`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`
`
`PHILIP MORRIS PRODUCTS, S.A.,
`Petitioner
`
`v.
`
`RAI STRATEGIC HOLDINGS, Inc.,
`Patent Owner
`
`Patent No. 9,901,123
`
`
`
`
`Inter Partes Review No. IPR2020-00919
`
`
`
`PATENT OWNER PRELIMINARY RESPONSE
`
`

`

`Patent Owner Preliminary Response
`IPR2020-00919
`
`
`TABLE OF CONTENTS
`
`
`I.
`II.
`
`Page
`INTRODUCTION AND SUMMARY OF ARGUMENT ............................. 1
`BACKGROUND ............................................................................................ 3
`A.
`The ’123 Patent .................................................................................... 3
`B.
`The Challenged Claims ........................................................................ 7
`C.
`State of the Art ..................................................................................... 8
`D. Other Proceedings on the ’123 Patent ................................................ 11
`III. LEVEL OF ORDINARY SKILL IN THE ART .......................................... 12
`IV. CLAIM CONSTRUCTION ......................................................................... 13
`V.
`THE BOARD SHOULD DENY INSTITUTION BECAUSE
`PETITIONER HAS NOT SHOWN A REASONABLE
`LIKELIHOOD THAT ANY CHALLENGED CLAIM IS
`UNPATENTABLE ....................................................................................... 14
`A.
`Petitioner Has Not Shown a Reasonable Likelihood That the
`Challenged Claims are Unpatentable Under Ground 1 ...................... 15
`1.
`Petitioner Has Not Shown That Morgan Discloses an
`Elongated Portion of a Resistance Heating Element That
`is “Positioned Proximal to the Center of the Outer
`Housing” .................................................................................. 15
`Petitioner Has Not Demonstrated a Motivation to Modify
`Morgan Alone, Based on a Purported “Design Choice” ......... 17
`Petitioner Has Not Demonstrated a Motivation to Modify
`Morgan in View of Adams ...................................................... 22
`Petitioner’s “Invention Record” (Exhibit 1016) and the
`Korean Park Patent (Exhibit 1015)—Neither of Which
`Was Publicly Available Before October 18, 2006—Do
`Not Demonstrate a Motivation to Modify Morgan .................. 33
`a.
`Petitioner has not established that its internal
`“Invention Record” (Exhibit 1016) was publicly
`available prior to the filing date of the ’123 patent ....... 34
`
`2.
`
`3.
`
`4.
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`TABLE OF CONTENTS
`(continued)
`
`Patent Owner Preliminary Response
`IPR2020-00919
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`Page
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`b.
`
`c.
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`
`
`B.
`
`C.
`
`Even if Petitioner were permitted to rely on
`Exhibit 1016, the document does not support any
`motivation to modify the heating element in
`Morgan in the manner claimed by the ’123 patent ........ 37
`Petitioner has not established that Park (Exhibit
`1015) is prior art ............................................................ 39
`Petitioner Has Not Shown a Reasonable Likelihood That the
`Challenged Claims Are Unpatentable Under Ground 2 ..................... 42
`Petitioner Has Not Shown a Reasonable Likelihood That the
`Challenged Claims Are Unpatentable Under Ground 3 ..................... 49
`VI. THE BOARD SHOULD EXERCISE ITS DISCRETION UNDER
`SECTION 325(d) TO DENY INSTITUTION ............................................. 52
`A.
`The Same Art Was Previously Presented to the Office ..................... 53
`B.
