Tag: Juul Labs

  • Florida Sues Juul

    Florida Sues Juul

    Image: Ulf

    Florida’s attorney general, Ashley Moody, has filed a lawsuit against Juul Labs, alleging that the company improperly marketed its products to children and offered misleading information about its products’ nicotine content, reports WUSF.

    The suit was filed in Hillsborough County Circuit Court. It seeks civil penalties and an injunction to prevent Juul “targeting children through their marketing and product design and from deceiving consumers with respect to the nicotine concentration.”

    “Juul relentlessly marketed to underage users with launch parties, advertisements using trendy-looking and young models, social media posts and free samples,” the lawsuit states. “It created a technology-focused, sleek design that could be easily concealed and sold its product in flavors known to be attractive to underage users. Juul also manipulated the chemical composition of its product to make the vapor less harsh on the throats of the young and inexperienced consumers it courted. To preserve its young customer base, Juul relied on age verification techniques that it knew were ineffective.”

    Juul responded to the lawsuit, stating that “it is disappointing to see the Florida attorney general direct her state’s resources to suing Juul Labs.”

    Juul’s response sets out “a few facts that should be understood,” including that “Florida’s attorney general initially led the negotiations between the state attorneys general and Juul Labs. For reasons that have not been explained to the public, she ultimately decided not to participate in a settlement to which 48 states and territories are now party to. Had she done so, like all those other jurisdictions, Florida would have its share of millions of dollars to help combat underage use and develop cessation programs. Instead, the Florida attorney general has now embarked on a drawn-out, expensive and uncertain legal process.”

    “Second,” the response continued, “Florida today suffers from the highest sales in the nation of illicit and potentially harmful disposable products emanating from China. These products are not in compliance with the [U.S. Food and Drug Administration’s] regulatory regime and, in many cases, are flagrantly targeting the state’s children. By contrast, over the past four years, Juul Labs has taken meaningful steps, including ceasing distribution of nontobacco, nonmenthol products in advance of FDA guidance on flavors, halting mass market product advertising, and restructuring our entire company with an emphasis on combating underage use. In part, due to these efforts, we have seen underage use of Juul products cut by 95 percent.”

    The response went on to allege that “Florida has the highest sales of these mostly foreign-made products in the United States, with over 60 percent of vapor sales dominated by disposables whose companies often disregard responsible practices with inappropriate flavor names and questionable marketing. Over the past months, we have been engaged with the attorney general’s office to help create a best-in-class program to combat illicit products. Even though Juul Labs plans to fight this case vigorously, the company remains ready to help Florida stem the tide of the proliferation of Chinese-made disposable products that have found what amounts to be a safe haven for foreign-made illegal vapor products.”

  • Juul to Restructure and Reduce Employees

    Juul to Restructure and Reduce Employees

    Image: Andrii Yalanskyi

    Juul Labs has announced a company restructuring aimed at reducing operating costs and positioning the company to continue to advance its mission during a period of regulatory and marketplace uncertainty.

    According to a press release, the principal aim of this restructuring is to enable the company to maximize profitability and cash-flow generation while continuing to invest in its core priorities, which include delivery of high-quality products to its commercial partners, ongoing development of next-generation products, engagement with the U.S. Food and Drug Administration regarding Juul’s pending and possible future market authorization applications, and commercial growth consistent with compliance with all applicable laws and regulations.

    With these operating cost reductions, Juul Labs says it is positioned to increase its adjusted EBITDA margins and generate meaningful free cash flow before litigation settlements. In doing so, the company will reduce its need to access capital pre-premarket tobacco product application, extend its time horizon to continue its pursuit of market orders from the FDA and generate positive equity value as the company pays down liabilities over time.

    Juul says it remains fundamentally optimistic about the prospects for Juul Labs Inc.—“a view rooted in our belief that our technology and our pipeline of new innovations represent the most valuable ever brought forward to transition adult smokers away from cigarettes while combating underage use,” the company wrote on its website.

