Lorillard files law suit against S&M Brands (Bailey Cigarettes)..

March 25, 2009 -Lorillard Tobacco Co. alleges in a lawsuit filed in a Richmond, Va., (in the U.S. District Court for the Eastern District of Virginia) after allegedly discovering that S&M Brands Inc. (based in Keysville, Va.) "formulated and implemented a plan and scheme" to use Lorillard's Newport marks to advertise and promote its Bailey's menthol cigarettes.

The suit says these acts likely will cause irreparable injury to Lorillard's goodwill and reputation. Specifically, Lorillard alleges that S&M used its Newport font and color schemes in its advertising for Bailey's. The complaint alleges trademark infringement, counterfeiting and unfair competition. Lorillard, Greensboro, N.C.-based, seeks an order enjoining defendant S&M Brands Inc. from using the marks. It also wants compensatory and punitive damages, attorney fees and costs, and disgorgement of S&M's profits.

Newport cigarettes, which Lorillard introduced in 1956, have become the nation's leading brand of menthol cigarettes and the second-best-selling cigarette brand overall, according to the lawsuit.

S&M is attempting to "trade off the resounding consumer goodwill of the Newport marks and Lorillard's Newport brand products," the complaint says. Lorillard says S&M's actions could cause smokers to look less favorably on the Newport marks and Newport brand cigarettes because the marks are being used to sell a "lower quality product." "Consumers dissatisfied with [S&M]'s Bailey's cigarettes may then avoid Newport brand cigarettes," the suit says.

Lorillard maintains that S&M's (Steve and Mac Bailey - father and son) actions were deliberate, intentional and in bad faith.

Reference: Competitor Copied Newport Marks, Lorillard Says by JOE HYLKEMA, Andrews Publications Correspondent, Findlaw.com.