Category: Intellectual Property

  • Court Upholds IP Damages for Republic

    Court Upholds IP Damages for Republic

    The U.S. Court of Appeals for the Eleventh Circuit on Aug. 22 upheld a multimillion dollar verdict against Diamond Wholesale and its owner, Raj Solomon, for infringing trademarks owned by Top Tobacco, Republic Technologies and Republic Tobacco, reports IPWatchdog.

    In March 2022, a jury in the U.S. District Court of Georgia awarded Top Tobacco $11 million in damages against the wholesale company and its owner. Diamond Wholesale appealed the ruling, arguing that the district curt erred in excluding evidence, including witness testimony and invoices, that would have proven the retailer and its owner believed it was purchasing the counterfeit product from a legitimate seller, Star Importers, and that their infringement could therefore not have been intentional.

    However, the Eleventh Circuit ruled that a “showing of intent or bad faith is unnecessary to establish a violation.”

    Earlier this year, federal jurors in Atlanta awarded Republic Brands $2.3 million in statutory damages in a case about counterfeit tobacco rolling papers against Star Importers and ZCell & Novelties.

  • Njoy Seeks U.S. Sales Ban of Juul Products

    Njoy Seeks U.S. Sales Ban of Juul Products

    Image: inimalGraphic

    Njoy has asked the U.S. International Trade Commission (ITC) to ban the importation and sale of certain Juul products, including its currently marketed Juul device and Juul pods, citing patent infringements.  

    “Protecting our intellectual property is critical to achieving our vision,” said Murray Garnick, executive vice president and general counsel of Njoy parent company Altria Group, in a statement. “Juul has infringed upon our patents through the sale of its imported products, and we ask the ITC to impose appropriate remedies in response to these trade violations.”

    Njoy has also filed a complaint against Juul in the U.S. District Court for the District of Delaware based on the same patent infringement. Njoy Ace is currently the only pod-based e-vapor product to have received marketing authorization from the U.S. Food and Drug Administration, which deemed the marketing of the Ace device and three Ace tobacco-flavored pods as “appropriate for the protection of public health.”

    Njoy’s ITC complaint against Juul alleges trade violations associated with the sale of imported products that, according to Njoy, infringe U.S. Patent No. 11,497,864 and U.S. Patent No. 10,334,881. Njoy acquired the Asserted Patents from Fuma International, concurrently with the settlement of a patent infringement lawsuit filed against the company by Fuma.

    Njoy’s complaint is the latest development in a broader intellectual property dispute.

    In July, Juul Labs asked the ITC to block sales and imports of Njoy Ace, claiming that the product infringes several Juul patents. It has also filed a complaint against Njoy with the U.S. District Court for the District of Arizona.

    Juul Labs complain also targets Altria Group, which agreed to acquire the Njoy in March after exchanging its minority investment in Juul for a heated tobacco product intellectual property license.

  • Juul Accuses NJOY of Patent Infringement

    Juul Accuses NJOY of Patent Infringement

    Photo: TheaDesign

    Juul Labs has asked the U.S. International Trade Commission (ITC) to block sales and imports of the NJOY Ace vapor device, claiming that the product infringes several Juul patents. It has also filed a complaint against NJOY with the U.S. District Court for the District of Arizona.

    “Our technology, designed internally and in the U.S. and protected by our robust patent portfolio, has been the most effective product development to transition adult smokers from combustible cigarettes—switching over 2 million adult smokers in this country. Innovation is critical in this space to advance tobacco harm reduction,” said Juul Labs Chief Legal Officer Tyler Mace in a statement.

    “When others infringe on our technology, we have no choice but to protect our intellectual-property rights.”

    This ITC complaint follows three prior successful actions from Juul Labs at the Commission, which all resulted in barring the importation and sale of infringing products, according to Juul Labs.

    “Just like we have in three prior successful ITC actions that vindicated our company’s IP rights, we intend to reach the same result here,” said Mace.

    Juul Labs complain also targets Altria Group, which agreed to acquire the NJOY in March after exchanging its minority investment in Juul for a heated tobacco product intellectual property license.

    The NJOY Ace device received marketing authorization from the Food and Drug Administration in April 2022.

     

  • Guantanamera Loses Duo Trademark Lawsuit

    Guantanamera Loses Duo Trademark Lawsuit

    Image: Swedish Match

    Guantanamera has lost a dispute over the Duo trademark with Swedish Match, reports Halfwheel.

    The lawsuit alleged that Swedish Match, Sam’s Club and Costco infringed on the Duo trademark with the sale of White Owl Duos.

    Judge Jonathan Goodman of the U.S. District Court for the Southern District of Florida ruled that Guantanamera “was able to establish two of seven factors used to determine whether there is a likelihood of consumer confusion among cigar customers; it failed to tip the scales in its favor.” He said the company “concedes that it has no evidence of even a single instance of actual confusion, which is often cited as among the most important of the seven factors.”

