UNITED STATES INTERNATIONAL TRADE COMMISSION
`WASHINGTON, DC
`
`
`
`
`Inv. No. 337-TA-____
`
`In the Matter of
`
`CERTAIN TOBACCO HEATING
`ARTICLES AND COMPONENTS
`THEREOF
`
`VERIFIED COMPLAINT OF RAI STRATEGIC HOLDINGS, INC., R.J. REYNOLDS
`VAPOR COMPANY, AND R.J. REYNOLDS TOBACCO COMPANY
`UNDER SECTION 337 OF THE TARIFF ACT OF 1930, AS AMENDED
`
`
`COMPLAINANTS
`RAI Strategic Holdings, Inc.
`401 North Main Street
`Winston-Salem, NC 27101
`Tel: (336) 741-2000
`
`R.J. Reynolds Vapor Company
`401 North Main Street
`Winston-Salem, NC 27101
`Tel: (336) 741-2000
`
`R.J. Reynolds Tobacco Company
`401 North Main Street
`Winston-Salem, NC 27101
`Tel: (336) 741-5000
`
`COUNSEL FOR COMPLAINANTS
`David M. Maiorana
`Ryan B. McCrum
`JONES DAY
`901 Lakeside Avenue
`Cleveland, OH 44114
`Tel: (216) 586-3939
`
`Stephanie E. Parker
`JONES DAY
`1420 Peachtree Street, N.E.
`Suite 800
`Atlanta, GA 30309
`Tel: (404) 521-3939
`
`(Listing of Counsel Continues on Next Page)
`
`PROPOSED RESPONDENTS
`Altria Client Services LLC
`6601 W. Broad Street
`Richmond, VA 23230
`Tel: (804) 274-2200
`
`Altria Group, Inc.
`6601 W. Broad Street
`Richmond, VA 23230
`Tel: (804) 274-2200
`
`Philip Morris USA, Inc.
`6601 W. Broad Street
`Richmond, VA 23230
`Tel: (804) 274-2000
`
`Philip Morris International Inc.
`120 Park Avenue
`New York, NY 10017
`Tel: (917) 663-2000
`
`Philip Morris Products S.A.
`Quai Jeanrenaud 3
`2000 Neuchâtel
`Switzerland
`Tel: 41-58-242-00-00
`
`
`
`
`
`
`
`Ex. 2001-0001
`
`

`

`Anthony M. Insogna
`JONES DAY
`4655 Executive Drive
`Suite 1500
`San Diego, CA 92121
`Tel: (858) 314-1200
`
`John J. Normile
`JONES DAY
`250 Vesey Street
`New York, NY 10281
`Tel: (212) 326-3939
`
`
`
`
`
`
`
`
`
`Ex. 2001-0002
`
`

`

`
`
`I. 
`II. 
`
`III. 
`
`IV. 
`
`
`
`
`
`TABLE OF CONTENTS
`
`
`
`Page
`
`INTRODUCTION ............................................................................................................. 1 
`THE PARTIES................................................................................................................... 3 
`A. 
`Complainants ......................................................................................................... 3 
`B. 
`Respondents ........................................................................................................... 3 
`1. 
`Altria Client Services LLC ........................................................................ 3 
`2. 
`Altria Group, Inc. ....................................................................................... 4 
`3. 
`Philip Morris USA, Inc. ............................................................................. 4 
`4. 
`Philip Morris International Inc. .................................................................. 5 
`5. 
`Philip Morris Products S.A. ....................................................................... 5 
`THE TECHNOLOGY AND PRODUCTS AT ISSUE ..................................................... 5 
`A. 
`The Technology ..................................................................................................... 5 
`B. 
`The Accused Products ............................................................................................ 6 
`1. 
`FDA Authorization .................................................................................... 7 
`2. 
`Actual Sales for Importation, Sales After Importation into the
`United States .............................................................................................. 8 
`The IQOS® Holder ..................................................................................... 8 
`3. 
`The IQOS® Disposable Tobacco Sticks ..................................................... 9 
`4. 
`The IQOS® Charger ................................................................................. 10 
`5. 
`Operation and Manufacture of the IQOS® System .................................. 10 
`6. 
`Respondents’ Instructions for Use of the IQOS® System ........................ 11 
`7. 
`THE PATENTS AT ISSUE ............................................................................................. 12 
`A. 
`U.S. Patent No. 9,839,238.................................................................................... 13 
`1. 
`Identification of the Patent and Ownership by Complainant ................... 13 
`2. 
`Non-Technical Description of the ’238 Patent ........................................ 14 
`3. 
`Foreign Counterparts to the ’238 Patent .................................................. 15 
`U.S. Patent No. 9,901,123.................................................................................... 15 
`1. 
`Identification of the Patent and Ownership by Complainant ................... 15 
`2. 
`Non-Technical Description of the ’123 Patent ........................................ 16 
`3. 
`Foreign Counterparts to the ’123 Patent .................................................. 17 
`U.S. Patent No. 9,930,915.................................................................................... 17 
`
`B. 
`
`C. 
`
`-i-
`
`
`
`Ex. 2001-0003
`
`