`The Petition Does Not Even Attempt to Demonstrate That the
`Office Materially Erred in Evaluating the Art and Arguments .......... 55
`VII. THE BOARD SHOULD DENY INSTITUTION IN VIEW OF THE
`PARALLEL ITC PROCEEDING ................................................................ 60
`VIII. CONCLUSION ............................................................................................. 65
`
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`-ii-
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`Patent Owner Preliminary Response
`IPR2020-00919
`
`
`TABLE OF AUTHORITIES
`
`Page
`
`
`
`CASES
`
`Advanced Bionics, LLC v. MED-EL Elektromedizinische Geräte
`GmbH,
`IPR2019-01469, Paper No. 6 (PTAB Feb. 13, 2020) ....................... 52, 55, 56, 58
`
`Apple Inc. v. MPH Techs. OY,
`IPR2019-00819, Paper No. 9 (PTAB Aug. 8, 2019) .......................................... 59
`
`Apple, Inc. v. Fintiv, Inc.,
`IPR2020-00019, Paper No. 11 (PTAB Mar. 20, 2020) ...............................passim
`
`Argentum Pharm., LLC v. Research Corp. Techs., Inc.,
`IPR2016-00204, Paper No. 19 ...................................................................... 33, 34
`
`Becton, Dickinson & Co. v. B. Braun Melsungen AG,
`IPR2017-01586, Paper No. 8 (PTAB Dec. 15, 2017) (precedential) ..........passim
`
`Benitec Biopharma Ltd. v. Cold Spring Harbor Lab.,
`IPR2016-00014, Paper No. 7 (PTAB Mar. 23, 2016) ........................................ 54
`
`Bio-Rad Labs. v. 10X Genomics,
`IPR2019-00567, Paper No. 23 (PTAB Aug. 9, 2019) ........................................ 61
`
`Clim-A-Tech Ind., Inc. v. William A. Ebert,
`IPR2017-01863, Paper No. 13 (PTAB Feb. 12, 2018) ....................................... 57
`
`Compass Bank v. Intellectual Ventures II, LLC,
`IPR2014-00724, Paper No. 12 (PTAB Nov. 6, 2014) ........................................ 13
`
`Cross Med. Prods. v. Medtronic Sofamor Danek, Inc.,
`424 F.3d 1293 (Fed. Cir. 2005) .................................................................... 37, 40
`
`-iii-
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`

`TABLE OF AUTHORITIES
`(continued)
`
`Patent Owner Preliminary Response
`IPR2020-00919
`
`
`Page
`
`DePuy Synthes Sales, Inc. v. Acantha LLC,
`IPR2016-00329, Paper No. 12 (PTAB June 3, 2016) .................................. 23, 24
`
`Facebook, Inc. v. Sound View Innovations, LLC,
`IPR2017-01005, Paper No. 13 (PTAB Sept. 1, 2017) ........................................ 13
`
`Grain Processing Corp. v. Am. Maize-Prods. Co.,
`840 F.2d 902 (Fed. Cir. 1988) ...................................................................... 14, 15
`
`In re Ekenstam,
`256 F.2d 321, 118 USPQ 349 (CCPA 1958) ...................................................... 40
`
`In re Gordon,
`733 F.2d 900 (Fed. Cir. 1984) ............................................................................ 24
`
`In re ICON Health & Fitness, Inc.,
`496 F.3d 1374 (Fed. Cir. 2007) .......................................................................... 23
`
`In re Kubin,
`561 F.3d 1351 (Fed. Cir. 2009) .......................................................................... 49
`
`In re NuVasive, Inc.,
`842 F.3d 1376 (Fed. Cir. 2016) .................................................................... 37, 40
`
`Intex Recreation Corp. v. Team Worldwide Corp.,
`IPR2018-00859, Paper No. 128 (PTAB Oct. 21, 2019) ..................................... 41
`
`Jones v. Hardy,
`727 F.2d 1524 (Fed. Cir. 1984) .......................................................................... 14
`
`Leo Pharm. Prods., Ltd. v. Rea,
`726 F.3d 1346 (Fed. Cir. 2013) .......................................................................... 49
`
`Merial, Inc. v. Intervet Int’l B.V.,
`IPR2018-00919, Paper 11 (PTAB Aug. 21, 2018) ............................................. 59
`
`-iv-
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`

`TABLE OF AUTHORITIES
`(continued)
`
`Patent Owner Preliminary Response
`IPR2020-00919
`
`
`Page
`
`Microsoft Corp. v. KoninKlijke Philips N.V.,
`IPR2018-00279 (Paper 11) (PTAB Feb. 1, 2019) ............................................. 54
`
`Neil Ziegman, N.P.Z., Inc. v. Stephens,
`IPR2015-01860, Paper No. 13 (PTAB Sept. 6, 2017) ........................................ 55
`
`NHK Spring Co. v. Intri-Plex Techs., Inc.,
`IPR2018-00752, Paper No. 8 (PTAB Sept. 12, 2018) .................................. 60, 62
`
`NOF Corp. v. Nektar Therapeutics,
`IPR2019-01396, Paper No. 28 (PTAB June 10, 2020) ...................................... 41
`
`Phillips v. AWH Corp.,
`415 F.3d 1303 (Fed. Cir. 2005) (en banc) .......................................................... 13
`
`Plas-Pak Indus. v. Sulzer Mixpac AG,
`600 F. App’x 755 (Fed. Cir. 2015) ..................................................................... 24
`
