PUBLIC VERSION
`
`UNITED STATES INTERNATIONAL TRADE COMMISSION
`WASHINGTON, DC
`
`Before the Honorable Clark S. Cheney
`Administrative Law Judge
`
`In the Matter of
`CERTAIN TOBACCO HEATING
`ARTICLES AND COMPONENTS
`THEREOF
`
`Investigation No. 337-TA-1199
`
`COMMISSION INVESTIGATIVE STAFF’S
`PRE-HEARING BRIEF
`
`Margaret D. Macdonald, Director
`Anne Goalwin, Supervisory Attorney
`Sarah J. Sladic, Investigative Attorney
`OFFICE OF UNFAIR IMPORT INVESTIGATIONS
`U.S. International Trade Commission
`500 E. St., S.W., Suite 401
`Washington, DC 20436
`(202) 205-2202
`(202) 205-2158 (Fax)
`
`January 4, 2021
`
`Ex. 2009-0001
`
`

`

`
`
`. Cochand Tr. at 33:4-34:5. Accordingly, the evidence is expected to show that the
`
`physical samples that Mr. Fox inspected were not representative of any device that may have
`
`been available in 2006, or at best, that the devices that Mr. Fox inspected were defective.
`
`Clemens Rpt., ¶ 253. Therefore, there is no way to know whether the structure and/or operation
`
`of these samples is accurate.
`
`For at least these reasons, and as further described below, Respondents are not expected
`
`to show, by clear and convincing evidence, that either RPX-0004 or RPX-0005 constitutes prior
`
`art under 35 U.S.C. § 102.
`
`In the event RPX-0004 and RPX-0005 are determined to be prior art, given that
`
`Respondents allege that RPX-0004 and RPX-0005 “are the same make and model as the Ruyan
`
`e-Cigars that Reynolds reverse engineered prior to filing the ’123 patent application,” the Staff
`
`submits that the evidence will show that they do not anticipate or render obvious any of claims 1-
`
`7, 9, 11-19, 21, 23-26 of the ’123 patent for all the reasons set forth in Section VI.D.1.b.i. above.
`
`iii. Hon ’0437
`
`Respondents assert that Chinese Patent No. 2719043Y, RX-0088, RX-01038 (“Hon
`
`’043”) anticipates and/or renders obvious all of the DI Claims along or together with secondary
`
`references. RPrHB at 131-1433 Hon ’043 was issued to Hon Lik, the inventor of the Ruyan e-
`
`Cigar discussed above. RPrHB at 131.
`
`The Staff expects, however, that the evidence will show that Hon ’043 does not anticipate
`
`or render obvious any of claims 1-7, 9, 11-19, 21, 23-26 of the ’123 patent.
`
`
`7 Complainants do not assert any independent bases for the validity of dependent claims 2-5, 7,
`9, 12, 13, 16-18, 21 and 26 and do not dispute that the additional limitations of these dependent
`claims are disclosed by Hon ’043. See CPrHB at 310-322; JX-0011C, ¶¶ 101, 102.
`8 RX-0088 is a certified translation of Hon ’043 used by Complainants in R.J. Reynolds Vapor
`Co. v. Fontem Holdings 1 B.V., IPR2016-01268. RX-0103 is a certified translation of Hon ’043
`produced by Respondents.
`
`
`
`146
`
`Ex. 2009-0002
`
`

`

`
`
`a. Claims 1 and 15
`
`Complainants do not dispute that several of the limitations of claims 1 and 15 are
`
`disclosed in Hon ‘043. See JX-0011C, ¶¶ 99-101. Complainants dispute, however, that Hon
`
`’043 discloses two limitations in each of claim 1 and 15. Those limitations are: (1) “a puff-
`
`actuated controller . . . adapted for regulating current flow through the electrical resistance heater
`
`during draw;” and (2) “the mixture comprising the tobacco extract and the aerosol-forming
`
`material can be wicked into contact with the electrical resistance heater.” See CPrHB at 310-
`
`322. The Staff expects that Respondents will be unable to establish by clear and convincing
`
`evidence that that Hon ’043 anticipates or renders obvious claims 1 and 15 of the ’123 patent.
`
`The evidence will show that Hon ’043 discloses the claimed “a puff-actuated
`
`controller . . . adapted for regulating current flow through the electrical resistance heater during
`
`draw.” Mr. Fox will testify that, in Hon ’043, when the reed (pressure) switch K1 closes, Hon
`
`’043’s field effect transistor (“FET”) U1 turns on, and the battery energizes the heater “RL.” See
`
`Fox Op. Rpt., ¶ 567; RX-0088, RX-0103 at Figure 12 (color added).
`
`Mr. Fox will further testify that when field effect transistor U1 is turned on as described
`
`above, current flows through heating element RL. Id. Current flow continues until the user
`
`stops drawing on the device, when K1 opens and turns off FET U1. RX-0088, RX-0103 at 6
`
` 
`
`
`
`147
`
`Ex. 2009-0003
`
`

