Tobacco On Trial

Defendant tobacco companies in countries with American populations may have to abide by Judge Kessler’s Aug. 17, 2006 ruling on descriptors if she gives weight to a unique amicus brief filed by a foreign NGO.

In early October, Annelise Connell of Hong Kong’s “Clear the Air” filed an amicus brief opposing Defendants’ motion to delay or amend Judge Kessler’s Order regarding “lights” descriptors..

Clear the Air argued in its request to file that “it is important that you be fully aware of the nature of the deception that US citizens in Hong Kong are facing from the marketing practices of the defendants.” (On Oct. 10, Judge Kessler, in a handwritten note on Clear the Air’s motion, granted the organization leave to file.)

In its brief, Clear the Air states that:

1. In Hong Kong it is illegal to register a trademark that is “likely to deceive” the public;

2. Under the FCTC, which China has ratified, deceptive labeling is forbidden;

3. Clear the Air earlier this year filed an application with Hong Kong’s Intellectual Property Department (IPD) to revoke the “Marlboro Lights” trademark;

4. Defendants have apparently failed to alert the IPD of Judge Kessler’s ruling;

In light of the above, Clear the Air asks of Judge Kessler ” that you do not exempt the Hong Kong Special Administrative Region of the People’s Republic of China, in your ruling on remedies.”

Defendants’ brief in opposition notes that Clear the Air’s amicus filing is not only a year late but introduces evidence not established at trial.

Addressing the brief’s most wide-ranging implicaitons, Defendants argue that:

[F]ar from supporting application of this Court’s Order to the sale of cigarettes in Hong Kong, Clear the Air’s proposed brief highlights why overseas application of the Order would interfere with the sovereignty of other nations. For example, Clear the Air suggests that the use of the trademark “lights” violates Hong Kong law and the Framework Convention on Tobacco Control signed by China. . . . These obviously are legal issues that should be resolved by the Hong Kong or Chinese courts, not by this Court in the context of a federal RICO lawsuit. . . . [A]pplication of this Court’s Order to cigarette sales in Hong Kong or other overseas locations would not only extend RICO beyond its jurisdictional limits but would also violate principles of comity by usurping any ongoing or future examination of the lights issue by foreign sovereigns or entities.

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Texts follow of:

Clear the Air Motion to appear as Amicus (granted), September 27, 2006

Clear the Air Amicus Brief, September 27, 2006

Clear the Air/Hong Kong Intellectual Property Department Trademarks Letter, March 8, 2006

Defendants’ Opposition to Clear the Air’s Brief, October 12, 2006

Also Proveded is:

Clear the Air’s Application to Revoke Marlboro Lights Trademark, September 22, 2006

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Clear the Air Motion to appear as Amicus (granted), September 27, 2006

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UNITED STATES OF AMERICA,

Plaintiff,

V.

PHILIP MORRIS USA, INC. f/k/a PHILIP MORRIS INCORPORATED, et al.,

Defendants.

C.A. No. 99-CV-02496 (GK)

MOTION BY CLEAR THE AIR TO APPEAR AS AMICI CURIAE IN OPPOSITION TO CERTAIN DEFENDANTS’ MOTION FOR CLARIFICATION OR IN THE ALTERNATIVE FOR RELIEF UNDER RULES 52, 59 AND 60 WITH RESPECT TO THE COURT’S AUGUST 17, 2006 ORDER

Clear The Air respectfully requests that this Court grant it leave to appear as amicus curiae in opposition to the motion by the defendants for

“clarification that the Court does not intend that certain aspects of the Order - i.e., those provisions prohibiting the use of descriptors and the se requiring corrective statements at retail point-of-sale - apply to sales wholly outside the United States.”

A description of Clear The Air and the bases for granting it leave to appear as amicus curiae are set forth below. The Amicus brief is attached hereto as Exhibit 1.

Description

Clear The Air is an anti-air pollution non-profit group in Hong Kong, a Special Administrative Region of the People’s Republic of China. Clear The Air is committed to the introduction and implementation of measures to significantly reduce air pollution in Hong Kong.

Clear The Air has identified tobacco smoke as one of the major causes of air pollution that is making people sick in Hong Kong, including US citizens. This pollution harms people through both active and passive smoking.

