PUBLIC VERSION
`
`UNITED STATES INTERNATIONAL TRADE COMMISSION
`Washington, D.C.
`
`In the Matter of
`CERTAIN TOBACCO HEATING
`ARTICLES AND COMPONENTS
`THEREOF
`
`Investigation No. 337-TA-1199
`
`COMMISSION OPINION
`
`TABLE OF CONTENTS
`
`I.
`
`BACKGROUND ..................................................................................................... 1
`Procedural History .............................................................................................. 1
`The Parties ........................................................................................................... 8
`Complainants ................................................................................................... 8
`Respondents ..................................................................................................... 8
`The Asserted Patents ........................................................................................... 8
`The ’915 Patent ................................................................................................ 8
`The ’123 Patent ................................................................................................ 9
`The ’238 Patent .............................................................................................. 11
`The Accused Products ....................................................................................... 12
`D.
`The Domestic Industry Products ..................................................................... 12
`E.
`COMMISSION REVIEW OF THE FINAL ID ................................................. 13
`II.
`III. ANALYSIS ............................................................................................................ 13
`A.
`Issues Under Review for the ’915 Patent ........................................................ 14
`The ALJ’s Claim Construction of “Electrical Energy Source” and
`Additional Findings in the FID..................................................................... 14
`a. Order No. 28.................................................................................................. 15
`b. The FID ......................................................................................................... 16
`Analysis and Modified Construction of “Electrical Energy Source” ....... 17
`Indefiniteness ................................................................................................ 18
`a.
`b. Modified Construction of “Electrical Energy Source” ............................. 21
`c. Effect of the Modified Claim Construction ................................................ 27
`Issues Under Review for the ’123 Patent ........................................................ 29
`Non-Obviousness of Claims 27-30 ................................................................ 30
`a. The FID.......................................................................................................... 31
`b. Analysis ......................................................................................................... 33
`Economic Prong of the Domestic Industry Requirement .......................... 37
`Issues Under Review for the ’238 Patent ........................................................ 38
`C.
`IV. REMEDY, THE PUBLIC INTEREST, AND BONDING ................................ 40
`A.
`Remedy ............................................................................................................... 40
`Limited Exclusion Order .............................................................................. 40
`
`A.
`B.
`
`C.
`
`B.
`
`Ex. 2016-0001
`
`

`

`PUBLIC VERSION
`
`
`
`B.
`
`a. No Carve-Out for HeatSticks ...................................................................... 41
`b. No Warranty and Repair Exemption is Needed ........................................ 43
`c. A Certification Provision Should Be Included ........................................... 45
`d. No Reporting Requirement ......................................................................... 46
`Cease and Desist Orders ............................................................................... 49
`a. Philip Morris USA ........................................................................................ 50
`b. ACS ................................................................................................................ 52
`c. PMP ............................................................................................................... 52
`Public Interest .................................................................................................... 53
`Public Health and Welfare............................................................................ 56
`a. The RD’s Findings ........................................................................................ 56
`b. Analysis ......................................................................................................... 59
`Production in the United States of Like or Directly
`Competitive Products .................................................................................... 65
`a. The RD’s Findings ........................................................................................ 65
`b. Analysis ......................................................................................................... 66
`Competitive Conditions in the United States Economy ............................. 68
`a. The RD’s Findings ........................................................................................ 68
`b. Analysis ......................................................................................................... 68
`United States Consumers .............................................................................. 70
`a. The RD’s Findings ........................................................................................ 70
`b. Analysis ......................................................................................................... 70
`No Reason to Delay the Effective Date of the LEO .................................... 75
`
`An Additional Hearing on Public Interest is Not Necessary ..................... 75
`
`C. Bonding .............................................................................................................. 76
`The RD ............................................................................................................ 77
`
`No Bond During the Period of Presidential Review ................................... 78
`
`V. CONCLUSION ..................................................................................................... 80
`
`
`
`
`
`
`
`
`
`ii
`
`
`Ex. 2016-0002
`
`

