Tobacco Giants Pivot to High-Tech Nicotine Alternatives

Mar.31.2022
Tobacco Giants Pivot to High-Tech Nicotine Alternatives
Big tobacco companies shift focus to high-tech nicotine alternatives; patents and legal battles heat up in the nicotine market.

Warren Buffett once described the tobacco industry as effortless money-making: spend one cent to make a cigarette, sell it for one dollar. Those days are long gone.

 

As heated tobacco, e-cigarettes, and nicotine pouches gain popularity, companies such as Philip Morris International and British American Tobacco are shifting their focus from simple cigarettes to high-tech, rechargeable devices.

 

The explosive growth of inventions offering nicotine without smoking, which have the most harmful impact, has sparked a lot of controversy over who owns the technology. Tobacco companies, once competing for top marketing executives, are now pursuing top patent lawyers.

 

Following Russia's invasion of Ukraine, Big Player has announced plans to withdraw from Russia, potentially escalating tensions. Russia is not only the world's fourth-largest cigarette market but also a significant region for heating tobacco products. This means that the company may try to compensate by pursuing growth in other regions.

 

According to a detailed patent review, a total of 73,758 patents related to electronic cigarettes, heated tobacco, and smokeless products were published in the decade leading up to 2020. The report was authored by Roya Ghafele, founder of the intellectual property consulting firm OxFirst, and commissioned by the Smoke-Free World Foundation, which is funded by Philip Morris.

 

A spokesperson reported that Philip Morris International submitted over 20 times more patents for smoke-free innovations between 2018 and 2020 than they did in the two years prior to that. Meanwhile, British American Tobacco claimed to have submitted over 350 patents related to new categories in 2021, a significant increase from the approximately 50 submitted in 2015. Typically, patent applications are submitted in the early stages of research and development, and receiving a patent grant gives the holder exclusive rights to commercialize their invention for a certain period of time.

 

Ghafele stated, "Tobacco companies are newcomers in the patent field, and leading companies are quickly retaining talent from other industries because they realize that a lack of intellectual property awareness could pose a risk to their business in the future.

 

Philip Morris has hired attorneys from Rui Sheng International Law Firm to represent them in litigation, including automobile manufacturers, technology companies, and winners in the decades-long battle over artificial blood vessels. Reynolds has hired lawyers at Zhongda to defend Alphabet Inc.'s Google and Johnson & Johnson in patent cases involving autonomous driving cars and semiconductor technology.

 

The industry is catching up on 50 years of innovation vacuum and suddenly someone started innovating with products aimed at reducing smoking - everyone is entering this field," said Jacek Olczak, CEO of Philip Morris in an interview. "More and more people are investing in innovation, which is a good thing. The effectiveness of patents is a separate issue, which we are studying.

 

Philip Morris was barred from importing its IQOS heated tobacco sticks into the United States last year following a legal battle with British American Tobacco. The company has repeatedly argued that this is a public health issue because the IQOS is the only heated non-burning product approved for sale in the US.

 

Reynolds American Inc., a subsidiary of BAT, filed a lawsuit in April 2020 alleging that Philip Morris and Altria had copied patent technology developed for its Vuse product. Since then, both companies have made additional patent infringement claims in US courts and requested that the US Patent and Trademark Office revoke the other company's patents.

 

The electronic cigarette that vaporizes nicotine is widely believed to have been invented in China twenty years ago. At that time, pharmacist Han Li was attempting to find a less harmful way to satisfy nicotine cravings. In 2013, he ultimately sold his company's patent to Imperial Brands Plc, triggering a series of patent infringement disputes.

 

After Juul Labs Inc. introduced nicotine salts to the world, which are absorbed more quickly into the bloodstream, competitors began selling similar e-cigarettes.

 

Advancing a Lawsuit in Advance

 

As companies venture into the smokeless category, which includes nicotine pouches and medical therapy, more lawsuits are looming. The segment's search for alternative electric heating methods means these companies are facing patent minefields in every expansion area.

