A protracted and intense legal battle over tampon patents between Albaad Massuot Yitzhak Ltd. (TASE: ALBA) and US giant Edgewell has ended in victory for the Israeli company.
The background to the struggle is a lawsuit filed by US personal care consumer products company Edgewell against Albaad for allegedly violating its tampon manufacturing patents, after it began marketing its products to US retail chains. The US corporation attempted to make the marketing chains take Albaad's tampons off its shelves.
Albaad manufactures absorbent hygiene products and wet wipes and is traded on the Tel Aviv Stock Exchange (TASE) with a market cap of about NIS 205 million. The company decided in 2010 to gain a foothold in the tampon market and acquired Caesarea-based Rostam for $65 million. Rostam manufactures tampons that were marketed under private labels to retail chains around the world, mainly in the US. The tampon that Albaad produced for the American market challenged, among other things, Edgewell's Playtex brand sports tampons. Edgewell is a huge corporation and part of Energizer Holdings, which is traded on the New York Stock Exchange with a market cap of $2 billion.
Albaad's sports tampons began being sold in retail chains like Target, Walmart and Kroger at the rate of $1.5 million annually, and Albaad's management were looking forward to a rapid growth in sales revenue. When Edgewell's management saw the private brand of the company from Israel starting to bite into its own sales, they moved into action, approaching the marketing chains with a clear demand: remove the Israeli products from the shelves because we are suing them for patent violation. In December 2015, Edgewell filed a lawsuit in the Delaware court alleging the violation of three patents on the product and its structure.
As part of the court proceedings, the lawyers acting for Albaad Advs. Guy Yonay and David Levenstein, partners in the IP Litigation department of Pearl Cohen in the US, supported in Israel by Adv. Zeev Pearl, the managing partner of Pearl Cohen Zedek Latzer Baratz, were able to successfully prove in court that there was no infringement of most of the patents that it was claimed were violated. The court gave Albaad backing in its ruling and there remained just the claim of one patent violation - regarding the geometrical relations of the leaves on the tampon's insertion head.
Albaad submitted its summation to the court at the end of 2017and requested that this patent be invalidated and to issue an order of non-violation of the patent and also attached documents supported by experts. In March 2018, the decisive hearing on the case was held and the court subsequently ruled the Edgewell's patent was cancelled, and found in favor of Albaad. The ruling was still not the end of the story and Edgewell appealed to the US Federal Court of Appeals in New York, which has now dismissed the appeal. Albaad's tampons thus finally get to stay on the shelves of US stores.
Published by Globes, Israel business news - en.globes.co.il - on January 29, 2020
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