BAT and Vossius fend off Philip Morris suit over heat-not-burn cigarettes

British American Tobacco has been successful in a case against rival Philip Morris over heat-not-burn e-cigarette technology in Germany. As a result, Philip Morris withdrew its application for a preliminary injunction from the Regional Court Munich. But the dispute will only really gain momentum in Europe next year.

9 December 2020 by Mathieu Klos

heat-not-burn With the help of Vossius, BAT has won a dispute against rival Philip Morris over heat-not-burn e-cigarette technology ©Евгений Вершинин/ADOBE STOCK

British American Tobacco and Philip Morris are fighting a global battle over novel heat-not-burn technology for e-cigarettes. London and Munich courts are the main venues for the dispute in Europe and, at the beginning of November, the first showdown took place in Munich. However, BAT is being seen as the victor, after Philip Morris did not obtain the judgment that it had hoped for.

Iqos manufacturer Philip Morris had applied for a preliminary injunction against competitor BAT’s e-cigarette products in Germany (case ID: 7 O 12188/20). BAT sells the products under brand name Glo. However, the court confirmed that Philip Morris withdrew its application on the day of the hearing.

According to sources, the court appears to have had doubts as to whether the patent EP 32 66 323 was rightly granted. Philip Morris did not comment on this. In July the European Patent Office granted EP 32 66 323. In September, BAT filed an opposition against it.

Heat-not-burn goes head-to-head

The global dispute broke out in 2018, when Philip Morris launched a patent infringement action in Japan against BAT’s e-heated tobacco products. In spring this year BAT hit back, suing Philip Morris at the International Trade Commission in the US. According to press reports, BAT claimed remedies for damages, as well as an injunction at the District Court of Eastern Virginia.

BAT also filed a patent infringement suit against Philip Morris at the Regional Court in Munich. In this case, the plaintiff is Nicoventures Trading, a subsidiary of BAT. Nicoventures develops and distributes novel nicotine products for the tobacco giant, which sells its product under brand name Glo. Similarly, Glo uses heat-not-burn technology.

BAT is suing Philip Morris’ German subsidiary (7 O 4452/20) and parent company Philip Morris Products S.A. (7 O 4964/20). In accordance with custom, the court has divided the action. BAT is attacking several Iqos products. The company claims direct and indirect infringement of its patent EP 3 398 460 B1. In Germany, BAT seeks injunctive relief and damages from Philip Morris.

The Munich court will hear the lawsuits on 18 February, and in October 2021.

Shortly after the action was filed, Philip Morris responded by applying to the Munich Regional Court for a preliminary injunction. JUVE Patent is not aware yet of any further lawsuits by Philip Morris currently pending in Germany.

London calling

The UK litigation market is also seeing some movement in heat-not-burn litigation. Nicoventures has commenced litigation proceedings for a patent revocation action against Philip Morris (case no. HP-2020-000011) at the High Court in London. The case concerns a patent family owned by Philip Morris, which protects the combustion technology used in heat-not-burn e-cigarettes.

However, BAT is not the only party to introduce UK proceedings. Philip Morris has also commenced proceedings against RAI Strategic Holdings, another subsidiary of BAT, for revocation of the BAT patent-in-suit (case no. HP-2020-000012).

Both companies have also claimed for infringement of their patents. JUVE Patent understands the High Court will hear the trials in February and May 2021.

According to Philip Morris, courts in the Czech Republic, Bulgaria and Poland have recently rejected BAT’s preliminary injunction requests against PMI’s heated tobacco product. The two companies are battling also in Italy.

Industry experts are not excluding the possibility of BAT and Philip Morris bringing action in other European countries with lucrative markets.

Philip Morris moves to heat-not-burn

Analysts consider the e-cigarette business a key driver of tobacco industry growth. It is estimated that global sales could rise to US$30 billion by 2030. However, in recent years, sales growth has collapsed, after e-cigarettes hit the headlines in connection with a number of deaths. Once again, questions have arisen concerning the safety of the products.

Nevertheless, Philip Morris has already announced its departure from traditional cigarettes. Novel smoking products netted the world’s largest tobacco company €4 billion in 2018.

In addition to Vype and Iqos, products produced by BAT and Philip Morris respectively, the market considers Juul Labs and JTI important players.

In April, BAT sued Juul Labs’ parent company Altria in the US for patent infringement. JUVE Patent is not yet aware of any parallel lawsuits in Germany and the UK.

Mixed team for BAT

In London and Munich, BAT relies on a combination of two firms. While the London patent team of Kirkland & Ellis acts for BAT in the High Court proceedings, as well as helping co-ordinate the European litigation, Vossius & Partner ran the first case in Germany –  and took the first win.

Tobias Hahn

Why BAT has chosen the two firms remains unknown. But neither covers Europe completely. Vossius lacks an office in London, but Kirkland & Ellis has a renowned patent team in the UK capital. However, the latter is not present in Germany. Jin Ooi, partner at Kirkland in London, leads the team from this side.

BAT is a new client for Kirkland. On the other hand, Vossius and BAT have had good relations for many years. JUVE Patent is currently unaware which law firms are acting for BAT in the other jurisdictions.

Boutique teams

Global patent disputes are ideal for patent teams at international law firms. But, with the exception of Hoyng ROKH Monegier, both opponents have banked on mixed teams from renowned law firms in the respective jurisdictions.

Powell Gilbert partner Alex Wilson leads UK proceedings, as well as co-ordinating the European disputes. In Germany, Hoyng ROKH Monegier has taken over the defence of Philip Morris, also acting for the company in the counterclaim. Here, the firm’s German team advises the tobacco manufacturer for the first time. Powell Gilbert and Hoyng ROKH Monegier maintain good relations. As such, the combination of the two firms comes as no surprise.

UK firm Reddie & Grose originally filed EP 323. More recently, Philip Morris transferred the prosecution to Stuttgart firm Dreiss, which also handles the opposition proceedings. UK firm D Young & Co is conducting opposition proceedings on behalf of BAT.

Thure Schubert

Thure Schubert

In the US ITC proceedings, Jones Day represents BAT. Latham & Watkins represents Philip Morris.

For British American Tobacco
Vossius & Partner (Munich): Thure Schubert (lead), Elard Schenck zu Schweinsberg (patent attorney), Kai Rüting (Düsseldorf); associates: Matthias Jentsch, Ananda Landwehr (patent attorney)
In-house (London): Tracey Cooke (head of patents)

For Philip Morris
Hoyng ROKH Monegier (Düsseldorf): Tobias Hahn (lead), Kay Kasper; associates: Franca Poll-Wolbeck, Valentin Wagner

Regional Court Munich, 7th Civil Chamber
Matthias Zigann (presiding judge), Anna-Lena Klein, Georg Werner