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CIGX Update > More On The Tobacco Trial Of The Future

|Includes: Rock Creek Pharmaceuticals, Inc. (RCPI)

4-9-2012

Dr. John L. Faessel
ON THE MARKET
Commentary and Insights

FDA and U.S. Patent Office have blessed CIGX - Now Big Tobacco must list the "Unsafe Chemicals" in their products. Licensing of Stars Technology is Next

Star Scientific Inc. (CIGX) Nasdaq

More on the Tobacco Trial of the Future

The seeming endless mishmash of legal machinations goes on with Star Scientific and Reynolds Tobacco. Last November, Reynolds, experienced yet another loss when the Federal Circuit court declined their request to have the dispute covering patents for tobacco-curing technology heard again by the entire full court (of I believe 16 judges), rather than the smaller panel. The court originally ruled in favor of Star re the validity of their patents. The definition of that full court hearing process is referred to "en banc."

More recently, March 30, 2012, Reynolds petitioned the U.S. Supreme Court to invalidate Star's two patents for their tobacco-curing that removes the cancer-causing agents. Some backdrop is needed here: Each year about 11,000 cases are submitted to the nation's highest court and only about 80 are heard, so the odds are that the case will not be heard. Also, key is that Stars patents were validated not only by the US Patent Office not once, but twice (that supposedly makes them irreconcilably valid) so an overturn is extremely unlikely. Obviously, anything can happen when it comes to the courts, but this one's a far stretch.

Now to add to the equation, on March 30 the FDA released a list of 93 chemicals that tobacco makers would have to report the quantity of in their products, So the regulations, not to mention news flow are decidedly against Big Tobacco.

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So, just for fun, let's again muse about the "Tobacco Trial of the Future" with this new information to add some zing to the story.

Let's begin by refreshing our memory re the FDA ruling last year* that net, net ruled that Star can market its tobacco products that have the cancer-causing lethal agent in tobacco removed.

Now slash into the future - coming to a courthouse near you... the setting: the Tobacco / Cancer Class Action trial in 20xx.

Attorney for the litigants: So Mr. Big "bad" Tobacco executive, our plaintiffs have suffered immensely and incomprehensibly due to your studied and willful negligence. Just why didn't you license Star Scientifics' technology that removes the cancer causing agent from the tobacco? Each year (you) sell $80 billion of tobacco products in the U.S. and $250 billion globally. Over the last 5-years that's over a $trillion in sales and since the lawsuit was filed over 10-years ago it's twice that amount. It would have been so inexpensive ― probably a minuscule 2% royalty? The totality of all that illness and pain is staggering. Each day 13,500 people worldwide die from tobacco related diseases. Shame. Shame. Shame...

Ladies and gentlemen of the Jury --- Eviscerate them!

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Just imagine, for over a decade the recalcitrant Big Tobacco companies have been beating up on tiny Star with all kinds of "willful" legal impediments in hopes that they could outlast their infinitesimally small pest. Big Tobacco has chosen to disregard, or was unwilling to explore, or chose to ignore, opportunities to provide safer products. They have violated the public trust. The time has come to recognize that Star has developed what is a momentous technological breakthrough; an undertaking that will provide a much safer product to the over billion people who choose to use tobacco products.

* The immensely credible U.S. Food & Drug Administration [FDA] who represents us all has, provided a de facto okay* for Star to market their products providing immense legitimacy to their decade-long efforts.

Add that on March 11, 2011 it was announced that the U. S. Patent Office in a re-examination of patents central to the lawsuit against Reynolds American Inc. (NYSE:RAI) were validated, i.e. "set in stone" with no possibility of appeal . Now of course Reynolds is taking this to the Supreme Court in what must be their final last gasp.

In my opinion we will soon see a licensing deal because Big Tobacco would be butchered in front of a jury. In what is suppose to be the largest patent infringement case ever, the total payment to Star in some kind of licensing deal from Big Tobacco could total in the hundreds of millions of even billions.

More backdrop in favor Star:

Star's patent application indicates that in using the Star Scientific method of curing, the deadly nitrosamines are "below the levels of detection. Star's curing method / technology results in a tobacco product that has the deadly nitrosamines reduced to "below the levels of detection" [BDL] (i.e. unable to be found / not there? I presume)... From what I understand, no one else is able to accomplish that. Nitrosamines are identified by scientists' world wide as the cancer-causing agents in tobacco leaf and smoke.

If you missed my previous reports more specific in detail and scope to each of Star's themes, or to receive my Best Ideas for 2012 send a request to: Dr.Faessel@onthemar.com

To view the (CIGX) website: http://www.starscientific.com/about-star/company-profile/

Disclosure: I am long CIGX.