[stamped:

RECEIVED

OCT 2 - 2006

NANCY MAYER Wittington, CLERK

U.S. DISTRICT COURT]

[handwritten:

Leave to file granted–10/10/06]

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How many people die of tobacco smoke in Hong Kong? 1

• Smoking kills 5,700 persons per year, 19% by passive smoking.

• Smoking accounts for 90% of lung cancer deaths in men, and more than 30% of all cancer deaths.

• In 2000, almost 34,500 people required hospitalization due to illnesses from smoking.

Our Chairperson and many Clear The Air members are US citizens and therefore members of the US public. Any decision by a US court that withholds protection from US citizens visiting and living abroad is of particular interest to us.

There are over 50,000 US citizens living in Hong Kong 2

Over a million US residents arrived in Hong Kong as tourists in 2005. 3

US citizens abroad are entitled to protection by the US Government. 4

“Americans at home and abroad face threats to their physical and economic well-being. The State Department protects our nation, its people, and our prosperity by helping to:

• Protect and assist American citizens who travel, conduct business, and live abroad.”

To effectively reduce air pollution you must do so at the source. If fewer children start smoking, and more children and adults stop smoking because they no longer believe that they are smoking “healthy” cigarette, then we believe we will reduce tobacco smoke pollution and the health impact on US citizens in Hong Kong.

—–

1 Hong Kong Council on Smoking and Health

hp//www.srnokefree.hk’cosh/ccs/detaiI.xmt?Iaen&11drid= 19

2 Trade and Industry Department, The Government of the Hong Kong SAR

www.tid.gov.hk!english/ab… I

3 Legislative Council Secretariat FSO1/05-06 jegco.ov.hk/yrO5O6/engIish/sec/1ibrary/QOffsOiçpff

4 US Department of State

future.state.gov/why/prot…

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CONCLUSION

We believe it is important that you be fully aware of the nature of the deception that US citizens in Hong Kong are facing from the marketing practices of the defendants to US citizens living and visiting Hong Kong.

For the foregoing reasons, Clear The Air respectfully requests that we be granted leave to appear as amicus curiae in this action.

Respectfully submitted,

Annelise Connell

Chairperson

Clear The Air

8/F Eastwood Centre, 5, A Kung Ngam Village Rd, Shaukeiwan, Hong Kong

Phone: Country Code (852) 2886-2655

DATED: September 27, 2006

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Clear the Air Amicus Brief, September 27, 2006

**———————————————————

Exibit 1.

BRIEF OF AMICUS CURAE BY CLEAR THE AIR

IN OPPOSITION

TO CERTAIN DEFENDANTS’ MOTION FOR CLARIFICATION

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UNITED STATES OF AMERICA,

Plaintiff,

V.

PHILIP MORRIS USA, INC. f/k/a

PHILIP MORRIS INCORPORATED, et al.,

Defendants.

C.A. No. 99-CV-02496 GK)

BRIEF OF AMICUS CURAE BY CLEAR THE AIR IN OPPOSITION TO CERTAIN DEFENDANTS’ MOTION FOR CLARIFICATION OR IN THE ALTERNATIVE FOR RELIEF UNDER RULES 52,59 AND 60 WITH RESPECT TO THE COURT’S AUGUST 17, 2006 ORDER

1. US citizens have a right to be protected from dangers known by the US Government to the health and safety of their families even if they live or travel outside the United States. We note from the “US Department of State for Youth” website that one of the duties of the US Government is to “Protect and assist American citizens who travel, conduct business, and live abroad.” 1

2. There are about 54,000 US citizens living in Hong Kong Special Administrative Region of the People’s Republic of China. 2

3. 1,143,089 US residents arrived in Hong Kong as tourists in 2005. 3

4. A major outlet for deception of US citizens in Hong Kong by the defendants is the duty free tobacco concession at the Hong Kong International Airport. Here, the defendants attempt to deceive over one million members of the US public and their children every year as they return by air to the United States and pass by or enter this outlet. 4

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1 4 Protect America

future.state.gov/why/prot…

2 Trade and Industry Department, The Government of the Hong Kong SAR

www.tid.gov.hk/english/ab…

3 Legislative Council Secretariat FSO 1/05-06

http://www Iegco.gov.hk/yr05-06/english/sec/Iibrary/O5O6fs01e.pdf

4 BAT “Note for the Tobacco Executive Committee” dated 14 Nov 1991; Philip Morris “Worldwide Duty Free” Executive Biographies

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5. The 7-11 and Circle-K retail chains are distributors of the defendants deceptively labeled tobacco products in Hong Kong. They have stores in 90% of the mass transit railway (MTR) stations. All US citizens using the MTR and entering these stores are exposed to the deceptively labeled tobacco products because the products are shown at eye level behind he cashier to all customers.

