Juul Labs files lawsuit against 30 counterfeiters

Juul Labs has filed trademark claims against 30 entities in China for selling counterfeit Juul products on eBay. The complaint was filed in late August, and today the company announced that the Federal Court in the Eastern District of Virginia has granted a temporary restraining order and frozen the PayPal accounts of the entities selling counterfeit Juul devices and products.

The Juul e-cig has grown in popularity at a rapid clip since 2015, currently owning more than 70 percent of the market based on revenue. Most obviously, that growth has come along with regulatory hurdles from the FDA, including an investigation launched in April around underage use.

But just like any other growing startup, Juul Labs is also dealing with copycats.

On the one hand, Juul says these counterfeit e-cigs and pods were not quality tested the same way as Juul, posing a safety threat to those that purchased. On the other, these products circumvented the age verification process which Juul uses (21+ on its own website), according to the company.

Age verification is particularly important to Juul right now. The company has built out a rather impressive distribution network with vape shops, convenience stores, and other shops, which has been lucrative for growth. However, it has forced the startup to sacrifice some level of control over who can purchase the product.

In April, the FDA launched an investigation into why Juul products have drawn teenagers and minors as customers, asking Juul to turn over all documents related to “product marketing; research on the health, toxicological, behavioral or physiologic effects of the products, including youth initiation and use; whether certain product design features, ingredients or specifications appeal to different age groups; and youth-related adverse events and consumer complaints associated with the products.”

The FDA is also cracking down on some e-commerce platforms, with Juul and regulators working to take down illegal sales of the Juul product on Amazon and eBay. Thus far, the company has worked to remove more than 16,000 listings from online marketplaces since January, attempting to limit sales to only verified and authorized dealers.

This may seem like a side battle in Juul’s greater war, but they’re really one in the same. Juul’s brand perception is nearly as important as the quality of the product itself. Can the company find a way to retake control of its own distribution, whether through a new smartphone-connected device that verifies age and intake or through other means?

That question is only further muddled by the fact that counterfeit products are floating around the market and, according to Juul Labs, potentially putting the public at risk, all under the Juul brand name.

So why has Juul decided to file a complaint now?

“The prevalence of counterfeiters has increased dramatically over the last year consistent with JUUL’s rise in the marketplace,” Gerald Masoudi, Chief Legal Officer at JUUL Labs told TechCrunch. “The process of tracking and identifying the culprits of counterfeit products is time intensive. We have dedicated additional resources to this initiative to ensure these products stay off the market and out of hands of underage users.”

Masoudi added that the best way for customers to know that there Juul is the real deal is to either buy through the website or check that the store they’re visiting is listed on the Juul website as a verified seller.

You can read the full complaint below:

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