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.
Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Adviser
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.
SOSS21101303
All your finances.
All in one app.
App Store rating
