DCT

2:20-cv-01322

Pinkerton Tobacco Co LP v. Art Factory Ab

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I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 2:20-cv-01322, C.D. Cal., 04/05/2021
  • Venue Allegations: Plaintiffs allege venue is proper in the Central District of California based on Defendants' alleged acts of infringement in the district, including sales and distribution activities purposefully directed at California.
  • Core Dispute: Plaintiffs allege that Defendants’ "DRYFT" brand nicotine pouch products infringe a patent related to the chemical formulation of oral nicotine pouches.
  • Technical Context: The technology concerns smokeless, tobacco-free oral nicotine products, a market segment focused on providing alternatives to traditional tobacco with improved nicotine delivery characteristics.
  • Key Procedural History: The complaint alleges a complex business history, including that Defendant TillCe AB was a former co-owner of the patent-in-suit. Plaintiffs also allege that Defendants TillCe AB and The Art Factory AB were notified in writing of the alleged infringement on October 12, 2016, nearly five years before the filing of the amended complaint.

Case Timeline

Date Event
2011-03-29 Earliest Priority Date for ’908 Patent
2015-10-20 ’908 Patent Issue Date
c. August 2016 Accused "DRYFT" Product Allegedly Launched in U.S.
2016-10-12 Plaintiffs Allegedly Notified Defendants of Infringement
Late 2017/Early 2018 Defendant TAF Allegedly Began Manufacturing Accused Product
2021-04-05 First Amended Complaint Filing Date

II. Technology and Patent(s)-in-Suit Analysis

U.S. Patent No. 9,161,908 - "Pouch Containing Nicotine in Free Salt Form,"

  • Patent Identification: U.S. Patent No. 9,161,908, "Pouch Containing Nicotine in Free Salt Form," issued October 20, 2015 (the "’908 Patent"). (Compl. ¶30).

The Invention Explained

  • Problem Addressed: The patent’s background section explains that prior nicotine delivery systems had significant drawbacks. Nicotine in its base form is readily absorbed by the body but is chemically unstable and volatile, while nicotine in a salt form is stable but is not easily absorbed through oral membranes ('908 Patent, col. 3:4-13). Existing products like "snus" pouches were said to provide slow and incomplete nicotine release ('908 Patent, col. 2:36-47). The technical challenge was to create a product with the shelf-stability of a nicotine salt but the rapid bioavailability of nicotine base.
  • The Patented Solution: The invention is an oral pouch containing a powder core. This core includes a "free nicotine salt," a pH adjusting agent, and a filler ('908 Patent, col. 4:62-col. 5:1). When the pouch is placed in the mouth, saliva permeates the pouch and dissolves the powder. The pH adjusting agent then raises the local pH of the saliva, converting the stable nicotine salt into its unprotonated base form in situ. This base form is then rapidly absorbed through the oral mucosa, aiming to provide user satisfaction more quickly than prior art products ('908 Patent, col. 5:55-62).
  • Technical Importance: This in situ conversion technique sought to resolve the long-standing trade-off between chemical stability during storage and speed of delivery during use for oral nicotine products ('908 Patent, col. 2:51-62).

Key Claims at a Glance

  • The complaint asserts independent claim 1 and reserves the right to assert other claims (Compl. ¶¶44, 46).
  • Independent Claim 1 of the ’908 Patent recites the following essential elements:
    • A product for oral delivery of nicotine containing a core comprising a powder of:
    • a) at least one free nicotine salt
    • b) at least one pH adjusting agent
    • c) at least one filler
    • and a water insoluble pouch, wherein said pouch is permeable for saliva and therein dissolved parts of the powder,
    • wherein said product upon contact with purified water gives a pH of at least 6,
    • and wherein said powder being substantially free from adsorbed and/or absorbed nicotine.

III. The Accused Instrumentality

Product Identification

  • The accused instrumentalities are nicotine pouch products sold under the brand name "DRYFT" (the "Accused Product") (Compl. ¶10).

Functionality and Market Context

  • The complaint alleges that the Accused Products are manufactured in Sweden and imported, distributed, and sold in the United States by the Defendants (Compl. ¶¶10-11, 14). The complaint describes a supply chain where Defendant TAF (and previously TillCe) manufactured the products for Defendants Kretek and Dryft Sciences, who then distributed them in the U.S. (Compl. ¶11). Sales are alleged to be substantial, with distribution across 47 states and over a million cans sold to Kretek between 2018 and 2020 (Compl. ¶¶22, 25). The products are also allegedly marketed and sold through the website www.getdryft.com (Compl. ¶17). No probative visual evidence provided in complaint.

IV. Analysis of Infringement Allegations

The complaint references a claim chart applying independent claim 1 to the Accused Product, which was attached as an exhibit to the original complaint (Compl. ¶45). As this exhibit is not provided with the First Amended Complaint, the infringement allegations are summarized narratively.

The complaint asserts that the Accused Products directly infringe at least claim 1 of the ’908 Patent (Compl. ¶46). The core of the infringement theory is that the DRYFT nicotine pouches are products for oral delivery containing a powder within a permeable pouch. The complaint alleges, through its incorporation of the unfiled claim chart, that this powder contains the claimed combination of a free nicotine salt, a pH adjusting agent, and a filler, and that the product as a whole meets the pH and "substantially free from adsorbed... nicotine" limitations of the claim (Compl. ¶¶44-46). The complaint does not, however, provide specific factual allegations in its body detailing the chemical composition of the Accused Product or how its specific ingredients map to the claim elements.

