June 5 (Bloomberg) -- Schweitzer-Mauduit International Inc. lost a bid to prevent a German competitor from shipping self-extinguishing cigarette papers to the U.S.
Julius Glatz GmbH of Neidenfels, Germany, didn’t violate Schweitzer-Mauduit’s patent rights, the U.S. International Trade Commission said in a notice posted on the agency’s website. The commission gave no reason for its final decision to reject Schweitzer-Mauduit’s request to halt imports of the rival papers.
Schweitzer-Mauduit, based in Alpharetta, Georgia, supplies about 80 percent of the U.S. market for so-called low-ignition proclivity papers, which have thick bands that act as buffers so a cigarette goes out if a smoker isn’t drawing air through it. Glatz and its LIPtec unit sell papers for discount brands produced by American Indian tribes and sold online.
All 50 U.S. states and the District of Columbia have passed laws requiring so-called fire-safe cigarettes as part of an effort to cut down on fire-related deaths. Smoking is the top reason people die in home fires, with an estimated 700 to 900 deaths each year, according to the National Fire Protection Association.
Schweitzer-Mauduit makes papers under the name Alginex, and has said in regulatory filings that it has additional patents protecting its flagship brand from competitors.
An ITC judge in February sided with Glatz on both patents in the case. The commission reviewed whether the judge had correctly interpreted key terms of the patents, as well as other aspects of the case, and today said it was terminating the investigation with a finding of no violation. The full decision will be available once both sides have a chance to redact confidential information.
In October, Schweitzer-Mauduit said it had settled its dispute with one competitor, Germany-based Delfortgroup AG, and its distributor, Astra Tobacco Corp. of Chapel Hill, North Carolina. Under the terms of the agreement, Delfortgroup agreed to pay a minimum of $4 million a year for five years, with additional payments through the life of the patents, some of which last through 2023.
The case is In the Matter of Reduced Ignition Proclivity Cigarette Paper Wrappers, 337-756, U.S. International Trade Commission (Washington).
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