MONTREAL, July 6 (Reuters) - Canada's Imperial Tobacco said on Thursday it and two other big Canadian cigarette manufacturers have launched a legal challenge of new federal rules requiring graphic health warnings on tobacco packaging.

Imperial, Canada's largest cigarette maker and a unit of British American Tobacco, said it and JTI-Macdonald Corp and Rothmans, Benson and Hedges Inc., asked a Quebec court to declare invalid the labeling rules and other reporting requirements. ``We object to the excessive expropriation of our packages and trademarks,'' said Don Brown, Imperial chairman and chief executive. The warnings, to take effect in January, will cover the top half of the fronts and backs of tobacco product packs and will feature a text warning such as ``Cigarettes Cause Mouth Disease'' as well as a graphic or photo which could depict rotten gums and stained teeth. Imperial, which holds 70 percent of Canada's market for cigarettes, said it was seeking an immediate suspension of the federal requirements. Rothmans, Benson & Hedges is Canada's No. 2 maker. It is owned 60 percent by the Canadian firm Rothmans Inc. and 40 percent by Philip Morris Cos. Inc., the United States' biggest cigarette company. JTI-Macdonald, owned by Japan Tobacco Inc. is the third-largest maker. ``We do object to legislation and regulations that make a mockery of the Supreme Court decision rendered in 1995,'' Imperial's Brown said, referring to the 1995 Supreme Court of Canada ruling that struck down a government ban on tobacco ads. Cigarettes sold in Canada already carry warnings but they are smaller and on a voluntary basis because of the 1995 court decision. Catherine Lappe, a senior advisor to Health Minister Allan Rock, said the health department's lawyers were aware of the move by Imperial Tobacco. ``The Supreme Court of Canada has set out some clear guidance on what we can and can't do in this field. We have taken this into account. When the day comes when we have to defend our choices in court we'll be ready,'' she told Reuters.

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