6. It is illegal in Hong Kong to register a Trade Mark that is “likely to deceive” the public. 6

7. The People’s Republic of China has ratified the Framework Convention on Tobacco Control. 7 Article 11 of the FCTC requires measures so that

(a) 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 character characteristics, health effects, hazards or emissions, 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. These may include term such as “low tar”, “light”, “ultra-light”, or “mild”;

8. The Hong Kong Government Intellectual Property Department (IPD), which is responsible for granting Trade Marks, had not by February, 2006 when Clear The Air contacted them, been informed by the defendant of the deceptive nature of descriptors on existing registered Trade Mark or pending Trade Mark applications. 8

9. The current court ruling in this case states that

“All Defendants, Covered Persons and Entities are permanently enjoined from making, or causing to be made in any way, any material false, misleading, or deceptive statement or representation, or engaging in any public relations or marketing endeavor that is disseminated to the United States public and that misrepresents or suppresses information concerning cigarettes.”

In March 2006 it was Clear The Air, not the defendants, that took the initiative to inform the IPD of the deceptive nature of certain descriptors included in pending and registered trademarks resulting in changes to the IPD Trade Mark Work Manual. 8

We believe that the defendants continued failure to inform the IPD of the deceptive nature of certain of their existing trademarks and pending Trade Mark applications is in contravention of your order and is an attempt to suppress information that would then be disseminated to US citizens n Hong Kong.

10. On 22 September 2006 an objection was filed with the IPD in Hong Kong to the registered Trade Mark “Marlboro Lights” as “likely to deceive” the public. Your ruling will help determine if the Trade Mark owner wil be compelled to provide information or believe they are entitled to suppress information that would be disseminated to US citizens in Hong Kong regarding this deceptive Trade Mark.

CONCLUSION

US citizens have a right to be protected when living abroad. It is not lawful in Hong Kong to have a Trade Mark that is “likely to deceive”. US citizens visiting and living abroad are entitled to the same protection as those living in the U as we continue to be members of the US public. Therefore, we ask that you do not exempt the Hong Kong Special Administrative Region of the People’s Republic of China, in your ruling on remedies.

Respectfully submitted, A I

Annelise Connell Chairperson Clear The Air

8/F Eastwood Centre, 5, A Kung Ngam Village Rd, Shaukeiwan, Hong Kong Phone: Country Code (852) 2886-2655

DATED: September 27, 2006

8 lbid.

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Clear the Air HK IP Dept Trademarks Letter, March 8, 2006

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Exhibit 2

Letter from Hong Kong Government Intellectual Property Department regarding deceptive descriptors on Trade Marks

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peter.cheung@ipd.pov.hk wrote on 3/812006, 5:51 PM:

Dear Miss ConnelL

Thank you for your mail dated 1 March.

We have again taken note of the issues raised in your previous emaiLs.

The working practice of trademark examiners under the Trade Marks Ordinance Cal 559 has been set out in the Trade Mark Work Manual, a public document published here www.ipd .gov hk/eri/inteLLectuaL_property/trademarks registry/AbsoLute%20grounds%20for%20refusat pdf

Regarding the paragraphs on “Section 11 (4)(b) - marks that are likely to deceive”, we have inserted a new paragraph, which will bring the relevant matters in the FCTC to the attention of our examiners when they exercise their discretion in deciding whether any given mark is misleading. Such discretion is based on established trademark law practice, and has regard to the particular circumstances of each case.

Regards

Yours sincerely

Peter Cheung

for Director of Intellectual Property

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JD Opposition to Clear the Air, October 12, 2006

**———————————————————

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

UNITED STATES OF AMERICA,

Plaintiff,

and

TOBACCO-FREE KIDS ACTION FUND,

et al.,

Plaintiff-Intervenors,

v.

PHILIP MORRIS USA INC. (f/k/a

PHILIP MORRIS INCORPORATED),

et al.,

Defendants.