    “GCC did not provide any survey evidence or expert witness testimony concerning actual confusion or even a likelihood of confusion,” the judge wrote in his ruling. “Given the length of time that the parties’ products coexisted and White Owl duos’ ample sales figures, the court would certainly expect evidence of actual confusion if any consumers were actually confused. But there was none.

    “Plaintiff’s failure to come forward with evidence of actual confusion is not from a lack of effort. The president and founder of GCC testified that he and his lawyers actively monitored the marketplace for potential infringers of its Duo mark. The president also testified that he had continuous, daily interactions with his customers and that he had personally visited convenience stores and gas stations on almost a weekly basis throughout the relevant time period. Yet, he admitted that he first learned of White Owl duos cigarillos only through his attorneys in April 2021, a year after their introduction. This factor weighs in favor of Swedish Match.”

  • Kaival Releases Details of Acquired Patents

    Kaival Releases Details of Acquired Patents

    Image: Tobacco Reporter archive

    Kaival Brands Innovations Group provided additional details of its recently acquired extensive patent portfolio from GoFire as it looks to expand its current product offerings to explore near-term and long-term revenue opportunities, according to GlobeNewswire.

    In the near term, Kaival Brands expects to seek third-party licensing opportunities in the cannabis, hemp/CBD, nicotine and nutraceutical markets as a means of monetizing its new patents. Longer term, the company believes it can utilize the acquired patents to create innovative and market-disruptive products for its growing base of adult consumers, including patent protected vaporizer devices and related hardware and software applications.

    The consideration for the purchased patents consisted primarily of Kaival Brands equity securities, consisting of common stock, newly designated Series B Preferred Stock and a warrant to purchase common stock. Importantly, in certain key aspects, the equity consideration was structured in a forward-looking manner with valuations or exercise prices struck at premiums to the current market price of Kaival Brands’ common stock. The weighted price per share of the common stock issued and the common stock underlying the Series B Preferred Stock was $1.53 per share on the May 30 closing date, accompanied by warrants with exercise prices ranging from $3 and $6.

    Included in the acquired technologies are patented systems and methods that are designed to overcome common issues regarding reliability and consistent dispensing over the entire life of a cartridge or reservoir as well as improvements to the vaporizing chamber to ensure complete vaporization with minimum residue.

    The acquired patent portfolio includes the following: Bluetooth Child Safety App and Mechanical Cartridge Protection; Controlled Delivery; Flavor Delivery and Experience to Last Puff; Leak Proof Design and Removal of Cutting Agents; Authentication System/Counterfeit Protection; Dry Puff Protection; 510 and Pod Compatibility; Product Remaining Indicators; and MHRA Requirements.

    The GoFire patent portfolio includes 12 existing patents and 46 pending applications with novel technologies across extrusion dose control, product preservation, tracking and tracing usage, multiple modalities (i.e., different methods of vaporizing) and child safety. The patents and patent applications cover territories including the United States, Australia, Canada, China, the EPO (European Patent Organization), Israel, Japan, Mexico, New Zealand and South Korea. The portfolio also includes a proprietary mobile device software application that is used in conjunction with certain patents in the portfolio.

    The acquired assets are housed in Kaival Labs, a wholly owned subsidiary of Kaival Brands, which develops new branded and white label products and services in the vaporizer and inhalation technology sectors.

  • Court Rejects Challenge to PMI Heating Patents

    Court Rejects Challenge to PMI Heating Patents

    Image: nimalGraphic

    The High Court of Justice in London ruled April 17 that Philip Morris Products’ (PMP) patents protecting a tobacco-heating technology are valid, reports Law360. The ruling represents a defeat for BAT and its Nicoventures subsidiary, which had sought to revoke PMP’s patents.

    While considering the patent valid, the court also said that BAT’s Glo heated-tobacco products did not infringe the patents, heading off an infringement counterclaim filed by PMP.

    The April 17 ruling is the latest chapter in an ongoing intellectual property dispute between the tobacco giants.

    PMP initially sued BAT and Nicoventures, claiming they infringed several of its tobacco-heating technology patents. This prompted BAT and Nicoventures to file counterclaims seeking to invalidate the patents.

    The proceedings have now branched off into several different actions before the High Court.

    In the current case, Nicoventures argued, among other things, that the PMP technology was obvious in light of a 1998 patent application referred to as “Pienemann,” which covers a “system for providing an inhalable aerosol.”

    While Pienemann, like PMP’s technology, has multiple heating elements, Judge Michael Tappin said that a skilled team would consider the multiple heaters to “mimic” one heater. Pienemann also did not specify the inclusion of a thin-film heater as seen in the PMP patent, instead describing a “graphite loaded sheath,” according to the judgment.

    Regarding the infringement claim, Tappin said that BAT’s Glo products did not infringe the patents because they did not include a method of allowing different parts of the heating system to be heated at different times.

  • Republic Dials Down Damages Push in Fake Papers Case

    Republic Dials Down Damages Push in Fake Papers Case

    Photo: md3d

    Republic Brands rescinded its push for $18 million in statutory damages each against Star and ZCell, two Georgia wholesalers accused of trading counterfeit versions of Republic tobacco rolling papers, reports Law360. Acknowledging that the initially sought penalty was “high,” Republic’s counsel told jurors to instead use their common sense when determining damages.