`

`TABLE OF CONTENTS
`(continued)
`
`
`
`V. 
`VI. 
`
`Page
`Identification of the Patent and Ownership by Complainant ................... 17 
`1. 
`Non-Technical Description of the ’915 Patent ........................................ 18 
`2. 
`Foreign Counterparts to the ’915 Patent .................................................. 18 
`3. 
`Licensees Under the Asserted Patents ................................................................. 18 
`D. 
`SPECIFIC INSTANCES OF UNLAWFUL IMPORTATION AND SALE ................... 19 
`UNFAIR ACTS OF RESPONDENTS ............................................................................ 23 
`A. 
`Infringement ......................................................................................................... 23 
`1. 
`Direct Infringement .................................................................................. 23 
`2. 
`Indirect Infringement ............................................................................... 24 
`Evidence of Infringement .................................................................................... 27 
`1. 
`The ’238 Patent ........................................................................................ 27 
`2. 
`The ’123 Patent ........................................................................................ 28 
`3. 
`The ’915 Patent ........................................................................................ 28 
`VII.  HARMONIZED TARIFF SCHEDULE INFORMATION ............................................. 28 
`VIII.  THE DOMESTIC INDUSTRY ....................................................................................... 28 
`A. 
`Economic Prong ................................................................................................... 29 
`B. 
`Technical Prong ................................................................................................... 30 
`PHYSICAL SAMPLES ................................................................................................... 30 
`RELATED LITIGATION ............................................................................................... 31 
`RELIEF REQUESTED .................................................................................................... 32 
`
`B. 
`
`IX. 
`X. 
`XI. 
`
`
`
`
`
`
`-ii-
`
`
`
`Ex. 2001-0004
`
`

`

`
`
`
`Ex. No.
`1
`2
`3
`4
`5
`6
`
`7
`8
`
`9
`10
`
`11
`12
`13
`14
`15
`16
`17
`18
`19
`
`20
`21
`
`22
`23
`24
`25
`26
`27
`28
`29
`
`30
`31
`
`
`
`
`
`EXHIBIT LIST
`
`Description
`Certified Copy of U.S. Patent No. 9,839,238
`Certified Copy of U.S. Patent No. 9,901,123
`Certified Copy of U.S. Patent No. 9,930,915
`Certified Copy of Recorded Assignments for U.S. Patent No. 9,839,238
`Certified Copy of Recorded Assignments for U.S. Patent No. 9,901,123
`Certified Copy of Recorded Assignments for U.S. Patent No. 9,930,915
`Licensing Agreements relating to U.S. Patent Nos. 9,839,238, 9,901,123 and
`9,930,915 (CONFIDENTIAL)
`FDA PMTA Authorization Summary of IQOS® System
`Atlanta Business Chronicle article dated May 1, 2019, entitled “Altria Chooses
`Atlanta To Test Market New FDA-Approved Tobacco Product”
`Altria/Philip Morris Press Release re FDA Authorization of IQOS®
`Investor’s Business Daily article dated July 19, 2019, entitled “Best Dividend
`Stocks: Philip Morris, with 5.2% Yield, Bets Big On IQOS”
`Public Version of Section 3 (Product Description) of MRTPAs on IQOS®
`IQOS User Guide (Section A3.4.1 of PMTAs on IQOS®)
`IQOS Quick Start Guide (Section A3.4.2 of PMTAs on IQOS®)
`IQOS User Guide (Section A3.4.3 of PMTAs on IQOS®)
`FDA Marketing Order Letter re IQOS® System Holder and Charger
`FDA Marketing Order Letter re MarlboroTM HeatSticks
`FDA Marketing Order Letter re MarlboroTM Fresh Menthol HeatSticks
`FDA Marketing Order Letter re MarlboroTM Smooth Menthol HeatSticks
`Philip Morris’s Presentation to Tobacco Products Scientific Advisory Committee
`on the IQOS Heating System, dated January 24, 2018
`Philip Morris’s Website re Making Heated Tobacco Products
`Photographic Images of IQOS® System (including IQOS® holder, charger,
`cleaning tool, and MarlboroTM Heat Sticks)
`Photographic Images of Pack of 20 MarlboroTM HeatSticks
`Photographic Images of Pack of 20 MarlboroTM Fresh Menthol HeatSticks
`Photographic Images of Pack of 20 MarlboroTM Smooth Menthol HeatSticks
`Clinical Trial NCT01967719
`Clinical Trial NCT01989156
`Clinical Trial NCT02396381
`Clinical Trial NCT02649556
`November 18, 2016 Philip Morris Letter to the Food and Drug Administration
`with Modified Risk Tobacco Product Application
`FDA Press Release re Authorization of IQOS®
`-iii-
`
`
`Ex. 2001-0005
`
`

