Australia's highest court upheld the world's toughest law on cigarette promotion on Wednesday despite protests from tobacco companies that argued the value of their trademarks will be destroyed under new rules that will strip all logos from cigarette packs.

The decision by the High Court means that, starting in December, tobacco companies will no longer be able to display their distinctive colours, brand designs and logos on cigarette packs.

The packs will instead come in a uniformly drab shade of olive and feature graphic health warnings and images of cancer-riddled mouths and blinded eyeballs. The government hopes the new packs will make smoking as unglamorous as possible.

'Although the (law) passed the constitutional test, it's still a bad law that will only benefit organized crime groups which sell illegal tobacco on our streets.'—British American Tobacco spokesman Scott McIntyre

British American Tobacco, Philip Morris International, Imperial Tobacco and Japan Tobacco International are worried that the law will set a global precedent that could slash billions of dollars from the values of their brands. They challenged the new rules on the grounds that they violate intellectual property rights and devalue their trademarks.

The cigarette makers argued that the government would unfairly benefit from the law by using cigarette packs as a platform to promote its own message, without compensating the tobacco companies.

Australia's constitution says the government can only acquire the property of others on "just terms."

British American Tobacco spokesman Scott McIntyre said the company was disappointed in the court's decision, but would comply with the law.

"Although the [law] passed the constitutional test, it's still a bad law that will only benefit organized crime groups which sell illegal tobacco on our streets," McIntyre said in a statement.

"The illegal cigarette black market will grow further when all packs look the same and are easier to copy."

The court withheld its reasons for the judgment on Wednesday. Those will be released later this year.