`

`
`
`(“[W]hen K1 is closed, U1, i.e. the field effect transistor, is turned on; RL starts”). Thus, the
`
`evidence will show that Hon ’043 discloses the claimed “puff- actuated controller.”
`
`In addition to starting/stopping current flow when the user’s puff (or draw) starts and
`
`stops, the evidence will show that Hon ’043’s circuit also regulates current in that it stops current
`
`flow if voltage drops below a certain level, including during a puff/draw. Specifically, if battery
`
`voltage is too low, circuit element U2 will turn off FET U1 (even if K1 is shut), and thus stop
`
`current flow through the heaters. See RX-0088, RX-0103 at 6 (describing the “the low voltage
`
`detection element for over-discharge protection of the lithium ion battery”).
`
`As they did with the Reynolds Ruyan e-Cigar, Respondents argue that the ’123 Patent
`
`shows that “regulating current flow through the electrical resistance heater during draw” means
`
`something more than just turning on the heater. See Clemens Rpt., ¶ 264. For the same reasons
`
`discussed in Section VI.D.1.b.i.a., this argument is incorrect and should be rejected.
`
`To the extent that the “puff-actuated controller” limitation is found not to be disclosed in
`
`Hon ’043 the evidence is expected to show that it would have been obvious in view of Brooks
`
`for the same reasons discussed in Section VI.D.1.b.i.a. Further, Mr. Fox will testify that a
`
`POSITA would have been motivated to improve the electronic control circuitry in Hon ’043 with
`
`a more sophisticated system like the one disclosed by Brooks. Fox Op. Rpt., ¶¶ 551-562. Mr.
`
`Fox is further expected to explain that the system taught by Brooks would allow the use of a
`
`high-powered heater that can rapidly heat up to the optimum temperature (providing the
`
`optimum rate of aerosol generation sooner), and then maintain that optimum temperature by
`
`reducing the current (or more precisely, average current) for the remainder of the puff. Id.; see
`
`also RX-0001 at 5:1-38 (also noting that maximum aerosol generation may be achieved in 0.5
`
`seconds or less).
`
`
`
`148
`
`Ex. 2009-0004
`
`

`

`
`
`Consequently, the evidence will show that the “a puff-actuated controller . . . adapted for
`
`regulating current flow through the electrical resistance heater during draw” limitation of claims
`
`1 and 15 is disclosed or rendered obvious by Hon ’043.
`
`The evidence, however, is not expected to show that Hon’043 anticipates or renders
`
`obvious the “the mixture comprising the tobacco extract and the aerosol-forming material can be
`
`wicked into contact with the electrical resistance heater” limitation of claims 1 and 15.
`
`As with the Reynolds Ruyan e-Cigar, Respondents are unable to show that liquid mixture
`
`is “wicked into contact with the electrical resistance heater.” Respondents’ argument that the
`
`liquid mixture in Hon ’043 contacts “heating element 26” and is volatilized into an aerosol is not
`
`supported by the disclosure of Hon ’043. RPrHB at 136. On the contrary, Hon ’043 discloses
`
`that:
`
`The solution in the porous body 27 is driven by the high-speed airflow of
`the ejection hole and ejected in the form of droplets into the atomization
`cavity 10; it is atomized ultrasonically by the first piezoelectric element 23
`and is further atomized under the effect of the heating element 26; atomized
`droplets of large diameters are attached to the wall under the vortex effect
`and are re-absorbed by the porous body 27 via the overflow hole 29;
`droplets of small diameters suspend in the airflow and form an aerosol,
`which is sucked out via the aerosol passage 12, gas vent 17, and the
`mouthpiece 15.
`
`RX-0088, RX-0103 at 7. This passage does not disclose that there is any contact between the
`
`droplets and the heating element 26, and instead only states that droplets are atomized “under the
`
`effect of the heating element 26.” Id. Moreover, this disclosure indicates that “atomized droplets
`
`of large diameters are attached to the wall under the vortex effect and are re-absorbed by the
`
`porous body 27 via the overflow hole 29,” and that “droplets of small diameters suspend in the
`
`airflow and form an aerosol.” Id. This disclosure therefore indicates that the vapor is formed
`
`without any contact between the liquid droplets and the heating elements. As a result, there is no
`
`
`
`149
`
`Ex. 2009-0005
`
`