`

`PUBLIC VERSION
`
`On July 27, 2021, the Commission determined to review in part the final initial
`
`determination (“FID”) issued by the presiding administrative law judge (“ALJ”) on May 14,
`
`2021. 86 Fed. Reg. 41509-11 (Aug. 2, 2021). On review, the Commission has determined that
`
`there has been a violation of section 337 of the Tariff Act of 1930, as amended, 19 U.S.C.
`
`§ 1337, with respect to claims 27-30 of U.S. Patent No. 9,901,123 (“the ’123 patent”) and claims
`
`1-3 and 5 of U.S. Patent No. 9,930,915 (“the ’915 patent”). This opinion sets forth the
`
`Commission’s reasoning in support of that determination.
`
`I.
`
`BACKGROUND
`
`A.
`
`Procedural History
`
`On May 15, 2020, the Commission instituted this investigation based on a complaint filed
`
`by RAI Strategic Holdings, Inc., R.J. Reynolds Vapor Company, and R.J. Reynolds Tobacco
`
`Company, all of Winston-Salem, North Carolina (collectively, “Reynolds” or “Complainants”).
`
`85 Fed. Reg. 29482-83 (May 15, 2020). The complaint, as supplemented, alleges a violation of
`
`section 337 based upon the importation of certain tobacco heating articles and components
`
`thereof by reason of infringement of certain claims of the ’238 patent, the ’915 patent, and
`
`the ’123 patent (collectively, “the Asserted Patents”). Id. The complaint also alleges the
`
`existence of a domestic industry. The notice of investigation names the following respondents:
`
`Altria Client Services LLC (“ACS”), Altria Group, Inc. (“AGI”), and Philip Morris USA, Inc.
`
`(“Philip Morris USA”), all of Richmond, Virginia; Philip Morris International Inc. (“PMI”) of
`
`New York, New York; and Philip Morris Products S.A. (“PMP”) of Neuchatel, Switzerland
`
`(collectively, “Philip Morris” or “Respondents”). See id. The Office of Unfair Import
`
`Investigations (“OUII”) is also a party to the investigation. See id.
`
`The notice of investigation instructed the presiding ALJ to make findings regarding the
`
`public interest. 85 Fed. Reg. at 29482-83.
`
`1
`
`Ex. 2016-0003
`
`

`

`PUBLIC VERSION
`
`Reynolds subsequently amended the complaint and notice of investigation to add
`
`allegations of infringement of claim 3 of the ’915 patent. Order No. 9 (July 29, 2020),
`
`unreviewed by Notice (Aug. 18, 2020); see also 85 Fed. Reg. 52152 (Aug. 4, 2020).
`
`The Commission later terminated respondents AGI and PMI from the investigation based
`
`on Complainants’ partial withdrawal of the complaint. See Order No. 24 (Dec. 14, 2020),
`
`unreviewed by Notice (Jan. 5, 2021).
`
`The ALJ held a claim construction hearing on September 17, 2020. FID at 3. On
`
`January 6, 2021, the ALJ issued a Markman order (Order No. 28) construing certain disputed
`
`terms. Order No. 28 (Jan. 6, 2021).
`
`On January 19, 2021, the ALJ granted in part Reynolds’s motion for summary
`
`determination that it has satisfied the economic prong of the domestic industry requirement
`
`under section 337(a)(3)(A) and (B) with respect to the ’238 and ’915 patents. Order No. 35 at 5-6
`
`(Jan. 19, 2021), affirmed in part by Notice (Feb. 18, 2021). On review, the Commission
`
`affirmed the grant of summary determination with respect to section 337(a)(3)(A) and provided
`
`supplemental analysis. Notice (Feb. 18, 2021). The Commission reviewed but took no position
`
`as to the finding that the economic prong was satisfied under section 337(a)(3)(B). Id.
`
`Prior to the evidentiary hearing, Reynolds and Philip Morris entered into two stipulations
`
`regarding undisputed facts. JX-0011C (Stipulation Among the Private Parties to Narrow the
`
`Issues for the Evidentiary Hearing) (“Stip.”); JX-0121C (Joint Stipulation Regarding Economic
`
`Domestic Industry) (“DI Stip.”).
`
`The ALJ held a prehearing conference on January 22, 2021. Hrg. Tr. 1-1603. The ALJ
`
`held an evidentiary hearing from January 25 to February 1, 2021. Id.
`
`2
`
`Ex. 2016-0004
`
`

