At present, a "war" on heated cigarettes is unfolding between two multinational tobacco giants, Philip Morris International and British American Tobacco. In order to compete for the dominance of the heated cigarette market, the two parties have launched a heated cigarette patent battle around the world. They all agree that heated cigarette products are likely to replace combustible tobacco products in the future.

Philip Morris International takes the lead

Philip Morris International has been one of the market leaders in the heated cigarette segment since the first launch of the heated cigarette IQOS in Japan in 2014. IQOS quickly became popular among tobacco consumers around the world, and the product is now available in more than 70 countries and territories. This success is a key component of Philip Morris International's "smoke-free future" strategy, which plans to completely abandon combustible tobacco products within the next 10 to 15 years.

In addition to Philip Morris International, many companies have long been eyeing the field of heated cigarettes. As early as the late 1980s, Reynolds Tobacco Company launched the heated cigarette Premier. The market at the time was not ready for heated cigarettes, consumers did not like the taste of Premier, and the product was not a commercial success. In 1996, Reynolds Tobacco launched the heated cigarette product Eclipse. In 1998, the heated cigarette Accord launched by Philip Morris International was left out in the market. In 2014, Reynolds Tobacco, which has become a subsidiary of British American Tobacco, launched Revo, a heated cigarette, and Philip Morris International launched IQOS, and heated cigarettes were gradually accepted by the market.

To gain dominance in the heated cigarette market, British American Tobacco and Philip Morris International have fought over the patent rights of their respective heated cigarette products glo and IQOS. It all started in 2018 when Philip Morris International sued British American Tobacco for infringing patents on its heated cigarette products.

British American Tobacco fights back

In the face of Philip Morris International's prosecution, in 2020, British American Tobacco launched a counterattack, suing Philip Morris International for infringing its heated cigarette patent and claiming compensation to the US International Trade Commission and the Virginia Commonwealth Court. Meanwhile, Nicoventures Trading, a subsidiary of British American Tobacco, sued Philip Morris in the UK.

In response to British American Tobacco's counterattack, Philip Morris International filed a dismissal lawsuit to the British court. In March 2021, the British court revoked two patent authorizations of British American Tobacco and dismissed the infringement allegations of British American Tobacco against Philip Morris International. British American Tobacco, dissatisfied with the verdict, filed an appeal, which was rejected by the court. The court held that British American Tobacco's patent grant was revoked because of its obviousness, and the patent it applied for lacked "creativeness".

After repelling the counterattack of British American Tobacco, Philip Morris International attempted to "take advantage of the victory" and filed a counterclaim for infringement against British American Tobacco. In mid-July 2021, a British court declared that Philip Morris International's four heated cigarette technology patents were also invalid, and British American Tobacco pulled a round.

British American Tobacco sued Philip Morris International for infringing its patent on heated cigarettes in the Munich court in Germany after the UK "flattened". Philip Morris International filed a patent lawsuit with the European Patent Office. British American Tobacco has unsuccessfully applied for patent protection in Bulgaria, the Czech Republic, Poland and Romania. In addition, the two companies have also launched a "legal battle" in Italy.

Last year, the U.S. International Trade Commission ruled that Philip Morris International's IQOS infringed two patents owned by a British American Tobacco subsidiary, barring products such as IQOS from being imported into the United States. The U.S. International Trade Commission's ruling cuts off Philip Morris International's access to U.S. imports of heated cigarette products. British American Tobacco has an initial victory in the US market.

Philip Morris International suffered a setback and had to suspend the launch of IQOS in the US market, but will they "stand still"?

Philip Morris International struggles to regain market

Philip Morris International has delayed further expansion of its heated cigarette products in the U.S. market due to the U.S. International Trade Commission ruling. A spokesman for the company said: "The US International Trade Commission has launched a lengthy investigation into us, and we have full confidence in our products. IQOS heated cigarette products have been authorized by the US Food and Drug Administration as a harm-reduced tobacco product. At the same time, we We will continue to rely on Altria, our exclusive U.S. distributor, to take the necessary steps to ensure the success of IQOS in the U.S. and globally."

After repeated research, Philip Morris International has found two solutions: one is to change the design of IQOS so that it no longer infringes on British American Tobacco's patents; the other is to manufacture the product domestically in the United States, bypassing the US International Trade Commission's import ban . Considering the complexity of changing the IQOS design, Philip Morris International believes that moving production to the United States is a more convenient option.

Philip Morris International CEO Jacek Olzak said in an interview that the company had been planning to make IQOS in the United States. "Given the size and opportunity of the IQOS market, we hope that one day IQOS will not only be sold in the United States, but also manufactured in the United States," he said. "And that day will come sooner because of the U.S. International Trade Commission's ruling."

At this time, Philip Morris International has not specified where they will manufacture IQOS in the United States, but they have decided to have IQOS back on US store shelves in the first half of 2023.

Faced with the cake of the heated cigarette market, major multinational tobacco giants all want to get a share of the pie. The "war" in the heated cigarette market is far from over, let's wait and see.