Pa.'s Zippo lighter company squares off against top e-cigarette maker

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Pennsylvania’s Zippo Manufacturing Co., which makes the iconic Zippo lighters, has filed a legal claim against one of the nation’s top cigarette makers, alleging trademark infringement.

Zippo and a subsidiary, ZippMark, filed the complaint against LOEC Inc., a subsidiary of North Carolina’s Lorillard tobacco company, over Lorillard’s “blu” line of electronic cigarettes. Zippo says the blu brand of e-cigarette conflicts with Zippo’s own line of BLU-brand butane-fueled lighters.

The counterclaim, filed Monday in U.S. District Court for the Central District of California, seeks to prevent Lorillard, the nation’s third-largest tobacco company, from selling blu-branded e-cigarettes.

“Through its extensive advertising and marketing, LOEC has catapulted itself from a single-digit market share of e-cig sales at the time it acquired [the] leading e-cig brand in the U.S.,” Zippo’s complaint says.

In April 2012, Lorillard acquired blu brand e-cigs, “the leading electronic cigarette company in the U.S.,” for $139 million in cash and considerations. The blu cigarette trademark had been in existence since 2009, owned by the original developers, BLEC LLC and related companies, themselves owned by Australian entrepreneur Jason Healy. (He now heads Lorillard’s LOEC subsidiary.)

Zippo, meanwhile, has been selling its BLU lighters since 2007.

“Despite our attempts to resolve this matter amicably, Zippo has been compelled to seek the court’s assistance to protect our BLU trademarks,” Zippo CEO Gregory Booth said in a statement.

“Zippo is instantly recognizable because we have long understood the value of our brand. … Our BLU trademarks are similarly valuable and will be similarly protected,” he said.

In his own statement, Bob Bannon, director of investor relations for Lorillard, said, “It is Lorillard's policy not to comment on pending litigation. However, as is stated in our previous court filing, Lorillard does not believe it infringes any Zippo trademarks and intends to vigorously pursue its claims.”

Zippo, based in Bradford, McKean County, filed its counterclaim after LOEC first sought a declaratory judgment of noninfringement last month.

The conflict predates the court system, however.

In March 2012, ZippMark filed a complaint (called a “notice of opposition”) with the U.S. Patent and Trademark Office’s trial and appeals board, saying Lorillard’s “blu” mark, once put into greater market circulation, “would give rise [to] a likelihood of confusion with [ZippMark’s] existing domestic and international BLU” trademarks.

Zippo has since filed subsequent complaints with the trademark office.

Lorillard said in its initial April complaint that if Zippo were seriously concerned about marketplace confusion, it wouldn’t have taken so long to bring a civil action. Because Zippo “lollygagged” in its legal filings, it has essentially “acquiesced in and consented to LOEC’s use of the ‘blu’ family of marks,” Lorillard said.

With sales of conventional cigarettes eroding over the decades, tobacco companies have sought to offset that erosion by investing in e-cigarettes.

In spring 2013, Reynolds American announced a national rollout of its VUSE electronic cigarette. Also last year, Marlboro owner Altria Group Inc. released its MarkTen e-cig.

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