`R.J. Reynolds Vapor Co. v. Fontem Holdings 1 B.V.,
`IPR2018-00626, Paper No. 7 (PTAB Sept. 27, 2018) .................................. 56, 57
`
`Roku, Inc. v. Universal Elecs., Inc.,
`IPR2019-01619, Paper No. 11 (PTAB Apr. 2, 2020) ......................................... 57
`
`TQ Delta, LLC v. CISCO Sys., Inc.,
`942 F.3d 1352 (Fed. Cir. 2019) .......................................................................... 41
`
`United Patents Inc. v. Korea Advanced Institute of Sci. & Tech.,
`IPR2019-01071, Paper 11 (PTAB Oct. 3, 2019) ................................................ 59
`
`ZTE Corp. v. Fractus, S.A.,
`IPR2018-01457, Paper No. 10 (PTAB Feb. 28, 2019) ................................. 55, 58
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`TABLE OF AUTHORITIES
`(continued)
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`Patent Owner Preliminary Response
`IPR2020-00919
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`Page
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`STATUTES
`
`35 U.S.C. § 103 ........................................................................................................ 14
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`35 U.S.C. § 311 ........................................................................................................ 34
`
`35 U.S.C. § 314 ........................................................................................................ 60
`
`35 U.S.C. § 325 .................................................................................................passim
`
`OTHER AUTHORITIES
`
`37 C.F.R. § 1.56 ....................................................................................................... 58
`
`MPEP § 2126.01 ...................................................................................................... 40
`
`MPEP § 2143.01(VI) ............................................................................................... 24
`
`Office Trial Practice Guide Aug. 2018 Update 9 .................................................... 61
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`Patent Owner Preliminary Response
`IPR2020-00919
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`LIST OF PATENT OWNER EXHIBITS
`
`Ex. 2001
`
`Tobacco Tactics, “Heated Tobacco Products,”
`https://tobaccotactics.org/wiki/heated-tobacco-products/
`
`Invalidity Claim Chart C3 from ITC Investigation No. 337-TA-1199
`
`
`Ex. 2002
`
`Ex. 2003 U.S. Patent No. 5,954,979
`
`Ex. 2004 U.S. Patent No. 5,730,158
`
`Ex. 2005 U.S. Patent No. 5,093,894
`
`Ex. 2006 U.S. Patent No. 5,228,460
`
`Ex. 2007 U.S. Patent No. 5,322,075
`
`Ex. 2008 U.S. Patent No. 5,498,855
`
`Ex. 2009 U.S. Patent No. 5,665,262
`
`Ex. 2010 U.S. Patent No. 5,530,225
`
`Ex. 2011 U.S. Patent No. 5,591,368
`
`Ex. 2012 U.S. Patent No. 5,692,291
`
`Ex. 2013 U.S. Patent No 5,708,258
`
`Ex. 2014 U.S. Patent No. 5,750,964
`
`Ex. 2015 U.S. Patent No. 5,880,439
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`Ex. 2016 U.S. Patent No. 5,902,501
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`Ex. 2017 U.S. Patent No. 6,040,560
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`Ex. 2018 U.S. Patent No. 5,865,185
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`European Patent Publication No. EP0917830A1
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`Patent Owner Preliminary Response
`IPR2020-00919
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`European Patent Publication No. EP0703734A1
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`PCT Patent Publication No. WO9632854A2
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`PCT Patent Publication No. WO9406314A1
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`PCT Patent Publication No. WO9527412A1
`
`Ex. 2019
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`Ex. 2020
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`Ex. 2021
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`Ex. 2022
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`Ex. 2023
`
`Ex. 2024 Accord 2001 Update,
`https://www.industrydocuments.uscf.edu/docs/jxlx0179
`(PM3001487472-PM3001487482)
`
`
`Ex. 2025 Glenn Collins, “Analysts Mixed on Philip Morris’s Smoking System,”
`The New York Times (Oct. 24, 1997)
`
`
`Ex. 2026 Complaint from ITC Investigation No. 337-TA-1199
`
`Ex. 2027 Notice of Institution of Investigation from ITC Investigation No. 337-
`TA-1199
`
`
`Ex. 2028
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`Excerpt of Respondents’ invalidity contentions from ITC
`Investigation No. 337-TA-1199
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`Procedural Schedule from ITC Investigation No. 337-TA-1199
`
`
`Ex. 2029
`
`Ex. 2030 Order Granting Defendants’ Unopposed Motion to Invoke the
`Statutory Stay of Plaintiffs’ Claims Relating to U.S. Patent Nos.
