Although the paternity of the electronic cigarette is wrongly attributed wrongly to Chinese pharmacist Hon Lik, he is nevertheless recognized for being the first to have developed the device via his company Ruyan, further called Dragonite International Ltd.
From risk reduction to business
The Chinese pharmacist, who is at the origin of one of the greatest revolutions of the 21st century, found his inventive energy after his father, a heavy smoker, died from lung cancer.
He seemed to have somewhat changed his tactics, in 2013, by allying with the Big Tobacco with the sale of patents owned by his company, Dragonite Ltd. to Imperial Tobacco.
The supporters of a free and independent vape could perceive Hon Lik’s attitude as a certain betrayal, while others, on the other hand, have seen a simple rational application of the laws of finance.
Hon Lik explained that the Chinese companies of his country are not able to comply with forthcoming European standards and, today, those companies continue to produce e-liquid containing “hazardous substances”. Hon Lik was pleased not to work with those Chinese companies who think only of profits.
He compared his financial transaction with Imperial Tobacco to a marriage with a rich and powerful family.
The “Patent Cold War”
One year later, in 2014, Imperial Tobacco (currently Imperial Brand), the fourth largest cigarette manufacturer in the world, attacked, via Fontem Ventures, its subsidiary, the major players in the field of the e-cigarette for patent infringement.
The intellectual rights of the father of industrial electronic cigarette Hon Lik (Dragonite Ltd.), are now used to prune the market.
The lists of offenders is long: NJOY, Spark Industries (Cig2O), Vapor Corp., LOEC (Blu Cig Lorillard ), FIN Branding/Victory E-cigs, CB Distributors (21st Century Smoke), Logic Technology, VMR Products (V2 Cigs and Vapor Couture) and Ballantyne Brands (Mistic).
On March 5, 2014 all those companies were notified they were breaking the law by manufacturing products copied from the patents filed by Dragonite Ltd. a few years earlier, and purchased by Fontem in 2013 in the only aim of legally attack these industry leaders. United States District Court for the Central District of California in relation to e-vapour technology.
Return on investment was here clearly sought by Fontem Ventures, even if the value of the patents were hotly contested at the time by some industry players.
These legal battles that would relate a priori on cigalikes models only, these electronic cigarettes that look like traditional tobacco cigarettes.
A “settlement agreement”
On April 5, 2016, after two years of legal procedure, Fontem Ventures and VMR Products announced that they have reached a settlement agreement “that resolves ongoing litigation in the USA.” The settlement put an end to the patent infringement cases originally brought by Fontem Ventures in March 2014.
Behind the term “settlement”, it is in fact a non-exclusive royalty-bearing licence that Fontem Ventures granted to VMR Products. The terms of the deal were not revealed to public.
A list of settlement agreements reached by Fontem Ventures with some brands:
- VMR Products, LLC, U.S. based distributor and retailer of vaporizers and and e-liquids V2®, V2 Pro®, Vapour2™, and Vapor Couture™, Zig-Zag®, OCB®, ECG®, and QuickDraw® (Settlement agreement in relation to e-vapour technology patents).
- Nicoventures Holdings Limited (10 Mar, 2016 – Settlement and Licence Agreement in relation to e-vapour technology patents).
- Spark Industries LLC, U.S. based owner of Cig2o and Vapage brand vapor products (26 Jan, 2016 – Settlement agreement in relation to e-vapour technology patents).
- Ballantyne Brands LLC, U.S. based distributor and owner of the Mistic and HAUS brands of personal vaporizers and e-liquids (26 Jan, 2016 – Settlement agreement in relation to e-vapour technology patents).
- Electronic Cigarettes International Group, Ltd. (06 Jan, 2016 – Settlement agreement in relation to e-vapour technology patents).
- Vapor Corp., U.S. based distributor and retailer of vaporizers and e-liquids VaporX®, Krave®, Hookah Stix® and Vaporin™ (18 Dec, 2015 – Settlement agreement in relation to e-vapour technology patents).
- CB Distributors, Inc. and DR Distributors, LLC, distributor and owner of e-cigarette brands 21st Century Smoke and Vapin Plus (27 Nov, 2015 – Settlement agreement in relation to e-vapour technology patents).
- NJOY, Inc. (16 Nov, 2015 – Settlement agreement in relation to e-vapour technology patents).