The electronic cigarette market is growing exponentially and it is no surprise that everybody wants a share of the profit. Sales of e-cigarettes, which generate a smoke-like vapor without burning tobacco, may reach $5 billion in the U.S. in 2015, according to analysis by Bloomberg Industries.
Imperial Tobacco, the world’s fourth largest cigarette company has recently filed a series of lawsuits in a US court against Lorillard Inc., NJOY, VaporCorp and eight other electronic cigarette manufacturers, claiming intellectual property infringement over the technology used by these tiny devices.
On Wednesday, March 5, 2014, Fontem Ventures B.V., a Netherlands-based, wholly owned subsidiary of the British multinational tobacco company headquartered in Bristol, United Kingdom asked the court in Los Angeles to rule that its patents were valid and for the defendants to pay damages. The alleged patents have been purchased by Fontem as a part of a portfolio of intellectual property acquired in late 2013 from Dragonite International Limited, China, for $75 million. Fontem also sued VMR Products LLC, Ballantyne Brands LLC, CB Distributors Inc., Spark Industries LLC, Logic Technology Development LLC, FIN Branding Group LLC, Victory Electronic Cigarettes Corp. and DR Distributors LLC.
“The reason for filing this lawsuit is to protect our intellectual property and seek fair compensation for the infringements of our patents,” said Marc Michelsen, director of communications and corporate ventures at Fontem Ventures in Amsterdam.
Lorillard, America’s third-largest tobacco company remains the only one of the first three to distribute its ecigs nationally, due to the purchase of BluCigs in April 2012 for $135 million; thanks to this transaction, the brand’s e-cigarettes are now available in more than 100,000 stores across the United States.
According to early reports, the lawsuits point of interest is Fontem’s patents for rechargeable electronic cigarettes, cartridge refill packs, batteries and disposable e-cigarettes. Among the multiple accusations is BluCigs’ statement that its cartomizers “are designed to be used only with your blu electronic cigarette and should not be used with any other device or for any other application”.
The plaintiffs said they are entitled to unspecific monetary damages. “Defendant’s continuing infringement has inflicted and, unless restrained by this court, will continue to inflict great and irreparable harm upon the plaintiffs,” it said.
In February of 2014, British American Tobacco became the first tobacco company in decades to launch a TV commercial in the UK, through a promotional campaign for its ecigarette brand Vype. Vype released the product to the UK markets last summer, gaining a significant lead over its smaller rival. On the other hand, Imperial Tobacco had its own e-cigarette brand ‘Puritane’ launched on the market for a few weeks and this lawsuit can represent an attempt for the company to “fast-track” its product.
But the popularity of these electronic cigarettes is surging as the industry, advocacy groups and consumer await potentially stricter FDA regulations that were announced since last fall.
However, with all the legal battles, there is still a patent from 1965 by inventor Herbert Gilbert for a ‘Smokeless Non Tobacco Cigarette’ who claims that ‘There is no electric cigarette today, that I have seen, that does not follow the basic road map set forth in my original patent’ in his interview from 2013.