Civil Action No. 99-CV-2496 (GK)

Next Scheduled Court Appearance: None

CERTAIN DEFENDANTS’ OPPOSITION TO MOTION BY CLEAR THE AIR TO APPEAR AS AMICI CURIAE IN OPPOSITION TO CERTAIN DEFENDANTS’ MOTION FOR CLARIFICATION OR IN THE ALTERNATIVE FOR RELIEF UNDER RULES 52, 59 AND 60 WITH RESPECT TO THE COURT’S AUGUST 17, 2006 ORDER

The undersigned defendants respectfully oppose the request of Clear the Air — a non-profit corporation devoted to fighting air pollution in Hong Kong — to submit an amicus brief.1

First, notwithstanding the rule that an amicus brief focus on the “legal principles of the case,”2 the proposed brief submitted by Clear the Air contains no legal analysis that would be helpful to the Court. Defendants’ previous submission has outlined the limits upon

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1 Defendants note that they were not served with the motion by Clear the Air and learned of its filing only upon receiving electronic notification on October 10 of this Court’s order granting leave to file.

2 Russell v. Bd. of Plumbing Examiners, 74 F. Supp. 2d 349, 351 (S.D.N.Y. 1999); see also New England Patriots Football Club, Inc. v. Univ. of Colorado, 592 F.2d 1196, 1198 n.3 (1st Cir. 1979) (amicus brief should provide information “of some matter of law” and not a “highly partisan…account of the facts”).

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application of RICO to overseas conduct. E.g., Certain Defendants’ Reply Memorandum In Support of Motion for Clarification or in the Alternative for Relief Under Rules 52, 59, and 60 with Respect to the Court’s August 17, 2006 Order (“Reply Mem.”), at 8-9; see also North South Fin. Corp. v. Al-Turki, 100 F.3d 1046, 1052 (2d Cir. 1996). By contrast, the proposed amicus submission fails to mention RICO at all. Instead, it is premised upon the generic argument that “U.S. citizens have a right to be protected when living abroad.” (p. 3). The only citation for this proposition — which has nothing to do with RICO — is a reference to a statement on the “U.S. Department of State for Youth” website that it is a duty of the State Department to “protect and assist American citizens who travel, conduct business, and live abroad.” ¶ 1. Obviously, this statement about the duties of the U.S. State Department has no relevance to the issue of whether RICO has worldwide application or governs the sale of cigarettes in Hong Kong.

Second, the amicus submission consists almost entirely of factual assertions that are not part of the record in this case and that were never the subject of an evidentiary hearing.3 It is inappropriate for an amicus to interject new factual assertions or evidence into a case, particularly — as here — long after the trial has concluded. See, e.g., Ministry of Def. of the Islamic Republic of Iran v. Gould, Inc., 969 F.2d 764, 773 (1992) (“declin[ing] to go outside the record to consider new facts submitted by a non-party [amicus]”); Smith v. United States, 343 F.2d 539, 541 (5th Cir. 1965) (court may not “consider the new factual material included in the brief of the amicus”); Gandee v. Glaser, 785 F. Supp. 684, 686 (S.D. Ohio 1992) (amici “ought

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3 For example, the motion for leave to appear as amicus curiae states that “Clear the Air has identified tobacco smoke as one of the major causes of air pollution” in Hong Kong. (Motion at 1). But Clear the Air’s website includes a pie chart purporting to identify the “sources of air pollution,” which indicates that 50% of air pollution comes from power plants, 25% from vehicles, and 15% from building dust. www.cleartheair.org.hk. The chart does not even mention cigarettes, which presumably are lumped together with various other sources of air pollution in the 3% “other” category.

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not to be allowed to enter evidence into the record at this stage of the litigation [i.e., after trial].”) Indeed, allowing amici unilaterally to interject new fact assertions into the case long after the trial has concluded would violate the “cardinal principle of our system of justice that factual disputes must be heard in open court and resolved through trial-like evidentiary proceedings.” United States v. Microsoft, 253 F.3d 34, 101 (D.C. Cir. 2001).