 

Swedish Match AB attempted to shut down competitors of nicotine pouch manufacturers, which are similar to small tea bags placed on top of gum, although its lawsuit against Dryft Sciences LLC, a closely held company, failed. Kretek International Inc. sold its Dryft nicotine pouch business to BAT in 2020, which is sold under the Velo brand. Swedish Match is appealing the ruling.

 

For all the right reasons, the tobacco industry has been innovating on the margins to lower risk," said Jason Carignan, CEO of Dryft in an interview. "It feels like these predatory tactics are preventing consumers from accessing the low-risk nicotine alternatives they deserve.

 

According to Ghafele of OxFirst, if innovation is to help reduce the risks associated with nicotine products, the industry needs to "conceptualize intellectual property in a different way.

 

The industry should "move away from patents solely existing to prevent others from using your technology and shutting them down when they do, towards thinking about how patents can be used to build bridges and more positive things," said Rockefeller.

 

(Source: bloomberg.com)

 


Disclaimer

This article is provided solely for professional research, industry discussion, and informational purposes. Any references to brands, companies, products, technologies, or policies are made for factual reporting and analytical purposes only, and do not constitute endorsement, recommendation, promotion, or advertising by 2Firsts.

Nicotine-containing products, including but not limited to cigarettes, e-cigarettes, heated tobacco products, and nicotine pouches, carry significant health risks. Readers are responsible for complying with all applicable laws and regulations in their respective jurisdictions, including age restrictions and access limitations.

The information contained in this article should not be regarded as investment, legal, medical, regulatory, or commercial advice. While 2Firsts strives to ensure the accuracy and reliability of its content, it does not assume liability for any direct or indirect loss arising from errors, omissions, inaccuracies, or reliance on the information contained herein.

This article is not intended for individuals below the legal age for accessing tobacco or nicotine-related information in their jurisdiction.

 

Copyright Notice

This article is either original content produced by 2Firsts or content reproduced, translated, summarized, or adapted from third-party sources with attribution where applicable. The intellectual property rights of the original content remain with 2Firsts or the respective original rights holders.

No individual or organization may copy, reproduce, distribute, republish, modify, translate, or otherwise use this content without prior authorization. Any unauthorized use may result in legal action.

For copyright-related inquiries, corrections, or removal requests, please contact: info@2firsts.com.

 

AI-Assisted Translation and Editing Notice

Portions of this article may have been translated, edited, or reviewed with the assistance of artificial intelligence tools to improve efficiency and readability. Due to the limitations of AI-assisted translation and editing, discrepancies, omissions, or inaccuracies may exist when compared with the original source.

Where applicable, readers are advised to refer to the original source for the most complete and accurate information. If you identify any errors or believe that any content infringes upon your rights, please contact us at info@2firsts.com, and we will review and address the matter promptly.