`

`PUBLIC VERSION
`
`On May 14, 2021, the presiding ALJ issued the FID, finding that a violation of
`
`section 337 has occurred in the importation into the United States, the sale for importation, or the
`
`sale within the United States after importation, of certain tobacco heating articles and
`
`components thereof based on infringement of claims 27-30 of the ’123 patent and claims 1-3 and
`
`5 the ’915 patent. FID at 99-100. The relevant findings are summarized as follows:
`
`• The importation requirement is satisfied. Id. at 15.
`
`• The Commission has subject matter, personal, and in rem jurisdiction in this
`investigation. Id. at 14-16; Stip. ¶¶ 132-134.
`
`• Reynolds has standing in this investigation due to its ownership by assignment of
`the Asserted Patents. Id. at 16.
`
`• Philip Morris’s accused products infringe claims 27-30 of the ’123 patent. Id. at
`25-36. Claims 27-30 have not been shown to be invalid. Id. at 37-41.
`
`• Philip Morris’s accused products infringe claims 1-3 and 5 of the ’915 patent. Id.
`at 41-54. Claims 1-3 and 5 have not been shown to be invalid. Id. at 57-64.
`
`• Philip Morris’s accused products do not infringe claim 19 of the ’238 patent. Id.
`at 64-79. Claim 19 is invalid as anticipated under 35 U.S.C. § 1021 by two prior
`art references. Id. at 84-92.
`
`• The technical prong of the domestic industry requirement has been satisfied with
`respect to the ’123, ’915, and ’238 patents. Id. at 36-37, 55-57, 79-84.
`
`• The economic prong of the domestic industry requirement has been satisfied with
`respect to the ’123, ’915, and ’238 patents. Id. at 92-99.
`
`The FID includes the ALJ’s recommended determination (“RD”) on remedy, the public
`
`interest, and bonding should the Commission find a violation of section 337. Id. at 123-131.
`
`Specifically, the RD recommends the issuance of a limited exclusion order (“LEO”) barring
`
`entry of products that infringe asserted claims of the Asserted Patents. FID at 124-126. The RD
`
`
`1 The issue of whether the ’238 patent has been shown to be invalid is considered under
`35 U.S.C. § 102, as amended by the America Invents Act (“AIA”) 35 U.S.C. § 102. However,
`the ’915 and ’123 patents predate enactment of the AIA on March 16, 2013, and thus must be
`considered under the pre-AIA statutes.
`
`3
`
`Ex. 2016-0005
`
`

