BAT and Kirkland invalidate four Philip Morris heat-not-burn patents

Today, the UK High Court handed down a judgment invalidating four patents belonging to tobacco product manufacturer Philip Morris (case no: HP-2020-000011). The decision is yet another twist in the high-stakes global dispute between the rivals BAT and Philip Morris. All current battles between the two giants concern lucrative technology for heat-not-burn cigarettes.

BAT and Philip Morris showdown

In the same proceedings, Philip Morris defended the validity of its four patents while counterclaiming for infringement by BAT’s heat-not-burn glo product. However, given that the court found all four patents invalid, the judge dismissed the counterclaim.

A spokesperson for BAT says, “BAT is pleased that the UK High Court has found these four Philip Morris patents invalid. BAT commenced this legal action to protect our innovations and product portfolio in the Tobacco Heated Products space. We will continue to protect our valuable proprietary technology.”

A spokesperson for Philip Morris says, “We respectfully disagree with the decision of the court and are evaluating the decision and assessing our options. The patents in question form part of PMI’s extensive portfolio of patents for smoke-free innovations reflecting our commitment to and progress towards a smoke-free future and our considerable investment in smoke-free technologies over more than a decade.”

They say, “We intend to continue to vigorously protect our intellectual property.”

Heat-not-burn on the shelf

The recently-developed heat-not-burn cigarette technology is a lucrative market, The heated tobacco generates an aerosol containing nicotine and thus contains potentially lower toxic emissions than traditional cigarettes, which usually burn nicotine to create the aerosol.

Heat-not-burn technology differs to vaping, which uses a battery-powered heating device to vaporise a liquid, flavoured or otherwise, in a reservoir. Philip Morris is concentrating solely on expanding its heat-not-burn cigarette business, investing over eight billion dollars into its ICOS system.

On the other hand, BAT is focused on continuing to offer consumers a mixture of smoking paraphernalia. This includes vapes, e-cigarettes and traditional tobacco products. BAT first launched its glo product in Japan in 2017.

According to BAT’s opening submissions cited in the court judgment, on 23 April 2021 the European Patent Office published its notice of intention to grant a fifth patent, EP 3 248 487 (EP 487). However, the EPO has not yet granted the patent. As such, BAT cannot yet claim its revocation.

Prior art in particular

According to the judgment, the four patents claim as the inventive concept the Metal Insulator feature. This is a “thermally insulating material provided as a separate element for insulating the at least one heater, wherein the thermally insulating material comprises a metal.”

However, the court invalidated the four patents for obviousness over the prior art, in light of the common general knowledge taken at the priority date. It found that the four patents contained what BAT describe as two separate “A” and “B” features. The features cover the heating of the tobacco product, and the insulation to keep the device efficient or to protect the user.

Presiding deputy judge Marcus Smith found that the combination of A and B features contains no inventive step over the prior art. The judge found that feature B is obvious, containing no inventive concept. Furthermore, the court also found feature A obvious.

Philip Morris moves in Germany

In 2018, Philip Morris launched a patent infringement action in Japan against BAT’s heat-not-burn cigarette products. In spring 2020 BAT hit back, suing Philip Morris at the International Trade Commission (ITC) in the US.

Jin Ooi

BAT subsidiary Nicoventures Trading also filed a patent infringement suit against Philip Morris at the Regional Court in Munich, as well as in the UK. Following this move in Germany, Philip Morris responded by filing a successful revocation action against two divisional BAT patents at the UK High Court.

In March 2021, the court revoked the two BAT patents, EP 3 398 460 B1 and EP 3 491 944 B1 4. The UK Court of Appeal has refused BAT permission to appeal in this instance. The same patents are also in dispute in Germany, although the Munich court has moved the oral hearing concerning EP 460 back to November 2021.

Furthermore, at the beginning of June, the Munich Regional Court heard an infringement case over EP 944.

Philip Morris also opposed the two revoked patents at the European Patent Office. The EPO Opposition Division invalidated EP 460, while the opposition process against EP 944 is ongoing.

Kirkland and PG step up

In London, Kirkland & Ellis acts for BAT in the heat-not-burn cigarette proceedings, led by partner Jin Ooi. The firm is also helping co-ordinate the litigation globally, with patent boutique Vossius & Partner running the German case. Vossius and BAT have had good relations for many years. In the UK, BAT was a new client for Kirkland at the commencement of proceedings.

Alex Wilson

For Philip Morris, Powell Gilbert leads proceedings in the UK, with Hoyng ROKH Monegier running the case in Germany. Partners Alex Wilson and Peter Damerell led the case for PMI.

Marcus Smith, a deputy judge of the Chancery Division, acted as the presiding judge in this case. The latest case on heat-not-burn technology was heard at the end of May, with the judgment turned around in around seven weeks.

For BAT/Nicoventures
8 New Square (London): Adrian Speck
11 South Square (London): Kathryn Pickard
Kirkland & Ellis (London): Jin Ooi (partner); associates: Peter Pereira, Nadia Spiccia, Ashley Grant
D Young & Co. (London): Darren Lewis

For Philip Morris International
8 New Square (London): Andrew Lykiardopoulos
11 South Square (London): Tom Alkin
Hogarth Chambers (London): Edward Cronan
Powell Gilbert (London): Alex Wilson, Peter Damerell (partners); associates: Alex Borthwick, Callum Beamish

UK High Court, London
Marcus Smith (presiding judge)