Altria Group (MO-2.7%) and Philip Morris (PM-2.0%) must end the sale and import of their IQOS heated tobacco device after the U.S. International Trade Commission ruled that it infringed on two patents held by rival R.J. Reynolds, a subsidiary of British American Tobacco (BTI-4.0%).
The ban will take effect in two months after an administrative review process. Philip Morris says it will appeal the decision.
British American Tobacco previously took action against Philip Morris in the U.K., Greece, and other international markets, but courts sided with Philip Morris in those cases.
IQOS is a cigarette alternative that heats, rather than burns tobacco and is the only inhalable tobacco product allowed to say that it exposes buyers to fewer dangerous chemicals than tobacco. It is manufactured by Philip Morris and Altria began selling the product in the U.S. two years ago under a licensing agreement.
The ruling deals a blow to Philip Morris' shift in focus from traditional tobacco to healthier alternatives. The Marlboro maker recently acquired asthma inhaler manufacturer Vectura.