`

`
`
`
`Ex. No.
`
`32
`
`33
`
`34
`
`35
`
`36
`37
`38
`39
`
`40
`41
`
`42
`43
`
`44
`45
`46
`47
`
`48
`49
`50
`51
`52
`53
`54
`55
`56
`
`57
`
`
`
`
`
`
`Description
`Wall Street Journal article dated April 30, 2019, entitled “FDA Clears Philip
`Morris International Heat-Not-Burn IQOS Device For Sale In U.S.”
`CNBC article dated April 30, 2019, entitled “FDA Clears Philip Morris’ IQOS,
`Altria Plans To Start Selling Heated Tobacco Device In The US This Summer”
`Receipt dated October 7, 2019 for purchasing the IQOS® system from the
`IQOS® store at Lenox Square in Atlanta, Georgia
`Receipt dated October 7, 2019 for purchasing the IQOS® system from the
`IQOS® store at Lenox Square in Atlanta, Georgia
`Receipt dated October 8, 2019 for purchasing the IQOS® system from the
`IQOS® store at Lenox Square in Atlanta, Georgia
`IQOS® User Guide
`IQOS® Quick Start Guide
`Infringement Claim Chart for U.S. Patent No. 9,839,238
`Domestic Industry Claim Chart for U.S. Patent No. 9,839,238
`(CONFIDENTIAL)
`Infringement Claim Chart for U.S. Patent No. 9,901,123
`Domestic Industry Claim Chart for U.S. Patent No. 9,901,123
`(CONFIDENTIAL)
`Infringement Claim Chart for U.S. Patent No. 9,930,915
`Domestic Industry Claim Chart for U.S. Patent No. 9,930,915
`(CONFIDENTIAL)
`List of Foreign Counterparts to U.S. Patent No. 9,839,238
`List of Foreign Counterparts to U.S. Patent No. 9,901,123
`List of Foreign Counterparts to U.S. Patent No. 9,930,915
`Altria Group, Inc.’s Second Quarter 2019 Earnings Call Transcript (July 30,
`2019)
`Declaration of Nicholas Gilley (CONFIDENTIAL)
`Photographic Images of the VUSE® Vibe Device Vapor Pen
`Photographic Images of the VUSE® Solo Device Vapor E-Cig Power Unit Kit
`Photographic Images of VUSE® Vibe Menthol Refill Cartridges
`Photographic Images of VUSE® Vibe Vapor Pen Packaging
`Photographic Images of VUSE® Solo Vapor E-Cig Power Unit Kit Packaging
`Photographic Images of VUSE® Vibe Menthol Refill Cartridges Packaging
`Product Information Guide for the VUSE® Vibe Device Vapor Pen
`Product Information Guide for the VUSE® Solo Device Vapor E-Cig Power Unit
`Kit
`
`
`
`-iv-
`
`
`
`Ex. 2001-0006
`
`

`

`
`
`
`
`
`
`
`
`
`
`PHYSICAL EXHIBIT LIST
`
`Ex. No.
`
`PX1
`PX2
`PX3
`PX4
`PX5
`PX6
`PX7
`
`Description
`IQOS® System (including IQOS® holder, charger, cleaning tool, and MarlboroTM
`HeatSticks)
`Pack of 20 MarlboroTM HeatSticks
`Pack of 20 MarlboroTM Smooth Menthol HeatSticks
`Pack of 20 MarlboroTM Fresh Menthol HeatSticks
`VUSE® Vibe Vapor Pen
`VUSE® Vibe Menthol Refill Cartridges
`VUSE® Solo Vapor E-Cig Power Unit Kit
`
`
`
`
`-v-
`
`
`
`Ex. 2001-0007
`
`

