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EXCLUSIVE: Star Scientific Comments On RJ Reynolds Patent Dispute


It has been a ten-year process up to now and, according to Star Scientific's (NASDAQ: CIGX) Vice President of Communications and Investor Relations, Sara Troy Machir, it will be at least another 18 months before the patent dispute between Star Scientific and RJ Reynolds Tobacco Company (RJR) reaches its conclusion.

RJ Reynolds filed requests for the reexamination of patents ‘649 and ‘401 with the United States Patent and Trademark Office in January 2009, and Star Scientific said on Friday that its patent council, Banner & Witcoff, had received two notices and letters from the patent and trademark office confirming the validity of each of the claims involved in the reexamination of the two patents.

As reported in AlphaTrade Finance on Friday, the ‘649 and ‘401 patents were issued in 2001 and 2002, and they cover the tobacco-leaf curing process in a manner that largely prevents bacterial activity in the tobacco leaf. That activity results in the formation of tobacco-specific nitrosamines (TSNAs), a group of carcinogens that have been identified as some of the most lethal and abundant toxins found in tobacco. With the StarCured process, as described in the two patents in question, tobacco leaves are found to have the lowest TSNA found anywhere in the world, Star Scientific believes.

Machir said on Monday that while the notices from the patent and trademark office were good news for Star, the champagne is on ice. “The patents were upheld and we're awaiting the decision from the federal circuit,” said Machir. “If the Federal Circuit overturns the June, 2009 jury verdict, RJR is likely to appeal for a rehearing of this appeal before the full Federal Circuit Court (appeals are heard by a three-judge panel). Therefore it would be at least late 2011, if Star wins, before the case would be returned to US District Court for reassignment to a new judge, and then a new trial, which would take place sometime in 2012”

Machir wouldn't be drawn on the subject of a timeframe for receiving revenue from the patents. “As a public company, we have a responsibility to not engage on speculation, so as far as a timeframe for revenue from these patents, I have no idea.”

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