`

`
`
`evidence that the Hon ’043 discloses the “wicked into contact with the electrical resistance
`
`heater” limitation of claims 1 and 15.
`
`Respondents argue that a POSITA would have been motivated to modify Hon ’043 using
`
`the heater/wick assembly taught by Whittemore. For the same reasons discussed in Section
`
`VI.D.1.b.i.a., the evidence will show that Respondents’ argument should be rejected because it
`
`would not have been obvious to modify Hon ’043 in view of Whittemore.
`
`For these reasons, the Staff expects that Respondents will not establish by clear and
`
`convincing evidence that Hon ’043 anticipates or renders obvious claims 1 and 15 of the ’123
`
`patent.
`
`b. Claims 6 and 19
`
`Claims 6 and 19 each require “essentially pure nicotine, extracts composed
`
`predominantly of nicotine, or formulations composed predominantly of nicotine.”
`
`Complainants argue that “essentially pure nicotine” requires “pharmaceutical grade
`
`nicotine.” CPrHB at 320. As discussed above, this interpretation of the additional limitations of
`
`claims 6 and 19 is unsupported by any intrinsic evidence and is therefore incorrect.
`
`The evidence will also show that Hon ’043 does not disclose that the nicotine contained
`
`any impurities, nor would a POSITA have sought to add any. Furthermore, a POSITA would
`
`have made that mixture by combining pure ingredients in the desired ratios to arrive at the
`
`desired nicotine strength and flavor profile. RX-0108 at 6:65-7:1, 7:42-45 (showing that 98%
`
`nicotine, “stock number 1242” from “Eastman” was commercially available). Mr. Fox is
`
`expected to testify that a POSITA seeking to make vaping liquids with different flavors with
`
`different nicotine levels would have used essentially pure nicotine, such as that taught in Ray, to
`
`be able to achieve different strengths and flavor profiles when formulating Hon ’043’s mixtures
`
`(which dilute the nicotine until the nicotine is below 3.5% of the composition). Complainants’
`150
`
`
`
`Ex. 2009-0006
`
`

`

`
`
`expert, Mr. Clemens, does not refute that it would have been obvious to use the formulation
`
`disclosed by Ray, or that doing so would have met this limitation
`
`Accordingly, the evidence is expected to show that the mixture inside the Hon ’043
`
`cartridge either discloses or renders obvious the “essentially pure nicotine, extracts composed
`
`predominantly of nicotine, or formulations composed predominantly of nicotine” limitations of
`
`claims 6 and 19. However, because claims 6 and 19 depend from valid claims 1 and 15,
`
`respectively, the Staff expects Respondents will nonetheless be unable to show that Hon ’043
`
`anticipates or renders obvious claims 6 and 19.
`
`c. Claims 11 and 23
`
`Claims 11 and 23 of the ’123 Patent require an “electrically conductive cartridge.” It is
`
`undisputed that Reynolds Ruyan e-Cigar cartridge is made entirely of plastic and thus does not
`
`disclose this limitation. See CPrHB at 321; RPrHB at 140. Respondents contend it would have
`
`been obvious for a POSITA implementing Hon ’043 to try a variety of materials, including
`
`metals that were electrically conductive. RPrHB at 140. Respondents, however, provide no
`
`reason why a POSITA would have used any of the materials in Hon ’043 in place of the plastic
`
`material that it actually used. See Clemens Rpt., ¶ 226. Respondents also fail to identify any
`
`defects or problems with Hon ’043 in this regard. Id. Moreover, the evidence is expected to
`
`show that, in Hon ’043, the heater is in the power unit, not the cartridge, so there would be no
`
`reason or motivation for a POSITA to make the cartridge electrically conductive. Id. Thus, the
`
`evidence will show that Hon ’043 does not render obvious claims 11 and 23.
`
`d. Claims 14 and 24
`
`Claims 14 and 24 of the ’123 Patent require that the absorbent fibrous material “is in
`
`contact with the electrical resistance heater.” Respondents do not dispute that Hon ’043 does not
`
`disclose that the absorbent fibrous material is in contact with the heater, and instead rely entirely
`
`
`
`151
`
`Ex. 2009-0007
`
`