China’s Vape-Related Exports Rose 4.5% in Q3 2026 as 21.6% Growth in Shipments to the UK Offset a Decline in Shipments to the US
China’s Vape-Related Exports Rose 4.5% in Q3 2026 as 21.6% Growth in Shipments to the UK Offset a Decline in Shipments to the US
China's vape-related exports rose 4.5% year over year to $2.86 billion in the third quarter of 2026, led by stronger shipments to the United Kingdom as exports to the United States declined. UK-bound shipments increased 21.6%, adding $81.9 million, while US exports fell 5.2%, or $53.6 million. Growth weakened through the quarter, with September exports down 6.3% globally and 37.8% to the US. Nicotine-containing vape products accounted for more than 82% of the quarterly net increase, while device exports were nearly flat. Nine-month exports totaled $7.82 billion, up 4.0%.
DATA
Oct.26
Special Report|CrossBar's High-Puff Vapes Draw Attention on Pennsylvania's 163-Product Directory as Link Between Earlier 1.3mL PMTA Filings and New 13mL Products Remains Unclear
Special Report|CrossBar's High-Puff Vapes Draw Attention on Pennsylvania's 163-Product Directory as Link Between Earlier 1.3mL PMTA Filings and New 13mL Products Remains Unclear
Pennsylvania began enforcing its electronic nicotine delivery system directory restrictions on October 19, 2026. Among 163 product listings recorded before enforcement, four CrossBar 20K disposables stood out with 13mL capacity, advertised puff counts of up to 20,000 and a flattened design distinct from conventional pod systems and compact disposables. Historical records identify earlier 1.3mL CrossBar products associated with Romo LLC, while newer 13mL products appeared in several state directories beginning in 2025 under entities including Blue Nine LLC. PMTA compliance expert Mr. K identified amendments and application ownership transfers as possible regulatory mechanisms, although neither has been confirmed in this case. Separately, Reynolds' $7.5 million acquisition of 16 PACHA products and related assets illustrates the commercial value of products linked to historic PMTA submissions.
Special Report
Oct.22
Special Report | Altria's NACS Booth Raises Questions Over U.S. Tobacco Advertising Warnings
Special Report | Altria's NACS Booth Raises Questions Over U.S. Tobacco Advertising Warnings
During its coverage of Altria's booth at NACS Show 2026, 2Firsts documented product displays that prompted questions about U.S. tobacco advertising warning requirements. Following public comments from a former FDA official, 2Firsts sought responses from Altria and independently consulted U.S. regulatory lawyer Azim Chowdhury. Altria maintained that its B2B communications complied with applicable laws, while Chowdhury explained that federal warning rules provide no general trade-show exemption for e-cigarettes and nicotine pouches. The special report examines the broader regulatory implications.
Nov.04
RLX Technology Dropped From FTSE All-World as International Business Reaches 68.5% of Q2 Revenue
RLX Technology Dropped From FTSE All-World as International Business Reaches 68.5% of Q2 Revenue
RLX Technology (NYSE: RLX) has been removed from the FTSE All-World Index, effective September 21. FTSE Russell records show RLX was already part of its global equity index universe by 2022, when its American depositary receipts were classified as China Large Cap securities. Trading volume rose to about 44.77 million shares on September 18, roughly 23 times the previous session's volume. RLX reported RMB1.0105 billion in second-quarter revenue, up 14.8% year over year, with international operations contributing 68.5%. The company also acquired a 51% stake in one of Western Europe's largest distributors of next-generation smoke-free and FMCG products in July.
Sep.22
U.S. Rep. Krishnamoorthi Questions FDA Over Planned PMTA Rewrite, Seeks Communications With Altria and Reynolds
U.S. Rep. Krishnamoorthi Questions FDA Over Planned PMTA Rewrite, Seeks Communications With Altria and Reynolds
U.S. Rep. Raja Krishnamoorthi on Oct. 6 questioned the FDA over its plan to reassess and potentially replace the 2021 PMTA regulatory framework, asking the agency to identify provisions it may change or eliminate, state whether current scientific evidentiary standards will be maintained, and disclose communications with Altria, Reynolds and other parties challenging the rule. Krishnamoorthi led a congressional investigation into JUUL and youth vaping in 2019 and has since remained active on e-cigarette regulation and enforcement.
Regulations
Oct.08
JUUL Purchasers Ask Ninth Circuit to Preserve Antitrust Classes in Case Over Altria’s $12.8 Billion Investment
JUUL Purchasers Ask Ninth Circuit to Preserve Antitrust Classes in Case Over Altria’s $12.8 Billion Investment
Private antitrust litigation stemming from Altria's 2018 $12.8 billion investment for a 35% economic interest in JUUL is advancing before the U.S. Court of Appeals for the Ninth Circuit. Direct purchasers, indirect purchasers and indirect resellers of JUUL products filed answering briefs this week seeking to preserve class certifications granted by a California federal court in February. Altria and JUUL argue that individual consumers and large distributors differ too much in purchasing terms to remain in a single direct-purchaser class, while a separate dispute concerns whether California antitrust law can apply to indirect purchasers across 27 jurisdictions. A September trial has been put on hold during the appeal.
Sep.23