October 4, 2018 / 10:07 AM / 2 months ago

E-cigarette maker Juul files complaints against 'copycat products'

LONDON (Reuters) - Juul Labs, the e-cigarette maker at the heart of a U.S. crackdown on youth vaping, has filed patent infringement complaints in the United States and Europe against what it said were copycat rivals.

A woman smokes a Juul e-cigarette in New York, U.S., September 27, 2018. REUTERS/Brendan McDermid

The complaints follow the seizure this week by U.S. health regulators of more than 1,000 pages of documents from Juul Labs about its sales and marketing practices, as they investigate growing e-cigarette use among young people that threatens to create a new generation of nicotine addicts.

Juul, which controls nearly three quarters of the U.S. e-cigarette market, filed a complaint on Wednesday with the U.S. International Trade Commission (ITC) naming 18 entities, most of them based in the United States or China, accusing them of developing and selling products based on its patented technology.

The complaint, made public on Thursday, asks the ITC to prevent the importation of the products into the United States and their sale.

The company said its UK subsidiary also filed a complaint in Britain against French company J Well France SAS, alleging that its Bo line of e-cigarettes infringed its UK patents.

An official for J Well, also named in the U.S. complaint, said the company was surprised by Juul’s claims and that the company would “take all the necessary steps to defend its rights against Juul.”

Silicon Valley-based start-up Juul gained prominence in the United States in just a few years, helped by its high nicotine content and sleek, flash-drive sized device. Its breakneck growth and popularity in high schools across the country has attracted scrutiny from government officials and regulators.

It also sparked a wave of lower-priced rivals.

“The rapid proliferation of products infringing on our intellectual property continues to increase as our market share grows,” Kevin Burns, Juul’s chief executive officer, said in a statement.

“Protecting consumers and preventing underage use are critical priorities, and we will take decisive action where available to restrict illegal copy-cat products that undermine our efforts.”

Juul said many of those rival products appear to be sold with little or no age-verification processes and appear to target young people with flavors such as “bubble bubble” and “sour gummy”.

Liberum analyst Nico von Stackelberg said a ban on Juul lookalikes would further strengthen the position of Juul and other companies in the e-cigarette space, which include British American Tobacco (BATS.L), Imperial Brands (IMB.L) and Altria (MO.N), by allowing for consolidation of the market.

“The reality is the US e-cigarette market is largely grey and the knock-off players in question ... exist and compete for share of wallet,” he said.

Reporting by Martinne Geller; Editing by Keith Weir

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