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Altria can’t sell Iqos in U.S. as Biden won’t intervene in patent dispute

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Philip Morris International displays an iQOS electronic cigarette. It heats the tobacco but doesn’t burn it.

Getty Images| AFP | Getty Images

Altria Philip Morris InternationalAfter the Biden administration chose to ignore a patent dispute, Iqos cigarettes devices cannot be imported or sold in the U.S.

Rival R.J. Reynolds is a subsidiary British American TobaccoThe claim was filed with the U.S. International Trade Commission. In late September, the ITC ruled that the Iqos device infringed on two of Reynolds’ patents. In the course of this process, the Biden Administration conducted a 60 day administrative review. It decided not to take any action against the ITC’s decision.

Gareth Cooper (British American Tobacco Assistant General counsel) stated that today’s announcement “provides a measure success for our enforcement IP rights so we can continue innovating as a common practice among innovation-based industry,” said Cooper.

Altria released the Iqos device to the United States in 2012, however it had been developing the product for more than 10 years before Philip Morris left the company. To heat tobacco, the device does not burn it. It is designed to deliver the same nicotine rush as smoking a cigarette but with fewer toxins.

Philip Morris is the international distributor of the Iqos device and Altria has been granted a license for it to be sold in the U.S. Although Iqos is not a significant part of Altria’s U.S. operations, it does represent the company’s move away from traditional tobacco products that have been in declining demand. Altria stated that it has 20,000 U.S. users who use the device. However, they won’t be able buy it in the U.S.

However, this is far from the end for the patent disputes between Reynolds, Altria, and Philip Morris. Reynolds filed a claim to the U.S. Patent and Trademark Office regarding Iqos. This process could take between six and twelve months. However, appeals can be filed, which may prolong it even further.

Philip Morris released a statement saying that, “While this decision will cause short-term disruption,” he said.

Philip Morris said also that it is working on contingency planning to go back to the U.S. They could either move production to the U.S., or alter the design sufficiently to prevent patent infringement claims.

British American Tobacco’s shares fell 1% premarket on Tuesday while Philip Morris and Altria had fallen less than 1 percent.

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