys of the best regulatory practices).
(150) See, e.g., Agreement for the Promotion and Protection of Investments, U.K.-Argentina, art. 2.2 (Dec. 11, 1990), UNCTAD Investment Instruments, http://www.unctad.org/sections/dite/iia/docs/ bits/uk_argentina.pdf.
(151) NEWCOMBE & PARADELL, supra note 125, at 304.
(153) Tecnicas Medioambientales Teemed S.A. v. United Mexican States, ICSID Case No. ARB(AF)/00/2, Award, [paragraph] 122 (May 29, 2003), 43 I.L.M. 133 (2004).
(154) BG Group Plc. v. Argentina, UNCITRAL, Award, [paragraph] 341 (Dec. 24, 2007), http://www.italaw.com/documents/BG-award_000.pdf.
(155) Id. [paragraph] 342.
(156) Id. [paragraph] 343.
(157) Id. [paragraph] 342.
(158) Ministry of Public Health Ordinance 514, art. 3 (Aug. 18, 2008) (Uru.), http://www.tobaccocontrollaws.org/files/live/Uruguay/ Uruguay%20%20Ordinance%20No.%20514%20-%20national.pdf.
(159) PMI v. Uruguay, Request for Arbitration, supra note 28, [paragraph] 79.
(160) While companies are no longer allowed to use words like "light" or "mild" on boxes to imply that some cigarettes are safer than others, they have planned to use packaging to differentiate products. For instance light colors would be used to indicate former light cigarettes. "The color-coding ... is red and dark green for regular and menthol; blue, gold and light green for light cigarettes; and silver and orange for ultra lights." Duff Wilson, Coded to Obey Law, Lights Become Marlboro Gold, N.Y. TIMES, Feb. 19, 2010, at B1.
(161) PMI v. Uruguay, Request for Arbitration, supra note 28, [paragraph] 25.
(162) Id. [paragraph] 81.
(165) FCTC, supra note 5, art. 2.
(166) GUIDELINES FOR IMPLEMENTATION OF ARTICLE 11 OF THE WHO FRAMEWORK CONVENTION ON TOBACCO (PACKAGING AND LABELING OF TOBACCO PRODUCTS) [paragraph] 12 (Nov. 17- 22, 2008), http://www.who.int/fctc/guidelines/article_11.pdf.
(167) See, e.g., Can. Attorney Gen. v. JTI-MacDonald Corp.,  2 S.C.R 610 (Can.) (holding that a requirement that fifty percent of the principal display surface of a package be devoted to a warning of the health hazards of a product is a "reasonable measure demonstrably justified in our society and is constitutional...."). In Commonwealth Brands Inc. v. United States, the U.S. Court held that the Family Smoking Prevention and Tobacco Control Act did not unjustifiably and unduly burden the commercial speech of the claimants. See Commonwealth Brands Inc. et al. v. United States, 678 F. Supp. 2d 512 (W.D. Ky 2010). The act mandated the use of warning for cigarette packages that occupy 50 percent of the front and rear panels of packaging and include color graphics depicting negative health consequences of smoking. The judge stated that "Congress has provided reasons for the particular features of the warning requirements ... most obviously, it relied on the international consensus reflected in the World Health Organization's Framework Convention on Tobacco Control...." Id. at 531. The judge concluded that "[t]his is a case where Congress, after decades of implementing various measures that did not affect Plaintiffs' speech, decided to add label and advertising restrictions to its comprehensive regulation of the tobacco industry. That decision seems eminently reasonable, too, since every other tool in the government's arsenal is made less effective and more costly by plaintiffs' use of advertising to stimulate ... demand." Id. at 538.
(168) BECKY FREEMAN ET AL., THE CASE FOR PLAIN PACKAGING OF TOBACCO PRODUCTS 7 (2007).