`

`
`
`on the combination of Hon ’043 and Whittemore for disclosure of this limitation. RPrHB at 141-
`
`142. For the reasons discussed above in Sections VI.D.1.b.i.a. and VI. D.1.b.iii.a, it would not
`
`have been obvious to combine Whittemore with Hon ’043. Thus, the evidence will show that
`
`Hon ’043 does not render obvious claims 14 and 24.
`
`e. Claim 25
`
`Claim 25 of the ’123 Patent requires that the absorbent fibrous material “is positioned in
`
`proximity to the at least one electrical resistance heater.”
`
`As with the Reynolds Ruyan e-Cigar, Respondents indicate that Mr. Fox is expected to
`
`testify that the fibrous/wicking material, or porous body 27, in Hon ’043 is positioned in
`
`proximity to the at least one electrical resistance heater because, the liquid “solution in the
`
`porous body 27 is driven by the high-speed airflow … and ejected in the form of droplets into the
`
`atomization cavity 10,” and as seen in the figure below the heating element 26 is within the
`
`atomization cavity. RPrHB at 135-136, 142.
`
`This argument is conclusory at best. For example. Respondents offer no explanation why
`
`porous body 27 that surrounds the exterior of the atomization cavity 10 should be understood to
`
`be “in proximity to” heating element 26 located within cavity 10. This conclusory argument is
`
`
`
`
`
`152
`
`Ex. 2009-0008
`
`

`

`
`
`insufficient to establish by clear and convincing evidence that the additional limitation of claim
`
`25 is disclosed in Hon ’043.
`
`Respondents additionally state that Mr. Fox is expected to testify that the combination of
`
`Hon ’043 and Whittemore teaches this element. RPrHB at 142. For the reasons discussed above
`
`in Sections VI.D.1.b.i.a. and VI. D.1.b.iii.a, it would not have been obvious to combine
`
`Whittemore with Hon ’043.
`
`Thus, the evidence will show that Hon ’043 does not anticipate or render obvious claim
`
`25.
`
`2. Derivation
`
`Respondents argue that, regardless of whether the Reynolds Ruyan e-Cigar is prior art to
`
`the ’123 patent under 35 U.S.C. § 102(a), claims 1-7, 9, 11-19, 21, 23-26 of the ’123 patent are
`
`invalid under 35 U.S.C. § 102(f) for derivation. RPrHB at 126-128. The evidence is expected to
`
`show that the DI claims are not invalid for derivation.
`
`To prove derivation under § 102(f), “the party asserting invalidity must prove both prior
`
`conception of the invention by another and communication of that conception to the patentee.”
`
`Eaton Corp. v. Rockwell Int'l Corp., 323 F.3d 1332, 1344 (Fed. Cir. 2003). The communication
`
`must be sufficient to enable a POSITA to make the patented invention. Id.
`
`Respondents contend the named inventors of the ’123 patent did not conceive of the
`
`claimed invention, and “[o]ne cannot claim or reproduce the invention of another and obtain a
`
`patent on that ‘invention.’” Apotex Inc. v. Cephalon, Inc., No. 2:06-CV-2768, 2011 WL
`
`6090696, at *17 (E.D. Pa. Nov. 7, 2011), aff’d, 500 F. App’x 959 (Fed. Cir. 2013). Specifically,
`
`Respondents argue that the subject matter of the DI Claims of the ’123 patent was conceived of
`
`(and reduced to practice) by Mr. Hon Lik and Beijing SBT Ruyan Technology and Development
`
`Company Ltd. (and its employees) at least as early as 2005 (see Weiss Dep. at 64:7-12) and no
`153
`
`
`
`Ex. 2009-0009
`
`

`

`
`
`equal to Jawbone’s. . . .In these circumstances, there is no danger that Jawbone will be injured by
`
`the sale of Fitbit products during the 60-day Presidential review period, and thus no bond is
`
`necessary”).
`
`XI. Conclusion
`
`The evidence is expected to show that all of the asserted claims of the ’123 patent and
`
`’915 patent are valid and infringed, directly and indirectly, by Respondents’ accused IQOS
`
`products. The evidence is also expected to show that the accused products do not infringe the
`
`asserted claim 19 of the ’238 patent, and to clearly and convincingly establish that that claim is
`
`invalid. Additionally, the evidence is expected to show that the domestic industry requirement
`
`has been satisfied with respect to each of the asserted patents. Thus, ultimately, evidence is
`
`expected to show that there has been a violation of Section 337 by reason of infringement of
`
`claims 27-30 of the ’123 patent and claims 1-3 and 5 of the ’915 patent.
`
`
`
`Respectfully submitted,
`
`
`/s/ Sarah J. Sladic
`
`Margaret D. Macdonald, Director
`Anne Goalwin, Supervisory Attorney
`Sarah J. Sladic, Investigative Attorney
`Office of Unfair Import Investigations
`U.S. International Trade Commission
`500 E Street SW, Suite 401
`Washington, DC 20436
`(202) 205-2202
`(202) 205-2158 (facsimile)
`
`
`January 4, 2021
`
`
`
`
`251
`
`Ex. 2009-0010
`
`