US Suspends IQOS Imports
The International Trade Commission upheld its preliminary ruling from May 2021 that Philip Morris International’s IQOS device infringes two patents owned by Reynolds American Inc. (RAI), a BAT subsidiary. The agency has issued an import ban and cease-and-
The International Trade Commission (ITC) upheld its preliminary ruling from May 2021 that Philip Morris International's IQOS device infringes on two patents owned by BAT subsidiary Reynolds American Inc. (RAI).
The agency has issued an import ban and cease-and-desist order to prevent IQOS cartridges and devices from being sold in the United States for 60 days. PMI's U.S. partner, Altria Group, plans to continue selling IQOS in its existing markets for the next 60 days.
British American Tobacco welcomed the ruling. "Infringing our intellectual property undermines our investment and innovation capabilities, thereby reducing the health impact of our business," the company stated in a release. "Therefore, we will vigorously defend our intellectual property globally."
These patents relate to an electric device with a heater that produces aerosol, which will expire in October 2026 and November 2031.
BAT has filed similar cases globally, including in Germany, the UK, Japan, and Italy.
Morgan Stanley stated that the ruling has limited financial impact on PMI and Altria, as IQOS sales in the U.S. do not significantly contribute to the companies' revenues. However, the outcomes of similar cases filed by BAT internationally against PMI could have a more significant impact. So far, PMI has successfully defended itself in cases in the UK and Greece.
The investment bank also noted that the IQOS ban applies to imported products,
indicating that the issue could be overcome by shifting production to the U.S.
The U.S. Trade Representative will now review the ITC's decision. If the decision is not overturned within 60 days (which is rare), an appeal can be made to the U.S. Court of Appeals, but the import ban remains in effect throughout the appeal process.