(169) Article 11.1(b) of the FCTC requires that: "Each Party shall, within a period of three years after entry into force of this Convention for that Party, adopt and implement, in accordance with its national law, effective measures to ensure that:... (b) each unit packet and package of tobacco products and any outside packaging and labelling of such products also carry health warnings describing the harmful effects of tobacco use, and may include other appropriate messages. These warnings and messages: (i) shall be approved by the competent national authority, (ii) shall be rotating, (iii) shall be large, clear, visible and legible, (iv) should be 50% or more of the principal display areas but shall be no less than 30% of the principal display areas, (v) may be in the form of or include pictures or pictograms."
(170) Geoffrey T. Fong, David Hammond & Sara C. Hitchman, The Impact of Pictures on the Effectiveness of Tobacco Warnings, 87 WHO BULL 640, 641 (2009) ("Pictorial warnings may be particularly important in communicating health information to populations with lower literacy rates.").
(171) WHO, CALL FOR PICTORIAL WARNINGS ON TOBACCO PACKS (May 29, 2009), http://www.who.int/mediacentre/news/releases/2009/no_tobacco_day_20090529/ en/index.html.
(172) CAN. CANCER SOC'Y, CIGARETTE PACKAGE HEALTH WARNINGS INT'L. STATUS REP. 3 (2010), http://tobaccofreecenter.org/files/pdfs/en/WL_status_reporten.pdf.
(173) In order to promote international cooperation, the FCTC Conference of the Parties (COP) requested that WHO's Tobacco Free Initiative (TFI) establish and maintain a central database of pictorial health warnings and messages. TFI, in collaboration with the WHO FCTC Convention Secretariat, has established such a database to facilitate sharing of pictorial health warnings. See WHO, FCTC HEALTH WARNINGS DATABASE, http://www.who.int/tobacco/healthwarningsdatabase/en/index.html.
(174) See, e.g., Alberto Alemanno and Enrico Bonadio, The Case of Plain Packaging of Cigarettes, 1 EUR. J. OF RISK REG. 268, 268 (2010) ("'Plain packaging' (also known as 'generic packaging') means that all forms of tobacco branding are required to be labelled exclusively with simple unadorned text. This means that trademarks, graphics and logos are removed from cigarette packs with the exception of the brand name which is displayed in a standard font.").
(175) FCTC, supra note 5, art. 11.1(a).
(176) The FCTC Conference of the Parties adopted guidelines for implementation of articles 11 and 13 at its second and third sessions held in Bangkok, Thailand on June 30--July 6, 2007, and Durban, South Africa on November 17-22, 2008, respectively. The text of the guidelines is available at http://www.who.int/fctc/guidelines/article_11.pdf and http://www.who.int/fctc/guidelines/article_13.pdf.
(177) WHO, GUIDELINES FOR IMPLEMENTATION OF ARTICLE 13 OF THE WHO FRAMEWORK CONVENTION ON TOBACCO CONTROL [paragraph] 17 (Nov. 17-22, 2008), http://www.who.int/fctc/guidelines/ article_ 13.pdf.
(178) BECKY FREEMAN ET AE., THE CASE FOR PLAIN PACKAGING OF TOBACCO PRODUCTS 10 (2007).
(179) Vienna Convention on the Law of Treaties Preamble, May 23, 1969, 1155 U.N.T.S. 331 (1969) [hereinafter VCLT]. For an accurate analysis, see generally Ernst-Ulrich Petersmann, Do Judges Meet their Constitutional Obligation to Settle Disputes in Conformity with 'Principles of Justice and lnternational Law'? 1(2) EUR. J. LEGAL STUD. 1 (2007), http://www.ejls.eu/2/22UK.pdf, considering judges' role in promoting constitutional justice in international law.
(180) For instance, article 21.9.2 of the Australia-United States Free Trade Agreement expressly states that the arbitral panel shall consider the Agreement "in accordance with applicable rules of treaty interpretation under international law as reflected in articles 31 and 32 of the Vienna Convention on the Law of Treaties." Australia-United States Free Trade Agreement art. 21.9.2, U.S.-Austl., May 18, 2004, http://www.dfat.gov.au/ftaJausfta/final-text/chapter_21.html [hereinafter AUSFTA].