    Under the U.S. Lanham Act, intentional trading of counterfeit products can be punished by up to $2 million per mark at issue. Inadvertent infringement elicits statutory damages of between $1,000 and $200,000 per mark.

    U.S. District Judge Michael L. Brown ruled before trial that Star and ZCell had bought and sold counterfeit rolling papers.

    In a May 2019 raid, authorities seized around 70,000 rolling paper booklets from Star’s Atlanta-area warehouse. If authentic, they would have been worth more than $110,000, according to Republic. From ZCell’s nearby warehouse, law enforcement confiscated around 180,000 booklets, worth more than $260,000 if authentic.

    Republic attorney Maia T. Woodhouse said each of the defendants either knew they were dealing in counterfeit rolling papers or recklessly disregarded obvious red flags that revealed as much.

    The defendants contended they were unaware that some of the papers they traded were knockoffs.

    Star is one of the largest wholesalers of its kind in the American Southeast with around $100 million in annual sales. ZCell does around $16 million in annual sales.

  • Altria Exchanges Juul Stake for HTP License

    Altria Exchanges Juul Stake for HTP License

    Photo: Juul Labs

    Altria Group has exchanged its entire investment in Juul Labs for a non-exclusive, irrevocable global license to certain of Juul’s heated tobacco intellectual property.

    “We believe exchanging our Juul ownership for intellectual property rights is the appropriate path forward for our business,” said Altria CEO Billy Gifford in a statement. “Juul faces significant regulatory and legal challenges and uncertainties, many of which could exist for many years. We are continuing to explore all options for how we can best compete in the e-vapor category.”

    As of Dec. 31, 2022, the carrying value and estimated fair value of Altria’s Juul investment was $250 million. Altria will record the financial impact of the agreement in the first quarter of 2023 and intends to treat any such amounts as a special item and exclude it from its adjusted diluted earnings per share.

    “The return of Altria’s equity stake and termination of underlying agreements affords us full strategic freedom—we are no longer limited by the terms of those agreements to pursue other strategic opportunities and partnerships,” wrote Juul in a statement. “We are free to take advantage of a range of options to maximize the value of our company while we continue to advance our leading product technology and innovation pipeline.”

    In late 2018, Altria paid nearly $13 billion for a 35 percent stake in Juul. “We have long said that providing adult smokers with superior, satisfying products with the potential to reduce harm is the best way to achieve tobacco harm reduction,” said Altria’s then-CEO Howard Willard at the time. “Through Juul, we are making the biggest investment in our history toward that goal. We strongly believe that working with Juul to accelerate its mission will have long-term benefits for adult smokers and our shareholders.”

    Over the years that followed, however, regulatory scrutiny and litigation relating to Juul’s marketing practices severely eroded Juul’s valuation. On June 23, 2022, the U.S. Food and Drug Administration ordered Juul Labs to pull its e-cigarettes from U.S. store shelves, saying the e-cigarette manufacturer had submitted insufficient evidence that they were “appropriate for the protection of the public health.” After Juul challenged the marketing denial order (MDO), the FDA agreed to take another look at the company’s pre-market tobacco product application.

    The agency said it had determined that there are scientific issues unique to the Juul application that warrant additional review. 

    In early 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, which critics have blamed for sparking a surge in underage vaping.

    On Sept. 30, Altria announced it was ending its noncompete agreement with Juul. The tobacco giant is reportedly in talks to buy Njoy Holdings for at least $2.75 billion. Njoy has a roughly 2 percent of the U.S. vape market by volume, according to Jefferies. Juul, by contrast, accounts for around a quarter of American vapor product sales. Unlike Juul, however, Njoy has FDA permission to sell its products in the U.S.

    “While our appeal of FDA’s now-stayed MDO remains pending, we remain as confident in our science and evidence to support the continued marketing of Juul products,” Juul wrote after Altria announced the exchange of its investment for a license. “We also continue to pursue future applications for new products to accelerate our mission and progress for the adult smoker, public health, and an end to combustible cigarettes.”

  • Elfbar to Rebrand as EB Design

    Elfbar to Rebrand as EB Design

    Photo: Olivier Le Moal

    Shenzhen Weiboli Technology Co. plans to relaunch its Elfbar e-cigarettes under the name EB Design in the United States after losing a trademark dispute in court, reports 2Firsts.

    On Feb. 23, a federal judge ordered Weiboli 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.

    In an interview with 2Firsts, Elfbar’s North American public relations manager said that while Elfbar would launch its new name in March, the brand would retain its original logo. The letters E and B in “EB Design” are believed to represent the initials of Elfbar.

    Elfbar’s American PR manager said the company would continue to focus on the United States. The brand’s U.S. suppliers and distributors market are aware of the name change and prepared for it, he noted.

  • U.S. Court Orders Halt to Elfbar Sales

    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.