Swedish Match Loses Trademark Lawsuit against V2 Tobacco

Swedish Match Loses Claim to Round Snus Cans

The Stockholm District Court on Friday ruled against Swedish Match AB in their two year legal battle against V2 Tobacco A/S over the inocuous round snus can. Swedish Match had previously registered the round loose snus can with recessed lid as a brand; claiming V2 had infringed on that trademark and could not use round snus cans for their product.

The Court’s ruling invalidates Swedish Match brand no. 0405255, the mark consisting only of a round box without text and has no distinctive character.

The Court also ordered Swedish Match to pay V2 Tobacco 1.69MM SEK (approximately $256,812.00) on each of two counts or a total of $513,624.00.

In 2011, Swedish Match had also gone after British American Tobacco (BAT) and Swedmax Tobacco Ltd, a very small company in Mariestad who sold do-it-yourself snus kits over the round can trademark issue.

Ironically, Swedish Match began introducing a new version of their portion snus can with hinged catch lids in 2013. Both used snus catch lids and hinged catch lids were created by Gallaher Group; now JTI Tobacco.

Apparently JTI never patented these innovations or doesn’t bother enforcing their rights. JTI owns and manufactures the Swedish snus brands Camel (non-US version), Gustavus, and LD.

If the Hatfields and McCoys were Scandinavian Snus Manufacturers…

The feud between Swedish Match and V2 Tobacco (or V2 Tobacco and Swedish Match) goes beyond the Round Snus Can lawsuit.

V2 has not been shy about tweaking Swedish Match in the past.

For example, Swedish Match cans had 3 stars on their labeling so V2 added 5 stars to their cans. Swedish Match sued because when packed into retail snus chillers, only 3 of the V2 stars were visible.

SMAB asserted that this could cause consumers to confuse V2 brands with Swedish Match brands. Not an unrealistic concern but it also wasn’t their main concern at all.

SM is rightly very proud of their brands and the history behind them. They perceived V2’s action as a slap in the face to their centuries-old Swedish snus heritage.

Another example; almost all snus distributed in Sweden is done so by Swedish Match Distribution (SMD) regardless of who the manufacturer is.

The SMD network is huge and while their competitors aren’t thrilled about paying SMD for distribution, they go along with it because replicating SMD’s network just wouldn’t make economic sense. There was nothing personal on either side.

V2 instead created their own distribution network within Sweden and bypassed SMD completely. For Swedish Match, another break with how things were done in Sweden…by a Danish interloper.

That was not V2’s intent; they developed a less expensive way to distribute their snus in Sweden. Purely a business decision…… but did they smile over SMD’s surprise? I would venture to say yes and toast it with a cold bottle of Carlsberg beer.

Statistically, V2 snus brands command a very small percentage of snus sales in Sweden; even smaller back in 2011. The amount of animosity between both companies was more visceral than sales numbers alone would justify. In many ways it was personal.

I’ve always believed that SM’s claim to owning the “round loose snus can” was more of a tactic to tie up V2 legally in a protracted court battle and force them to spend resources and time on lawyers.

That is a time-honored practice in the US when it comes to shutting down a small or annoying competitor; throw lawyers at them until they suffocate.

V2 has always seen a legal challenge from any source of any size as a chance to pull out their legal swords and do battle. V2 Tobacco is not just a corporation; it IS Mark and Patrick Vogel. Anyone foolish enough to think they can smother the Vogels in legal papers had better be prepared for a long, costly and if necessary bloody war.

Conversely, V2 Tobacco could have avoided many of the other legal back and forths by not publicly kicking Swedish Match and Swedish snus in the shin quite so often…but from their perspective, it made good business sense at the time.

Each company took this feud beyond reason once.

For Swedish Match, it was the thankfully short-lived “Dirty Snus” affair in February of 2011. I came across an article I had written but never published detailing in a very granular fashion this sordid event.

I did not publish it for a reason; keeping this story alive would ultimately be hurtful both to eventually overturning the EU Snus Ban and promoting Swedish snus in the US. In hindsight, I still wouldn’t have published it. Sadly, by 2014 I also thought the ridiculous EU ban on Swedish snus would have been consigned to the dustbin of history.

V2’s unwarrented attack on SM wasn’t carried out in public but it more than crossed a line. Enough said.

I’m bring all this up so I can justify my thoughts on Fridays’ court verdict.

Swedish Match lost the round can lawsuit because it wasn’t really legally defensible. They knew that in 2011 and Friday was just the inevitable conclusion and mission accomplished. To a company of Swedish Match’s size and amortized over the past two years, the financial settlement was far from painful.

As for V2, they have grown from a small close-knit company into a true corporate giant in Denmark. With this comes the need for management to look at the organization differently and adopt new priorities. The latest addition to their new snus factory will be completed in April 2014; effectively doubling the size of the factory.

The 3.3MM SEK they were awarded will barely cover the cost of renovating CEO Mark Vogel’s already palatial office suite. His brother Patrick may even have enough money left to purchase himself a new desk chair

2014 is a new year promising opportunities but already serious challenges for those in the snus and tobacco industry. Both Swedish Match and V2 Tobacco have much bigger things to concentrate on than each other.

Both have known it for some time. It’s the reason why I don’t consider the outcome of the round can dispute to be of any real significance.

Since its height in 2011, the Swedish Match / V2 Tobacco feud or if you prefer, the V2 Tobacco / Swedish Match feud, has died a quiet death on the vine. Friday was just the reading of the Last Will and Testament.

Enjoy your Snus; from round can or oblong!