(181) VCLT, supra note 179, art. 31.1.
(182) FCTC, supra note 5, pmbl.
(183) NAFTA, supra note 136, art. 1114, para. 2.
(184) The Dominican Republic-Central America Free Trade Agreement encompasses the United States and the Central American countries of Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic. Dominican Republic-Central America Free Trade Agreement,, pmble., annex 10-C (4) (b), U.S.-Cen. Am.-Dom. Rep., Aug. 8, 2004, http://www.ustr.gov/sites/default/files/ uploads/agreements/cafta/asset_upload_file452_3942.pdf [hereinafter CAFTA].
(185) Id. art. 15.1.7.
(186) David Rogers, The TRIPS Regime of Trademarks and Designs, EUR. INTELL. PROP. REV. 76, 77 (2007) (reviewing NUNO PIRES DE CARVALHO, THE TRIPS REGIME OF TRADEMARKS AND DESIGNS (2006)).
(187) This argument was put forward by the Dominican Republic at the TRIPS Council meeting. See Members Debate Cigarette Plain-Packaging's Impact on Trademark Rights, WTO NEWS, June 7, 2011, http://www.wto.org/english/news_e/news11_e/trip_07jun11_e.htm.
(188) Ainslie Van Onselen, Rush to be the First on Plain Packaging on Tobacco, THE AUSTRALIAN, July 29, 2011, http://www.theaustralian.com.au/business/legal- affairs/ rush-to-be-first-on-plain-packaging-on-tobacco/story-e6frg97x-1226103789471 (stating that "countries ... have expressed concerns about ... the lack of evidence that plain packaging will actually reduce the incidence of smoking.")
(189) See Australian Cigarette Labelling Legislation Faces Renewed Controversy at WTO, BRIDGES WKLY. TRADE NEWS DIG., Nov. 2, 2011, at 8-9, http://ictsd.org/downloads/bridgesweekly/ bridgesweekly15-37.pdf (reporting that some developing country tobacco producers expressed concerns that plain packaging "would curtail competitiveness in the cigarette market and may not effectively address intended public health objectives" and "could even backfire by inciting illicit consumption ... potentially paving the way for an illicit market"); see also Cigarette Plain Packaging Laws Pass Parliament, ABC NEWS, Australia, Nov. 21, 2011, http://www.abc.net.au/news/2011-11-21/cig-plain-packaging-laws- pass/3684374 (reporting Phillip Morris's' allegations that the Australian government "passed this legislation despite being unable to demonstrate that it will be effective at reducing smoking"); Alison Rehn, Tobacco Giant British American Tobacco (BAT) takes Gillard Government to High Court over Plain Packaging, DAILY TELEGRAPH (Sydney), Dec. 1, 2011, http://www.dailytelegraph.com.au/news/tobacco-giant-british-american-tobacco- bat-takes-gillard-government-to-high-court-over-plain- packaging/story-e6freuy9-1226211425168 (reporting allegations of the spokesperson of a tobacco company that "the tobacco black market will be flooded with counterfeit cigarettes as they'll be easier to copy and smuggle into the country once all packs look the same").
(190) Garfield Mahood, Warnings that Tell the Truth: Breaking New Ground in Canada, 8 TOBACCO CONTROL 356 (1999).
(191) See Marcus R. Munafo et al., Plain Packaging Increases Visual Attention to Health Warnings on Cigarette Packs in Non-smokers and Weekly Smokers but not Daily Smokers, 106 ADDICTION 1505-06 (2011) (assessing the impact of plain packaging on visual attention towards health warning information on cigarette packs and summarizing research findings that plain packaging "[c]ould have an impact on smoking ... in at least three ways ... (i) mak[ing] health warnings appear more prominent and strengthen[ing] their impact; (ii) reduc[ing] the role of the pack as a tobacco promotion tool; and (iii) preventing the use of labels or elements of the pack (e.g. colour, which would be standardized) that could deceive smokers about the dangers of cigarette smoking.")
