CHESTER, Va.--(BUSINESS WIRE)--March 29, 2004--Star Scientific, Inc. (NASDAQ:STSI) issued the following update on the status of the pending patent infringement lawsuit the company filed against RJ Reynolds Tobacco Company:
On March 26, 2004, after the company had filed its annual report form 10-K with the SEC, counsel for Star received the last of the Reports and Recommendations (R&Rs) from the Special Master (R&R No.6). By Order of the Court, the R&Rs remain under seal. The issues regarding the sealing of these R&Rs are currently pending before the Court. Following the Court's ruling on such matters, Star may, if permitted, issue statements on the substance of the R&Rs. At this juncture, we are able to state the following:
The Special Master recommended that the Court grant in part, and deny in part, Star's Motion for Summary Judgment on Claim Construction and Definiteness. With respect to the five RJR Motions referred to the Special Master, the Special Master has recommended that the Court deny all five of those motions. Specifically, the Special Master has recommended that the Court deny RJR's Motions for Summary Judgment No. 1 (asserting RJR has not infringed the patents); No. 2 (asserting no direct infringement of the patents); No. 3 (asserting patent invalidity for failure to comply with 35 U.S.C. section 112); No. 4 (asserting invalidity based on the prior art), and No. 5 (asserting that the patents are unenforceable).
Under the September 15, 2003 Order, the parties have ten business days after each R&R is issued to file Objections, and ten business days thereafter to file Responses to the Objections. The parties' briefing related thereto also are currently filed under seal. Upon receipt of the Objections and Responses, the Court has discretion to adopt, reject or modify the Special Master's R&Rs, and will enter an Order or Orders accordingly. The Court has previously indicated that it will rule on the Motions for Summary Judgment expeditiously after receipt of the Special Master's R&Rs and related briefing by the parties.
In May 2001, the Star Scientific filed a patent infringement action against R. J. Reynolds Tobacco Company (RJR) in the United States District Court for Maryland, Southern Division, to enforce the company's rights under U.S. Patent No. 6,202,649 (`649 Patent), which claims a process for substantially preventing the formation of TSNAs in tobacco. On July 30, 2002, the Company filed a second patent infringement lawsuit against RJR based on a new patent issued by the U.S. Patent and Trademark Office on July 30, 2002 (Patent No. 6,425,401). The new patent is a continuation of the `649 Patent, and on August 27, 2002 the two suits were consolidated.
In April 2003 the parties filed dispositive motions. Star Scientific filed a Motion for Summary Judgment on Claim Construction and Definiteness, and RJR filed six Motions for Summary Judgment asserting various defenses. Pursuant to an Order dated September 15, 2003, the Court appointed a Special Master to prepare Reports and Recommendations for the Court on Star Scientific's Motion for Summary Judgment, and on five of RJR's six Motions for Summary Judgment. The Court did not refer to the Special Master RJR's Motion for Summary Judgment No. 6, concerning the scope of Star Scientific's damages claim.
This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The Company has tried, whenever possible, to identify these forward-looking statements using words such as "anticipates", "believes", "estimates", "expects", "plans", "intends" and similar expressions. These statements reflect the Company's current beliefs and are based upon information currently available to it. Accordingly, such forward-looking statements involve known and unknown risks, uncertainties and other factors which could cause the Company's actual results, performance or achievements to differ materially from those expressed in, or implied by, such statements. These risks, uncertainties and contingencies include, without limitation, the challenges inherent in new product development initiatives, particularly in the smokeless tobacco area, the uncertainties inherent in the progress of scientific research, the Company's ability to raise the capital necessary to grow its business, potential disputes concerning the Company's intellectual property, risks associated with litigation regarding such intellectual property, potential delays in obtaining any necessary government approvals of the Company's low-TSNA tobacco products, market acceptance of the Company's new smokeless tobacco products, competition from companies with greater resources than the Company, the Company's decision not to join the Master Settlement Agreement ("MSA"), the effect of state statutes adopted under the MSA and any subsequent modification of the MSA, and the Company's dependence on key employees and on its strategic relationships with Brown & Williamson Tobacco Corporation, and the impact, if any, of the proposed merger between Brown & Williamson and RJ Reynolds Tobacco Company, Inc. The impact of potential litigation, if initiated against or by individual states that have adopted the MSA, could be materially adverse to the Company. See additional discussion under "Factors That May Affect Future Results" in the Company's Annual Report on Form 10-K/A for the year ended December 31, 2002, and other factors detailed from time to time in the Company's other filings with the Securities and Exchange Commission, available at www.sec.gov . The Company undertakes no obligation to update or advise upon any such forward-looking statements to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events.
About Star Scientific
Star Scientific is a technology-oriented tobacco company with a toxin reduction mission. It is engaged in the development of tobacco products that deliver fewer carcinogenic toxins (principally tobacco specific nitrosamines, or TSNAs), through the utilization of the innovative StarCured(TM) tobacco curing technology, and in sublicensing that technology to others. Star Scientific has a Corporate and Sales Office in Chester, VA, an Executive, Scientific & Regulatory Affairs office in Bethesda, MD, and manufacturing and tobacco processing facilities in Chase City and in Petersburg, VA.