`

`PUBLIC VERSION
`
`does not recommend the issuance of cease and desist orders (“CDOs”) based on Reynolds’
`
`“scant briefing” concerning that issue. Id. at 126-128. The RD recommends that a bond of zero
`
`percent be set for any importations of infringing products during the period of Presidential
`
`review. Id. The RD concludes that the public interest evidence does not weigh against issuance
`
`of a remedy. Id. at 100-123.
`
`On May 28, 2021, Complainants filed a petition for review of the FID’s non-infringement
`
`and invalidity findings for the ’238 patent.2 That same day, Respondents filed a petition and
`
`contingent petition for review.3 Specifically, Respondents sought review of the FID’s
`
`construction of the limitation “electrical energy source” recited in claims 1 and 3 of the
`
`’915 patent, as well as the FID’s findings concerning infringement and invalidity with respect to
`
`the ’915 and ’123 patents, and the FID’s DI findings for the ’123 patent. Respondents also
`
`sought contingent review of the constructions of the limitations “pressure channel” and “air inlet
`
`channel” recited in claim 19 of the ’238 patent, and the FID’s infringement findings based on the
`
`allegedly incorrect claim constructions of these terms. Also that same day, OUII filed a petition
`
`for limited review of the constructions of the limitations “pressure channel” and “air inlet
`
`channel” recited in claim 19 of the ’238 patent, and the FID’s infringement findings with respect
`
`to the limitation “spatially separated” also recited in claim 19.4
`
`
`2 Complainants’ Petition for Commission Review (May 28, 2021) (“CPet.”).
`3 Respondents’ Petition and Contingent Review of the Final Initial Determination (May
`28, 2021) (“RPet.”).
`4 Petition of the Office of the Office of Unfair Import Investigations for Limited Review-
`in-Part of the Initial Determination on Violation of Section 337 (May 28, 2021) (“OUII Pet.”).
`
`4
`
`Ex. 2016-0006
`
`

`

`PUBLIC VERSION
`
`On June 3, 2021, the ALJ issued a Notice of Errata, which corrected an inadvertent error
`
`on page 116 of the FID.5 Notice of Errata to Initial Determination on Violation of Section 337
`
`and Recommended Determination on Remedy and Bond (June 3, 2021).
`
`On June 8, 2021, the parties filed their respective responses to the petitions for review.6
`
`Also on June 8, 2021, Respondents filed a motion to strike-in-part Complainants’ petition
`
`for review to the extent the petition sought review of the RD.7 On June 21, 2021, Complainants
`
`filed a response opposing the motion to strike-in-part.8 OUII did not file a response.
`
`On June 15, 2021, both Complainants and Respondents filed submissions on the public
`
`interest pursuant to Commission Rule 210.50(a)(4) (19 C.F.R. § 210.50(a)(4)).9 OUII did not
`
`file a statement on the public interest.
`
`The Commission also received seven filings in response to its Federal Register notice
`
`calling for public interest comments.10 See 86 Fed. Reg. 28382 (May 16, 2021).
`
`
`5 Specifically, the notice of errata states the following: “The corrected text, with the
`correction identified by emphasized typeface, is: “Congressman George Holding represented,
`until January 2021, a tobacco-producing district in North Carolina.” Notice of Errata (emphasis
`in original).
`6 Complainants’ Response to Respondents’ and Commission Investigative Staff’s Petition
`and Respondents’ Contingent Petition for Commission Review (June 8, 2021) (“CPet. Reply”);
`Respondents’ Response to Complainants’ Petition for Review (June 8, 2021) (“RPet. Reply”);
`Combined Response of the Office of Unfair Import Investigations to the Private Parties’
`Petitions for Review of the Initial Determination on Violation (June 8, 2021) (“OUII Reply”).
`7 Respondents’ Motion to Strike-in-Part Complainants’ Petition for Review (June 8,
`2021) (“RMtS”).
`8 Complainants’ Response in Opposition to Respondents’ Motion to Strike-in-Part
`Complainants’ Petition for Review (June 21, 2021) (“CReply to RMtS”).
`9 Complainants’ Statement on Public Interest Pursuant to 19 C.F.R. § 210.50(a)(4)(i)
`(June 15, 2021); Respondents’ Submission on the Public Interest (June 15, 2021).
`10 The seven filings support the availability of IQOS and include submissions from:
`American Vaping Association; Iraq and Afghanistan Veterans of America; AOI Universal
`Hospital in Japan; George Holding, former North Carolina Representative; Progressive Policy
`Institute; Rose Research Center; and Taxpayers Protection Alliance.
`
`5
`
`Ex. 2016-0007
`
`