(192) Australia Plans Plain Packaging, supra note 11.
(193) That the matter is controversial is also proven by the conflicting reactions of WTO member states to plain packaging during the TRIPS Council Meeting in June 2011. The Dominican Republic, supported by Cuba, Ecuador, Honduras, Mexico, Nicaragua, the Philippines, Ukraine, and Zambia, objected to the draft Australian legislation and expressed serious concerns that the proposed law would violate the provisions of the TRIPS Agreement and the linked Paris Convention for the Protection of Intellectual Property. On the other hand, reportedly
New Zealand, Uruguay and Norway said Australia's draft law is justified. India did not comment on the law specifically but said studies show that plain packaging does reduce smoking. India, Brazil and Cuba stressed their view that countries have the right to implement public health policies without intellectual property being an obstacle-referring directly or indirectly to the 2001 Doha Declaration on TRIPS and Public Health.
Members Debate Cigarette Plain-Packaging's Impact on Trademark Rights, supra note 187.
(194) Panel Report, Canada--Patent Protection of Pharmaceutical Products, [paragraph] 7.24, WT/DS114/R (Mar. 17, 2000), http://www.wto.org/english/tratop_e/dispu_e/7428d.pdf.
(195) TRIPS Agreement, supra note 73, art. 8(1).
(196) World Trade Organization, Ministerial Declaration on the TRIPS Agreement and Public Health, [paragraph] 4, WTO Doe No WT/MIN(01)/DEC/2 (2001), http://www.wto.org/english/thewto_e/ minist_e/min01_e/mindecl_trips_e.pdf ("We agree that the TRIPS Agreement does not and should not prevent Members from taking measures 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.... 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.") [hereinafter Doha Declaration]; see also World Trade Organization, Ministerial Declaration of 14 November 2001, [paragraph] 6, WT/MIN(01)/DEC/1 14 I.L.M. 746 (2002), http://www.wto.org/english/tbewto_e/minist_e/min01_e/mindecl_e.pdf ("[U]nder WTO rules no country should be prevented from taking measures for the protection of human, animal or plant life or health, or of the environment 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 conditions prevail, or a disguised restriction on international trade, and are otherwise in accordance with the provisions of the WTO Agreements."). Notwithstanding the existence of article 8, the application of the TRIPS Agreement proved to be problematic with regard to public health measures before the adoption of the Doha Declaration. See, e.g., Frederick M. Abbott, The Doha Declaration on the TRIPS Agreement and Public Health. Lighting a Dark Corner at the WTO, J. INT'L ECON. L. 469, 480 (2002) (highlighting that "developing country concerns with the impact of the TRIPS Agreement on access to medicines evolved over a period of years, and these concerns were expressed in many fora").
(197) VCLT, supra note 179, art. 31.1 (emphasis added).
(198) See generally Valentina Vadi, Trademark Protection, Public Health and International Investment Law: Strains and Paradoxes EUR. J. INT'L L. 773, 774 (2009) (identifying the two main functions of trademarks).
(199) See generally Vincent Chiappetta, Trademarks: More than Meets the Eye U. ILL. J. L. TECH & POL'Y 35 (2003) (arguing for an "encouragement" based trademark regime which creates incentive for investment); William Landes and Richard Posner, Trademark Law: An Economic Perspective 30 J. L. & ECON. 265 (1987) (considering the ways in which trademark law aims to promote economic efficiency); Nicholas Economides The Economics of Trademarks 78 TRADEMARK REP. 523, 525-526 (1988) (analyzing certain anticompetitive effects of trademark law).
(200) According to one author, "Consumer protection, as desirable and worthy though it may be, is little more than a by-product of trademark law." DAVID BAINBRIDGE, INTELLECTUAL PROPERTY 533 (6th ed. 2006).
(201) Mark Lemley, The Modern Lanham Act and the Death of Common Sense, 108 YALE L.J, 1687, 1697 (1999).
