Tobacco.org

Jury Rules in Favor of R.J. Reynolds Tobacco Company in Patent Suit 

R.J. Reynolds Tobacco Company is very pleased with today's jury verdict in favor of the company in a patent infringement lawsuit brought by Star Scientific, Inc. (Star) in the U.S. District Court for Maryland - Northern Division. The jury ruled the patents in question, involving a method of treating tobacco to substantially prevent the formation of tobacco-specific nitrosamines (TSNAs), were invalid and not infringed.

"Certainly, we are pleased with the jury's decision," said August Borschke, chief patent counsel for R.J. Reynolds. "The jury carefully evaluated all of the evidence presented and came to the right conclusion. They saw what we have known all along, that Star's patents are invalid, and they should not have been issued in the first place. The jury also confirmed R.J. Reynolds did not infringe Star's patents in any event."

Jump to full article »

Baltimore Federal Jury Rejects Star's Patent Infringement Claims Against R.J. Reynolds 

The jury verdict was a wipeout for Star: Jurors not only found its patents invalid but also said Reynolds did not infringe. It doesn't get much more resounding than that, folks. Star's shares, according the The Wall Street Journal's account of the verdict, fell more than 80 percent after the jury ruled. . . .

McMillan told the Litigation Daily on Wednesday that Star will file posttrial motions asking Judge Marvin Garbis to reverse the verdict, and, if those are not successful, will appeal. The Crowell & Moring partner said Reynolds based its case on whether the tobacco farmers that Star alleged to infringe its patents used an earlier curing method developed by a Reynolds scientist. "We moved at the outset to strike that and focus on the relevant issues we were trying, which were whether the farmers did in fact perform each element of the [Star] patents," McMillan said. "We think there were an extraordinary number of errors made by the trial judge."

Given Star's history with Judge Garbis, we'd put odds against him tossing the jury verdict.

Jump to full article »

Jury Verdict Announced in Star Scientific Patent Infringement Lawsuit Against RJ Reynolds 

Scientific Inc. (NASDAQ: STSI) announced today that the jury in the trial of the company's patent infringement lawsuit concluded its deliberations. The jury found that the two Star patents at issue in the case were not valid, and were not infringed. The company issued the following statement:

Our counsel will file a motion with the US District Court for Judgment as a Matter of Law or a New Trial within the next ten days. If that motion is not granted, our appellate counsel then will file a notice of our intent to appeal the verdict with the United States Court of Appeals for the Federal Circuit as soon as practically possible.

Jump to full article »

• Star Scientific loses Reynolds US patent dispute  

A U.S. jury in Maryland ruled on Tuesday against tobacco company Star Scientific Inc in its lawsuit with Reynolds American Inc over a patent dispute on reducing cancer-causing elements in tobacco.

Shares of Star Scientific plummeted more than 80 percent in after-hours trading while shares for Reynolds gained 2.39 percent.

Star Scientific sued RJ Reynolds, a subsidiary of Reynolds American, in 2001, alleging patent infringement over a technology invented by Star Chief Executive Jonnie Williams. The technology comes from work he began in 1996 on a tobacco curing process that would inhibit "microbial nitrate reductase activity," which can lead to cancer-causing nitrosamines in tobacco.

In June 2007, a Maryland district judge ruled that Star's patents were unenforceable because of the way in which the company applied for the patent.

Jump to full article »

• Jury Hears Closing Arguments In Tobacco-Patent Case 

Lawyers for Star Scientific Inc. (STSI) and R.J. Reynolds Tobacco Co. made their final bid Monday to sway jurors in a high-stakes case involving Star's patent claim to a new tobacco-curing method that substantially reduces the formation of certain cancer-causing toxins.

Star, which is seeking several hundred million dollars from RJR for patent infringement, said its patented method for reducing certain toxins in cured tobacco, known as tobacco specific nitrosamines, was a revolution in the tobacco industry.

"Nobody could believe it," Star lawyer Richard McMillan said in his closing argument to jurors. "It was completely surprising to the industry."

McMillan said RJR, a unit of Reynolds American Inc. (RAI), "got wind" of the small company's patent and encouraged its farmers to practice Star's invention without permission.

Jump to full article »

• High-Stakes Tobacco-Patent Lawsuit Heads To Jury Next Week  

The fortunes of aspiring tobacco company Star Scientific Inc. (STSI) could hinge on a high-stakes patent-infringement case that goes to a federal jury in Baltimore next week.

