Category: Litigation

U.S. Court Orders Halt to Elfbar Sales

Photo: md3d
A U.S. federal judge on Feb. 23 ordered Shenzhen Weiboli Technology to stop marketing its Elfbar e-cigarettes in the U.S., finding that VPR Brands, which makes and sells Elf brand vapes, is likely to succeed on its claims that the Elfbar vapes infringe its trademark, reports Law360.
According to U.S. District Judge Aileen M. Cannon, VPR has shown there is a likelihood of confusion and the company stands to suffer harm if its Chinese competitor is allowed to keep selling the Elfbar vapes.
In November, VPR asked for an injunction blocking Shenzhen Weiboli from continuing to use the Elfbar mark, arguing the alleged infringement is costing VPR about $100 million because of the effect on future sales.
VPR claims Shenzhen Weiboli is not only infringing VPR’s Elf trademark but also its patent for its e-cigarette device.
While there is no direct evidence that Shenzhen Weiboli deliberately intended to adopt the Elf mark to take advantage of the existing trademark, Judge Cannon wrote that the company was well aware of the Elf mark and that there was potential for confusion, as the U.S. Patent and Trademark Office denied the registration of an Elfbar trademark specifically for those reasons.
VPR welcomed the judge’s decision. “VPR is pleased that the court found Elf is a strong trademark and granted the injunction,” said Joel B. Rothman of Sriplaw, which represented VPR in the case. “The injunction will allow VPR to move quickly against infringers and counterfeiters in the marketplace.”
An attorney for Shenzhen Weiboli said the company intends to appeal the order.
February 24, 2023
Pouch Trade Secrets Dispute Settled

Photo: Andrii
Kretek International, Modoral and Swedish Match have settled a legal dispute relating to nicotine pouch trade secrets, reports Law360.
In 2020, Swedish Match alleged that Kretek and its subsidiary Dryft Sciences, as well as Modoral, misappropriated six trade secrets concerning the manufacturing and formulation of nicotine pouches.
The defendants all denied Swedish Match’s claims and said they don’t owe the company any damages.
Swedish Match sells nicotine pouch products under the name Zyn based on U.S. Patent No. 9,161,908 and trade secrets that it bought from Swedish nicotine company TillCe. According to Swedish Match, one of TillCe’s affiliates in 2016 breached its agreements with Swedish Match by selling the trade secrets to Kretek, which formed Dryft Sciences to sell products in competition with Swedish Match.
Kretek then formed Dryft Sciences to sell products that misappropriated Swedish Match’s trade secrets, the complaint states.
In November 2020, BAT—which owns Modoral’s parent company Reynolds American—bought Dryft Sciences’ nicotine pouch business and its product line.
After Swedish Match informed BAT that it owned the U.S. patent and other trade secret information, Modoral filed a declaratory judgment action for noninfringement and also sought invalidity of the patent as well as for no misappropriation of Swedish Match’s trade secrets, the complaint states.
On Jan. 19, U.S. District Judge Stanley Blumenfeld Jr. entered partial judgment in favor of Modoral, finding that Swedish Match couldn’t establish that Modoral’s accused product infringed any of the asserted claims of the patent.
In their trial briefs filed earlier this month, Modoral and Kretek both argued that Swedish Match can’t sustain its trade secret misappropriation claims because its alleged trade secrets aren’t actually secret.
January 24, 2023
Preliminary Approval for Juul Settlement

