Patent Law

Star Crossed

By Gary Odom and Jordan Kuhn

In 2001, smokeless tobacco maker Star Scientific sued R.J. Reynolds over patents for lower carcinogens while curing tobacco. Maryland district court Judge Marvin Garbis found Star guilty of inequitable conduct. In a landmark ruling, the CAFC overturned. Then, in hopes of further delay, RJR tried to put the patents out to pasture on reexam. But trial is set for May 18, while the reexam smolders on. The most recent curveball from RJR: a motion to deny Star a chance to present its damages theory to the jury.

Financially, Star has been smokeless for quite some time. Last year it lost $18 million on sales of $ one-half million. But investors have invested, hoping to smoke RJR with patents that might cure Star. The Wall Street Journal -

With just $500,000 of the nearly $5 billion smokeless-tobacco market, Star is too tiny to have attracted much attention from independent financial analysts. But after researching the company, some fund managers have invested nearly $100 million in Star to prop it up amid the legal battle. "It's a small company with a Fortune 100 legal team and some very, very promising intellectual property," says Robert W. Scannell, a partner in Tradewinds Investment Management in Sausalito, Calif.

The trial is just the next chapter. Whoever prevails, the case will be on offer for another chew by the appeals court.

Full post as published by The Patent Prospector on April 15, 2009 (boomark / email).