UK Court Rejects PMI's Heat-Not-Burn Patent Appeal

According to sources familiar with the matter, on December 19, a UK appellate court rejected Phillip Morris International's (PMI) application to restore its patent on a method of heating tobacco. This is the latest ruling in the global patent war between PMI and British American Tobacco (BAT).

On Friday, the appeal court upheld the decision of the High Court that PMI's patent was invalid due to obviousness, but noted that the lower court judges should take their time to consider whether one of the patents had been infringed upon.

In a letter to the appellate court, Chief Justice Christopher Floyd stated, "This negligence will have regrettable consequences, and if we allow the appeal, we will have to refer the case back to the judge for further rulings, which will undoubtedly increase costs.

The ruling on Friday marks the latest development in an international dispute between two companies over tobacco heating technology as they strive to gain dominance in the "heat not burn" market, which involves heating tobacco to release nicotine without burning it.

This case was filed by Nicoveventures in April 2020 in an attempt to invalidate four PMI patents that were applied for in 2017. A few months prior, BAT had launched its own heated tobacco product. In response, PMI filed a counterclaim for infringement, which was heard alongside the invalidity suit.

Nicoveventures and BAT argued in the High Court that PMI's patent relies on an invention from 1994 called Deevi.

According to Friday's ruling, this invention describes a "film heater" that can be incorporated into "smoking articles of the same size and shape as traditional cigarettes.

In July 2021, Judge Marcus Smith at the High Court declared four patents of PMI invalid, stating that they were a "non-innovative combination" of heating systems and insulation materials, aimed at reducing equipment heat loss. Judge Smith also found that a skilled team could make modifications, including replacing the "disposable insert" described in Deevi, to create a reusable heater similar to the PMI patent.

The appellate court has ruled to limit the scope of appeal to only consider one out of four patents, as they are all related to the same original patent application.

In its appeal, PMI argued that Judge Smith was mistaken in determining that its patent described a method of heating tobacco using "multiple tracks". The company maintained that the patent's claims only covered a single track, with "multiple portions" connected to the heater's power source.

According to PMI's lawyer, "None of the tracks have individually connectable components, which is not covered.

Lawyers from Nicoveventures and BAT have accused PMI of attempting to disrupt the situation and are requesting that the appellate court overturn this decision, as it does not imply that a re-evaluation is possible during the appeal.

However, the appellate court upheld the original ruling and determined that Judge Smith had not erred in defining the patent claims when considering whether PMI's invention was obviously valid according to Devi's viewpoint.

The appellate court has rejected PMI's appeal. However, the court noted that despite providing "plenty of evidence," Judge Smith failed to determine whether the patent in question was infringed upon by Deevi.

However, the appeal was rejected because the appellate court found that there were no grounds to overturn the decision that the main claims of PMI's patent were valid.

On Monday, PMI representatives declined to comment.

Representatives of BAT did not respond immediately to a request for comment.

PMI and BAT are currently embroiled in a patent dispute over "heat-not-burn" technology throughout Europe. Parallel lawsuits have been initiated in Germany, Italy, Greece, Poland, Bulgaria, and the Czech Republic.

Judges Richard Arnold, Christopher Nugee and Christopher Floyd attended the panel of the Court of Appeals.

PMI was represented by Andrew Lykiardopoulos QC of 8 New Square and Tom Alkin of 11 South Square, with guidance from Powell Gilbert LLP.

Representatives from Nicoventures and BAT are Adrian Speck KC from 8 New Square and Kathryn Pickard from 11 South Square, respectively, guided by Kirkland & Ellis International LLP.

The case PMI v. NICOVNCHEUS is currently being heard in the appellate court under case number CA-2021-000302.

2FIRSTS will continue to report on this topic, stay tuned for more updates.