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

    Njoy Seeks U.S. Sales Ban of Juul Products

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    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 Seeking $1 Billion in Funding

    Juul Seeking $1 Billion in Funding

    Photo: Lamppost

    Juul Labs is seeking to raise about $1 billion, reports Bloomberg News

    The e-cigarette manufacturer, which had about $800 million in revenue in 2022, is reportedly working with Jefferies Financial Group for the fundraising.

    In July, the company said it was exploring options including financing alternatives, to protect its business and help refinance an existing loan, as it dealt with lawsuits related to the marketing of its e-cigarettes.

    In November 2022, Juul secured a cash infusion to keep the company in business while it appeals the U.S. Food and Drug Administration’s marketing denial order related to its vapor products.

    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.

  • Former Juul Exec Loses Contamination Case

    Former Juul Exec Loses Contamination Case

    Photo: Steheap

    A former Juul Labs executive has lost a case accusing the vapor company of shipping contaminated vaping pods to retailers and firing him in retaliation for complaining, reports Reuters.

    Siddharth Breja,  a former senior vice president of global finance, sued Juul in October 2019. He alleged that the company endangered consumers by refusing to recall mint-flavored e-cigarette nicotine pods or to issue a safety warning.

    Breja said he objected to the company re-selling products that were nearly a year old without a “best by” date on their packages. He said his complaints angered his superiors and that he was fired in retaliation in March 2019.

    Juul denied all claims and sought to have the case sent to arbitration. The federal court lawsuit was put on hold pending arbitration in March 2020.

    In a joint filing on July 27, lawyers for both parties said an arbitrator had ruled against Breja and ordered him to pay certain of the company’s legal costs. They did not give further details about the decision, but asked that the lawsuit be dismissed once Breja had paid the award.

  • Juul Seeks FDA Authorization for Juul2

    Juul Seeks FDA Authorization for Juul2

    Juul Labs has submitted a premarket tobacco product application (PMTA) for its next-generation vapor platform to the U.S. Food and Drug Administration. The company says its submission includes comprehensive science and evidence for a new device and new tobacco-flavored pods at 18 mg/mL nicotine concentration, as well as information on novel, data-driven technologies to restrict underage access.

    “Our company DNA is product innovation,” said Chief Product Officer Kirk Phelps in a statement. “With our next-generation platform, we have designed a technological solution for two public-health problems: improving adult-smoker switching from combustible cigarettes and restricting underage access to vapor products. This is only the beginning of new tech being developed and refined for the U.S. market and abroad to eliminate combustible cigarettes and combat underage use.”

    Launched initially in the U.K. in 2021 as the JUUL2 System, the new vapor platform delivers an improved vapor experience for adult smokers, utilizes unique Pod ID authentication to address illicit products and incorporates age-verification technology capabilities.

    Our next-generation vapor platform PMTA is built on new technology that advances public-health objectives and compelling science that demonstrates a clear public-health benefit, as required to secure a marketing authorization.

    According to Juul, features of the next-generation platform include:

    • A more consistent vapor experience that better competes with combustible cigarettes
    • A Bluetooth-enabled device with a larger, long-lasting battery and a “smart light system” that communicates battery life and e-liquid level to the user
    • Newly designed, tamper-resistant pods that enable improved aerosol delivery
    • An innovative heating element that improves product performance and temperature-control precision
    • A unique Pod ID chip that, among other tech capabilities, prevents the use of illicit counterfeit and compatible pods with the next-generation device
    • A mobile and web-based app that enables age-verification technology, including device-locking, and real-time product information and usage insights for age-verified consumers with industry-leading data-privacy protections

    Initial behavioral research of the new platform in the U.K. has demonstrated compelling adoption and switching among adult smokers. Over 32 percent of JUUL2 System users had switched completely from combustible cigarettes six months after purchasing the product. While the currently marketed Juul System has switched over 2 million adult smokers in the U.S., the company looks forward to bringing this new technology to over 28 million adult smokers in the country who continue to smoke combustible cigarettes.

    “Our next-generation vapor platform PMTA is built on new technology that advances public-health objectives and compelling science that demonstrates a clear public-health benefit, as required to secure a marketing authorization,” said Juul Chief Regulatory Officer Joe Murillo. “We look forward to engaging with FDA throughout the review process while we pursue this important harm-reduction opportunity.”

