BAT, Philip Morris settle patent disputes over heated tobacco, vapes

[February 03, 2024]  (Reuters) - Tobacco giants Philip Morris International and British American Tobacco said on Friday they had agreed to resolve a multitude of ongoing patent infringement disputes relating to their cigarette alternatives.

The cigarette makers had been fighting a multi-front patent dispute that has hurt both sides.

BAT, which makes Vuse vapes and Glo heated tobacco devices, was ordered to pay PMI millions of dollars after losing one case, while PMI has been blocked from importing its flagship heated tobacco device IQOS into the United States as part of another.

Under the non-monetary, worldwide settlement, which lasts for eight years, the companies have agreed to dismiss all pending patent infringement cases, according to statements and filings from the companies. It also prevents future claims against current products.

A PMI filing with the Securities and Exchange Commission added that under the agreement the parties will also request the block on IQOS imports into the United States to be rescinded - a key win for PMI as it looks to bring the device to the critical market this year.

"We are pleased that this matter has been resolved to the mutual satisfaction of both parties," said Jacek Olczak, PMI's Chief Executive Officer.

A woman poses with a cigarette in front of BAT (British American Tobacco) logo in this illustration taken July 26, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

"This agreement is an important step forward for BAT and all our stakeholders," BAT Chief Executive Officer Tadeu Marroco said, adding it will allow the company to focus on innovation.

The agreement allows both companies to introduce future iterations of their products, they added in separate statements.

Shares in BAT briefly spiked after the news. They were up 1.4% at 1235 GMT. PMI's stock was flat in thin pre-market trading.

(Reporting by Yadarisa Shabong in Bengaluru and Emma Rumney in London; Editing by Shinjini Ganguli and Emelia Sithole-Matarise)

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