(202) See generally Christophe Geiger, Trademarks and Freedom of Expression--The Proportionality of Criticism INT'L REV. INTELL. PROP. & COMPETITION L. 317 (2007) (discussing freedom of expression as a defense for use of trademarks); Thorsten Klein, The Uncertain Balance Between Parody and Trademark Rights, 12 CONTEMP. LEGAL ISSUES 356 (2001) (analyzing U.S. courts' view of parody in trademark cases, including its protection under the First Amendment); John Cross, Language and the Law: The Special Role of Trademarks, Trade Names and Other Trade Emblems 76 NEB. L. REV. 95 (1997) (analyzing the language-based approach to trade emblem law applied by many courts).
(203) "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 technological knowledge and in a manner conducive to social and economic wellfare, and to a balance of rights and obligations." TRIPS Agreement, supra note 73, art.7 (emphasis added).
(204) ECOSOC, Comm. on Econ., Soc. & Cultural Rights, Substantive Issues Arising in the Implementation of the International Covenant on Economic, Social and Cultural Rights, [paragraph] 4, U.N. Doc. E/C12/2001/15 (Dec. 14, 2001), available at http://www.unhchr.ch/tbs/doc.nsf/0/ 1e1f4514f8512432c1256ba6003b2ec6/$FILE/G0146641.pdf.
(205) Peter Drahos, Intellectual Property and Human Rights 3 INTELL. PROP. Q. 349, 355 (1999).
(206) See, e.g., TRIPS Agreement, supra note 73, art. 16 (1) ("The owner of a registered trademark shall have the exclusive right to prevent all third parties not having the owner's consent from using in the course of trade identical or similar signs for goods or services which are identical or similar to those in respect of which the trademark is registered where such use would result in a likelihood of confusion. In case of the use of an identical sign for identical goods or services, a likelihood of confusion shall be presumed. The rights described above shall not prejudice any existing prior rights, nor shall they affect the possibility of Members making rights available on the basis of use.").
(207) Alberto Alemanno & Enrico Bonadio, Do You Mind My Smoking? Plain Packaging of Cigarettes Under the TRIPS Agreement 10 J. MARSHALL REV. INTELL. PROP. L. 450, 462 (2011). See also Benn McGrady, TRIPS and Trademarks: The Case of Tobacco, 3 WORLD TRADE REV. 53, 66-67 (2004).
(208) See generally Valentina Vadi, Critical Comparisons: The Role of Comparative Law in Investment Treaty Arbitration, 39 DENV. J. INT'L L. & POL'Y 67 (2010) (examining the use of comparative law in investment treaty arbitration).
(209) According to Article 38(1)(b) of the Statute of the ICJ, the sources of international law include international conventions and international customs, as well as general principles and, as a subsidiary means of interpretation, judicial decisions and the teachings of the most highly qualified publicists of international law. Statute of the International Court of Justice art. 38(1)(b), June 26, 1945, 59 Stat. 1055, 1060, T.S. No. 995, at 25, 30 [hereinafter ICJ Statute].
(210) Campbell McLachlan, The Principle of Systemic Integration and Article 31(3)(C) of the Vienna Convention, 54 INT'L & COMP. L.Q. 279, 287-288 (2005).
(211) Vadi, supra note 208, at 87 (highlighting "a sort of endogenous path coherence by which arbitrators look at previous arbitral awards" and "an increasingly heterogeneous path coherence by which arbitrators look at the jurisprudence of other international courts.").
(212) Case C-491/01, The Queen v. Sec'y of State for Health ex parte British American Tobacco Investments Ltd. & Imperial Tobacco Ltd., 2002 E.C.R. I-11453, [paragraph] 149.
(213) Council Directive 2001/37, art. 5(1), 2001 O.J. (L 194) 26 ("The tar, nicotine and carbon monoxide yields of cigarettes measured in accordance with Article 4 shall be primed on one side of the cigarette packet in the official language or languages of the Member State where the product is placed on the market, so that at least 10 % of the corresponding surface is covered.... ").