Photo: Juul Labs
Juul Labs secured preliminary court approval on Jan. 20 of a $255 million settlement resolving claims by consumers that it deceptively marketed e-cigarettes, reports Reuters.
U.S. District Judge William Orrick in San Francisco said the proposed class action settlement was “fair, reasonable and adequate.”
The settlement is part of a larger, global agreement by Juul to resolve thousands of lawsuits by school districts, local governments and individuals accusing it of contributing to a youth vaping epidemic.
In December, Juul Labs settled more than 5,000 lawsuits covering more than 10,000 individual plaintiffs. The deal is valued at $1.7 billion, according to The Wall Street Journal.
The recent class action settlement resolves claims by people who say they would have paid less, or not bought the e-cigarettes at all, if Juul had not downplayed the products’ addictiveness and appealed to teenagers through social media campaigns and other means.
A pioneer in the vaping business, Juul Labs has gone from dominating the U.S. e-cigarette market to fighting for its survival in a relatively short time.
Following its initial success, the company quickly came under regulatory scrutiny over its marketing practices. Critics blame Juul Labs for contributing to an “epidemic” of underage vaping.
Thousands of lawsuits have been filed against Juul over the past several years, alleging that the company marketed its e-cigarettes to children. Juul has said it never marketed to underage users.
In September, Juul Labs agreed to pay nearly $440 million to settle a two-year investigation by 33 U.S. states into the marketing of its vaping products.
Juul’s e-cigarettes were briefly banned in the U.S. in late June after the Food and Drug Administration concluded that the company had failed to show that the sale of its products would be appropriate for public health. But following an appeal, the health regulator put the ban on hold and agreed to an additional review of Juul’s marketing application.
In October, Juul published the details of its marketing denial order appeal. In late September, Juul shareholder Altria Group exercised the option to be released from its noncompete deal with the e-cigarette maker.
January 22, 2023
Court to Rehear Triton’s MDO Appeal

Photo: fotofabrika
The U.S. Fifth Circuit Court of Appeals has granted Triton Distribution’s petition for a rehearing of its appeal of the Food and Drug Administration’s marketing denial orders (MDOs) for the company’s flavored e-liquids, reports Vaping360. The original Fifth Circuit panel denied Triton’s appeal in July 2022.
The decision to rehear the case means the original decision against Triton and its sister company, Vapetasia, is vacated, and the case will be decided by a panel of all active Fifth Circuit judges.
The court will set a schedule for supplemental briefs to be filed and eventually could set a date for oral arguments.
In contesting its MDO, Triton argued that the FDA retroactively changed the requirements for premarket tobacco product applications.
“By imposing a new, across-the-board requirement that flavored ENDS [electronic nicotine-delivery systems] products be demonstrably more effective at promoting smoking cessation than otherwise identical tobacco-flavored products, FDA acted contrary to its authority under Section 910 of the Food, Drug and Cosmetic Act (FDCA), 21 U.S.C. § 387j, and not in accordance with law,” Triton wrote at the time.
In October 2021, another Fifth Circuit panel stayed Triton’s MDO, calling the FDA’s imposition of new evidentiary standards for vape industry applicants a “surprise switcheroo” and ruling that the Triton appeal was likely to succeed on the merits of its case.
Texas-based Triton Distribution manufactures e-liquid under its own brand names and under contract for other manufacturers. Among the brands included in Triton’s MDO were Suicide Bunny, Boiler Maker, Vape Hooligan, Chewy Clouds and Teleos.
January 20, 2023
Reynolds Vapor Denied New Trial in Vuse Case

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R.J. Reynolds Vapor Co. was denied a new trial in its Vuse Alto intellectual property dispute with Altria Group, according to Bloomberg Law.
In September, a jury in the U.S. District Court for the Middle District of North Carolina awarded Altria Client Services more than $95 million after finding that Reynolds Vapor Co.’s Vuse Alto e-vapor product infringed three Altria patents.
Following its loss, Reynolds Vapor Co. requested a new trial, stating that “Altria’s improper injection of inflammatory evidence regarding patent infringement allegations against Reynolds in other cases denied Reynolds a fair trial.”
Judge N. Carlton Tilley Jr. disagreed. “That the jury did not agree with” Reynolds “does not mean the trial was unfair,” he wrote in an opinion issued Jan. 12 in the U.S. District Court for the Middle District of North Carolina.
Tilley also denied Reynolds’ motion to reduce the damages jurors awarded to Altria Client Services in their Sept. 7 verdict.
“This was a fair trial,” Altria said in a statement. “There is no basis for another trial, and we are pleased that the jury correctly found that Reynolds Vapor has infringed a number of our patents.”
At issue in this case were three patents awarded to Altria Client Services by the U.S. Patent and Trademark Office based on filings dating back to April 2015. The jury found that Reynolds Vapor violated Altria’s patents covering the pod assembly used in Vuse Alto.
January 17, 2023
Green Light for EU Flavor Ban Challenge

