The IQOS device sold by Altria Group Inc. is battery-powered and heats tobacco instead of burning it.

Altria Group has opened stores in the U.S. to sell the IQOS product including this location in Carytown that opened in November 2019. Altria plans to add locations in additional markets.

The IQOS device sold by Altria Group Inc. is battery-powered and heats tobacco instead of burning it.

Philip Morris International’s iQOS device heats tobacco instead of burning it, producing a vapor that the user inhales.

Henrico County-based Altria Group Inc. must stop selling the alternative smoking device IQOS in the United States after a ruling issued by the U.S. International Trade Commission was allowed to stand.

Altria, a major employer in the Richmond area and the parent company of top U.S. cigarette maker Philip Morris USA, had been selling the IQOS device in several U.S. markets, including the Richmond region, as a potentially less-risky alternative to conventional cigarettes.

However, the U.S. International Trade Commission ruled in late September that Altria and its former subsidiary, Philip Morris International, must halt imports and sales of the IQOS device because it infringes two patents held by their top competitor, Winston-Salem, N.C.-based R.J. Reynolds Tobacco Co.

The trade commission’s ruling went through an administrative review process that ended on Monday without changing the decision.

The IQOS is a battery-powered device that heats tobacco instead of burning it. The trade commission’s ruling also covers the replaceable tobacco HeatSticks that consumers can buy at retail stores and that are inserted into the IQOS device.

The U.S. Food and Drug Administration had given Altria clearance to market the product as a “modified risk” nicotine product that could reduce levels of harmful chemicals. Reduced-risk nicotine products are a category that tobacco companies have been pursuing to offset declines in consumption of conventional cigarettes.

Altria has not reported sales figures for IQOS or the number of customers who have bought the device. But the company said in its most recent regulatory report that sales volume had continued to grow in the four states where IQOS is available, with repeat purchases of the Marlboro-branded HeatSticks accounting for about 85% of sales.

Altria first introduced IQOS in the U.S. in the Atlanta area in 2019 as part of an exclusive agreement with Philip Morris International. Altria later expanded sales of IQOS into the Charlotte, N.C., area and the Richmond area, including opening a store dedicated to IQOS sales in Carytown.

The IQOS stores have been closed in compliance with the ITC order, a spokesperson for Altria said Tuesday.

“We’re disappointed in this decision, as IQOS is the only inhalable tobacco product to have received FDA authorization as a modified risk tobacco product,” Altria said in a statement. “The ITC’s importation ban makes the product unavailable for all consumers who have switched to IQOS, reduces the options for the over 20 million smokers looking for alternatives to cigarettes, and ultimately is detrimental to the public health.”

A complaint filed in April 2020 claims that the IQOS device infringes on patents held by R.J. Reynolds’ parent company, British American Tobacco PLC, that were issued by the U.S. Patent and Trademark office between November 2012 and December 2019.

“We continue to believe that the plaintiff’s patents are invalid and that IQOS does not infringe on those patents,” Altria said in its statement. “We’re complying with the ITC order. We’ve been focused on our contingency plans surrounding sales and distribution and have been in communication with PMI on their domestic manufacturing plans.”

“We’re communicating with IQOS consumers regarding removal of IQOS and HeatSticks from the market, why this is occurring and that we’re working on contingency plans to make these products available again at retail,” the company said.

Philip Morris International was spun off as a separate publicly traded company from Altria in 2008 and does business only in overseas markets, while Altria operates businesses in the United States through subsidiaries such as Philip Morris USA, U.S. Smokeless Tobacco Co. and cigar maker John Middleton.

A spokesperson for Philip Morris International said Tuesday that the company’s contingency plans include domestic manufacturing of the product, but the company cannot share further details at this point.

“We are disappointed in the disregard not only of the scientific evidence supporting IQOS, but also the wishes of American adults who are searching for a better alternative to continued smoking, which should have been the most important consideration of all,” the company said.

Philip Morris International said the U.S. Patent office also is reviewing the patent claims in question, with initial rulings expected in 2022, subject to an appeal process.

“While this [trade commission] decision will cause near-term disruption, we continue to see a large opportunity for IQOS and other FDA authorized smoke-free products in the U.S. over the coming years,” the company said

Altria could appeal the decision to the U.S. Court of Appeals for the Federal Circuit.

Reynolds’ parent company, British American Tobacco, said it was pleased with the trade commission’s decision.

“Today’s announcement provides a measure of success for our enforcement of intellectual property rights to ensure we can continue to innovate, as is common practice among innovation-based industries,” Gareth Cooper, British American Tobacco’s assistant general counsel, said in a statement reported by the Winston-Salem Journal in North Carolina.

“As we have strenuously noted, there was no reason to overturn the policy.”

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The IQOS device sold by Altria Group Inc. is battery-powered and heats tobacco instead of burning it.

Altria Group has opened stores in the U.S. to sell the IQOS product including this location in Carytown that opened in November 2019. Altria plans to add locations in additional markets.

The IQOS device sold by Altria Group Inc. is battery-powered and heats tobacco instead of burning it.

Philip Morris International’s iQOS device heats tobacco instead of burning it, producing a vapor that the user inhales.

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