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Rite Aid Pulls NicoWater in Maine Stores
Platinum Products, LLC announced the issuance of an award in its favor by a three-judge panel of arbitrators, who decided, among other things, that QT 5, Inc.'s rights to United States Patent No. 6,268,386 were properly and completely terminated in June 2003. The arbitrators ordered QT 5 to immediately cease and desist from the sale of nicotine water. The award was issued following a contested arbitration hearing in which evidence was taken on December 18, 19, 22 and 23, 2003, and which concluded with final arguments on January 8, 2004. QT 5 had attempted to claim in the proceeding that its rights to the Patent had not been terminated and that it still had the right to market its flagship product NicoWater.
"Obviously, we're thrilled at the result," commented Platinum's lead attorney Kevin J. Leichter. "It's always gratifying to win," he continued, "but this was a clean sweep of extraordinary proportions, and it was completely justified by the evidence and the law. The arbitrators ruled unanimously, and their ruling rejected all of QT 5's claims, across the board, including a specific rejection of the testimony of QT 5 principals Tim Owens and Steve Reder as to the central contract interpretation issue in the case. All that's left to decide now is how much to award our side for the attorneys fees and costs we've expended to defeat QT 5's contentions." In their ruling, the arbitrators set a schedule for submissions as to attorneys fees and costs, and indicated that the panel will decide the fees and costs matter without further hearing. Pending the award of attorneys fees and costs, the decision of the panel today was an interim award in a binding arbitration.
Platinum was represented in the arbitration by Mr. Leichter, a member of Los Angeles law firm Christensen Miller Fink Jacobs Glaser Weil & Shapiro LLP. Inventor Marshall Thompson was represented by Frank Longo, Esq. of Beverly Hills based law firm Longo & Longo, LLP.
Platinum co-founders Robert Moore and Todd Sanders expressed their elation at the ruling. "This clears the way for Platinum to commence full operations without interference from QT5. We are delighted at the arbitrators' decision and thrilled at the prospect of moving forward to exploit our exclusive Patent rights. We are deeply committed to developing and marketing our product in a safe and responsible manner, and we intend to give our fullest cooperation to all regulatory authorities, including especially the FDA, in order to provide every appropriate assurance that our products will serve the public interests."
In addition, bottles of the nicotine-laced water, NICOWater, were pulled from the shelves of Rite Aid drug stores in Maine as legislators considered whether to ban the product.
A Rite Aid spokeswoman said the company removed bottles of NicoWater for sale in its 80 Maine stores Wednesday night, shortly after a legislative health committee voted 6-5 for a measure to outlaw the product until it's approved by the U.S. Food and Drug Administration.
The bill would need full Senate and House approval to become law.
Jody Cook, a spokeswoman for Rite Aid, said the company decided to stop selling the product in Maine because it wanted to be a good corporate citizen. "We're currently evaluating whether we will pull it from shelves across the chain," Cook said.
State Sen. John Martin took aim at NicoWater last spring when he saw ads touting the product as a cigarette substitute for people who have nicotine cravings in non-smoking environments. Sen. Martin, sponsor of the bill, said that the product, containing 4 milligrams of nicotine in a half-liter bottle, allows people to continue their nicotine habits when he believes the habit should be discouraged all together. His hope is that the committee recommends passage of the bill, and the full Legislature banishes the drink from Maine.
The product is sold in four-packs of half-liter bottles, each of which has 4 mg of nicotine, an amount equal to that in two cigarettes. Martin said NicoWater poses a threat, especially to children, and carries no health benefits. NICOWater is "meant for adult smokers when they can't smoke (each bottled is about two cigarettes worth of nicotine), like in an airplane, a train, around children or things of that sort," said David Rosen, a lawyer for the company based in Westlake Village, Calif. NICOWater failed to receive approval from the FDA in 2002 to be a dietary supplement.
The FDA blocked the sale of NicoWater in 2002, saying what producers called a dietary supplement was actually a drug. The water went on the market after QT 5 reclassified NicoWater as a "homeopathic nicotinum formula."