Tobacco firm alleges BAT sale forced by 'sham' lawsuit
Oral nicotine product maker claims rival pursued litigation to monopolise market | Tobacco-derived nicotine pouch products at centre of dispute.
Dryft Sciences has accused the US subsidiary of tobacco company Swedish Match of pursuing "sham" IP litigation to expand its monopoly position.
In a suit filed on Tuesday, August 2, US-based Dryft claimed that Match controls at least 80% of the market for tobacco-derived nicotine pouch products (NP products) in the US. And, to maintain its “monopoly position”, it said Match filed a “series of costly, time-consuming and baseless legal actions” against Dryft.
These patent and trade secret actions, according to Dryft, sought to “stifle competition” and “bully a smaller market participant”, and they have effectively forced Dryft out of the market.
Dryft’s NP products were sold to British American Tobacco in 2020 for $150 million, after its value had allegedly been hit by Swedish Match's campaign.
According to Dryft, there were only five Food and Drug Administration-compliant brands of nicotine pouches on the US market in 2016. After the British American Tobacco acquisition, Dryft’s brand was folded into British American Tobacco’s own NP products line.
“Match’s sham legal actions against Dryft were but one aspect of a premeditated, multi-pronged, multi-year campaign of harassment and intimidation that Match and its affiliates set in motion against Dryft and its associates, vendors, and affiliates, to maintain and expand its monopolist position in the NP products market in the US,” alleged Dryft.
The suit added that Match has also brought suits against its contract manufacturer in Sweden, as well as ignoring the clear implications of a 2017 settlement agreement between Match and Dryft’s parent company.
Dryft has claimed that Match’s acts violate the Sherman Act and the California Cartwright Act for protecting and expanding its monopoly, or attempting to monopolise, as well as "tortious interference" with a prospective economic advantage.
Now, Dryft is seeking damages of $1.2 billion, which it said represent the “difference in price that Dryft was valued before and after the sham legal actions commenced, as well as the estimated value that Dryft would have achieved”.
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