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Ruyan Patent Litigation as Reason to Consider Patent Protection

The concept of electronic cigarettes is not new.  Likewise, the idea of obtaining a patent on e-cigarettes is not new – Herbert A. Gilbert obtained a patent on an electronic cigarette in 1963.  But the popularity of e-cigarettes has grown significantly over the past decade, as has the importance of obtaining patent protection for a business’s intellectual property.  As a result of these converging trends, the market has seen a influx of new suppliers to the e-cigarette market and a similar surge in the number of patent applications filed on claimed ‘novel’ inventions on or relating to e-cigarettes.   Many of those applications remain pending, but the U.S. Patent & Trademark Office (“USPTO”) has recently granted a few of these patent applications, including a patent issued to Ruyan Investment (Holdings) Limited (“Ruyan”) in April of this year.

As night follows day, the issuance of the patent to Ruyan was followed by patent litigation.  On June 22, 2012, Ruyan launched patent infringement lawsuits against The Safe Cig, LLC, Vapor Corp., Spark Industries LLC, Nicotek LLC, CB Distributors, Inc., Finiti Branding Group, LLC, Barjan LLC, Scottera, Inc., LOEC, Inc., and Logic Technology Development LLC, in the United States District Court for the Central District of California.  Please email us at tobacco@troutmansanders.com for a copy of the lawsuit.

It is too early to tell how these cases will proceed.  They were filed separately and have been assigned to different judges, but could be consolidated before a single judge and/or for a determination of common issues, such as claim construction and invalidity challenges.  In addition, one or more of the defendants could challenge personal jurisdiction in California and/or seek to transfer to a more convenient venue, which would splinter these cases across several different courts.  Another possibility is that the cases are consolidated as multi-district litigation under 28 U.S.C. § 1407, as happened with the Bear Creek Technologies cases earlier this year (see here for a discussion of the Bear Creek Technologies cases).  Whatever occurs, if the cases do not settle quickly, the litigation could be ongoing for several years to come – the median time to trial in the Central District of California is 19 months and an appeal to the Federal Circuit Court of Appeals generally takes more than a year.

It is also too early to determine whether Ruyan’s broadside attack on its competitors is the beginning of a trend in the tobacco industry.  Competitors in other markets, such as cell phone and tablets, have been using patents to wage battles on multiple national and international fronts for several years.  As companies in the tobacco industry increase the use of technology to differentiate themselves in the market, we will likely see companies moving to build up their arsenal of patents in the e-cigarette and tobacco industry so that they are properly armed for the possible battles ahead.

Contributors: Robert Angle and Dabney Carr, Troutman Sanders Intellectual Property Practice

For questions and/or comments, please contact Bryan Haynes, at 804.697.1420 or by email.

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