Tag: Altria Client Services

  • Altria: Illicit Disposable Vapes Impacting NJOY Sales

    Altria: Illicit Disposable Vapes Impacting NJOY Sales

    Credit: Apichat

    Altria says a booming illegal disposable flavored vape market is causing a major decline in the sales of its authorized vaping products.

    Sal Mancuso, Altria’s CFO, pointed out on a call with select media and financial analysts that traditional cigarette industry volumes had dropped even more than usual in the third quarter. The decline was caused by inflation and economic issues influencing customers, as well as the heightened usage of illegal flavored disposable e-cigarettes.

    Mancuso further stated that there appeared to be more switching between different categories than initially assumed and that e-cigarettes alone were causing a 1.5 percent to 2.5 percent reduction in traditional cigarette industry volumes.

    BAT subsidiary R.J. Reynolds Vapor Co. holds the top market share in the U.S. at 41.8 percent as of the latest Nielsen convenience store report released Oct. 7.

    NJOY, which Altria purchased for $2.75 billion in June, has struggled to increase its No. 3 market share.

    “The current state of the (vaping) market is intolerable for both legitimate manufacturers and consumers,” Billy Gifford, Altria’s CEO, said during the call. “As we have noted repeatedly for months, the regulated market is being overrun by illegal-flavored disposable e-vapor products made and distributed by companies violating virtually every rule and guidance FDA has issued since 2016.

    “A lot of these products are imported. They’re imported illegally and then they’re sold illegally.”

    Saying a “strong course correction is needed,” Gifford noted that Altria has filed federal lawsuits in California against 34 organizations that include manufacturers, distributors and online retailers.

  • Reynolds Hit with $95 Million Verdict in Vapor Patent Dispute

    Reynolds Hit with $95 Million Verdict in Vapor Patent Dispute

    Photo: New Africa

    A jury in the U.S. District Court for the Middle District of North Carolina awarded Altria Client Services more than $95 million after finding that Reynolds Vapor Co.’s Vuse Alto e-vapor product infringed three Altria patents.

    The jury awarded $95.23 million in past damages through June 30, 2022. Post-trial proceedings will address ongoing damages through the expiration of Altria’s patents in 2035. At trial, Altria urged the jury to find a royalty rate of 5.25 percent, which the jury accepted in returning its award of past damages.

    “Patents are at the core of innovation, and we take very seriously protecting our intellectual property,” said Murray Garnick, executive vice president and general counsel of Altria, in a statement. “We are pleased that the jury recognized the importance of Altria’s innovation and the value of its patent rights.”

    At issue in this case were three patents awarded to Altria Client Services by the U.S. Patent and Trademark Office based on filings dating back to April 2015. The jury found that Reynolds Vapor violated Altria’s patents covering the pod assembly used in Vuse Alto.

    The case is Altria Client Services vs. Reynolds Vapor Company et al.

  • Altria Buys Poda Holdings’ Assets and Properties

    Altria Buys Poda Holdings’ Assets and Properties

    Photo: Poda Holdings

    Altria Client Services will pay $100.5 million for assets and properties used in Poda Holdings’ business of developing, manufacturing and marketing multisubstrate heated capsule technology, according to a Poda press release. The deal includes the owners’ associated patents and the company’s license of certain of those patents pursuant to an amended and restated royalties agreement dated April 12, 2019.

    “This agreement represents a significant milestone for Poda and its employees,” said Ryan Selby, Poda’s CEO, director and chairman of the company’s board of directors. “Our teams have worked diligently on this technology since the company’s inception, and we believe these agreements maximize its value for the company and its shareholders.”

    Poda’s multisubstrate heated capsule technology uses proprietary biodegradable single-use capsules. The design of the technology prevents cross-contamination between the heating devices and the capsules, which eliminates cleaning requirements and provides users with a convenient and enjoyable experience, according to Poda Holdings.

    This agreement represents a significant milestone for Poda and its employees.

    Ryan Selby, CEO, director and chairman, Poda Holdings

    Poda’s technology is fully patented in Canada and is patent pending in over 60 additional countries, covering almost 70 percent of the global population.

    Altria Client Services’ parent company, Altria Group, currently holds a license to distribute Philip Morris International’s IQOS HnB product in the United States. That product, however, has been subject to an import ban in the wake of an intellectual property dispute with BAT.

    Analysts have also speculated on the likelihood of the IQOS distribution deal being renewed when it expires in 2024. PMI and Altria currently disagree about whether Altria has thus far met the milestones to earn the renewal option for an additional five-year deal.