`9,839,238, 9,901,123, and 9,930,915 Pursuant to 28 U.S.C. § 1659
`from E.D. Virginia Case No. 1:20-cv-00393-LO-TCB dated June 18,
`2020
`
`
`Ex. 2031 Reply of Philip Morris Products, SA to Withers & Rogers LLP’s
`Opposition to the Grant of EP2800486 dated November 6, 2017
`
`
`Ex. 2032 Reply of Philip Morris Products, SA to Withers & Rogers LLP’s
`Opposition to EP2782463 dated September 15, 2017
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`Ex. 2033 Response of Philip Morris Products, SA to Third Party Observations
`as to European Patent Application No. 17187283.1 dated May 4, 2020
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`Patent Owner Preliminary Response
`IPR2020-00919
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`Ex. 2034 Office Action issued on April 5, 2016 as to U.S. Serial No.
`14/370,410
`
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`Ex. 2035 Applicant’s Request for Reconsideration in Response to Office Action
`issued on April 5, 2016 as to U.S. Serial No. 14/370,410 dated
`August 4, 2016
`
`
`Ex. 2036 Applicant’s Amendment and Reply in Response to Office Action
`issued on June 28, 2012 as to U.S. Serial No. 12/954,701 dated
`October 31, 2012
`
`
`Ex. 2037 U.S. Patent No. 5,613,504
`
`Ex. 2038 U.S. Patent No. 5,353,813
`
`Ex. 2039
`
`Field Names for Truth Tobacco Industry Documents,
`https://www.industrydocuments.ucsf.edu/tobacco/help/field-names/
`
`
`Ex. 2040 Document Information for Method of Making a Heater with Bullet
`Shape (Exhibit 1016),
`https://www.industrydocuments.ucsf.edu/tobacco/docs/#id=mhpp021
`7
`
`
`Ex. 2041
`
`Invalidity Contention Exhibit C1 - Petition for Inter Partes Review of
`U.S Patent No. 9,901,123 from ITC Investigation No. 337-TA-1199
`
`
`Ex. 2042 Office Action issued on June 28, 2012 as to U.S. Serial No.
`12/954,701
`
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`IPR2020-00919
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`INTRODUCTION AND SUMMARY OF ARGUMENT
`The Petition for inter partes review of claims 27-30 of U.S. Patent No.
`
`I.
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`9,901,123 (the “’123 patent”), owned by RAI Strategic Holdings, Inc. (“Patent
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`Owner” or “RAI” or “Applicant”), is deficient for several reasons. Institution
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`should be denied.
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`A fundamental flaw is Petitioner’s broad-brush approach to the challenged
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`claims, vastly oversimplifying and reducing their claimed configuration to generic
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`parts. Petitioner thereby contends that one change here, and another change there,
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`would simply have been a matter of design choice. This is incorrect on the law and
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`the facts. The obviousness inquiry asks whether, notwithstanding the differences
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`between the claims and the prior art, a person of ordinary skill in the art (“POSA”)
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`would have been motivated to make the particular combination claimed, and in the
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`manner claimed. Petitioner’s asserted references do not meet this showing—the
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`references use different components and configurations that would not have been
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`obvious (or even possible) to modify as the ’123 patent claims. Notably, Petitioner
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`itself has applied for, and obtained, numerous patents on heat-not-burn smoking
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`articles, as well as developed numerous such products, before the relevant priority
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`date—none of which use the configuration of the challenged claims.