`

`
`
`
`Appx. No.
`A
`B
`C
`D
`E
`F
`
`
`
`LIST OF APPENDICES
`
`Description
`U.S. Patent No. 9,839,238 Certified Prosecution History
`U.S. Patent No. 9,839,238 Cited References
`U.S. Patent No. 9,901,123 Certified Prosecution History
`U.S. Patent No. 9,901,123 Cited References
`U.S. Patent No. 9,930,915 Certified Prosecution History
`U.S. Patent No. 9,930,915 Cited References
`
`
`
`
`
`
`-vi-
`
`
`
`Ex. 2001-0008
`
`

`

`
`
`I.
`
`INTRODUCTION
`
`1.
`
`RAI Strategic Holdings, Inc. (“RAI”), R.J. Reynolds Vapor Company (“RJRV”),
`
`and R.J. Reynolds Tobacco Company (“RJRT”) (collectively, “Complainants”) respectfully
`
`request that the United States International Trade Commission (“Commission”) institute an
`
`investigation into violations of Section 337 of the Tariff Act of 1930, as amended, 19 U.S.C.
`
`§ 1337, by the Proposed Respondents Altria Client Services LLC (“ACS”), Altria Group, Inc.
`
`(“AGI”), Philip Morris USA, Inc. (“PM USA”), Philip Morris International Inc. (“PMI”), and
`
`Philip Morris Products S.A. (“PMP”) (collectively, “Respondents”).
`
`2.
`
`This Complaint is based on Respondents’ unlawful and unauthorized ongoing
`
`importation into the United States, sale for importation, and/or sale within the United States after
`
`importation of certain tobacco heating articles and components thereof. Respondents’ products
`
`infringe at least one or more claims listed below (“Asserted Claims”) of the following U.S.
`
`patents (“Asserted Patents”):
`
`U.S. Patent No.
`
`Asserted Claims1
`
`9,839,238 (Ex. 1)
`
`19*
`
`9,901,123 (Ex. 2)
`
`27*, 28, 29, 30
`
`9,930,915 (Ex. 3)
`
`1*, 2, 5
`
`3.
`
`The Asserted Patents are valid and enforceable United States patents, the entire
`
`right, title, and interest to which RAI owns by assignment. Exs. 4-6. RJRV is an exclusive
`
`licensee of the Asserted Patents. Ex. 7. RJRT has conducted (and continues to conduct)
`
`research and development and has provided (and continues to provide) technical support for
`
`
`1 Independent claims are denoted by *.
`
`
`
`
`
`Ex. 2001-0009
`
`

`

`
`
`products practicing the Asserted Patents. In addition, RJRT has made (and continues to make)
`
`investments in plant, equipment, capital, and labor relating to the products practicing the
`
`Asserted Patents in the United States.
`
`4.
`
`Respondents’ activities with respect to the ongoing importation into the United
`
`States, sale for importation into the United States, and/or sale within the United States after
`
`importation of certain tobacco heating articles and components thereof, described more fully
`
`infra, are unlawful under 19 U.S.C. § 1337(a)(l)(B)(i) in that they constitute infringement of the
`
`valid and enforceable Asserted Patents.
`
`5.
`
`A domestic industry exists in the United States relating to articles protected by the
`
`Asserted Patents, described more fully infra, as required by Section 337 (a)(2) and defined by
`
`Section 337 (a)(3). Complainants’ domestic industry includes significant domestic investments
`
`in plant and equipment, significant employment of labor and capital, and substantial investments
`
`in the exploitation of the inventions claimed in the Asserted Patents, including through research
`
`and development and engineering relating to the exploitation of the claimed inventions and
`
`articles protected by the Asserted Patents, including Complainants’ VUSE® Vibe and VUSE®
`
`Solo products (“Domestic Industry Products” or “D.I. Products”). Exs. 50-57; PX 5-7.
`
`Complainants manufacture components of their VUSE® Vibe and VUSE® Solo products in the
`
`United States. Id.
`
`6.
`
`To remedy Respondents’ continuing unfair and unlawful violations of Section
`
`337, Complainants seek, as permanent relief, a limited exclusion order pursuant to 19 U.S.C.
`
`§ 1337(d) barring from entry into the United States Respondents’ products that infringe one or
`
`more of the Asserted Claims of the Asserted Patents. Complainants also seek cease and desist
`
`orders pursuant to 19 U.S.C. § 1337(f) prohibiting each Respondent from engaging in the
`
`
`
`-2-
`
`Ex. 2001-0010
`
`

