Philip Morris, Altria banned from importing or selling Iqos tobacco device in the U.S.

  • The U.S. International Trade Commission ruled Wednesday that Philip Morris International and Altria must stop the sales and imports of their Iqos tobacco device.
  • The import and sales ban will take effect in two months after an administrative review.
  • Philip Morris said that it plans to appeal the trade agency's decision.

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The U.S. International Trade Commission ruled Wednesday that Philip Morris International and Altria must stop the sale and import of the Iqos tobacco device.

The decision is the result of a patent case filed by rival R.J. Reynolds. The trade agency found that the cigarette alternative infringed on two of Reynolds' patents.

The import and sales ban will take effect in two months after an administrative review that requires President Joe Biden's signature. Philip Morris said that it plans to appeal the trade agency's decision, and an Altria spokesperson said that the two companies are working together on contingency plans.

"We continue to believe RJR's patents are invalid and that IQOS does not infringe those patents," an Altria spokesperson said in a statement to CNBC.

Altria launched the Iqos device in the United States two years ago, but it began development of the product more than a decade ago before Philip Morris International was spun off from the company. The device heats tobacco without burning it, which is meant to give users the same rush of nicotine without as many toxins as smoking a cigarette.

Philip Morris sells the device in dozens of international markets and has granted Altria a license to sell the it in the U.S. While Iqos doesn't represent a large portion of Altria's U.S. business yet, it's part of the company's shift away from traditional tobacco products, which have seen falling demand.

"Infringement of our intellectual property undermines our ability to invest and innovate and thereby reduce the health impact of our business," a Reynolds American spokesperson said in a statement. "We will therefore defend our IP robustly across the globe."

Reynolds American is owned by British American Tobacco. Shares of the three tobacco companies were down 1% or less in premarket trading Thursday.

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