(214) Id. art. 5(5), at 29-30.
(215) Case C-491/01, supra note 212, [paragraph] 143.
(217) Id. [paragraph] 143.
(219) Id. [paragraph] 150
(220) Id. [paragraph] 152.
(221) Id. [paragraph] 153.
(222) BANKOLE SODIPO, PIRACY AND COUNTERFEITING GATT, TRIPS AND DEVELOPING COUNTRIES 74, 81 (1997).
(223) See Deborah R. Gerhardt, Consumer Investment in Trademarks', 88 N. C. L. REV. 427, 431 (2010) ("The expansion of trademark law is resulting in trends that ignore or harm consumer interests."); Id. at 433 ("As trademark law expands, courts are often confronted with the choice of favoring the mark owner or the public."). See also Lawrence Heifer, Toward a Human Rights Framework for Intellectual Property, 40 UC DAVIS L. REV. 972, 1017 (2006-2007) (discussing the use of human rights law to impose external limits on intellectual property).
(224) Rogers, supra note 186, at 77.
(225) Council Directive 2033/33, 2003 03. (L 152) 16, 17 (The European Parliament and Council adopted Directive 2003/33/EC to replace Directive 98/43/EC that had been annulled. In a previous case, Case C-376/98 Germany v. Parliament and Council, Germany had successfully challenged Directive 98/43/EC on the advertising and sponsorship of tobacco products. The Court annulled that directive, holding Article 95 EC (Article 100a EC as it was numbered at the time) could not be used as a legal basis for the outright ban of tobacco advertising).
(226) Case C-380/3, Fed. Rep. of Ger, v. Eur. Parliament and Council of the Eur. Union, 2006 EUR Lex CELEX LEXIS (Nov. 2, 2011), available at http://eur-lex.europa.eu/LexUriServ/ LexUriServ.do?uri=CELEX:62003CJ0380:EN:PDF, [paragraph][paragraph] 156-58.
(227) Id. [paragraph] 153
(228) Id. [paragraph] 154.
(229) Case C-210/03, Swedish Match AB and Swedish Match UK Ltd v. Sec'y of State for Health, 2004 E.C.R. I-11893 (discussing actions brought by a Swedish manufacturer and a German trader who wanted to commercialize tobacco products for oral use, prevented by national laws, in the United Kingdom and Germany respectively); Case C-434/02, Arnold Andre' GmbH & Co. v. Landrat des Kreises Herford, 2004 E.C.R. I-11825 (concerning the prohibition of the marketing in Germany of tobacco products for oral use from the importer Swedish Match). 230 Case C- 210/03, Swedish Match AB, [paragraph] 73.
(231) Id. [paragraph] 74.
(232) Id. [paragraph] 56.
(233) Id. [paragraph] 49 ("[I]t is apparent from the preamble to the latter directive that the prohibition of the marketing of tobacco products for oral use was the only measure that appeared appropriate to cope with the real danger that those new products would be used by young people, thus leading to nicotine addiction, with those products causing cancer of the mouth in particular.").
(235) Austin v. Tennessee, 179 U.S. 343 (1900).
(236) Id. at 348-49.
(237) Vienna Convention on the Law of Treaties art. 31, [paragraph] 3, May 23, 1969, 1155 U.N.T.S. 331.
(238) Legal Consequences for States of the Continued Presence of South Africa in Namibia (South-West Africa) Notwithstanding Security Council Resolution 276 (1970), Advisory Opinion, 1971 I.C.J. 16 (June 21).
(239) Philippe Sands, Searching for Balance: Concluding Remarks, 11 N.Y.U. ENVTL. L. J. 198, 202 (2002). See generally Duncan French, Treaty Interpretation and the Incorporation of Extraneous Legal Rules, 55 INT'L & COMP. L.Q. 281 (2006).
