South China Morning Post January 12, 2011 Patent owner to sue in US over e-cigarette rights Dennis Eng Hong Kong-listed patent owner Dragonite International is hoping to secure its hold on the estimated US$500 million global market for electronic cigarettes by suing potential infringers in the United States. Dragonite International, formerly Ruyan Group (Holdings), intends to take legal action against all the major e-cigarette manufacturers and distributors in the US. The company has won a number of patent infringement cases on the mainland, but a victory in US courts for Dragonite International would probably bolster its claim on the burgeoning e-cigarette market. The smokeless e-cigarettes are battery-powered devices that vaporise a liquid nicotine solution. They work by emitting a puff, or fine mist of nicotine, which is inhaled by the user. They are mostly made on the mainland. Legal action by Dragonite, which is expected to begin in Los Angeles tomorrow, would probably serve as a litmus test for the protection of patents based on Chinese innovations. "The lack of protection of intellectual property rights in China has permitted a deluge of illicit and poorly manufactured Chinese-made e-cigarettes to export markets," Dragonite International executive director Angela Ching said. "The confusion [over] the safety of these products has delayed the development of this otherwise breakthrough, which holds the potential to reduce global smoking-related health costs by hundreds of billions of US dollars." Even if Dragonite wins the suit and stops copyright-infringing rivals from doing business, it wouldn't be able to bring its product to the US market without approval from the US Food and Drug Administration. The FDA has classified e-cigarettes not as regular cigarettes and other tobacco products, but as unapproved smoke-cessation "drug delivery devices". As pharmaceutical products, e-cigarettes would have had to undergo years of clinical trials and extensive testing, something e-cigarette companies have argued against. In March 2009, the FDA imposed a formal import ban on the products. But 10 months later, federal Judge Richard Leon ruled that the FDA could only regulate the products and not ban them. The ruling was upheld by the District of Columbia Court of Appeals, which said e-cigarettes should be considered tobacco products, and that the FDA couldn't regulate them as drugs or devices if they weren't marketed as therapeutic. Even if the FDA agrees to regulate e-cigarettes as tobacco products, they must still be licensed and taxed. The FDA may also need to establish new inspection processes as the manufacturing of e-cigarettes differs from that of traditional cigarettes. In Hong Kong, the Department of Health declared the devices illegal in 2009, viewing any product containing nicotine as a pharmaceutical product that needs to be registered. The company's patent application for the "electronic atomisation cigarette" was recently approved by the US Patent and Trademark Office and covers all the main components, including the battery, vaporisation mechanism, activation switch and flavour cartridge. Hon Lik, who co-founded the company, is stated as the "first named inventor" of the e-cigarette on the approved patent application. The patent has already been granted in the European Union, Russia, the mainland, Malaysia, Taiwan, India, Mexico, Singapore, Israel and other major countries.