Court refuses Philip Morris bid to stay British American Tobacco dispute
The English High Court has rejected tobacco company Philip Morris’ request for a stay in patent proceedings concerning competitor British American Tobacco (BAT).
On Friday, May 27, Mr Justice Mellor of the Patents Court held that a refusal of the stay would bring some commercial certainty for BAT, while also directing that one of the trials be heard in March 2023.
A BAT spokesperson said: “BAT is pleased with the UK Patents Court decision dismissing PMI’s application to stay UK revocation proceedings brought by BAT against PMI’s patent, European Patent number 3266323. BAT has consistently maintained that this PMI patent is invalid. The court directed the UK trial of the revocation proceedings to be listed for hearing in March 2023. While this case remains ongoing, we are unable to comment further.”
The two actions before the court consist of a revocation of two BAT patents, brought by Philip Morris, and an action brought by BAT to revoke PMI's '323 patent. BAT has already consented to revocation of one of the patents (EP080) and counterclaimed for infringement of the other in the former action (EP830).
All the patents concern 'heat not burn' products (HNB), also known as 'tobacco-heating products' (THP). Tobacco is heated to generate a nicotine-containing aerosol, with the lack of burning said to significantly to reduce the levels of harmful chemicals in the aerosol compared to the smoke of combustible cigarettes.
In late April, Mellor heard three applications. In the first proceeding (known as the ‘029 action’) Philip Morris applied for permission to amend its statements of case to introduce a claim for Arrow-type declaratory relief.
In the latter proceedings, known as the 002 action, Philip Morris applied for a stay of proceedings pending final resolution of parallel opposition proceedings at the European Patent Office (EPO). BAT also applied for an order that the trial take place at the earliest possible date after 1 March 2023.
"On these applications one side is attempting to alleviate the effects of legal and litigation uncertainty on their commercial plans, whilst at the same time seeking to obstruct (to differing degrees) a similar attempt by the other,” said Mellor.
He added: “In the 029 action, BAT opposes Philip Morris’ application to introduce the claim for Arrow-type relief, relief which aims to provide legal certainty for Philip Morris. In the 002 action, BAT seeks an early resolution in this action of its claim that the Philip Morris patent in suit is invalid. It can be said that by its application for a stay, Philip Morris seeks to delay the achievement of the legal certainty sought and thereby to prolong the uncertainty for BAT.”
The actions are part of a “much larger global battle” started by Philip Morris in Japan in 2018, said Mellor.
In March last year, the English High Court revoked two BAT e-cigarette patents for obviousness, concluding they lack an “inventive step” over Philip Morris’ patent. And, in April 2020, BAT commenced proceedings to revoke three divisional patents from the same family as those in issue in Japan. An appeal is pending and due to be heard in November 2022.
Turning to the stay application, Mellor said that the 002 action must be considered against the global patent dispute backdrop.
“Although this point was not discussed in the evidence, in my view, there is reason to believe, from this dispute and the previous cases between the parties decided in the UK, that each side has been and remains intent on building up/acquiring a thicket of patents around every possible detail of their HNB or THP products, ready to assert against the other,” he said.
While adding there is nothing inherently wrong with this (provided the patents are valid), both sides are “intent on creating and maintaining as much commercial and legal uncertainty as possible for the other”.
According to the court, refusal of the stay will bring some commercial certainty for BAT at a considerably earlier date via the 002 action than in the EPO.
Mellor concluded: “In my view the balance of justice comes down firmly in favour of eliminating, as soon as possible, the uncertainty created for BAT by the presence of EP323 and EP225, and hence in favour of refusing the stay sought by Philip Morris.”
However, Philip Morris did succeed in introducing its claim for Arrow-type relief.
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