`

`PUBLIC VERSION
`
`On July 27, 2021, the Commission determined to review the FID in part. 86 Fed. Reg.
`
`41509-11 (Aug. 2, 2021) (“WTR Notice”). Specifically, the Commission determined to review:
`
`(1) for the ’915 patent, the ALJ’s construction of the limitation “electrical energy source” recited
`
`in asserted claims 1 and 3 and the FID’s infringement, technical prong, and invalidity findings to
`
`the extent they may be affected by a modified claim construction; (2) for the ’123 patent, the
`
`FID’s obviousness and domestic industry findings; and (3) for the ’238 patent, the FID’s
`
`infringement finding. Id. The Commission also asked the parties to address a question related to
`
`the issues under review with respect to the ’915 patent. Id. The Commission further requested
`
`briefing on remedy, bonding, and the public interest. Id.
`
`On August 5, 6, 9, and 10, 2021, twenty-nine members of the public submitted public
`
`interest submissions in support of continued availability of the accused Philip Morris IQOS
`
`electric tobacco heating device systems.11 The Commission also received the following public
`
`interest submissions in support of availability of the accused IQOS devices: on August 9, 2021,
`
`from the Hispanic Leadership Fund and the National Minority Quality Forum; on August 10,
`
`2021, from Nextera Healthcare; and on August 11, 2021, from Tom Miller, the Attorney General
`
`of Iowa.
`
`
`11 The August 5, 2021 filings include submissions from: John Hartzell, Edlin Montinola.
`Vlada Pinchuk. The August 6, 2021 filings include submissions from: Reinaldo Pabon, Jr.,
`Ahmed Abuayyash, Jad Najjar, Alexander Khetagur, Omar Almutairi, Khaled Jarrar, Matt
`Jenkins, and Loc Pham. The August 9, 2021 submissions included filings from: Mike Roberts,
`Waqar Rajput, Yoko Gur, Muhammad Aljuneibi, Mike Guidotti, Alfarooq Aljanabi, Janet E.
`Causey, Mike Bowen, Rory Friendly, Majid Barabba, Ahmed Aloneiz, and Rob Mangum. The
`August 10, 2021 filings include submissions from: Kiro Megaly, Jenna Holtzman, Justin
`Klieber, Ahmed Nabil Badawi, Lydia M. Austin, and Sara Hadley.
`
`6
`
`Ex. 2016-0008
`
`

`

`PUBLIC VERSION
`
`On August 10, 2021, Reynolds filed its initial written response to the Commission’s
`
`request for briefing.12 Philip Morris filed its initial written response that same day.13 OUII also
`
`filed its initial written response that day.14
`
`On August 17, 2021, Reynolds filed its reply submission.15 That same day, Philip Morris
`
`filed its reply submission.16 On August 20, 2021,17 OUII filed its reply submission.18
`
`On September 13, 2021, Philip Morris filed a motion asking the Commission to take
`
`judicial notice of two FDA press releases and a decision from the Southern District of New
`
`York.19 On September 15, 2021, Reynolds filed an opposition to the motion.20
`
`
`12 Complainants’ Initial Submission in Response to Commission Determination to
`Review in Part a Final Initial Determination Finding a Violation of Section 337 and the Request
`for Written Submissions on the Issues Under Review and on the Public Interest, Remedy, and
`Bonding (Aug. 10, 2021) (“ReynoldsIR”).
`13 Respondents’ Opening Brief in Response to Commission’s Notice of Review (Aug. 10,
`2021) (“PMIR”).
`14 Response of the Office of Unfair Import Investigations to the Commission’s Request
`for Written Submissions Regarding the Issues Under Review and Remedy, Bonding, and the
`Public Interest (Aug. 10, 2021) (“OUIIIR”).
`15 Respondents’ Reply Submission to Commission’s Notice (Aug. 17, 2021) (“Reynolds
`Reply”).
`16 Complainants’ Responsive Submission in Response to Commission Determination to
`Review in Part a Final Initial Determination Finding a Violation of Section 337 and the Request
`for Written Submissions on the Issues Under Review and on the Public Interest, Remedy, and
`Bonding (Aug. 17, 2021) (“PM Reply”).
`17 The Commission granted an extension of the deadline for OUII’s reply submission to
`August 20, 2021. See Aug. 10, 2021 Letter from Int’l Trade Comm’n to Office of Unfair Import
`Investigations.
`18 Reply Submission of the Office of Unfair Import Investigations to the Private Parties’
`Written Submissions Regarding the Issues Under Review and Remedy, Bonding, and the Public
`Interest (Aug. 20, 2021) (“OUII Reply”).
`19 Respondents’ Motion to Take Judicial Notice of Recent Regulatory Determinations
`and District Court Opinion (Sept. 13, 2021) (“Motion to Take Judicial Notice”).
`20 Complainants’ Opposition to Respondents’ Motion to Take Judicial Notice of Recent
`Regulatory Determinations and District Court Opinion (Sept. 15, 2021).
`
`7
`
`Ex. 2016-0009
`
`