`

`
`
`importation into the United States, as well as the sale within the United States after importation,
`
`the advertising, marketing, distributing, transferring, operating, testing, updating, supporting,
`
`servicing, repairing, or soliciting of products that infringe one or more of the Asserted Claims.
`
`Further, Complainants request that the Commission impose a bond upon each Respondent’s
`
`importation of infringing articles during the 60-day Presidential review period pursuant to 19
`
`U.S.C. § 1337(j).
`
`II.
`
`THE PARTIES
`
`A.
`
`7.
`
`Complainants
`
`Complainant RAI is a North Carolina corporation with its principal place of
`
`business located at 401 North Main Street, Winston-Salem, N.C. 27101. RAI is the assignee and
`
`sole owner of the Asserted Patents.
`
`8.
`
`Complainant RJRV is a North Carolina corporation with its principal place of
`
`business located at 401 North Main Street, Winston-Salem, N.C. 27101. RJRV is an exclusive
`
`licensee of the Asserted Patents and is responsible for developing, distributing, and selling the
`
`D.I. Products. Ex. 7.
`
`9.
`
`Complainant RJRT is a North Carolina corporation with its principal place of
`
`business located at 401 North Main Street, Winston-Salem, N.C. 27101. RJRT provides research
`
`and technical support for the D.I. Products and makes significant investments in facilities,
`
`equipment, and labor to produce components of the D.I. Products.
`
`B.
`
`Respondents
`
`1.
`
`Altria Client Services LLC
`
`10.
`
`On information and belief, Respondent ACS is a Virginia corporation with offices
`
`at 6601 West Broad Street, Richmond, Virginia 23230. On information and belief, ACS is
`
`licensed by Respondent PMI to distribute and sell tobacco heating articles and components
`
`
`
`-3-
`
`Ex. 2001-0011
`
`

`

`
`
`thereof, including disposable tobacco sticks, in the United States that infringe the Asserted
`
`Patents. Ex. 8 at 10. On information and belief, ACS imports into the United States, sells for
`
`importation into the United States, and/or sells within the United States after importation,
`
`tobacco heating articles and components thereof, including disposable tobacco sticks, that
`
`infringe the Asserted Patents.
`
`2.
`
`Altria Group, Inc.
`
`11.
`
`On information and belief, Respondent AGI is a Virginia corporation with offices
`
`at 6601 West Broad Street, Richmond, Virginia 23230. On information and belief, AGI is a
`
`parent entity of ACS and PM USA. Ex. 9. On information and belief, AGI operates in
`
`conjunction with the other Respondents with regard to the importation into the United States,
`
`sale for importation into the United States, and/or sale within the United States after importation,
`
`of tobacco heating articles and components thereof, including disposable tobacco sticks, that
`
`infringe the Asserted Patents. Exs. 9-11.
`
`3.
`
`Philip Morris USA, Inc.
`
`12.
`
`On information and belief, Respondent PM USA is a Virginia corporation with
`
`offices at 6601 West Broad Street, Richmond, Virginia 23230. On information and belief, PM
`
`USA is licensed by Respondent PMI to distribute, offer for sale, and sell tobacco heating articles
`
`and components thereof, including disposable tobacco sticks (the “IQOS® system”), in the
`
`United States that infringe the Asserted Patents. Exs. 8-9. On information and belief, PM USA
`
`imports into the United States, sells for importation into the United States, and/or sells within the
`
`United States after importation, tobacco heating articles and components thereof, including
`
`disposable tobacco sticks, that infringe the Asserted Patents. According to packaging and other
`
`materials submitted to the U.S. Food and Drug Administration (“FDA”), and the packaging and
`
`other materials sold by Respondents with the Accused Products in the United States, the IQOS®
`
`
`
`-4-
`
`Ex. 2001-0012
`
`