    Juul said it continues to pursue its administrative appeal of the FDA’s stayed decision for the Juul System and believes that it too will receive marketing authorization once a decision is made on science and evidence.

  • FTC Drops Complaint After Altria’s Juul Exit

    FTC Drops Complaint After Altria’s Juul Exit

    Photo: Paul Brady

    The U.S. Federal Trade Commission (FTC) on July 3 dismissed a complaint against Altria Group and Juul Labs relating to the cigarette maker’s 2018 investment in Juul, reports Reuters.

    In late 2018, Altria paid $12.8 billion for a 35 percent state in Juul. The FTC said in 2020 that Altria’s investment violated antitrust law because the company acquired the position rather than continuing to compete against Juul in the market for closed-system e-cigarettes.

    After Altria exchanged its entire investment in Juul for a global license to Juul heated tobacco intellectual property, the tobacco giant asked the FTC to drop its challenge.

    Altria terminated its Juul stake after the investment lost much of its value in the wake of regulatory scrutiny and litigation relating to Juul’s marketing practices. 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 2022, 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, 2022, Altria announced it was ending its noncompete agreement with Juul.

  • 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.

     

  • Juul and Altria to Pay $60.5 Million in Minnesota Deal

    Juul and Altria to Pay $60.5 Million in Minnesota Deal

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    Juul Labs and Altria Group will pay more than $60 million to settle Minnesota litigation relating to Juul’s marketing practices, according to Law360.

    Minnesota Attorney General Keith Ellison sued Juul in 2019, alleging its marketing was deliberately targeted to minors and that the company failed to adequately verify customers’ ages, as required by law.

    In April, the parties announced a settlement without disclosing the terms pending public filing of the papers.  

    Under the terms of the consent judgment filed with the Hennepin County District Court, Juul and Altria—a one-time Juul investor—will jointly pay $60.5 million to the state over an eight-year period. Altria will foot $5 million of the bill, according to the agreement.

    The deal is front-loaded and will require the companies to pay nearly 60 percent of the settlement in less than one year, according to the Attorney General’s office.

    The agreement also prohibits Juul from marketing or selling to children and young adults, restricts the company’s ability to sponsor certain events and use outdoor advertising in the state, prevents it from distributing product samples and requires that it accurately disclose the nicotine content of its products, according to the judgment.

    The deal with Minnesota follows a $438.5 million settlement with more than 30 states and territories in September, a $255 million deal in December to end economic loss claims in multidistrict litigation and a $23.8 million deal in March to resolve the city of Chicago’s suit, among others.

    And Juul last month agreed to pay $462 million to settle claims with California, Colorado, Illinois, Massachusetts, New Mexico, New York and Washington, D.C., over youth marketing claims.

  • Altria Settles Multiple Juul Cases

    Altria Settles Multiple Juul Cases

    Photo: Steheap

    Altria Group has reached agreement on terms to resolve at least 6,000 Juul-related state and federal cases for $235 million.

    “While we continue to believe the claims against us are meritless, we believe this settlement avoids the uncertainty and expense of a protracted legal process and is in the best interest of our shareholders,” said Murray Garnick, Altria’s executive vice president and general counsel, in a statement. “This settlement brings to a close the vast majority of our pending Juul-related litigation.”

    In October 2019, the U.S. Judicial Panel on Multidistrict Litigation ordered the coordination or consolidation of federal individual and class action lawsuits related to Juul in the U.S. District Court for the Northern District of California for pretrial purposes. These cases include approximately 50 economic class actions, approximately 4,500 personal injury actions and approximately 1,500 government entity actions, including approximately 1,400 school district cases. These cases are covered by the agreement as well as cases in a related state court consolidated proceeding involving 750 cases.

    This settlement does not apply to three cases brought by attorneys general, 35 cases brought by Native American tribes, 17 antitrust cases or three Canadian cases.

    The settlement remains subject to the parties entering into one or more final settlement agreements approved by the relevant courts.

    Altria expects to record a pre-tax charge of $235 million in the second quarter of 2023 and intend to treat such amount as a special item and exclude it from our adjusted diluted earnings per share.