Panelists Address Growing Threat from ‘Brand Restrictions’ at Virtual INTA Annual Meeting

Restrictions on the use of branding symbols are a growing and serious threat to IP rights, according to a panel of trademark specialists speaking at the online INTA Annual Meeting this week, which has been combined this year with the Association’s Leadership Meeting and is being held virtually. About 3,340 people from 110 countries are registered to attend.

The moderator of the panel, former INTA President Ronald van Tuijl of JT International S.A., said there is “a very strong case against brand restrictions” arguing that: “In a market where all products look alike, the products become commoditized. Premium brands lose market share or are even delisted. That results in less consumer choice ultimately.”

The most extreme form of restriction is plain packaging, which is now mandatory for tobacco products in many countries, but other forms include limits on advertising, restrictions on the use of logos or figurative elements of brands, and sponsorship bans. The speakers said there was evidence that brand restrictions led to increased illicit production, loss of excise revenue, and consumer confusion.

In 2019, INTA’s Board of Directors passed a Resolution on Brand Restrictions, which stated that “brand restrictions now impact or threaten to impact statutory and common law protection regarding the use of word marks, logos, packaging, product shape, colors and other source-identifying mechanisms (including sounds, smells, three-dimensional marks and other non-traditional marks) that constitute the totality of a brand’s image.” And in 2017 the ICC published a Discussion Paper on Labeling and Packaging Measures Impacting on Brand Assets.

Expansion of Restrictions

One of the panelists, Wallis Pons of AngelesPons, said that Dominican Republic outlawed the use of images such as teddy bears, nests and babies on infant formula and related products back in 1997.

In the two decades since, many countries have sought to use brand restrictions to tackle non-communicable diseases (NCDs) such as obesity. Announcing a Global Action Plan against NCDs in 2013, then-WHO Director General Margaret Chan said: “It is not just tobacco anymore. Public health must also contend with Big Food, Big Soda, and Big Alcohol.”

In 2014, the Pan-American Health Organization published a Plan of Action for the Prevention of Obesity in Children and Adolescents, including by regulation of front-of-package labeling. “Since 2014 lots of countries have started to initiate the plan for addressing the front-of package labeling,” said Pons, adding: “Brand restriction was not part of the plan to fight obesity in children … But it happened by one interpretation that a decision was imposed.”

Abraham Díaz of Olivares said that in recent years brand restrictions have spread throughout the Americas. In 2015, Chile passed Law 20,869 banning advertisements directed to under-14s and limiting TV advertising of some products from 10.00 p.m. to 6.00 a.m. The Law also limits the use of characters in advertising. This has resulted in the demise in Chile of the characters used on packaging for Cheetos, Zucaritas, Trix and other brands.

Latest Proposals in Mexico

Mexico has now followed Chile, with a regulation on labeling that requires warning signs and legends from October 1, 2020, and restrictions on the use of characters, animations, interactive elements and other features from April 1, 2021. In July this year, INTA submitted comments urging the withdrawal or alternation of the language regarding characters etc.

Even more extreme measures, such as a ban on the sale of junk food to under-18s, have been imposed in the state of Oaxaca and are being considered in Tabasco state. Díaz said legal challenges are being filed against the Mexican proposals, including on the basis that they violate treaty obligations and infringe fundamental rights. “We need to educate people about the importance of IP,” he said, adding that visual brands are particularly important for illiterate people. “Banning IP in general is not the solution to fighting obesity.”

Marlou Van de Braak of Heineken International B.V. said that the alcoholic beverage industry has to contend with “more and more regulation coming our way” including labeling and advertising restrictions, and even total bans in some countries, which means consumers cannot differentiate between products and brand owners cannot exploit their brands. She argued that restrictions should only be introduced based on firm evidence: “There should be scientific research showing they are effective in obtaining the desired outcomes.”

Díaz warned that restrictions are also impacting industries such as pharmaceuticals and cosmetics, and have a knock-on effect on media companies, celebrities and sport: “We believe we are seeing the tip of the iceberg. We are seeing a domino effect.” It is an issue that all trademark practitioners should pay attention to, study, and bring to the attention of politicians and decision makers, said van Tuijl.

Image Source: Deposit Photos
Author: Deanora
Image ID: 139428386 

James Nurton

is a freelance journalist and editor, based in London, United Kingdom. He was previously editor of Managing Intellectual Property magazine and has worked on publications and events for AIPPI, AIPLA, INTA, WIPO, the EPO and EUIPO. He is editorial consultant to MARQUES and a partner of Lextel, which provides editorial and thought leadership services to law firms.

For more information or to contact James, visit his Firm Profile Page.