`

`PUBLIC VERSION
`
`B.
`
`The Parties
`
`
`
`Complainants
`
`RAI Strategic Holdings, Inc. is the assignee and sole owner of the patents asserted in this
`
`investigation. FID at 5. R.J. Reynolds Vapor Company is an exclusive licensee of the patents
`
`asserted in this investigation and is responsible for developing, distributing, and selling the
`
`domestic industry articles. Id. R.J. Reynolds Tobacco Company provides research and technical
`
`support for the products on which Reynolds relies to show satisfaction of the statutory domestic
`
`industry requirement. Id.
`
`
`
`Respondents
`
`Philip Morris USA imports and sells after importation certain accused IQOS systems and
`
`disposable tobacco sticks into the United States. Id. at 5-6. PMP has imported into the United
`
`States and sold for importation into the United States certain accused IQOS system products and
`
`disposable tobacco sticks. Id. PMP is a premarket tobacco applicant with the U.S. Food and
`
`Drug Administration (“FDA”) for the accused IQOS systems and disposable tobacco sticks, and
`
`PMP consulted with ACS and Philip Morris USA to obtain FDA authorization in the United
`
`States. Id.
`
`C.
`
`The Asserted Patents
`
`Reynolds asserts claims under three patents in this investigation: the ’915 patent, the
`
`’123 patent, and the ’238 patent. Id. at 6-13.
`
`
`
`The ’915 Patent
`
`The ’915 patent, titled “Smoking Articles and Use Thereof for Yielding Inhalation
`
`Materials,” issued on April 3, 2018. Id. at 10; JX-0003 (the ’915 patent). The ’915 patent claims
`
`priority to application no. 13/205,841, which was filed on August 9, 2011, and issued as U.S.
`
`Patent No. 9,078,473. Id. The ’915 patent expires on November 9, 2031. Id. The ’915 patent
`
`8
`
`Ex. 2016-0010
`
`