`

`
`
`system and components thereof, including disposable tobacco sticks, are manufactured outside
`
`the United States for PM USA. Exs. 8, 12-15.
`
`4.
`
`Philip Morris International Inc.
`
`13.
`
`On information and belief, Respondent PMI is a Virginia corporation with offices
`
`at 120 Park Avenue, New York, New York 10017. On information and belief, PMI is the
`
`ultimate parent entity of PMP. On information and belief, PMI operates in conjunction with the
`
`other Respondents with regard to the importation into the United States, sale for importation into
`
`the United States, and/or sale within the United States after importation, of tobacco heating
`
`articles and components thereof, including disposable tobacco sticks, that infringe the Asserted
`
`Patents.
`
`5.
`
`Philip Morris Products S.A.
`
`14.
`
`On information and belief, Respondent PMP is a societe anonyme duly existing
`
`under the laws of Switzerland with a corporate address at Quai Jeanrenaud 3, 2000 Neuchâtel,
`
`Switzerland. On information and belief, PMP imports into the United States, sells for
`
`importation into the United States, and/or sells within the United States after importation,
`
`tobacco heating articles and components thereof, including disposable tobacco sticks, that
`
`infringe the Asserted Patents. On information and belief, in particular, PMP is a premarket
`
`tobacco applicant with FDA for the IQOS® system. Ex. 8 at 28; Exs. 16-19. On information and
`
`belief, PMP worked in concert with Respondents and others to prosecute and gain FDA
`
`authorization for the IQOS® system.
`
`III. THE TECHNOLOGY AND PRODUCTS AT ISSUE
`
`A.
`
`The Technology
`
`15.
`
`The technology at issue generally relates to tobacco heating articles and
`
`components thereof, such as disposable tobacco sticks. Complainants are American companies
`
`
`
`-5-
`
`Ex. 2001-0013
`
`

`

`
`
`that lead the industry in research, development, manufacturing, sale, and distribution of products
`
`for U.S. adult tobacco consumers seeking alternative sources of nicotine.
`
`16.
`
`Traditional combustible cigarettes yield an inhalable smoke that provides flavors
`
`and sensations that smokers desire. Complainants’ U.S.-based research efforts to invent and
`
`develop tobacco heating and vapor articles that produce inhalable aerosols with the desirable
`
`flavor and sensory attributes of a traditional cigarette while possibly reducing the smoker’s
`
`exposure to potentially harmful constituents date back to at least the 1980s and continue today.
`
`These efforts have resulted in, inter alia, the creation of new and improved methods of
`
`generating and applying a heat source to vaporize aerosol-forming materials, such as glycerin,
`
`tobacco components, and other flavor sources, without substantial combustion of tobacco
`
`constituents, and new and improved heat sources, power sources, aerosol-forming materials, and
`
`aerosol delivery systems, critical to providing quality alternative sources of nicotine.
`
`17.
`
`Some of those efforts are the subject of the Asserted Patents, U.S. Patent Nos.
`
`9,839,238 (“the ’238 patent”), 9,901,123 (“the ’123 patent”) and 9,930,915 (“the ’915 patent”).
`
`18.
`
`These efforts also have resulted in the commercial introduction of the D.I.
`
`Products, including the VUSE® Vibe and VUSE® Solo products, which include devices that are
`
`protected by one or more claims of the Asserted Patents, and the accompanying or related
`
`accessories and components.
`
`B.
`
`19.
`
`The Accused Products
`
`The Accused Products are tobacco heating articles and components thereof that
`
`are being imported into the United States, sold for importation into the United States, and/or sold
`
`within the United States after importation, by or on behalf of Respondents, that infringe the
`
`Asserted Claims of the Asserted Patents. In particular, the tobacco heating articles and
`
`
`
`-6-
`
`Ex. 2001-0014
`
`

