R.J. Reynolds Wins Ruling on Star Scientific Patents

Source from:  By Jeff St.Onge June 26 (Bloomberg) 06/27/2007

R.J. Reynolds Tobacco Co., the second-largest U.S. cigarette maker, won a ruling that two Star Scientific Inc. patents covering a formula for reducing carcinogens in tobacco are unenforceable. Star sued Reynolds in federal court in 2001, claiming infringement of the patented inventions. Star, a developer of low-toxin tobacco products, sought hundreds of millions of dollars in compensation for the claimed violations. U.S. District Judge Marvin Garbis in Greenbelt, Maryland, ruled today that Star deceived the U.S. Patent and Trademark Office in obtaining formal rights to its invention. The agency requires applicants to disclose all material information about a new invention. Star has said it would appeal. ``There is clear and convincing proof of substantial material false statements and omissions'' in the patent process, Garbis wrote in a 46-page decision. ``There is also clear and convincing proof of intent to deceive'' by Star Chief Executive Officer Jonnie Williams ``and others to a seriously high degree.'' R.J. Reynolds Tobacco, maker of Camel and Salem cigarettes, is a unit of Winston, North Carolina-based Reynolds American Inc. In January, Garbis granted Reynolds's request for a judgment before trial and invalidated the disputed patents. Unclear The patents were unclear in describing the invention they covered, Garbis said in his January ruling. As a result of this ``indefiniteness,'' others wouldn't know in advance whether a particular tobacco ``curing'' operation would breach patent claims. Chester, Virginia-based Star said it would appeal Garbis's judgment to the U.S. Court of Appeals for the Federal Circuit in Washington, which specializes in patent law. Garbis delayed issuing a final judgment until he could rule on R.J. Reynolds's contention that the patents are unenforceable due to Star's so-called inequitable conduct before the Patent Office. Star will appeal ``immediately,'' said Sara Machir, a spokeswoman for the company. The ruling is ``shocking in its lack of evidentiary support'' said Machir. ``We look forward to beginning the appeal process and we will ask for expedited review.'' `False Impression' Garbis ``ruled in our favor on virtually every pending issue,'' said August Borschke, chief patent lawyer for R.J. Reynolds, in a statement. ``Today's ruling validates what R.J. Reynolds proved at trial.'' Tobacco with low to undetectable levels of certain toxins had been developed in the U.S. prior to Star's applications for the patents, Garbis said in today's decision. An initial patent application ``was designed to mislead the PTO into believing that'' prior innovations couldn't yield tobacco with low levels of cancer-causing chemicals known as tobacco specific nitrosamines, or TSNA. ``Williams and others kept critical information from the PTO so as to give the false impression that, as of the time of the application leading to the patents-in-suit, there had been no curing process used in the U.S. that was capable of producing tobacco with low levels of TSNA,'' Garbis wrote. Williams is listed as an inventor on the patents. Shares of Star were unchanged at 90 cents on the Nasdaq market. The shares have dropped 72.3 percent this year. Shares of Reynolds American rose $1.66 cents to $63.67 in New York Stock Exchange composite trading. Altria Group Inc.'s Philip Morris unit is the largest U.S. tobacco company. The case is Star Scientific Inc. v. R.J. Reynolds Tobacco Co., 01-cv-1504, U.S. District Court, District of Maryland (Greenbelt). To contact the reporter on this story: Jeff St.Onge in Washington at jstonge@bloomberg.net . Enditem