U.S. customs officials bar imports bearing the Philip Morris USA trademark..

September 25, 2009 - The International Trade Commission has ordered U.S. customs officials to bar imports of import of counterfeit cigarettes bearing the trademarks of Philip Morris USA, the nation's No. 1 tobacco company said Thursday, September 24th.

Philip Morris, owned by Richmond, Va.-based Altria Group Inc., said in a statement that the order will help stop Internet-based vendors from illegally importing cigarettes made abroad without trademark owners' permission and selling them in the United States. The company estimates more than 800 million cigarettes were sold to U.S. consumers by Internet sellers in 2008.

In March 2008, Philip Morris USA filed a complaint with the commission as part of an effort to end the trade of counterfeit, stolen and untaxed or under-taxed cigarettes. The company said Internet-based cigarette vendors are violating U.S. intellectual property laws and the Lanham Act.(Philip Morris USA Takes Action Against Internet-Based Cigarette Vendors)

The federal government and many states have raised cigarette taxes in recent years, driving up their overall cost to consumers. So-called gray-market vendors typically import counterfeit cigarettes and smokes intended for foreign markets and sell them to consumers more cheaply than legitimate products in part because they're untaxed.

Passage of the bill "Prevent All Cigarette Trafficking Act (the PACT Act) of 2009," would clamp down on illegal tobacco sales. This bill was passed 397-11 by the U.S. House of Representatives (HR1676) on Thursday, 5/21/2009 and the companion bill (S1147) sponsored by of Senator Herb Kohl has been referred to the Judicial Commitee in the Senate. This legislation is extremely important, it will effectively end Internet and telephone tobacco smuggling by stopping shipments of cigarettes and smokeless tobacco through the U.S. Postal Service. FedEx, UPS, and DHL have already agreed not to mail tobacco. (Let's Get It Passed - Prevent All Tobacco Trafficking Act of 2009..)

Gray market cigarettes are made with different materials and under different quality-control procedures than cigarettes sold in the U.S. and may not display the required health warnings, Philip Morris said in the complaint. Consumers also may be "disappointed and/or confused" by the differences between the gray market cigarettes and those Philip Morris sells in the U.S., it said.

Reference: International Trade Commission Blocks Illegal Internet Cigarette Sales Philip Morris USA prevails against overseas Internet cigarette sellers, Philip Morris USA, Business Wire, 9/24/2009.