(240) The WTO case law on the possibility to take external (non-WTO) norms into account in the interpretation of WTO law if both parties to the second treaties are not parties to the first, is far from settled. For instance, in EC-Approval and Marketing of Biotech Products, the panel rejected the EC argument that its measures were fully justified by the Cartagena Protocol on Bio-Safety, an instrument that had been ratified by 142 states. Panel Report, European Communities Measures Affecting the Approval and Marketing of Biotech Products, [paragraph] 7.68 WT/DS291/R (Sep. 29, 2006). Instead the panel took the view that since the instrument at hand had not been ratified by all WTO members, a treaty interpreter was not required to have regard to it. Id. at [paragraph][paragraph] 7.92-7.93.
(241) Article 18 of the VCLT, supra note 179, reads as follows:
A State is obliged to refrain from acts which would defeat the object and purpose of a treaty when: (a) it has signed the treaty or has exchanged instruments constituting the treaty subject to ratification, acceptance or approval, until it shall have made its intention clear not to become a party to the treaty; or (b) it has expressed its consent to be bound by the treaty, pending the entry into force of the treaty and provided that such entry into force is not unduly delayed.
(242) Requests for the Establishment of a Panel by Indonesia, United States Measures Affecting the Production and Sale of Clove Cigarettes, WT/DS406/2 (June 11, 2010). It is not by coincidence that the United States mentioned the FCTC in its first written submission before the WTO in United States-Measures Affecting the Production and Sale of Clove Cigarettes, First Written Submission of the United States, [paragraph][paragraph] 140-41, WT/DS406 (Nov. 16, 2010) (stating that "The United States--like most countries in the world--recognizes the inherent dangers of tobacco and pursues a policy to minimize the harms of tobacco products wherever practicable...." and "The United States is one of 168 signatories to the World Health Organization Framework Convention on Tobacco Control. The [regulatory measure]'s focus on scientifically based measures to minimize the harms of tobacco (particularly by reducing youth smoking) is consistent with the approach embodied in the [FCTC]"). In the Final Report, issued on September 2, 2011, the Panel described the U.S. measure "as well as its broader factual context, including the United States' legal regime for tobacco control, the market for cigarettes in the United States, and the WHO Framework Convention on Tobacco Control." Panel Report, United States-Measures Affecting the Production and Sale of Clove Cigarettes, [paragraph] 2.2, WT/DS406/R (Sept. 2, 2011).
(243) TODD WELLER, PHYSICIANS FOR A SMOKE FREE CANADA, PHILIP MORRIS V. URUGUAY- -AN ANALYSIS OF TOBACCO CONTROL MEASURES IN THE CONTEXT OF INTERNATIONAL INVESTMENT LAW 35 (2010).
(244) As Emerich de Vattel once put it, "Owing to the binding character of express promises and agreements, a wise and prudent Nation will carefully examine and maturely consider a treaty of commerce before concluding it, and will take care not to bind itself to anything contrary to itself and to others." 3 EMERICH DE VATTEL, LE DROIT DES GENS OU PRINCIPES DE LA LOI NATURELLE 122 (James Brown Scott ed., Charles Fenwick trans., Press of Gibson Bros. 1916) (1758).
(245) Walid B. Hamida, La Prise en Compte de L'interet General et des Imperatifs de Developpement Dans le Droit des Investissements [Taking into Account the Public Interest and Development Needs in Investment Law], 135 JOURNAL DU DROIT INTERNATIONALE [J. INT'L L.] 999, 1002 (2008).
(246) New Investment and Dispute Settlement Provisions in U.S.-Peru Trade Agreement, 103 AM. J. INT'L L. 768 (John R. Cook ed., 2009).
(247) Treaty Establishing a Constitution for Europe, art. III-278, Dec. 16, 2004, 2004 O.J. (C310) 1; see Fernanda Nicola & Fabio Marchetti, Constitutionalizing Tobacco: The Ambivalence of European Federalism, 46 HARV. INT'L L.J. 507, 525 (2005).