`

`PUBLIC VERSION
`
`relates to smoking articles that heat tobacco or other material, preferably without significant
`
`combustion or burning, to provide an inhalable substance in vapor or aerosol form. ’915 patent
`
`at Abstract, 3:15-17.
`
`Reynolds asserts claims 1-3 and 5 of the ’915 patent against Philip Morris. Id. To satisfy
`
`the technical prong of the DI requirement, Reynolds relies on claims 1 and 3 of the ’915 patent.
`
`FID at 10. The claims that are relevant to the Commission’s review of the FID read as follows
`
`(with emphasis on the disputed limitation):
`
`1. A reusable control unit for use with a disposable smoking article, the reusable control
`unit comprising a control housing including:
`a receiving end for receiving an engaging end of the disposable smoking article
`and having an electrical energy source that includes a projection extending
`outwardly therefrom and that includes a component that forms an electrical
`connection with electrical contacts on a separate electrical heating member; and
`a control unit section that houses a power source, a switching component that
`actuates flow of electrical current from the electrical energy source to the
`electrical heating member, and a flow regulating component that regulates a
`previously initiated current flow from the electrical energy source to the
`electrical heating member, wherein the component that forms an electrical
`connection with the electrical contacts is located on the projection.
`2. The reusable control unit of claim 1, wherein the power source includes a battery.
`3. The reusable control unit of claim 1, wherein the electrical energy source includes a
`capacitor.
`5. The reusable control unit of claim 1, wherein the switching component comprises a
`pushbutton.
`’915 patent at claims 1-3 and 5 (emphasis added).
`
`
`
`The ’123 Patent
`
`The ’123 patent, titled “Tobacco-Containing Article,” issued on February 27, 2018. FID
`
`at 6; JX-0002 (the ’123 patent). The ’123 patent claims priority to application no. 11/550,634,
`
`which was filed on October 18, 2006, and issued as U.S. Patent No. 7,726,320. Id. The
`
`’123 patent expires on October 18, 2026. Id. The ’123 patent relates to smoking articles that
`
`9
`
`Ex. 2016-0011
`
`

`

`PUBLIC VERSION
`
`heat tobacco instead of burning it and also describes using e-liquid as an aerosol-forming
`
`material. ’123 patent at Abstract, 4:47-52, 13:18-21.
`
`Reynolds asserts that Philip Morris infringes claims 27-30 of the ’123 patent. FID at 7.21
`
`The claims that are relevant to Commission review read as follows (disputed terms highlighted in
`
`bold):
`
`27. An electrically-powered, aerosol-generating smoking article comprising:
`an electrical power source in the form of a battery within a tubular outer
`housing having a mouth-end and an end distal to the mouth-end;
`
`at least one electrical resistance heater powered by said electrical power
`source, wherein at least a portion of the resistance heating element is
`elongated and extending downstream toward the mouth-end of the
`outer housing, the elongated portion of the resistance heating element
`positioned proximal to the center of the outer housing;
`
`a controller within the tubular outer housing and adapted for
`regulating current flow through the electrical resistance heater; and
`
`a cigarette-type device removably engaged with the mouth-end of the tubular
`outer housing and comprising a tobacco segment circumscribed by a wrapping
`material and comprising a tobacco material and an aerosol-forming material,
`wherein the elongated portion of the resistance heating element extends into the
`tobacco segment when the cigarette-type device is engaged with the mouth-end of
`the outer housing, such that during draw, aerosol-forming material can be
`volatilized to produce a visible mainstream aerosol incorporating tobacco
`components or tobacco-derived components that can be drawn into the mouth of
`the user of the smoking article.
`28. The smoking article of claim 27, wherein the cigarette-type device further comprises
`a filter element downstream from the tobacco segment.
`29. The smoking article of claim 27, further comprising an actuation mechanism in the
`form of a switching mechanism that can be manually operated by the user in order
`to heat the cigarette-type device.
`
`
`21 To satisfy the technical prong of the domestic industry requirement, Reynolds relies on
`claims 1, 4, 6, 11, 13-15, 17, 19, and 23-26 of the ’123 patent. Id. The Commission did not
`review the FID’s finding that Reynolds has satisfied the technical prong of the DI requirement,
`therefore, these additional limitations are not listed herein.
`
`10
`
`Ex. 2016-0012
`
`

