Jury Orders RJR to Pay $95 Million to Altria in Vuse Alto Patent Dispute

A federal jury in North Carolina last week awarded Altria Group $95 million in damages from rival RJ Reynolds Vapor Co. after finding that Reynolds infringed on three Altria patents. The disputed patents concerned the pod-based Vuse Alto—currently the most popular vaping product in the convenience store/gas station segment of the vaping market.

RJ Reynolds Vapor Co. is the vape product arm of tobacco giant Reynolds American Inc., which is a division of British American Tobacco. The trial settled patent-infringement complaints filed in May 2020 by Altria Client Services against Reynolds in the U.S. District Court for the Middle District of North Carolina. The patents involved the Vuse Alto’s pod assembly.

Altria said in a press release that the jury award was for “past damages through June 30, 2022,” and that post-trial proceedings “will address ongoing damages through the expiration of Altria’s patents in 2035.” According to Altria, the jury agreed Reynolds should pay an ongoing royalty rate of 5.25 percent to Altria for Vuse Alto sales occurring after June 30.

Reynolds said in a statement it intends to “vigorously defend the issues remaining for the court, and, if necessary, we will appeal the decision" to the federal circuit court of appeals.

Reynolds claimed in 2020 that the infringement complaints by Altria were filed in retaliation for patent complaints filed by Reynolds against Philip Morris International (PMI) regarding the heated tobacco product (HTP) IQOS, which Altria sold in the U.S. under license from PMI. As a result of that patent dispute, the U.S. International Trade Commission (ITC) last September ordered imported IQOS devices off the American market. PMI later announced it would produce and sell IQOS in the U.S. itself.

The FDA has not authorized sale of the Vuse Alto, although three other Vuse devices—the Vuse Solo, and the Vuse Ciro and Vibe—have been given the okay to remain on the market. Reynolds submitted a premarket tobacco application (PMTA) for the Alto over two years ago, and it remains on the market due to the FDA’s 2021 enforcement discretion statements.

In April 2022, the FDA authorized sale of the NJOY Ace, a pod-based vape device very similar to the Vuse Alto. Both products are partly manufactured by the same Chinese company, Smoore, which also was involved with production of Altria’s MarkTen Elite pod vape before it was discontinued in October 2018. (Altria stopped selling vapor products entirely in early December 2018, and announced it would buy 35 percent of Juul Labs just two weeks later.)

In 2021, Reynolds settled a separate patent lawsuit with a small Ohio-based vape company, Fuma International, that alleged Reynolds used Fuma’s technology in the design of the Vuse Solo and Ciro.