Star, a small tobacco company with a big patent claim, says it has invented a method of curing tobacco that prevents the formation of certain cancer-causing toxins.

The Virginia-based company sued R.J. Reynolds Tobacco Co., a unit of Reynolds American Inc. (RAI), alleging that the nation's second-biggest tobacco company encouraged its tobacco farmers to practice Star's patented curing method. . . .

After several years of pre-trial legal wrangling, a patent-infringement trial began May 18. Closing arguments are likely to wrap up Monday, and then the case will be submitted to the jury for deliberations.

Jump to full article »

/C O R R E C T I O N -- Star Scientific, Inc./  

In the news release, Star Scientific Files First Quarter Financial Report, issued yesterday, May 11, by Star Scientific, Inc. over PR Newswire, we are advised by the company that the second paragraph, first sentence, should read "Net sales for first quarter 2009, which totaled $.15 million, were essentially unchanged compared with first quarter 2008 net sales of $.15 million" rather than "... compared with fourth quarter 2008 net sales of $.15 million" as originally issued inadvertently.

Complete, corrected release follows:

Jump to full article »

• Star Scientific Files First Quarter Financial Report 

Star Scientific, Inc. (Nasdaq: STSI) filed its quarterly report on Form 10-Q for the period ended March 31, 2009, today with the Securities and Exchange Commission. The company reported cash and cash equivalents of $19.7 million as of March 31, 2009 compared with $6.5 million for the fourth quarter 2008.

Net sales for first quarter 2009, which totaled $.15 million, were essentially unchanged compared with fourth quarter 2008 net sales of $.15 million. The company believes that sales of the company's dissolvable smokeless tobacco products, Ariva and Stonewall, were adversely impacted by an increase in the Federal Excise tax on tobacco products contained in the SCHIP legislation, which became effective April 1. Wholesale and retail operations were reluctant to maintain inventory on hand beginning in late February, in an effort to minimize taxable inventory as of the April 1 effective date. Early second quarter sales data appear to indicate that dissolvable tobacco sales have rebounded as wholesale and retail inventories are being restocked. Star Scientific had a net loss of $5.2 million for first quarter 2009 compared with a $5.5 million loss for first quarter 2008.

The company also announced that the jury trial in its patent infringement lawsuit against RJ Reynolds Tobacco Company (RJR) will commence with jury selection on Monday, May 18. The trial will be held in US District Court, West Lombard Street in Baltimore, MD, and Star anticipates that the jury trial will last approximately three weeks.

Jump to full article »

Star Scientific Reports on Filing Patent Application for Zero-Nitrosamine Tobacco Curing Process, Product Development by Rock Creek Pharmaceuticals 

Star Scientific (Nasdaq: STSI) and its wholly-owned subsidiary, Rock Creek Pharmaceuticals ("Rock Creek"), today reported on their continuing efforts to lessen the harm linked with tobacco use. Star Scientific, through its CEO Jonnie R. Williams, recently filed a new US Patent Application for a novel modification of its patented curing technology that results in the production of tobacco leaf that consistently contains levels of carcinogenic TSNAs (known as NNNs and NNKs) that are below detection even by the most sensitive measures. That patent application for zero-nitrosamine tobacco currently is pending before the US Patent and Trademark Office.

Jump to full article »

Marcial: Pros Gazing at Star Scientific  

Investors will be watching intently as a big tobacco industry patent-infringement case goes to trial in mid-May: a David-and-Goliath court battle pitting the second-largest U.S. cigarette maker, R.J. Reynolds Tobacco, a unit of Reynolds American (RAI), against the tiny and little-known Star Scientific (STSI).

Shares of Star Scientific, which has developed tobacco-curing technology that prevents the formation of certain carcinogenic toxins in tobacco, have started to attract some big investors.

Jump to full article »

• With Tobacco-Patent Suit, Star Scientific Presses for Clout  

A decade of seeking traction in the tobacco market has produced little success for Star Scientific Inc. Last year it posted an $18 million loss on sales of only $500,000.

But its commercial failures belie some technological innovations that have made Star Scientific something of a pioneer in the industry's hottest market: lower-carcinogen smokeless tobacco. And now its stock price is rising amid hopes of an imminent payoff for shareholders.

