PMI and Altria got burned by ITC’s decision to ban IQOS in the US.
British American Tobacco scored a major win when the US International Trade Commission (ITC) ruled last week that Philip Morris International and Altria must stop not just the import of IQOS, but also the sale of the heated tobacco device in the US. ITC found that IQOS infringes on two of BAT/RJ Reynolds’ patents. This is the latest development in a patent war over heat-not-burn technology with multiple law suits filed on both sides in courts in Japan, the UK, Germany, and Italy, in addition to the US.
Paradoxically, IQOS is the only electronic nicotine delivery product to receive US Food and Drug Administration (FDA) authorization as a modified risk tobacco product and allowed to be marketed in the country.
ITC’s decision most likely came as a surprise to PMI, which called it “puzzling”, after the full commission chose to review the initial administrative law judge’s findings and recommendations which favored BAT’s case in late July. At the time PM USA decided to delay further expansion of IQOS and Marlboro HeatSticks in the US, where the device is sold in a select few states – Georgia, North Carolina, South Carolina, and Virginia.
The import and sales ban will take effect in 60 days after administrative review. Philip Morris and Altria plan to appeal the decision and are working on contingency plans.