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WEEKLY NEWS - MARCH 09, 2008

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This article is part of MIP Week, a weekly email newsletter written by the editors of Managing IP magazine. Take a one week trial to Managing IP and find many more related articles.

Philip Morris asks ITC to stop grey market cigarettes

Eileen McDermott, New York

Tobacco company Philip Morris is taking action against counterfeit and grey market cigarettes, filing a lawsuit and a complaint at the International Trade Commission in the past two weeks

The most recent complaint was filed on Thursday with the International Trade Commission (ITC). The cigarette maker has asked the administrative court to stop websites advertising and selling parallel traded cigarettes not manufactured for sale in the US. The complaint refers to 200 such websites, 13 of which are actually named as respondents.

The complaint accuses them of selling Philip Morris cigarette brands that are manufactured for sale outside of the US to US consumers. Philip Morris wants the ITC to issue a General Exclusion Order, which would ban the importation of all infringing products – even those not named in the complaint – into the US.

Many of the websites named in the dispute assure visitors that the grey market cigarettes are genuine. For example, shopping-heaven.com says that buying cheap cigarettes made in Europe "is not an imitation of the world brands, this is original product produced by respective company" (sic). The website also states that its Marlboro cigarettes are "made under control of Philip Moris Products S.A., Switzerland".

Philip Morris spokesperson David Sutton told Managing IP: "The bottom line is that Philip Morris makes and sells cigarettes in the US for the US market only. If consumers buy these grey market products they may be disappointed. They may taste different, they don’t undergo the same quality control measures and there is no age verification process."

According to a company statement, the ITC complaint represents Philip Morris’ latest action in a series of 29 cases filed in US courts over the past four years against unauthorized importers.

Other websites named in the complaint include All-cigarettes-brands.com, Cheapcigarettes4all.com and Dirtcheapbutts.com.

The action at the ITC comes a week after Philip Morris filed a lawsuit in a federal court in California against Nice Pak Products, the world’s largest manufacturer of pre-moistened wipes. The company said that US Customs officials seized 26,900 cartons of counterfeit Marlboro cigarettes in August 2007 at the Port of Los Angeles that were destined for Nice Pak Products in Orangeburg, New York.

According to the complaint, the US Customs’ Notice of Seizure named Guangdong Dongguan DongCheng Plastic Products Factory in China as the exporter of the illegal products.

In a statement, Nice Pak said: "A healthcare products company, Nice-Pak has no association with cigarettes and has nothing whatsoever to do with tobacco products. Nice-Pak is astounded that Philip Morris filed a lawsuit and distributed a press release without attempting to verify the facts or contact Nice-Pak."

But Sutton said that the cigarette company is confident: "We do our due diligence on these actions and we stand by the suit."



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