Patent Lawsuits in the Tobacco Industry Heat Up

Philip Morris, British American Tobacco, and Others Battle It Out

Philip Morris International (PM), Altria (MO), and R.J. Reynolds Tobacco are embroiled in patent lawsuits as they seek to churn out nicotine products which are considered less risky to consumers’ health. The number of patent lawsuits in the tobacco industry has surged over the past few years as the search for cigarette alternatives heats up.

Last month, the US International Trade Commission ruled that Philip Morris must halt imports of IQOS heated tobacco sticks because of a patent fight with R.J. Reynolds, which is owned by British American Tobacco (BTI). IQOS could ultimately be banned from the US tobacco market as a result of the overseas litigation.

The Race to Dominate the Smokeless Product Market

In the race to dominate the smoke-free market, Philip Morris and British American Tobacco are in the lead. Philip Morris is on track to meet its goal to have over half of its revenue come from products which are considered less harmful to consumers by the middle of this decade.

Meanwhile, British American Tobacco is on track to achieve its goal of having one-fifth of its revenue come from these products in the same timeframe. These two companies have been the most litigious in the industry recently, filing patent disputes against one another in courtrooms in Japan and other key markets.

British American Tobacco won a case in September, but has lost other lawsuits in the UK, Poland, Greece, and other countries.

Tobacco Industry Protects Patents

The surge in patent suits in the tobacco industry has been driven by changes in the technology which goes into smokeless cigarettes and other products. Tobacco companies have more intellectual property to defend than they used to. Philip Morris had about 170 patents back in 2016, but that number surged to 1,300 by 2020. British American Tobacco doesn’t spend as much on its cigarette alternative efforts as Philip Morris, but it does defend its patents more. Over the past five years, the tobacco company has filed 35 patent lawsuits.

The tobacco industry is used to spending time in court, but this has usually been to defend business practices, not patents. As the search for cigarette alternatives heats up, companies are going to great lengths to protect their IP and hopefully gain ground in a growing market.

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ABOUT Meg Richardson Meg Richardson is a writer specializing in markets, technology, and personal finance. She loves breaking down seemingly complex ideas and making them readable and interesting for everyone. She holds an MFA in writing from Columbia University. When she is not writing about finance, she enjoys running in Central Park and drawing cartoons.

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