(248) Treaty of Lisbon Amending the Treaty on European Union and the Treaty Establishing the European Community art. 127 d (iv), Dec. 13, 2007, 2007 O.J. (C 306) 1, 135 [hereinafter Treaty of Lisbon].
(249) Agreement Between the United States of America and the Socialist Republic of Vietnam on Trade Relations, U.S.-Viet., Jul. 13, 2000.
(250) Methanex Corp. v. United States (Can. v. U.S.), 44 I.L.M. 1345 (Trib. on Jurisdiction and Merits 2006).
(251) See Art. 42 Costituzione [Cost.] (It.); see also GRUNDGESETZ FOR DIE BUNDESREPUBLIK DEUTSCHLAND [GRUNDGESETZ] [GG] [BASIC LAW], May 23, 1949, art. 14 (stating that the "content and limits [of the right to property] shall be defined by the laws" and affirming that "Property entails obligations. Its use shall also serve the public good ...") (emphasis added).
(252) Joseph William Singer, The Ownership Society and Takings of Property: Castles, Investments and Just Obligations, 30 HARV. ENVTL. L. REV. 309, 329 (2006) (arguing that "Part of what it means to be a member of society, to be an owner among owners, is to be part of a real or imagined social contract that limits liberty to enlarge liberty, that limits property to secure property.").
(253) Tsai-Yu Lin, Addressing the Issue of Trade in Services and Public Health in the Case of Tobacco, 7 J. WORLD INVEST. AND TRADE 545, 561 (2006).
(254) Doha Declaration, supra note 196, [paragraph] 5(a) (stating that "[i]n 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 principles").
(255) Jakob Cornides, Human Rights and Intellectual Property, Conflict or Convergence?, 7 J WORLD INTELL. PROP. 135, 143 (2004).
(256) See Alison Slade, Abstract, Articles 7 and 8 of the TRIPS Agreement: A Force for Convergence within the International IP System, 14 J. WORLD INTELL. PROP. 413,413 (2011) (stating that articles 7 and 8 "not only influence interpretative practice, they also encourage a convergence of policy objectives that facilitates greater coherency within the international system, and links IP with other areas of socio-economic importance").
(257) Gregory S. Alexander, Constitutionalizing Property: Two Experiences, Two Dilemmas, in PROPERTY AND THE CONSTITUTION 88, 89 (Janet McLeod ed., 1999).
(258) In addition to the cases described in this article, other cases concerning tobacco control have been adjudicated. For instance, Philip Morris challenged a Norwegian Display ban on tobacco products under the European Economic Agreement. Luke Eric Peterson, Philip Morris Lodges Second Treaty Claim, This Time Against Developed Country, INVESTMENT ARBITRATION REPORTER, Mar. 19, 2010. The judgment was released on 12 September 2011. EFTA Court, Case E-16/10, Philip Morris Norway AS v. Norway, available at http://www.eftacourt.int/images/uploads/16_10_Judgment_EN.pdf. The Canadian Cracking Down on Tobacco Marketing Aimed at Youth Act of 2009 has also created controversy in recent times. Tobacco and Alcohol Again Among Members' Trade Concerns, WTO NEWS, Jun. 23, 2010, available at http://www.wto.org/english/news_e/news10_e/tbt_23jun10_e.htm; see also R. Cunningham, Canada: Ban on Flavours, 19 TOBACCO CONTROL 4 (2010).
VALENTINA S. VADI, Marie Curie Postdoctoral Fellow, Maastricht University, The Netherlands. An earlier version of this article was presented at the Society of Legal Scholars Annual Conference, Property Law Section, Downing College, University of Cambridge, UK, 6 September 2011. The author thanks Professor Francesco Francioni, Professor Andrea Giardina, Professor G.L.H. Griffiths, Professor Vaughan Lowe, Professor Ernst-Ulrich Petersmann and the Editorial Board of the Stanford Journal of International Law for their comments and encouragement. The usual disclaimer applies.