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Lorillard Pursues Retailer Over Counterfeit Cigarettes

GREENSBORO, N.C. -- A customer's complaint about a pack of Newports has landed a Greensboro, N.C., convenience store in federal court, where Lorillard Inc., the country's third-largest cigarette maker, is pursuing an ongoing legal war to stamp out sales of counterfeit cigarettes, reports the Business Journal of the Greater Triad Area.

Lorillard is suing Casey's Citgo Inc. over the sale of a few dozen packs of counterfeit Newport cigarettes. Casey's claims it didn't know the cigarettes were fakes and that it acted responsibly by notifying Lorillard when a customer complained about the cigarettes in early March.

The trademark-infringement case, filed in March in the U.S. District Court in Greensboro, is just one of scores of such lawsuits that Lorillard has filed since 2002 in an effort to combat the growing sales of counterfeit cigarettes nationally.

"Our goal is to stop any counterfeiting of our product and to keep it out of the marketplace," said Hanna Hasl-Kelchner, associate general counsel for Lorillard and the corporate attorney responsible for overseeing the legal battle against counterfeits. "Our main concern is preserving the integrity of our product."

Lorillard executives say they're not sure how much of an impact counterfeits are having on the company's earnings, but since 2002, the company's annual report has warned investors that counterfeits "adversely impact sales by the manufacturer and potentially damage the value and reputation of those brands."

Lorillard's Newport brand is a target for counterfeiters because it's the country's leading menthol brand and the second-leading brand overall, behind Philip Morris's Marlboro, which is also a favorite target of counterfeiters.

Lorillard has pursued counterfeiters aggressively: In one major Illinois case, for instance, a judge has imposed almost $4.5 million in fines on people and companies that Lorillard accused of selling fake Newports. The company has cases pending in 10 other states, including North Carolina.

The lawyer for Casey's Citgo, Greensboro attorney Gerald C. Parker, said he couldn't comment in detail on the case, but he hoped it would end in a settlement.

"I think Lorillard really would like to know who in the hell got these cigarettes and counterfeited them more so than they are interested in us," he said. "We just wish this damn thing would go away."

Parker said he and his client are sharing information with Lorillard on who they bought the counterfeit Newports from, but that distributor himself may not have known they were counterfeit.

"We don't want to fight Lorillard," Parker said. "It's like fighting the federal government."

Lorillard also won't comment in detail on the lawsuit. Pretrial hearings in the case are scheduled for May.

"If there's anybody out there that thinks, 'It's only a few packs, it doesn't matter,' " Hasl-Kelchner warned, "we basically have a zero-tolerance policy."

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