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`For instance, the challenged claims require a specific configuration of a
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`heating element that is “proximal to the center.” Petitioner’s own products and
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`patents that predate the ’123 patent, as well as those of its expert Dr. Deevi, reflect
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`that, in this crowded field, using the heating element of the ’123 patent would not
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`have been obvious. The references Petitioner cobbles together are consistent with
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`Petitioner’s and Dr. Deevi’s patents and products—even expressly teaching
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`against the use of a heater proximal to the center. Petitioner’s only other recourse
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`for this claim limitation is to improperly borrow from references (not listed in its
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`grounds) that post-date the ’123 patent. And Petitioner’s two other grounds
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`similarly fail to show that the claimed combination would have been obvious to a
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`POSA at the time of the ’123 patent.
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`Petitioner’s cobbled-together references that do not teach the challenged
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`claims warrant denial of institution for a related, but independent, reason: All four
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`of the references—Morgan, Adams, Brooks, and Counts-962—were already
`
`presented to the Patent Office during examination, and the claims were issued over
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`them. Petitioner fails to acknowledge Section 325(d), much less carry its burden to
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`show why reconsideration would be warranted. In these circumstances, Section
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`325(d) denial of institution is justified.
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`Finally, other pending proceedings—an investigation in the U.S.
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`International Trade Commission (“ITC”) and an action in the U.S. District Court
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`for the Eastern District of Virginia—underscore that institution would be
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`inefficient. Not only is Petitioner raising art already presented to the Office, but
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`2
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`Petitioner is raising exactly the same prior art and arguments it has raised in the
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`ITC—in fact, Petitioner incorporated its Petition in full in the ITC. The ITC
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`investigation will conclude months before November 2021—the date for a Final
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`Written Decision here. And, the district court action has been stayed as to the ’123
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`patent in light of the ITC investigation. Under informative precedent in Apple, Inc.
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`v. Fintiv, Inc. (hereinafter “Fintiv”), IPR2020-00019, Paper No. 11 (PTAB Mar.
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`20, 2020) (precedential), these pending proceedings present further compelling
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`circumstances to deny institution.
`
`II. BACKGROUND
`A. The ’123 Patent
`The ’123 patent generally describes smoking articles that heat tobacco rather
`
`than burn it. See, e.g., Ex. 1001 at 4:42-52 (The patent is directed to smoking
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`articles that “produce aerosols that are not necessarily … a result of burning of
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`tobacco, but rather … a result of the application of heat upon tobacco or materials
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`that are in contact with tobacco.”). The patent claims priority to October 18, 2006.
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`Id. at p. 2.
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`The patent explains that prior-art smoking articles employing so-called
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`“heat-not-burn” technology “have not received widespread commercial success,”
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`possibly because they fail to deliver an experience that provides the advantages of
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`conventional tobacco smoking. See id. at 4:24-38, 4:52-65. Therefore, “it would
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`be highly desirable to” (id. at 4:28-31) provide a smoking article that:
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` “provides a smoker with an ability to enjoy using tobacco without the necessity
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`of burning any significant amount of tobacco” (id. at 4:28-31); and
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` “ha[s] the general appearance of a cigarette, cigar, or pipe” (id. at 4:31-38) and
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`“exhibit[s] many of the sensory characteristics associated with those types of
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`smoking articles that burn tobacco” (id. at 4:52-55), including “the generation
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`of a visible mainstream aerosol that in many regards resembles the appearance
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`of tobacco smoke” (id. at 16:53-58).
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`See also id. at 4:66-5:6 (“A preferred smoking article of the present invention … is
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`capable of providing mainstream aerosol that may be characterized as being
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`flavorful and satisfying. Highly preferred cigarettes provide certain of the flavors,
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`sensations and satisfaction of popular cigarettes that burn tobacco cut filler ….”).
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`Figure 3, reproduced below, shows a longitudinal cross-sectional view of
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`one embodiment of the ’123 patent invention:
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`4
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`Outer housing 20
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`Controller 50
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`Smoking article 10
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`Power source 36
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`Distal end 13
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`
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`Id. at Fig. 3 (annotated).
