A Comprehensive Analysis of Bat and Phillip Morris Patent Dispute

Published On: 21st March, 2024

Authored By: Aaditya Kumar
ICFAI Law School, Hyderabad

Abstract:

Following four years of intense conflict over heat-not-burn e-cigarette technology, British American Tobacco (BAT) and Philip Morris have now come to an international agreement. This results in the quick and unexpected conclusion of one of the largest worldwide patent fights. This article explains the patent infringement dispute between BAT and Phillip Morris related to their cigarette alternatives and their history. The article revolves around the development of technology in the tobacco sector and how Intellectual Property Rights (IPR) plays a major role in this sector. It also discusses how this patent dispute plays a very important role in the development of the tobacco sector globally.

Keywords:

Patent dispute, Philip Morris, British American Tobacco (BAT), UK High Court, Validity, Patent infringement, Legal battle, Higher Regional Court of Düsseldorf, Injunction, Complexity, International jurisdiction, Legal interpretation, Clarity, Resolution, Tobacco industry

Hashtags:

#PatentDispute #PhilipMorris #BAT #UKHighCourt #LegalBattle #IPR #CourtRuling #ValidityMatters #TobaccoIndustry #LegalComplexities #GlobalLitigation #DivergentOutcomes #IntellectualProperty #LegalResolution #IndustryDynamics #BATvsPhilipMorris

Introduction:

The world’s largest tobacco companies, Philip Morris International (PM.N) and British American Tobacco (BATS.L), said on Friday that they had reached a settlement to end many ongoing lawsuits alleging patent infringement in relation to their smokeless substitutes.

Philip Morris and BAT renounce their claims from the earlier litigation as part of the agreement, which was made public in February 2024. Additionally, they give up any future right to sue one another for patent infringement. As per a Form K6 filing with the US SEC, the settlement is effective for eight years and extends worldwide. The tobacco companies have been engaged in a costly, complicated patent battle that has harmed both parties. After losing one lawsuit, BAT, the company that manufactures Vuse vapes and Glo heated tobacco devices, was compelled to pay PMI millions of dollars, and as part of another, PMI was prohibited from importing its flagship product, the IQOS heated tobacco device, into the US.

The Issue Between BAT and Phillip Morris:

There was a dispute over patent infringement between BAT and Phillip Morris. Both companies stated that this agreement included all relevant injunctions and exclusion orders and that it ended all of their worldwide patent infringement lawsuits. It also shielded current heated tobacco and vapor products from future lawsuits and permitted both parties to innovate and release new product versions.[1] BAT had attempted to revoke two Philip Morris patents, EP 3 266 323 and EP 3 741 225, on the grounds of added matter and obviousness over the prior art. The court only considered the obviousness argument for EP 323, with Philip Morris conceding that EP 225 would also be invalid should the court find claim one of EP 323 invalid for obviousness. The court considered both patents separately regarding the added matter.[2]

The UK High Court upheld the validity of two patents held by Philip Morris but dismissed a claim made by the competing international tobacco corporation BAT that their cigarette technology violates the patents. This comes after the Higher Regional Court of Düsseldorf rendered a verdict akin to this one in January, nullifying an earlier, expansive injunction against BAT. Notwithstanding the latest escapades, a resolution to the conflict is still distant.

Analysis:

Both parties have taken part in several procedures associated with many different patents. The Düsseldorf Regional Court essentially prohibited BAT from selling its first-generation devices in January 2022. Then, in October, BAT’s crucial EP 3 398 460 B1 was denied by the EPO Technical Boards of Appeal. In 2020, BAT filed a lawsuit at the Munich Regional Court on 460 patents. The international legal battle between the two tobacco behemoths began with this action and others in the US and the UK.

By the conclusion of 2022, BAT had achieved two wins. Four Philip Morris patents were found to be invalid in the UK by the Court of Appeal due to obviousness (case ID: CA-2021-000302). The four patents in question, EP 3 248 483, EP 3 248 484, EP 3 248 485, and EP 3 248 486, are all related to heat-not-burn technology, which is used in a new generation of cigarettes to produce a nicotine-containing aerosol when the tobacco is heated.

Nevertheless, BAT’s claims of additional matters against EP 323 have likewise been denied by the EPO Opposition Division. Regarding the same patent, similar actions are being held in Germany.

The Düsseldorf Regional Court’s injunction was reversed by the Higher Regional Court Düsseldorf in January 2023 after it was determined that BAT’s goods did not violate the patent. As a result, the judge who oversaw the most recent UK ruling concurs with their German counterparts.

Conclusion:

We can conclude that the UK High Court recently declared a complex verdict in the patent dispute between Philip Morris and British American Tobacco (BAT). A degree of complication was added to the lengthy legal struggle when the court simultaneously rejected BAT’s allegation of patent infringement and upheld the validity of two patents held by Philip Morris. This decision, which revokes a broad injunction against BAT, is consistent with one rendered in January by the Higher Regional Court of Düsseldorf.

Although the firm has won a legal battle with the court’s recognition of Philip Morris’ patent validity, the whole dispute remains unresolved due to BAT’s counterclaim being dismissed. The complex structure of the case, which has produced inconsistent results in other courts, highlights the difficulties associated with international patent litigation in the cutthroat tobacco sector. Even with all of these legal complexities, a conclusive answer is still difficult. Although the ruling clarifies several patent-related difficulties, the ongoing disagreement raises the possibility of exploring other legal options or conflict resolution techniques. The outcome of this case leaves the larger battle open-ended, with consequences for the changing environment of intellectual property conflicts in the global market as both tobacco titans figure out their future moves.

References:

https://www.reuters.com/business/healthcare-pharmaceuticals/bat-philip-morris-settle-all-patent-litigations-relating-heated-tobacco-vapes-2024-02-02/

https://www.worldipreview.com/philip-morris-and-bat-resolve-all-disputes-over-vapes-and-heated-tobacco-devices

Attorney’s Dictionary of Patent Claims

Kluwer Patent Blogs: Phillip Morris V. BAT Ltd

[1] https://www.marketwatch.com/story/bat-philip-morris-resolve-global-patent-dispute-update-ad8eaa81

[2] https://www.juve-patent.com/cases/philip-morris-and-bat-continue-heat-not-burn-patent-saga-at-uk-high-court/

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