`

`
`
`components thereof that infringe one or more of the Asserted Claims of the Asserted Patents are
`
`Respondents’ IQOS® system, including disposable tobacco sticks. Exs. 8, 12-15, 20-25; PX 1-4.
`
`20.
`
`On information and belief, Respondents have imported the IQOS® system into the
`
`United States to conduct clinical studies within the United States. Exs. 26-29. On information
`
`and belief, Respondents have also imported the IQOS® system into the United States to support
`
`their premarket applications with FDA for its IQOS® system. Exs. 8, 12, 30. Respondents have
`
`imported the IQOS® system into the United States for commercial sale, distribution, and
`
`marketing, and for selling in the U.S. market after importation. Exs. 9-11, 16-19, 31-36.
`
`1.
`
`FDA Authorization
`
`21.
`
`On or about May 15, 2017, Respondent PMP, in concert with Respondents, their
`
`related entities, or other entities, submitted Premarket Tobacco Product Applications (“PMTAs”)
`
`seeking FDA authorization for the IQOS® system, including disposable tobacco sticks. Ex. 8 at
`
`1, 14; Ex. 16 at 1, 4.
`
`22.
`
`On or about April 30, 2019, FDA provided marketing authorization for
`
`Respondents’ PMTAs on the IQOS® system, a tobacco heating article and components thereof,
`
`including disposable tobacco sticks. Exs. 16-19. Respondents are now fully authorized by FDA
`
`to market and sell within the United States the products specifically authorized by FDA.
`
`23.
`
`Prior to filing the PMTAs, on or about November 18, 2016, Respondent PMP, in
`
`concert with Respondents, their related entities, or other entities, submitted Modified Risk
`
`Tobacco Product Applications (“MRTPAs”) seeking FDA authorization for the IQOS® system,
`
`including disposable tobacco sticks, with claims of reduced exposure or reduced risk. Exs. 30-
`
`31. On information and belief, Respondents’ MRTPAs are still under FDA review. Ex. 31.
`
`24.
`
`On information and belief, from filing the MRTPAs in 2016 and the PMTAs in
`
`2017, through market authorization of the PMTAs in April 2019, and continuing today,
`
`
`
`-7-
`
`Ex. 2001-0015
`
`

`

`
`
`Respondent PMP, in concert with Respondents, their related entities, or other entities, diligently
`
`prosecuted the FDA applications. Exs. 8, 10-12, 16-20, 31-33. During the time FDA was
`
`considering the PMTAs, Respondent PMP submitted several amendments, including responses
`
`to FDA information requests. Ex. 8 at 14.
`
`25.
`
`The authorized IQOS® system consists of three components: a holder, disposable
`
`tobacco sticks, and a charger. Exs. 13-15, 22-25, 37-38. The system is marketed under the
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`IQOS® brand name. Id. According to FDA documents, the authorized IQOS® system is IQOS®
`
`2.4, which, on information and belief, is sold in several countries around the world in the same or
`
`similar configuration. Exs. 8, 11-15, 20-25.
`
`2.
`
`Actual Sales for Importation, Sales After Importation into the United
`States
`
`26.
`
`Since at least October 2019, Respondents have imported into the United States,
`
`sold for importation, and/or sold within the United States after importation the FDA-authorized
`
`IQOS® system. For example, Respondents have imported into the United States and have sold
`
`within the United States after importation the IQOS® system from stores that they own and
`
`operate in Atlanta, Georgia and Richmond, Virginia. See, e.g., Exs. 34-36.
`
`3.
`
`The IQOS® Holder
`
`27.
`
`The IQOS® holder is an electrically powered and rechargeable unit designed to
`
`hold and heat the disposable tobacco sticks during use to generate a nicotine-containing aerosol.
`
`Ex. 8 at 10; Exs. 13-15, 20. The IQOS® holder includes a casing or housing, control electronics,
`
`a battery as its electrical source, and a heating blade. Ex. 8 at 15-16, 22; Exs. 13-15, 20. The
`
`IQOS® holder has an end for receiving the tobacco stick. Ex. 8 at 15-16; Exs. 13-15, 20.
`
`
`
`-8-
`
`Ex. 2001-0016
`
`