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`Heating element 72
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`Mouth end 15
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`
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`The smoking article 10 is “rod-like or tubular in nature, generally akin to a
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`cigarette-type or cigar-type smoking article” and has an outer housing 20 that is
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`likewise “generally tubular in shape.” Id. at 19:41-43. The outer housing 20
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`includes a mouth-end 15 and distal end 13, with “the distal end compris[ing] an
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`opening adapted for intake of air into the smoking article 10.” Id. at 19:59-64.
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`An electric power source 36, “such as at least one battery” is located within
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`the outer housing 20. Id. at 20:12-13. The smoking article 10 further includes a
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`controller 50 that is powered by the electric power source 36. Id. at 20:33-43.
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`The ’123 patent describes example circuits that can be included in the controller 50
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`5
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`(see, e.g., id. at 20:40-48, 30:37-32:34, describing Figs. 4 and 5) and further states
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`that “[r]epresentative types of electronic control components” for the controller 50
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`may include those of U.S. Pat. No. 4,947,874 to Brooks (id. at 20:43-48). Petitioner
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`applies Brooks against the ’123 patent claims. See Paper No. 2 (“Pet.”) at 7-8.
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`In the embodiment of Figure 3, the smoking article 10 includes a tobacco
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`segment 89 that is “circumscribed with a wrapping material 160” (id. at 27:43-46)
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`and can “incorporate an aerosol-generating material” (id. at 27:53-54). The smoking
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`article 10 further includes a resistive heating element 72 that “can be elongated” so
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`that it “can extend into the tobacco segment 89, and hence be in close contact with a
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`significant amount of substrate and aerosol-forming material within the tobacco.”
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`Id. at 28:35-43. As shown below, the elongated portion of the heating element 72
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`(highlighted in yellow) is located proximal to the center of the tubular outer
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`housing:
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`6
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`Id. at Fig. 3 (annotations added).
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`B.
`The Challenged Claims
`Petitioner challenges independent claim 27 and its dependent claims 28-30.
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`All of these claims recite a tobacco-containing, electrically-powered smoking
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`article with, inter alia, a tubular outer housing; an electrical power source in the
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`form of a battery within the outer housing; a removable cigarette-type device that
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`includes a tobacco material and an aerosol forming material; an electrical
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`resistance heater with an elongated portion that (i) extends toward the mouth-end
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`of the tubular outer housing, (ii) is positioned proximal to the center of the
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`housing, and (iii) extends into the tobacco segment when the cigarette-type device
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`is engaged with the housing; and a controller adapted for regulating current flow
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`through the heater that is also within the tubular outer housing.
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`Claim 27 is representative. It recites:
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`An electrically-powered, aerosol-generating smoking article comprising:
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`an electrical power source in the form of a battery within a tubular
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`outer housing having a mouth-end and an end distal to the mouth-
`
`end;
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`at least one electrical resistance heater powered by said electrical
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`power source, wherein at least a portion of the resistance heating
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`element is elongated and extending downstream toward the mouth-
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`7
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`end of the outer housing, the elongated portion of the resistance
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`heating element positioned proximal to the center of the outer
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`housing;
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`a controller within the tubular outer housing and adapted for
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`regulating current flow through the electrical resistance heater; and
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`a cigarette-type device removably engaged with the mouth-end of
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`the tubular outer housing and comprising a tobacco segment
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`circumscribed by a wrapping material and comprising a tobacco
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`material and an aerosol-forming material, wherein the elongated
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`portion of the resistance heating element extends into the tobacco
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`segment when the cigarette-type device is engaged with the mouth-
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`end of the outer housing, such that during draw, aerosol-forming
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`material can be volatilized to produce a visible mainstream aerosol
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`incorporating tobacco components or tobacco-derived components
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`that can be drawn into the mouth of the user of the smoking article.
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`Ex. 1001 at 34:31-58.
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`C.
`State of the Art
`Although Petitioner includes a brief section entitled “State of the Art,”
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`Petitioner fails to actually address any of the relevant aspects of the state of the art
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`as of the 2006 priority date of the ’123 patent. Instead, relying primarily on the
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`patent’s general descriptions of individual features of smoking articles in the art,
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`Patent Owner Preliminary Response
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`Petitioner mentions that “it was known to use tobacco with aerosol-generating
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`materials,” “wrapping materials and filters were known,” and “batteries,” “control
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`components, and resistance heating elements were known,” Pet. at 11-12, and
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`contends that the selection of such components for the challenged claims would
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`have amounted to nothing more than a design choice. Id. at 26-28, 32.
