Law360, New York (January 6, 2017, 4:40 PM EST) — Fontem Ventures BV has reached a settlement with Nu Mark LLC in a fight over electronic cigarette patents, ending an infringement lawsuit as well as challenges that Nu Mark had launched attacking the validity of the patents.
Fontem, a unit of U.K tobacco company Imperial Brands PLC, and Nu Mark filed papers Wednesday in North Carolina federal court to dismiss the lawsuit. The companies have also agreed to resolve cases at the Patent Trial and Appeal Board.
Terms of the agreement were not disclosed in court documents. A spokesman for Altria Group Inc., the parent of Nu Mark, said the company was pleased the issue had been resolved but declined to disclose details of the settlement.
Representatives for Fontem did not immediately respond to a request for comment.
The company sued Nu Mark in the spring of 2016, alleging its MarkTen and GreenSmoke products infringed eight patents. The suit was one of several that Fontem has filed against e-cigarette manufacturers in recent years.
It has also gone after the likes of R.J. Reynolds Vapor Co., maker of the top-selling Vuse; Spark Industries LLC; and Logic Technology Development LLC, among others.
Not long after the suit was filed, Nu Mark challenged each of the patents it was accused of infringing at the PTAB. It requested the board examine the patents in inter partes review, arguing that claims in each were invalid.
While some of Nu Mark’s petitions were still pending, the PTAB had declined to institute review in a handful of those cases, including one last month, when it said Nu Mark’s arguments about parts of a patent being obvious relied on evidence that had already been considered by a patent examiner.
The board said Nu Mark was, in effect, asking it to “second guess” the U.S. Patent and Trademark Office examiner.
“We are not persuaded that adjudicating a dispute on an already considered issue is an efficient use of the board or party resources,” the board wrote in its Dec. 15 decision.
Fontem in November 2013 paid $75 million to acquire e-cigarette technologies from Dragonite International Ltd. Hon Lik, a Chinese pharmacist who founded Dragonite and is widely recognized as being the inventor of the e-cigarette, also joined the company.
In addition to this week’s settlement with Nu Mark, Fontem has reached deals with companies including NJOY Inc., Vapor Corp. and Electronic Cigarettes International Group Ltd. to end patent litigation. Each of those three publicly announced deals included license agreements.
Fontem and R.J. Reynolds recently told the judge overseeing their case that the companies are working to identify a mediator that they can agree on.
Fontem is represented in the Nu Mark case in district court by Michael J. Wise, Joseph P. Hamilton, Lara J. Dueppen and Courtney M. Prochnow of Perkins Coie LLP, and Stuart H. Russell and G. Gray Wilson of Wilson Helms LLP.
Nu Mark is represented by Gregory P. Stone, Peter A. Detre, Peter E. Gratzinger and Zachary M. Briers of Munger Tolles & Olson LLP, Anish Desai, Elizabeth S. Weiswasser and Stephen Bosco of Weil Gotshal & Manges LLP, and Gregory C. Holland and Whit D. Pierce of Smith Moore Leatherwood LLP.
The case is Fontem Ventures BV et al. v. Nu Mark LLC, case number 16-cv-01261, in the U.S. District Court for the Middle District of North Carolina.
–Editing by Aaron Pelc.