Philip Morris fights Australian packaging rules



"We would anticipate that the compensation would amount to billions," Philip Morris spokeswoman Anne Edwards told The Associated Press.



The tobacco company says the treaty protects companies' property, including intellectual property such as trademarks. The plain packaging proposal severely diminishes the value of the company's trademark, Edwards said.

"Our brands are really one of the absolute key valuable assets that we have as a company - it's what helps us compete, it's what enables us to distinguish our products," Edwards said. "This move ... would essentially amount to confiscation of our brand in Australia."


"Our government is determined to take every step we can to reduce the harm by tobacco," Health Minister Nicola Roxon said. "We won't be deterred by tobacco companies making threats or taking legal action."

Prime Minister Julia Gillard also brushed off Philip Morris' threats. "We're not going to be intimidated by big tobacco's tactics," she told Australian Broadcasting Corp.

The legal notice filed Monday opens up a three-month period of negotiation between the two sides. Philip Morris said if a "satisfactory outcome" isn't achieved by the end of the three months, it will seek arbitration.

Similar steps are being taken in the U.S., where cigarette packs will soon feature new warning labels with graphic images of the negative health effects of smoking, including diseased lungs and the sewn-up corpse of a smoker.

The labels also feature phrases like "Smoking can kill you" and "Cigarettes cause cancer." They will take up the top half - both front and back - of a pack of cigarettes and be featured in advertisements.

The labels are a part of a campaign by the U.S. Food and Drug Administration that aims to convey the dangers of tobacco, which is responsible for about 443,000 deaths in the U.S. a year. The warnings must appear on cigarette packs by the fall of 2012.

The U.S and Australia are following the lead of other countries.


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