Juul Lobs Second Round of Suits Against E-Cigarette Rivals

(Bloomberg) -- Juul Labs Inc., the maker of an e-cigarette wildly popular with American teens, has lobbed a second round of litigation against what it says are copycats, even as it faces criticism that its products appeal to underage consumers.

Juul filed its second patent-infringement complaint on Tuesday with the U.S. International Trade Commission, seeking to block sales of competing e-cigarette devices and nicotine cartridges made by 24 companies mostly in China and Uruguay. Juul filed a similar complaint with the ITC against more than a dozen companies on Oct. 3.

The San Francisco-based company also filed mirror lawsuits in at least 10 district courts, accusing a range of companies of infringing patents for the vaping devices and cartridges. In Tuesday’s ITC complaint, Juul said the competing products, some of which are pods that are plug-compatible with the Juul e-cigarette, give teens easy ways to get pods for use in Juul’s system and should be blocked from U.S. shelves.

“Copycat JUUL-compatible pods, like the ones made by many of the companies listed in the complaint, with flavors that are clearly marketed to kids, not only violate our intellectual property, but are dangerous, bad for public health, and do not share our mission of improving lives of adult smokers,” Juul said Wednesday in a statement.

While the ITC can block imports, it has no ability to award damages. If Juul wants to get cash compensation from the cartridge makers, it will have to rely on the lawsuits it filed, which are likely to be put on hold until the ITC completes any investigation.

Last week, Juul Chief Executive Officer Kevin Burns announced that the company stopped selling fruit- and dessert-flavored nicotine pods to stores and shut down its U.S.-based Facebook and Instagram accounts. The move followed a campaign from the Food and Drug Administration to curtail underage use of e-cigarettes. Earlier this month, an FDA senior official said the agency would restrict sales of many fruit-flavored nicotine cartridges used in vaping devices.

Juul says the company was created to help adult smokers quit. Users suck on a sleek pen-like device to deliver a powerful hit of vaporized nicotine. The design and high nicotine content have made Juul the top-selling e-cigarette in the U.S. By this summer, Juul had captured 68 percent of the U.S. e-cigarette market, according to Nielsen data compiled in a Juul investor presentation viewed by Bloomberg.

Eonsmoke LLC, one of the companies named in the October complaint at the ITC, accused Juul of using the agency to shut out competitors so it could increase prices, and said Juul’s claims that it cares about protecting the nation’s youth are “misleading and hypocritical.”

The federal lawsuits were filed in Camden, New Jersey; New Haven, Connecticut; Wilmington, Delaware; Rochester, New York; Chicago; Denver; Minnesota; and Tampa, Orlando and Fort Lauderdale, in Florida.

The ITC case is In the Matter of Certain Cartridges for Electronic Nicotine Delivery Systems, 337-3354, U.S. International Trade Commission (Washington).

--With assistance from Olivia Zaleski and Susan Decker.

To contact the reporter on this story: Christopher Yasiejko in Wilmington, Delaware, at cyasiejko1@bloomberg.net

To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, Peter Jeffrey

©2018 Bloomberg L.P.