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Ireland’s High Court has granted two tobacco companies permission to challenge the EU ban on flavored tobacco-heating products, reports The Irish Times.
The ban, which covers all flavors except tobacco, took effect Nov. 23, 2022. EU member states have until July 23, 2023, to transpose the rule into national legislation.
BAT subsidiaries PJ Carroll and Co. and Nicoventures Trading claim the EU directive is invalid. Their challenge targets the minister for health, Ireland and the attorney general.
PJ Carroll contends the EU ban undermines its “ability to capitalize fully on the unique opportunity of being the first company to launch heated-tobacco products on the Irish market for adult smokers who would otherwise continue to smoke.”
The company, which holds 10 percent of the Irish market for e-cigarettes, started commercializing heated-tobacco products in Ireland in 2021.
In an affidavit, PJ Carroll Director and Head of Trade Simon Carroll said the ban will also undermine BAT’s significant investment in the development of “products with reduced-risk profile (relative to cigarettes) to cater to the preferences of adult smokers in Ireland who would otherwise continue to smoke.”
In addition, the ban has significant implications for the implementation of public health policy and anti-smoking campaigns where there are acceptable alternatives to traditional cigarettes, he said.
PJ Carroll and Nicoventures have also challenged the directive at the EU General Court, which is part of the EU Court of Justice.
January 12, 2023
Altria Seeks Juul Settlement Details

Image: Tobacco Reporter archive
Altria Group has requested that a federal judge order Juul Labs to turn over details of its settlement with about 10,000 plaintiffs seeking to hold Juul Labs responsible for a youth vaping “epidemic,” reports Reuters.
Altria stated that the settlement was “shrouded in secrecy” and that Juul refused to share the information with Altria, which in 2018 took a 35 percent stake in the company.
Altria was not part of the settlement and remains a defendant in mass tort litigation consolidated before U.S. District Judge William Orrick. Plaintiffs allege Altria took part in shaping Juul’s strategy to market e-cigarettes to minors.
Altria stated that it needs to see the details of the settlement and the negotiations leading up to it in order to evaluate its potential remaining liability and explore potential claims against third parties. Juul’s refusal to share the information “goes far beyond the protections needed to address those concerns, lack[s] any legal basis and would severely prejudice” Altria.
In a separate motion, Altria requested that Orrick put a hold on a class action suit seeking refunds on behalf of all Juul purchasers nationwide while Altria appeals the order certifying the class. The company said that it would be heavily burdened by continued discovery related to the suit.
January 6, 2023
Ohio Passes Ban on Cities’ Flavor Bans

Image: Tobacco Reporter archive
The Columbus City Council in the U.S. state of Ohio voted unanimously in favor of banning the sale of flavored tobacco and vaping products within city limits on Monday, Dec. 12. On Wednesday, the Ohio Senate approved a bill that would make what the Columbus City Council did illegal.
The Ohio Senate passed H.B. 513 by a vote of 23-8. It includes an amendment that will prohibit local governments in Ohio from enacting any laws regarding tobacco or vaping products that are stricter than state law, a mechanism known as preemption, according to Halfwheel.
Because of this amendment, the bill now heads back to the Ohio House of Representatives, where it must be approved before heading to the desk of Governor Mike DeWine. Reports indicate that the House vote is expected this week.
If approved, the state law will effectively void the law passed by the Columbus City Council on Monday. The Columbus city law is set to take effect on Jan. 1, 2024.
Preemption clauses have been a successful tool in blocking bans on the sales of flavored vaping products and other tobacco products. The city of Philadelphia lost a federal lawsuit that overturned its flavored tobacco ban due to Pennsylvania’s preemption clause.
December 15, 2022
Avail Loses MDO Case