  • Identified Points of Contention:
    • Factual Question: The primary point of contention will be establishing the actual chemical and physical properties of the Accused Product. The complaint’s conclusory allegations will require substantiation through discovery to determine if the DRYFT formulation contains components that meet the definitions of "free nicotine salt," "pH adjusting agent," and "filler" as recited in the claims.
    • Scope Questions: A central dispute may arise over the claim limitation requiring the powder to be "substantially free from adsorbed and/or absorbed nicotine" ('908 Patent, col. 18:10-12). The analysis will raise the question of whether the nicotine compound in the Accused Product is merely mixed with the filler, as the patent describes, or if it physically or chemically interacts with the filler (e.g., microcrystalline cellulose) to a degree that could be characterized as adsorption, potentially placing it outside the scope of the claim.

V. Key Claim Terms for Construction

  • The Term: "free nicotine salt"

  • Context and Importance: This term appears to be the primary point of novelty, distinguishing the invention from prior art that used either unstable nicotine base or nicotine salts that were chemically bound, entrapped, or adsorbed to other materials. Practitioners may focus on this term because the infringement analysis for every asserted claim will depend on whether the nicotine compound in the Accused Product qualifies as "free."

  • Intrinsic Evidence for Interpretation:

    • Evidence for a Broader Interpretation: The patent specification suggests a broad meaning, stating, "The nicotine salt can be free, i.e. it only needs to be mixed together with the other components in the powder" ('908 Patent, col. 3:23-25). This could support a construction where any nicotine salt simply blended into a powder mixture, without forming a new chemical entity, is "free."
    • Evidence for a Narrower Interpretation: The patent repeatedly contrasts the invention with nicotine that is "bound to, adsorbed to, absorbed into, enclosed into or forming a complex" ('908 Patent, col. 2:60-62). A defendant could argue that "free" implies a complete lack of physical or chemical association with other components beyond a simple mixture, and that any significant interaction with a filler material would render the salt not "free."

  • The Term: "substantially free from adsorbed and/or absorbed nicotine"

  • Context and Importance: This negative limitation reinforces the meaning of "free nicotine salt" and was likely included to distinguish from prior art describing nicotine absorbed into cellulose ('908 Patent, col. 2:7-14). Its construction is critical because many common pharmaceutical fillers have high surface areas that could lead to incidental adsorption.

  • Intrinsic Evidence for Interpretation:

    • Evidence for a Broader Interpretation (favoring Patentee): A party could argue "substantially free" does not require a complete absence of adsorption but means that adsorption is not the intended, primary, or significant mechanism for stabilizing the nicotine, in contrast to the prior art it was designed to overcome.
    • Evidence for a Narrower Interpretation (favoring Defendant): A party could argue that if the Accused Product uses a filler known to have adsorptive properties (such as microcrystalline cellulose), and testing reveals any meaningful level of adsorption, the product is not "substantially free" of it and thus does not infringe, regardless of whether the adsorption was intended.

VI. Other Allegations

  • Indirect Infringement: The complaint alleges that Defendants induced infringement by "advertising, distributing, making, using, selling, and/or offering for sale" the Accused Products (Compl. ¶¶46-47). It further alleges contributory infringement, stating the products are "especially designed, made, and/or adapted for use in an infringing manner" and have no substantial non-infringing uses (Compl. ¶47).
  • Willful Infringement: The complaint alleges willful infringement based on both pre-suit and post-suit knowledge (Compl. ¶53). It alleges that Defendants TillCe and TAF had actual knowledge since at least October 12, 2016, via a written notice letter from Plaintiff Swedish Match (Compl. ¶¶40, 51). Knowledge is also imputed to TillCe from the patent's issuance date, as it was allegedly a co-owner at that time (Compl. ¶51). Knowledge for Defendants Kretek and Dryft Sciences is alleged to have existed since at least August 2016 due to their business relationships with the other defendants (Compl. ¶¶41, 52).

VII. Analyst’s Conclusion: Key Questions for the Case

  1. An Evidentiary Question of Composition: The case first presents a fundamental factual question: what is the precise chemical composition and physical structure of the accused DRYFT product? As the complaint lacks specific factual allegations on this point, the viability of the infringement claim will depend entirely on evidence obtained during discovery.
  2. A Definitional Question of "Freedom": The dispute will likely center on claim construction, specifically the meaning of a "free nicotine salt" that is "substantially free from adsorbed and/or absorbed nicotine." A core issue will be whether this language permits incidental physical interaction between the nicotine salt and filler materials, or if it requires a near-total absence of such interaction, a distinction that could be dispositive.
  3. A Question of Intent: Given the allegations of prior co-ownership of the patent by a defendant and a specific pre-suit notice letter, a key focus of the case will be the defendants' state of mind. Should infringement be found, the extensive history alleged between the parties will make the question of whether the infringement was willful a central issue for the determination of damages.