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CONCLUSION
For the reasons provided above, we reverse the district court's judgment of unenforceability of both asserted patents due to inequitable conduct. We also reverse the district court's grant of summary judgment of invalidity of all asserted claims due to indefiniteness and remand for further proceedings on the infringement complaint consistent with this opinion.
REVERSED and REMANDED
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A Petersburg-based company has won an appeal in a lengthy legal battle with R.J. Reynolds Tobacco Co. over patents covering a process to reduce some cancer-causing toxins in tobacco.
The ruling yesterday by a three-judge panel of the U.S. Appeals Court for the Federal Circuit in Washington means the lawsuit brought by Star Scientific Inc. against the nation's second-largest cigarette maker is likely to go to trial, a Reynolds spokesman said.
Star, which sells smokeless tobacco products, sought millions of dollars in damages in the lawsuit, filed in 2001. It claimed that Winston-Salem, N.C.-based Reynolds had infringed Star's patents for a method designed to reduce carcinogens called tobacco-specific nitrosamines, which form during the curing of tobacco leaves.
The appeals court yesterday overturned a lower-court ruling in 2007 that declared the patents invalid. The appeals court sent the case back to U.S. District Court in Maryland.
Star Scientific Inc. rose the most in seven years after a U.S. appeals court revived the company's patent lawsuit against Reynolds American Inc.'s R.J. Reynolds Tobacco over a formula for reducing carcinogens in tobacco.
Star climbed $1.09, or 65 percent, to $2.76 in Nasdaq Stock Market trading, valuing the Petersburg, Virginia-based company at $254 million. The gain was the biggest since April 2001 and the closing price was the highest since Jan. 18, 2007. More than 7.25 million shares changed hands, 20 times the three-month daily average.
The U.S. Court of Appeals for the Federal Circuit in Washington ruled today that a judge was wrong to find two Star patents unenforceable and invalid, saying the decision was ``based on factual findings that we deem clearly erroneous.'' The panel sent the case back for review to determine whether the patents are infringed or invalid on other grounds.
Star Scientific, Inc. (NASDAQ:STSI) announced that it has filed its second-quarter financial report on Form 10-Q today with the Securities & Exchange Commission. Gross sales for the quarter ended June 30, 2008 totaled $167,483 compared with gross sales of $219,242 during the same period in 2007. Net sales for the second quarter totaled $52,176 as compared with $196,168 for second quarter 2007. Net sales were impacted in part by a decrease in unit sales volume and an increase in product discounts (placement fees) during the second quarter.
The company reported an operating loss of $6.29 million compared with $3.85 million for second quarter 2007. . . .
The company awaits a ruling on its appeal to the US Court of Appeals for the Federal Circuit in its patent infringement lawsuit against RJ Reynolds Tobacco Company
I. RJR HAS NOT SHOWN INEQUITABLE CONDUCT BY CLEAR AND CONVINCING EVIDENCE. . . .
II. RJR HAS NOT SHOWN BY CLEAR AND CONVINCING EVIDENCE THAT STAR SCIENTIFIC'S PATENTS ARE INDEFINITE. . . .
THE DISTRICT COURT ERRED IN REJECTING THE PRIORITY DATE OF THE PATENTS-IN-SUIT 26
Star Scientific, Inc. (NASDAQ:STSI) reported today that its reply brief in its appeal to the US Court of Appeals for the Federal Circuit has been filed with the clerk of the court. The company is appealing rulings issued by the US District Court of Maryland in January and June, 2007 in its patent infringement lawsuit against RJ Reynolds Tobacco Company. The District Court entered final judgment on those rulings on June 26 and Star filed its notice of appeal on June 27.
The filing of Star's brief in reply to RJR's opposition to the appeal completes the written briefing portion of the appeals process. The Federal Circuit Court of Appeals then will assign a date for oral arguments before a three-judge panel. An electronic version of the reply brief can be accessed by logging on to the company's corporate website, http://www.starscientific.com, and then clicking on the "Selected Articles" section of the website's "Media" menu.
Star Scientific, Inc. (NASDAQ:STSI) held its annual shareholder's meeting on Friday, December 14 in Washington, DC. Paul L. Perito, the company's Chairman, President and COO, and David Dean, Vice President for Sales and Marketing, each made presentations on the previous year's activities and goals for 2008.
Mr. Perito reviewed a numbers of "firsts" the company had achieved during the past seven years, which included the introduction of a new tobacco product category - low-TSNA dissolvable smokeless tobacco. Ariva® and Stonewall®, and their characteristics, are unique among all tobacco products currently being manufactured: the patented dissolvable products are the only product in their category, and their TSNA levels are the lowest of any tobacco product in the marketplace. TSNAs, or tobacco-specific nitrosamines, are widely recognized as one of the most powerful cancer-causing agents in tobacco leaf and smoke, and importantly, they are the major group of carcinogens in smokeless tobacco.