`

`
`
`
`28.
`
`The IQOS® holder heats the disposable tobacco stick using a ceramic blade,
`
`which is pushed into the tobacco stick by the act of inserting the tobacco stick into the holder.
`
`Ex. 8 at 15-16; Exs. 13, 20.
`
`4.
`
`The IQOS® Disposable Tobacco Sticks
`
`29.
`
`The disposable tobacco sticks are offered in three varieties (one regular and two
`
`menthol flavors) and are marketed under or in association with the IQOS® brand, as well as the
`
`trade name MARLBORO HEATSTICKS. Ex. 8 at 10, 15-19; Exs. 17-19; Ex. 20 at 106; Exs.
`
`21, 23-25; PX 2-4. The tobacco sticks are designed to function with the holder. They are an
`
`indispensable component for the proper operation of the IQOS® system and have no other
`
`function or authorized use. Exs. 16-19; Ex. 8 at 10, 15-19, 62; Exs. 23-25, 37-38; PX 1-4. The
`
`IQOS® system and the components thereof, including the disposable tobacco sticks, are
`
`collectively referred to as the “Accused Products.”
`
`30.
`
`The disposable tobacco stick is specially designed and intended for exclusive use
`
`with the IQOS® holder. Ex. 8 at 10, 15-19, 62; Exs. 16-19; Ex. 20 at 106; Exs. 22-25; PX 1-4.
`
`The tobacco stick contains specially processed tobacco made from tobacco powder that has been
`
`reconstituted into sheets following the addition of water, glycerin, guar gum, and cellulose fibers.
`
`Ex. 8 at 10, 15-19, 62; Ex. 20 at 16; Ex. 21.
`
`31.
`
`The IQOS® tobacco stick is marketed in three different flavors, regular and two
`
`menthol flavors (Smooth Menthol with 1.25 mg menthol per stick and Fresh Menthol with 2.5
`
`mg menthol per stick) to satisfy different consumer preferences. Ex. 8 at 10, 15-19; Exs. 17-19;
`
`Exs. 23-25; PX 2-4. The structure and operation across the variety of sticks is otherwise the
`
`same. Id. The IQOS® tobacco stick is specifically designed to function with the IQOS® holder
`
`to produce an aerosol. Ex. 8 at 10, 15-19, 62; Exs. 16-19; Ex. 20 at 28.
`
`
`
`-9-
`
`Ex. 2001-0017
`
`

`

`
`
`
`5.
`
`The IQOS® Charger
`
`32.
`
`The IQOS® system also includes an IQOS® charger for charging and storing the
`
`IQOS® holder after each use, and an AC power adaptor for recharging the charger. Ex. 8 at 10,
`
`25; Exs. 13-15, 22, 37-38; PX 1. The IQOS® charger stores sufficient energy for the use of
`
`approximately 20 of the disposable tobacco sticks. Ex. 8 at 10, 15, 25.
`
`33.
`
`On information and belief, the IQOS® charger, IQOS® holder, and IQOS®
`
`tobacco sticks are packaged in a kit that also contains a tool designed for cleaning the IQOS®
`
`holder. Ex. 12 at 19-22; Exs. 13-15, 22, 37-38; PX 1.
`
`6.
`
`Operation and Manufacture of the IQOS® System
`
`34.
`
`The IQOS® system works as follows in operation: The user inserts a tobacco
`
`stick into the holder and turns on the device by means of a pushbutton activated switch. The
`
`switch signals to the control electronics, which causes the battery to produce and supply
`
`electrical current to the heating blade. The heating blade heats the aerosol-forming materials in
`
`the tobacco stick, generating an inhalable nicotine-containing aerosol for the user. The
`
`temperature of the heating blade is controlled so that its operating temperature does not exceed
`
`350°C. This allows for heating of the tobacco constituents below the level of combustion, while
`
`producing an aerosol containing water, glycerin, and nicotine. Ex. 8 at 14-19; Exs. 13-15, 22,
`
`37-38; PX 1.
`
`35.
`
`On information and belief, the Accused Products are manufactured abroad by or
`
`on behalf of Respondents and are imported into the United States, sold for importation into the
`
`United States and/or sold within the United States after importation, by or on behalf of
`
`Respondents. Exs. 9-11, 31-33, 34-36. On information and belief, PMP is responsible for and
`
`controls the worldwide design, manufacturing and marketing of the IQOS® system, either
`
`directly or indirectly through Respondents, their related entities, or other entities, including
`
`
`
`-10-
`
`Ex. 2001-0018
`
`

`

`
`
`manufacturing of the IQOS® system or components thereof outside the United States, including
`
`at locations in Malaysia, Switzerland, and Italy, for importation into the United States. Ex. 8 at
`
`24, 27; Exs. 22-25. For example, the packaging for the IQOS® device purchased from
`
`Respondents’ store in Atlanta, Georgia, states: “Manufactured for Philip Morris USA,
`
`Richmond, VA 23261 . . . Made in Malaysia”; and the packaging for the disposable tobacco
`
`sticks purchased from Respondents’ store in Atlanta, Georgia, states: “Mfd. for Philip Morris
`
`USA, Richmond, VA 23261 . . . Made in Italy.” Exs. 22-25, 34-36.
`
`7.
`
`Respondents’ Instructions for Use of the IQOS® System
`
`36.
`
`As part of their PMTA submission to FDA, Respondents provi