Four nations had brought a complaint to the WTO that Australia's mandated plain packaging violated trade laws, but the WTO has rejected this, clearing the way for other countries to introduce similar legislation.

Australia had introduced the legislation in 2011 and it came into effect the following year. The pioneering legislation was enacted by the Gillard government and kept in place by later governments. A comprehensive evaluation of the legislative change concluded it had been effective in reducing numbers of smokers.

Plain packaging prohibits the use of logos, colour and branding get-up on tobacco products and packaging. Instead, these products are now sold in a generic olive-coloured packet with brand and product names listed in a standardised font.

Since then, Britain, Ireland, France, Norway, New Zealand, and Hungary have all enacted similar plain packaging laws. A number of other countries have legislation which is yet to come into effect or are preparing legislation in the same vein. Canada announced last week it was opening public consultations on the issue.

Honduras, Cuba, Indonesia and the Dominican Republic challenged the law at the WTO, arguing it violated intellectual property rights and infringed the trade marks of tobacco companies. The aggrieved countries also argued alternative measures could have been equally effective in terms of curbing the health impact of smoking.

The WTO rejected all these arguments however and the World Health Organization (WHO) welcomed the ruling, saying it was “another legal hurdle thrown up in the tobacco industry’s efforts to block tobacco control and is likely to accelerate implementation of plain packaging around the globe”.

Vera Luiza da Costa e Silva, Head of the Secretariat of the WHO’s Framework Convention on Tobacco Control, said the decision could begin a “domino effect” in plain packaging.

“What this shows is that plain packaging is a reality, it will happen anyway, and parties will progressively adhere more to plain packaging.”

After the ruling, Honduras officials said they might appeal the decision and that it contained several legal and factual errors.

Australia said it would vigorously contest any such appeal. “We will not shy away from fighting for the right to protect the health of Australians,” Trade Minister Steven Ciobo and Rural Health Minister Bridget McKenzie said in a joint statement. “Australia has achieved a resounding victory.”

The hearing was seen as an important test case and may have implications for how other nations legislate on alcohol and unhealthy snack foods.