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Intellectual Property Wars Continue

Some journalists are starting to take a look at the patent wars that burble beneath the surface of the vaping supplies industry. An article by Margaret Sampson and Jeff Gritton in the online version of Corporate Counsel addresses the issue of "Intellectual Property and the E-Cigarette Boom".

The authors note that the patent acquired by the first e-cigarette distributor, China's Ruyan ("like smoking") was already disputed long before Big Tobacco came on the scene. Ruyan's patent was on Hon Lik's 2004 invention, which was being marketed in the US and Europe by a variety of fledgling companies in 2007. Ruyan acquired a US patent in 2010, and sued some of them, with a variety of judicial outcomes, settlement in some cases, default in others.

Big Tobacco's entry into the field caused some changes. In 2012 Lorillard bought Blu E-Cigs, one of the independent companies Ruyan had successfully sued. British tobacco firm Imperial (through a Dutch subsidiary called Fontem) bought the patent held by Ruyan, now called Dragonite, and eventually (in 2013) renewed the lawsuits against the independent companies, now including (non-independent) Lorillard in the list, due to its current ownership of Blu.

More recently, Lorillard merged with its North Carolina neighbor R J Reynolds, and since Reynolds was just in the process of rolling out its own e-cig, Vuse, they included in the deal a sale of Blu to Imperial, which owns a large portion of Reynolds.

Got that? It does begin to make one's eyes cross.

The deal has not yet been approved by industry regulators, who are scanning it for violations of anti-trust law (which to the casual observer seem evident all over the place). Presumably, if the deal goes through, Imperial will drop Blu from the list of the companies whose patents it is challenging in court, since it would be suing itself.

Last year independent company NJOY sued another independent, Victory Electronic Cigarettes (now ECIG), and won. Sampson and Gritton claim that there are currently 90 patents on various parts of the e-cig or other vaping devices, and hundreds of pending applications.

In its discussion of the invention of the e-cigarette, the Sampson-Gritton article mentions the patent obtained in 1963 by American inventor Herbert Gilbert for a prototype that was never successfully marketed, and also other failed attempts in the US in the 70s and 80s.

They do not mention, however, the purchase of Gilbert's patent by Jon Cameron in 1913, just 50 years after the invention. Cameron was involved, some say ingloriously, in the demise of The Safe Cig, another leading independent in the early days. The Safe Cig was a family venture of the brothers Jon and Robert Deak, until they invited Cameron to be CEO. At first Cameron made a big media splash (as he has a lot of big media connections), but problems developed and the company foundered, partially as a result of disputes over dealings with Seminole E-Cigs, produced by The Safe Cig for the Seminole Tribe of Florida. The Deaks charged Cameron with taking over the company and ruining it. As the company was going under, the Deaks made a YouTube video with Seminole leaders and of all people Herbert Gilbert. No sign of Cameron, unless he was the figure whose face was greyed out in the video.

But several months later, Cameron brought out a firm called Emperor Brands, and introduced its product, an e-cig called "1963", claiming to be the true, original e-cig invented by Gilbert in that year. No sign of the Deaks, but Gilbert appeared on the Emperor Brands webpage, declaring gratitude to Cameron, and satisfaction in having his patent used by the new product. The Emperor Brands pages claim intent to present the strongest intellectual property claims in the industry for the Gilbert patent, now wholly owned by Emperor Brands.

This case would seem the most interesting one of all, but there has been little recent news about it.