On October 13, Reynolds Tobacco filed an investigation request (337 investigation) with the United States International Trade Commission (ITC), accusing 26 Chinese and American e-cigarette manufacturers and distributors of engaging in unfair import practices.
Renault has requested the International Trade Commission (ITC) to investigate and issue an exclusion order, in an effort to prevent further imports of disposable e-cigarette products into the United States. If the ITC approves Renault’s investigation request, all unauthorized flavored disposable e-cigarette devices can be blocked from entering the American market at the border.
Renault stated in its appeal that if illicit products are removed, they have the ability to fill any gaps in the market.
Based on the above information, 2FIRSTS synthesizes multiple sources to provide a comprehensive overview of various aspects including the involved companies, the progress of the case, legal perspectives, and the company’s response.
Start Time: Expected to Begin after November 13th
As of now, the International Trade Commission (ITC) has not made a decision regarding the appeal filed by Renault. However, according to Grace, a practicing lawyer in the United States, 337 investigations proceed at a rapid pace. It is common for the ITC to decide whether to initiate an investigation within 30 days of receiving the complaint, and in the majority of cases, an investigation is launched.
According to Grace’s statement, if ITC decides to initiate an investigation, it is expected to commence after November 13th.
Targets: 13 Chinese Enterprises
The current case involves a total of 26 companies, with 13 being Chinese enterprises and 13 being American enterprises. Among the Chinese companies, they mainly serve as manufacturers and brand owners, while the American companies primarily function as distributors.
Chinese companies include:
Dongguan (Shenzhen) Shikai Technology Co., Ltd.Guangdong Qisitech Co., Ltd.
Shenzhen Daosen Vaping Technology Co., Ltd.
Shenzhen Fumot Technology Co., Ltd.
Shenzhen Funyin Electronic Co., Ltd.
Shenzhen Han Technology Co., Ltd.
Shenzhen Innokin Technology Co., Ltd.
Shenzhen IVPS Technology Co., Ltd.
Shenzhen Noriyang Technology Co., Ltd.
Shenzhen Pingray Technology
Shenzhen Weiboli Technology Co. Ltd.
iMiracle (Shenzhen) Technology Co. Ltd.
Vapeonly Technology Co. Ltd.
Complaint Reasons: 3 Acts of Unfair Competition
In this case, Reynolds Tobacco alleges that the defendants engage in three categories of unfair competition: firstly, by using false and misleading advertising, such as falsely claiming that their products are “FDA-approved” when they are not, falsely advertising products as “Clear” when they actually have flavors, and using deceptive or false country-of-origin names; secondly, some defendants are in violation of federal regulations related to electronic nicotine delivery systems (ENDS); thirdly, some defendants are using incorrect customs codes.
FDA: Hoping ITC to Reject Reynolds’s Application
On November 1st, 2FIRSTS learned that the FDA has sent a letter to the ITC, urging the committee not to initiate an investigation into certain allegations in the complaint against Reynolds Tobacco. The FDA further emphasized that Reynolds Tobacco does not have the authority to request an ITC investigation into 26 e-cigarette companies.
Attorney Tang believes that due to the FDA’s intervention, there is a potential for the ITC to be excluded from jurisdiction, which could pose certain obstacles for Renault’s 337 investigation. However, there still remains the possibility for Renault to file an appeal with the court.
Company’s Response: Some Preparing to Appeal
On October 24th, Innokin responded to inquiries from 2FIRSTS regarding the ongoing investigation. Innokin stated that it has been named as a subject of investigation as the manufacturer of ESCOBAR, an e-cigarette brand based in the United States. However, Innokin clarified that its cooperation with ESCOBAR had already ended and there is no longer any relationship between the two parties. Innokin criticized the fact that it was included in the investigation without proper verification or prior consultation with the company. This inclusion is unfounded and lacks factual basis. Despite the ongoing investigation, with no formal case filed by the International Trade Commission (ITC) yet, Innokin is already preparing to defend itself.
Additionally, 2FIRSTS has reached out to Dawson and iMiracle for inquiries regarding this matter. However, as of the time of publication, we have not received a response from them.
Counsellor: Not Advisable for Chinese Companies to Fight Alone
Chinese e-cigarette legal expert Tang Shunliang believes that the charges in this case are not specific patents, but rather unfair competition in general. The outcome will have implications for the entire industry, and government departments will also attach great importance to it. From the content of Reynolds Tobacco’s application documents, it is evident that they have made sufficient preparations. The workload for lawyers is significant, and the accused companies are more inclined to prepare evidence and precedents, making it more troublesome to handle compared to dealing with patent infringement in 337 investigations. The subjectivity and controversy in the prosecution and defense are also greater.
In addition, lawyer Tang expressed that it is not advisable for Chinese companies to fight alone in response to legal challenges. This approach may result in varying levels of expertise among different lawyers employed, conflicting defense arguments, and the risk of being easily defeated or facing high settlement costs. Moreover, the costs of coordination and communication would also increase.