Photo: Avail Vapor
A U.S. court rebuffed Avail Vapor’s appeal of the Food and Drug Administration’s refusal to allow its products on the market, reports Reuters. The ruling is the latest in a series of court orders upholding the agency’s regulation of the e-cigarette industry.
The 4th U.S. Circuit Court of Appeals on Dec. 12 found that the FDA had acted within its authority in rejecting Avail Vapor’s premarket tobacco product applications.
In 2016, the FDA determined that e-cigarettes were subject to its regulation and gave manufacturers until 2020 to apply for approval of vapor products.
Avail Vapor sought approval for its products in 2020, telling the FDA that they could help smokers quit by switching to e-cigarettes. The company said it had measures in place that would ensure that its liquids would not be sold to minors.
The FDA denied the application in 2021, saying that the company had not presented long-term studies supporting its claim that its products, which included fruit flavors, were more effective at helping smokers quit than tobacco-flavored liquids, which the agency has said are less appealing to minors.
Avail lost an administrative appeal and then petitioned the 4th Circuit to overrule the agency. The company argued that the FDA failed to inform applicants in 2019 that they would need long-term studies. It also said the agency was obligated to consider the sales plan.
Circuit Judge J. Harvie Wilkinson wrote that Avail “encourages us to neglect the forest for the trees” by focusing on procedural objections rather than the FDA’s mandate to protect public health.
The FDA has denied more than 55,000 applications from e-cigarette products. Those denials have been previously upheld by the D.C. Circuit, 3rd Circuit and 7th Circuit.
December 13, 2022
Juul Settles Marketing Suit With Pennsylvania

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Juul Labs has agreed to pay Pennsylvania $38.8 million to end the state’s claims that the company targeted young people with its products, state Attorney General Josh Shapiro announced in a release. As part of the deal, Juul denied any wrongdoing.
“Juul knowingly targeted young people with tactics similar to the tobacco companies’ playbook,” said Shapiro. “They disregarded their growing audience of young users, taking no action as their market share skyrocketed on the backs of American kids. About 13 percent of Pennsylvania students have vaped in the past 30 days—this settlement is only the beginning of keeping our kids safe from the dangers of vaping.”
Filed in Philadelphia County court, the Pennsylvania settlement forbids Juul from marketing its products near schools and playgrounds, advertising at events that include kids or in media outlets where audiences are made up of 15 percent or more of kids.
“This settlement is a continuation of Juul Labs’ progress to resolve issues from the past. We applaud the attorney general’s plan to deploy resources to address underage use in the commonwealth,” the company said in a statement. “The terms of the agreement are aligned with our current business practices, which we started to implement after our company-wide reset in the fall of 2019.”
Earlier this month, Juul settled more than 5,000 lawsuits covering more than 10,000 individual plaintiffs, resolving much of the legal uncertainty that had driven the company close to bankruptcy.
Juul announced on Dec. 6 that it has secured an investment to cover the cost of the settlement. The company has been in talks with two early investors to fund a bailout that would cover legal liabilities.
A pioneer in the vaping business, Juul Labs has gone from dominating the U.S. e-cigarette market to fighting for its survival in a relatively short time.
Following its initial success, the company quickly came under regulatory scrutiny over its marketing practices. Critics blame Juul Labs for contributing to an “epidemic” of underage vaping.
Thousands of lawsuits have been filed against Juul over the past several years, alleging that the company marketed its e-cigarettes to children. Juul has said it never marketed to underage users.
In September, Juul Labs agreed to pay nearly $440 million to settle a two-year investigation by 33 U.S. states into the marketing of its vaping products.
Juul’s e-cigarettes were briefly banned in the U.S. in late June after the Food and Drug Administration concluded that the company had failed to show that the sale of its products would be appropriate for public health. But following an appeal, the health regulator put the ban on hold and agreed to an additional review of Juul’s marketing application.
In October, Juul published the details of its marketing denial order appeal. In late September, Juul shareholder Altria Group exercised the option to be released from its noncompete deal with the e-cigarette maker.
December 13, 2022