Those hopes -- and possibly Star's survival -- hinge on the outcome of a patent-infringement lawsuit that is scheduled to go to trial in U.S. District Court in Baltimore in May. In the suit, Star charges that tobacco-purveyor R.J. Reynolds infringed on Star patents covering a carcinogen-lowering process for curing tobacco. . . .

In one measure of the importance of legal strategy to Star's fortunes, its president is Paul Perito, a former senior partner in the law firm of Paul, Hastings, Janofsky & Walker LLP. And the lawyer who successfully represented Star in 2008 at the U.S. Court of Appeals for the Federal Circuit was Carter G. Phillips, a Sidley Austin LLP managing partner who has argued 56 cases before the U.S. Supreme Court.

Still, the merits of Star's case against Reynolds remain to be decided. And if it prevails, Reynolds would almost certainly appeal, while even the most generous verdict would leave Star a David in an industry of Goliaths.

Jump to full article »

Star Scientific Files Annual Financial Report 

Star Scientific, Inc. (Nasdaq: STSI) filed its Annual Report on Form 10-K today with the Securities and Exchange Commission. The company reported 2008 net sales of $0.5 million, which essentially were unchanged from net sales for 2007. However, volume sales of the company's two dissolvable smokeless tobacco products, Ariva(R) and Stonewall(R), increased 7.8% in 2008 compared to 2007. The wholesale price for 20-piece packages of the products was increased $.10 effective January 1, 2009. Star reported a net loss for 2008 of $18.3 million compared to the 2007 net loss of $41.5 million. The 2007 net loss included a $27.0 million loss from the sale of the interest stream and reversionary interest in the company's MSA escrow accounts, in addition to an operating loss of $17.1 million that was partially offset by a gain of $3.6 million on the sale of 990 tobacco curing barns.

Jump to full article »

Reynolds Appeal Rejected, Clearing Way for Star Trial (Update2)  

The U.S. Supreme Court refused to question Star Scientific Inc.’s lawsuit against R.J. Reynolds Tobacco Co. over a patented formula for reducing cigarette carcinogens, clearing the way for trial as soon as May.

The justices, without comment, today rejected an appeal by Reynolds, the second-largest U.S. tobacco company. The Reynolds American Inc. unit sought to overturn a federal appeals court decision, arguing unsuccessfully that Star obtained two patents by withholding information from federal examiners. Star rose as much as 17 percent on the news.

Star, based in Petersburg, Virginia, is seeking as much as $1 billion in damages in its patent-infringement suit. The company’s patents cover a method for curing tobacco leaves while leaving oxygen in the air to prevent formation of cancer-causing nitrosamines.

Jump to full article »

Supreme Court refuses to get involved in tobacco patent fight 

The Supreme Court has refused to get in the middle of a patent fight over a way to cure tobacco that may make it less carcinogenic.

The high court on Monday refused to hear an appeal from R.J. Reynolds Tobacco Co., who is being sued by Star Scientific, Inc.

Star Scientific, Inc. says R.J. Reynolds Tobacco Co. infringed on its patents on a way to cure tobacco minimizing the formation of tobacco-specific nitrosamines or TSNA, which may be carcinogenic.

But a trial court says the patents are unenforceable, because the inventor kept from the Patent and Trademark Office key documents and information -- including that low-TSNA tobacco already had been grown in the U.S.

The U.S. Court of Appeals for the Federal Circuit overturned that decision, saying a judge cannot throw a patent out without clear and convincing evidence that a deception was intentional.

Jump to full article »

Reynolds Appeal Rejected, Clearing Way for Star Trial (Update1) 

The U.S. Supreme Court refused to question Star Scientific Inc.’s lawsuit against R.J. Reynolds Tobacco Co. over a patented formula for reducing cigarette carcinogens, clearing the way for trial as soon as May.

The justices, without comment, today rejected an appeal by Reynolds, the second-largest U.S. tobacco company. The Reynolds American Inc. unit sought to overturn a federal appeals court decision, arguing unsuccessfully that Star obtained two patents by withholding information from federal examiners. Star rose as much as 17 percent on the news.

Star, based in Petersburg, Virginia, is seeking as much as $1 billion in damages in its patent-infringement suit. The company’s patents cover a method for curing tobacco leaves while leaving oxygen in the air to prevent formation of cancer-causing nitrosamines.

Jump to full article »