UPDATE 1-Star Scientific loses Reynolds US patent dispute

CHICAGO, June 16 (Reuters) - A U.S. jury in Maryland ruled on Tuesday against tobacco company Star Scientific Inc STSI.O in its lawsuit with Reynolds American Inc (RAI.N) over a patent dispute on reducing cancer-causing elements in tobacco.

Shares of Star Scientific plummeted more than 80 percent in after-hours trading while shares for Reynolds gained 2.39 percent.

Star Scientific sued RJ Reynolds, a subsidiary of Reynolds American, in 2001, alleging patent infringement over a technology invented by Star Chief Executive Jonnie Williams. The technology comes from work he began in 1996 on a tobacco curing process that would inhibit "microbial nitrate reductase activity," which can lead to cancer-causing nitrosamines in tobacco.

In June 2007, a Maryland district judge ruled that Star's patents were unenforceable because of the way in which the company applied for the patent.

More than a year later, Star won an appeal against RJ Reynolds in the U.S. Court of Appeals for the Federal Circuit [ID:nN25233036].

The U.S. Supreme Court, this year, said it would not hear Reynolds' appeal in the case.

Star shares closed down 3.44 percent in regular trading on Tuesday at $4.21 on the Nasdaq. Meanwhile, Reynolds shares closed down 0.6 percent at $36.33 on the New York Stock Exchange.

See Star Scientific v. R.J. Reynolds, U.S. District Court, District of Maryland (Greenbelt), No. 01-cv-01504-MJG (Reporting by Ian Sherr, editing by Matthew Lewis)