`

`PUBLIC VERSION
`
`30. The smoking article of claim 27, wherein the electrical resistance heating element
`provides surface region temperatures of at least 200° C. and less than 600° C.
`such that the tobacco material does not burn during use.
`’123 patent at claims 27-30 (emphasis added).
`
`
`
`The ’238 Patent
`
`The ’238 patent titled “Control Body for an Electronic Smoking Article,” issued on
`
`December 12, 2017. FID at 11; JX-0001 (the ’238 patent). The ’238 patent relates to aerosol
`
`delivery devices “that use electrical energy to heat a material . . . to form an inhalable
`
`substance.” ’238 patent at 4:33-37, 4:55-60. The disclosed device “may provide some or all of
`
`the sensations . . . of smoking a cigarette, cigar, or pipe, without any substantial degree of
`
`combustion or pyrolysis of any component,” and “[i]n highly preferred embodiments, aerosol
`
`delivery devices may incorporate tobacco and/or components derived from tobacco.” Id. at 4:38-
`
`45, 4:52-54. The ’238 patent expires on April 17, 2036. Id.
`
`Reynolds asserts that Philip Morris infringes independent claim 19 of the ’238 patent.
`
`FID at 11.22 Claim 19, which is the only claim relevant at this stage of the investigation, reads as
`
`follows (disputed limitations in bold):
`
`19. A control body for an electronic smoking article, the control body comprising:
`an elongated shell with an interior, a proximal end, and an opposing distal end;
`a coupler formed of an elongated body having a first end that forms a wall and
`that engages the proximal end of the shell and a second end that comprises a
`cavity configured to releasably engage a cartridge, wherein the coupler includes
`a pressure channel extending between a first end that is in fluid
`communication with the cavity and a second end that opens through the wall
`at the first end of the coupler, wherein the coupler includes an air inlet channel
`in fluid communication with the cavity and an air inlet aperture in an exterior
`surface of the coupler, and wherein the coupler has a longitudinal axis extending
`from the first end to the second end, and the first end of the pressure channel is
`
`22 To satisfy the technical prong of the domestic industry requirement, Reynolds relies on
`claims 1, 3, 5, 6, 8-11, 19, and 20 of the ’238 patent. Id. The Commission did not review the
`FID’s finding that Reynolds has satisfied the technical prong of the DI requirement, therefore,
`the additional limitations are not listed herein.
`
`11
`
`Ex. 2016-0013
`
`

`

`PUBLIC VERSION
`
`spatially separated from the air inlet channel relative to the longitudinal axis of
`the coupler; and
`a microprocessor.
`’238 patent at claim 19 (emphasis added).
`
`D.
`
`The Accused Products
`
`Reynolds accuses the Philip Morris IQOS 2.4, IQOS 3, and IQOS 3.1 Duo systems and
`
`HeatSticks (collectively, “Accused Products” or “IQOS”) of infringing the asserted claims of the
`
`’123, ’915, and ’238 patents. FID at 14. The Accused Products are identified in the Notice of
`
`Investigation as “electric tobacco heating device systems and the associated tobacco sticks sold
`
`for use with the device systems.” 85 Fed. Reg. at 29483.
`
`The Accused Products include three components: a holder, a charger, and a disposable
`
`tobacco stick or HeatStick. CX-0572C.3. The holder holds and heats, but does not burn, the
`
`HeatStick in order to generate a visible nicotine-containing aerosol that is inhaled. JX-
`
`0090C.40:12-25; CX-0590C.3-4. A HeatStick is used exclusively with the Accused Products.
`
`JX-0011C ¶ 80. A user inserts a HeatStick into the holder and presses the button, which turns on
`
`the heater and starts a six-minute timer. JX-0090C.73:23-74:2; CX-0572C.5. Once pre-heating
`
`is complete, the user draws on the tobacco stick to inhale the aerosol. JX-0090C.44:15-46:13;
`
`CX-0572C.5. A session ends when the timer reaches the end of the six minutes or the user takes
`
`14 puffs on the HeatStick, whichever occurs first. JX-0090C.74:3-7; CX-0572C.5. Once a
`
`session has ended, the user must recharge the IQOS 2.4 and IQOS 3 holders, but the IQOS 3.1
`
`Duo can complete two sessions before recharging. JX-0090C