Mr. Perito summarized the findings from two studies conducted by a group of researchers with the Transdisciplinary Tobacco Use Research Center (TTURC) at the University of Minnesota Cancer Center. These studies, which were presented in the December, 2007 Nicotine & Tobacco Research Journal, recruited adult dependent smokers to use either a medicinal nicotine lozenge or a smokeless tobacco product (Ariva® or Exalt) for two weeks, and to then use the other product for two weeks. In the fifth and final week, subjects were free to use either the smokeless product or the lozenge by choice. The studies revealed that "Ariva was preferred over the medicinal nicotine lozenge, which was preferred over Exalt."
Star Scientific, Inc. announced today that it has received a letter from the NASDAQ Global Market stating that all requirements necessary for continued listing have been met. NASDAQ Marketplace Rule 4450(a)(5) requires that the Company maintain a minimum closing bid price of $1.00 per share for at least 10 consecutive trading days, in order to demonstrate compliance with the rule. The minimum closing bid price per share for Star Scientific stock has ranged from $1.08 to $1.40 since October 2.
The company had received a letter from NASDAQ on August 24 stating that it was not in compliance with the minimum closing bid price listing standard, and that under Marketplace Rule 4450 (e)(2), it had 180 days to meet that standard.
Star Scientific, Inc. (NASDAQ:STSI - News) today announced that Park A. Dodd has been appointed as the company's Chief Financial Officer, Treasurer and Assistant Secretary. Mr. Dodd, who has been a special advisor to Star since May 2007, has had a thirty-year career in strategic financial planning and accounting. From 1980 to 2000 he was with Philip Morris, Inc.
Smokeless tobacco developer Star Scientific Inc said it has filed the opening brief in its appeal of its patent infringement lawsuit against RJ Reynolds Tobacco Inc, part of Reynolds American Inc.
Star said the papers were filed with the US Court of Appeals for the Federal Circuit yesterday.
The company alleges in the six-year dispute Reynolds infringed its patent for a process that reduces certain cancer-causing toxins in tobacco.
Star Scientific Inc., a company that specializes in tobacco technology, said it plans to file by Sept. 10 its opening brief with the U.S. Court of Appeals in an ongoing patent-infringement lawsuit dispute with R.J. Reynolds Tobacco Co.
On June 26, Reynolds won a patent-infringement lawsuit brought by Star Scientific. A U.S. District Court judge ruled that Star engaged in inequitable conduct before the U.S. Patent Office in obtaining patents involving a method of treating tobacco to substantially prevent the formation of tobacco-specific nitrosamines.
Also, Star Scientific said Thursday that it has been told by Nasdaq officials that it is has not been in compliance with the stock exchange's rule of having a minimum closing price of $1 a share for the past 30 days.
Brinks Hofer Gilson & Lione, one of the largest intellectual property law firms in the U.S., announced a resounding victory in a major patent infringement case brought against its client, R.J. Reynolds Tobacco Company, by Star Scientific, Inc. (Star Scientific, Inc. v. R.J. Reynolds et al., Nos. MJG-01-1504 & MJG-02-2504 (D. Md.)). The defense team was led by Brinks attorneys, Richard A. Kaplan, Ralph J. Gabric, K. Shannon Mrksich and Jerold A. Jacover, all shareholders at the firm. The case involved two patents for a method of substantially preventing the formation of tobacco-specific nitrosamines.
Smokeless tobacco developer Star Scientific, Inc said it has initiated the appeals process in its patent infringement lawsuit against RJR Reynolds Tobacco Company Inc by filing a notice of appeal with the US District Court in Maryland.
Star Scientific said it is appealing, and will seek expedited review, of the January 19, 2007 summary judgment rulings as well as the Court's ruling on inequitable conduct, which was issued earlier this week.
R.J. Reynolds Tobacco Co., the second-largest U.S. cigarette maker, won a ruling that two Star Scientific Inc. patents covering a formula for reducing carcinogens in tobacco are unenforceable.
Star sued Reynolds in federal court in 2001, claiming infringement of the patented inventions. Star, a developer of low-toxin tobacco products, sought hundreds of millions of dollars in compensation for the claimed violations.
U.S. District Judge Marvin Garbis in Greenbelt, Maryland, ruled today that Star deceived the U.S. Patent and Trademark Office in obtaining formal rights to its invention. The agency requires applicants to disclose all material information about a new invention. Star has said it would appeal.
Star Scientific Inc. early Wednesday vowed to appeal two federal court rulings against the smokeless tobacco developer in its patent dispute with cigarette maker R.J. Reynolds Tobacco Co.
In a statement, Star Scientific said it "is disappointed and frankly outraged" that the court ruled against the company Tuesday in the "inequitable conduct" bench trial, which had delayed the implementation of a prior patent ruling against Star Scientific.
In patent law, "inequitable conduct" suggests that the patent-holder knowingly misrepresented itself or withheld relevant information in applying for its patent, allowing the court to deem its patent unenforceable.
"The opinion ignores significant portions of the record, distorts others, and spins a tale that is unrecognizable to those who attended the trial," the company said.