Third, far from supporting application of this Court’s Order to the sale of cigarettes in Hong Kong, Clear the Air’s proposed brief highlights why overseas application of the Order would interfere with the sovereignty of other nations. For example, Clear the Air suggests that the use of the trademark “lights” violates Hong Kong law and the Framework Convention on Tobacco Control signed by China. ¶¶ 6-7. These obviously are legal issues that should be resolved by the Hong Kong or Chinese courts, not by this Court in the context of a federal RICO lawsuit. The proposed brief also emphasizes a proceeding that Clear the Air has initiated before the Intellectual Property Department of Hong Kong contending that the “Marlboro Lights” trademark is “likely to deceive.” ¶ 10; Ex. B. But application of this Court’s Order to cigarette sales in Hong Kong or other overseas locations would not only extend RICO beyond its jurisdictional limits but would also violate principles of comity by usurping any ongoing or future examination of the lights issue by foreign sovereigns or entities. See generally Certain Defendants’ Memorandum of Law In Support of Motion for Clarification or in the Alternative for Relief Under Rules 52, 59, and 60 with Respect to the Court’s August 17, 2006 Order, at 9-12; Reply at 8-9; McCulloch v. Sociedad Nacional de Marineros de Honduras, 372 U.S. 10, 21-22 (1963) (applying principles of comity).

Finally, Clear the Air’s submission violates this Court’s Order No. 1004, which required all prospective amici to submit their requests for leave to file by noon on September 12,

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2005. Clear the Air’s filing is over a year past this deadline and comes only in connection with a motion for clarification or, in the alternative relief under Rules 52, 59, and 60. There has already been a surfeit of amicus filings in this case (50 amici and six briefs in all) and there is no need for an additional submission at this late date.

Respectfully submitted,

/s/ Jane E. Chang for

Timothy M. Broas (D.C. Bar No. 391145)

WINSTON & STRAWN LLP

1700 K Street, N.W.

Washington, D.C. 20006-3817

Telephone: (202) 282-5000

Fax: (202) 282-5100

Dan K. Webb

Thomas J. Frederick

WINSTON & STRAWN LLP

35 West Wacker Drive

Chicago, Illinois 60601-9703

Telephone: (312) 558-5600

Fax: (312) 558-5700

Theodore V. Wells, Jr. (D.C. Bar No. 468934)

James L. Brochin (D.C. Bar No. 455456)

PAUL, WEISS, RIFKIND, WHARTON &

GARRISON LLP

1285 Avenue of the Americas

New York, New York 10019-6064

Telephone: (212) 373-3000

Fax: (212) 757-3990

Attorneys for Defendants

Altria Group Inc. and Philip Morris USA Inc.

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/s/ Jane E. Chang for

Robert F. McDermott (D.C. Bar No. 261164)

Peter J. Biersteker (D.C. Bar No. 358108)

JONES DAY

51 Louisiana Avenue, N. W.

Washington, D.C. 20001-2113

Telephone: (202) 879-3939

Fax: (202) 626-1700

Paul G. Crist

JONES DAY

North Point

901 Lakeside Avenue

Cleveland, Ohio 44114-1190

Telephone: (216) 586-3939

Fax: (216) 579-0212

Attorneys for Defendant

R. J. Reynolds Tobacco Company

/s/ Jane E. Chang for

David E. Mendelson (D.C. Bar No. 471863)

KIRKLAND & ELLIS LLP

655 15th Street, N.W., Suite 1200

Washington, D.C. 20005

Telephone: (202) 879-5000

Fax: (202) 879-5200

David M. Bernick

Stephen R. Patton

Renee D. Smith

KIRKLAND & ELLIS LLP

200 East Randolph Drive, Suite 5900

Chicago, Illinois 60601

Telephone: (312) 861-2000

Fax: (312) 861-2200

Attorneys for Defendant

Brown & Williamson Tobacco Holdings, Inc.

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/s/ Jane E. Chang for

J. William Newbold

Michael B. Minton

THOMPSON COBURN LLP

One US Bank Plaza, Suite 3500

St. Louis, Missouri 63101-1693

Telephone: (314) 552-6000

Fax: (314) 552-7597

Gene E. Voigts

SHOOK, HARDY & BACON LLP

2555 Grand Blvd.

Kansas City, Missouri 64108-2613

Telephone: (816) 474-6550

Fax: (816) 421-2708

Attorneys for Defendant

Lorillard Tobacco Company

/s/ Jane E. Chang for

Bruce G. Sheffler

David L. Wallace

CHADBOURNE & PARKE LLP

30 Rockefeller Plaza, 34th Floor

New York, New York 10112-0219

Telephone: (212) 408-5100

Attorneys for Defendant

British American Tobacco (Investments)

Limited (f/k/a British-American Tobacco

Company Limited)

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