Juul launches legal fight against black market vaping cartridges

(Bloomberg)—Juul Labs Inc. launched an aggressive legal campaign to halt what it calls a “seemingly endless stream” of black market cartridges for its e-cigarettes.The vaping company filed a patent-infringement complaint at the U.S. International Trade Commission in Washington, naming more than four dozen companies it says are importing copycat cartridges for the e-cigarettes. It’s seeking a blanket order that would block imports of any unauthorized cartridges.The complaint—as well as some four-dozen patent-infringement lawsuits filed in federal courts around the U.S. over the past few days—are part of what the San Francisco-based company paints as an effort to curtail sometimes dangerous products. Juul Chief Executive Officer K.C. Crosthwaite has pledged to repair the image of the embattled company, which was at the center of a debate over whether e-cigarettes should exist at all.“This new ITC action, if successful, would provide the additional public benefit of helping rid the market of unauthorized Juul-compatible products that can be modified by the user, such as empty and refillable pods, or those containing substances such as THC for which the Juul system was not designed,” Juul said in a statement.

Juul has stopped advertising products in the U.S. and halted sales of sweet nicotine flavors that public-health advocates say can attract younger users. The company’s market value has plunged during the controversy over the vaping epidemic. Juul needs to show it’s addressing critics as it prepares to submit an application later this year asking the Food and Drug Administration to let it remain on the market.

The legal fight also is about Juul protecting its market share, said Sarah Burstein, a professor who teaches design patent law at the University of Oklahoma.

“‘I want to make the only keys that fit in my locks,’ is what they are saying,” she said. “Most of these will settle quickly. These are the kind of things you file and expect the defendants not to show up and get a default judgment.”

This isn’t the first time Juul has used the trade agency to knock out competitors, though earlier cases involved patented technology on how the e-cigarettes worked. Last year it settled lawsuits by getting companies to leave the market, and won an order blocking imports of companies that refused to settle.

The newest complaint is over what the company calls the “simple, yet distinctive” look of the refill pods that are marketed as “Juul-compatible.” The patented designs cover the rectangular shape, transparent look and cap.“Seeking to freeride on JLI’s success, numerous infringers have created a seemingly endless stream of infringing copycat products,” Juul said in the ITC complaint, citing “concealed identities, fictitious business names and addresses, and other tactics used to hide the true source.”

The trade commission is an attractive venue when it comes to products, like the compatible pods, that are made overseas. The agency, which typically completes investigations in about 15 months, can order products halted at the border. The type of order Juul is seeking would apply to any pod that can be used with the Juul device that isn’t expressly authorized by the company.

The case is In the Matter of Certain Vapor Cartridges and Components Thereof, 337-3471, U.S. International Trade Commission (Washington)