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`Petitioner’s discussion fails to address the specific features of the ’123
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`patent. Petitioner’s generic, single reference to “resistance heating elements” is
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`representative. The challenged claims require a specific heating element
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`configuration—an elongated heater located proximal to the center of the device.
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`Ex. 1001 at 34:31-35:2. But the state of the art, including Petitioner’s asserted art
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`(see Part V.A below), overwhelmingly taught the opposite: multiple heating
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`elements arranged circumferentially around the tobacco, and away from the center.
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`So too did Petitioner’s own products and patents at the time of the invention, as
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`well as the patents and products of Petitioner’s expert, Dr. Deevi. Petitioner and
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`Dr. Deevi repeatedly applied for, and obtained, patents that use multiple heaters
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`arranged away from the center of the device—even specifically touting that
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`arrangement—and the products they developed used that same arrangement. See
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`Part V.A.3, below.
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`For example, in 1998, Philip Morris released Accord™, its first heated
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`tobacco product (“HTP”). Ex. 2001 at 4 (Heated Tobacco Products). Accord™
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`included a battery-powered heating device with multi-pronged, circumferentially-
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`located heating elements for surrounding tobacco in a removable cigarette. Ex. 2002
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`at 6 (Exhibit C3 of ITC invalidity contentions). Far from being proximal to the
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`center, Accord™’s heating blades were actually located outside of the cigarette.
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`And at the time, the art overwhelmingly taught the same—the theory being that with
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`such a configuration, the device could include a separate heating element, and thus
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`could heat a different part of the tobacco, for each puff. See, e.g., Ex. 2003 at 2:29-
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`33. Indeed, Petitioner itself (and related entities) has patented numerous smoking
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`devices with multi-pronged, circumferentially-spaced heating elements positioned
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`away from the center of the device. See, e.g., Ex. 1005 at 5:18-25; Ex. 2004 at 8:13-
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`18; Ex. 2005 at 6:55-61; Ex. 2006 at 3:18-37; Ex. 2007 at 2:57-3:2; Ex. 2008 at
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`7:24-31; Ex. 2009 at 5:58-6:9; Ex. 2010 at 6:9-27; Ex. 2011 at 9:66-10:17; Ex. 2012
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`at 5:32-42; Ex. 2013 at 5:34-44; Ex. 2014 at 5:40-50; Ex. 2015 at 8:26-32; Ex. 2016
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`at 5:35-48; Ex. 2017 at 6:54-64; Ex. 2003 at 6:10-14; Ex. 2018 at 8:4-20; Ex. 2019
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`at ¶ 12; Ex. 2020 at ¶ 29; Ex. 2021 at 19-20; Ex. 2022 at 19:14-24; and Ex. 2023 at
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`12-13; see also Part IV.A.1, below.
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`Likewise, Dr. Deevi, who helped develop Accord™, took the same approach.
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`Ex. 1003 at ¶ 33. Dr. Deevi is a named inventor on a list of unique families of
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`patents directed to smoking devices, all of which include multi-pronged,
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`circumferentially-spaced heater configurations. See Part IV.A.3, below.
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`Accord™ remained on the market until 2006, when it was discontinued due
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`to poor sales. Ex. 2001 at 5 (Heated Tobacco Products). Philip Morris briefly
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`rebranded Accord™ to Heatbar™ before permanently discontinuing both products
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`due to lack of success. Id.; Ex. 2024 at 2-3 (Accord 2001 Update); Ex. 2025 at 2
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`(Analysts Mixed on Philip Morris's Smoking System). Not until over a decade later,
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`did Petitioner bring to market a HTP with a single, centralized heating element—
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`IQOS®. Ex. 2001 at 5 (Heated Tobacco Products). But that was after RAI’s novel
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`and nonobvious invention disclosed and claimed in the ’123 patent. Ex. 1001.
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`D. Other Proceedings on the ’123 Patent
`On April 9, 2020, RAI filed an ITC complaint, seeking institution of a
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`Section 337 investigation against Petitioner Philip Morris Products, S.A.
