Tobacco giant Philip Morris is facing charges related to importing and selling a non-burning tobacco product.
The company was originally charged with importing and selling a product called HEETS, which heats tobacco sticks, rather than burning them.
However, one of the charges brought by the Ministry of Health has been dropped, and the judge-alone trial in the Wellington District Court will be only in relation selling the product.
The ministry argued the tobacco stick did not fall within the Smoke-Free Environments Act, and to allow it would mean loosening the regulations, allowing more tobacco products onto the market.
Prosecutor Sally Carter said the crux of the case was whether the tobacco sticks came under the Smoke-Free Restrictions Act - under which tobacco products for anything other than smoking, cannot be imported or sold.
"Because of the way the act is structured there are issues as to whether ... it's within the parameters of the act or not," she said.
"And one of those issues is whether, in fact, the product is a smoking product, whether the product ignites."
However, Philip Morris lawyer David Blodt said HEETS should be allowed to be sold because they do not create second-hand smoke like cigarettes.
"What this means of course, is that one of the really key statutory drivers of the entire legislation would be frustrated if all the people who might otherwise switch to this product are forced to keep smoking cigarettes," he said.