Reynolds continues to protect trademarks in e-cigarette suits

Protecting the Camel and Winston trademarks from misuse by small electronic-cigarette retailers has kept a Reynolds American Inc. subsidiary quite busy over the past four years.
Reynolds Innovations Inc. has filed 29 lawsuits in the U.S. District Court for the Middle District of N.C. since August 2009, with the last being submitted July 1.
In all 21 closed cases, the Reynolds subsidiary won a final judgment and/or permanent injunction to keep the companies from marketing products similar to the Reynolds brands in taste or logo. In many cases, Reynolds received damages. Another four have either reached a settlement or the judgment stage.
The common complaint filed by Reynolds is trademark infringement and unfair and deceptive trade practices.
Those odds have not deterred a Spokane, Wash., businessman, Chance Addison, from challenging what he calls Reynolds’ “misuse of the legal system” in pursuing a lawsuit against his company, Addison E-Cigarette LLC.
Addison wants the Reynolds lawsuit dismissed. A U.S. District Court judge has given Addison until Thursday to retain counsel for his LLC.
Reynolds has said the use of such images “will continue to result in a likelihood of consumer confusion and irreparable injury to the company.” Reynolds spokesman Bryan Hatchell said Monday that the company declined to comment beyond the lawsuit.
Addison accuses Reynolds of using the legal system “to harass” small e-cigarette companies as Reynolds entered the category with its Vuse product. However, the lawsuits predate Vuse’s debut by about three years. Addison said Reynolds did not send his company a cease-and-desist letter.
“It gives me great joy to explain all the ways in which your decision to proceed with court action, instead of pursuing other available options, has made this specific case a resounding failure,” Addison said in a letter sent to William Bryner, an attorney representing Reynolds Innovations, and forwarded to Judge Joi Elizabeth Peake.
Addison said the only way that Reynolds “could make my promise false would be to cut my life short by violent criminal action.”
In the latest settlement reached by Reynolds on July 19, Judge Carlton Tilley determined that a Lexington, S.C., company, Elite Vapors LLC, was selling e-cig products listed with the flavors of Camel, Pall Mall and Winston on a website. Tilley issued a permanent injunction against Elite Vapors from advertising and marketing 20 Reynolds cigarette brands and Vuse. The company was ordered to pay Reynolds damages.
R.J. Reynolds Vapor Co. initially launched Vuse in a test market in the Triad at select Tarheel Tobacco outlets. It began distributing Vuse this month in Colorado.
Small manufacturers tend to have one of three reasons why they believe they can associate their products with trademarked brand names, said Roger Beahm, executive director of the Center of Retail Innovation at Wake Forest Schools of Business.
“Because they are small, they think they will slip under the radar screen and get away with making the connection without acquiring proper trademark permission,” Beahm said.
“They may not know they are infringing on trademarks, though ignorance of the law is no excuse. They may have a broader definition on the ethics of marketing until they are caught and told to desist.”
When it comes to e-cigarettes, Beahm said smaller companies may remain cavalier in their marketing approaches until more federal regulations are formed. He said corporations will continue to defend their trademarks, no matter how small the competitor, because of their investment and the value consumers place on them.
“Since there is no Camel or Winston e-cigarette brand by Reynolds, another group claiming to offer that style could motivate smokers to switch, thus costing Reynolds potential market share,” Beahm said.