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`(“Petitioner” or “PMP”) and related entities for, inter alia, Petitioner’s
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`infringement of the ’123 patent and additional patents. See Certain Tobacco
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`Heating Articles and Components Thereof, Inv. No. 337-TA-1199 (ITC Apr. 9,
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`2020); Ex. 2026 at 1-3. On the same date, RAI filed a complaint in district court,
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`also asserting the ’123 patent and additional patents against Petitioner. Ex. 1032 at
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`17-18. The ITC instituted the investigation on May 11, 2020. Ex. 2027 (Notice of
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`ITC investigation).
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`In the ITC, Petitioner has raised the same patentability arguments that it
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`raises in its Petition. In fact, Petitioner expressly incorporated in its ITC invalidity
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`contentions the entirety of its Petition. Ex. 2028 (public version of Petitioner’s ITC
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`invalidity contentions). The ALJ is expected to issue his Initial Determination
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`addressing Petitioner’s invalidity contentions by May 14, 2021, and the
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`Commission is expected to issue its Final Determination by September 15, 2021.
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`Ex. 2029 at 4 (Procedural Schedule in the ITC). If IPR were instituted, a Final
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`Written Decision would not be due until November 2021—two months after the
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`ITC will have fully adjudicated the same invalidity grounds asserted here.
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`At the request of Petitioner and the other defendants, the district court action
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`as to the ’123 patent has been stayed in light of the ITC investigation. Ex. 2030
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`(Order granting motion to stay in the E.D. Va.). Petitioner has not moved to stay
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`the ITC investigation in light of its pending IPR Petition (and any such request at
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`this point is unlikely, given the extensive work the parties have already undertaken
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`in the ITC).
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`III. LEVEL OF ORDINARY SKILL IN THE ART
`The Petition proposes a POSA definition. Pet. at 13. RAI reserves the right
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`to dispute Petitioner’s definition if an IPR is instituted. For purposes of this
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`Preliminary Response, RAI maintains that Petitioner’s arguments fail even under
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`Petitioner’s POSA definition.
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`IV. CLAIM CONSTRUCTION
`In this IPR, claim terms are to be construed in accordance with the standard
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`set forth in Phillips v. AWH Corp., 415 F.3d 1303, 1312 (Fed. Cir. 2005) (en banc).
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`But “[o]nly terms which are in controversy need to be construed, and then only to
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`the extent necessary to resolve the controversy and material to the decision.”
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`Facebook, Inc. v. Sound View Innovations, LLC, IPR2017-01005, Paper No. 13 at
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`6 (PTAB Sept. 1, 2017) (citing Vivid Techs., Inc. v. Am. Sci. & Eng’g, Inc., 200
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`F.3d 795, 803 (Fed. Cir. 1999)). The Board routinely declines to explicitly
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`construe terms when it is unnecessary for determining whether to institute trial.
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`See, e.g., id.; Compass Bank v. Intellectual Ventures II, LLC, IPR2014-00724,
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`Paper No. 12 at 11 (PTAB Nov. 6, 2014) (“We find, for purposes of this decision,
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`it is not necessary to construe explicitly any term at this time.”).
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`Although not in the Claim Construction section of its Petition, “for purposes
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`of this IPR proceeding, Petitioner contends that ‘proximal to the center’ means
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`‘near or at the center.” Pet. at 26 n.8. For purposes of this Preliminary Response
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`only, Patent Owner accepts that meaning.
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`Petitioner also asserts that the terms “controller” and “removably engaged”
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`should be construed. Pet. at 13-17. But these terms do not need to be construed in
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`order for the Board to reach its institution decision. None of RAI’s arguments
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`against institution requires construction of these terms. RAI reserves its right to
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`put forth constructions of these or any other terms if the Board institutes trial.
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`V. THE BOARD SHOULD DENY INSTITUTION BECAUSE
`PETITIONER HAS NOT SHOWN A REASONABLE LIKELIHOOD
`THAT ANY CHALLENGED CLAIM IS UNPATENTABLE
`For each ground, Petitioner cannot show a reasonable likelihood of success.
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`Importantly, and as elaborated below, Petitioner’s reliance on broad
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`generalizations about generic elements in a smoking article are insufficient to
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`establish obviousness. “[I]t is irrelevant in determining obviousness that all or all
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`other aspects of the claim may hav