Case 1:20-cv-00393-LO-TCB Document 1316-1 Filed 06/11/22 Page 1 of 13 PageID# 33388
`Case 1:20-cv-00393-LO-TCB Document 1316-1 Filed 06/11/22 Page 1 of 13 PagelD# 33388
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`Case 1:20-cv-00393-LO-TCB Document 1316-1 Filed 06/11/22 Page 2 of 13 PageID# 33389
`1
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`UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF VIRGINIA
`
`Civil Action
`No. 1:20-cv-00393-LO-TCB
`June 9, 2022
`2:05 p.m.
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`)))))))))))))
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`ALTRIA CLIENT SERVICES,
`LLC,
`et al.,
`Plaintiffs,
`v.
`RAI STRATEGIC HOLDINGS, INC.,
`et al.,
`Defendants.
`
` DAY 2 - AFTERNOON SESSION
`TRANSCRIPT OF JURY TRIAL PROCEEDINGS
`BEFORE THE HONORABLE LEONIE M. BRINKEMA,
`UNITED STATES DISTRICT COURT JUDGE
`
`APPEARANCES:
`For the Plaintiffs:
`
`Maximilian Antony Grant, Esq.
`Latham & Watkins LLP (DC)
`555 11th Street, NW
`Suite 1000
`Washington, DC 20004-1304
`202-637-2200
`Email: Max.grant@lw.com
`Clement Joseph Naples, Esq.
`Latham & Watkins, LLP
`885 Third Avenue 25th Floor
`New York, NY 10022
`212-906-1200
`Email: Dement.naples@lw.com
`Gregory K. Sobolski, Esq.
`Latham & Watkins, LLP
`505 Montgomery Street
`Suite 2000
`San Francisco, CA 94111-6538
`202-637-2267
`Email: Max.grant@lw.com
`
`Scott L. Wallace, RDR, CRR
`Official Court Reporter
`
`
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`2
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`APPEARANCES: (Cont.)
`For the Plaintiffs:
`
`For the Defendants:
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`Thomas W. Yeh, Esq.
`Latham & Watkins LLP (CA)
`355 South Grand Avenue
`Suite 100
`Los Angeles, CA 90071-1560
`213-891-8050
`Email: Thomas.yeh@lw.com
`Matthew John Moore, Esq.
`Latham & Watkins LLP (DC)
`555 11th Street, NW
`Suite 1000
`Washington, DC 20004-1304
`202-637-2200
`Email: Matthew.moore@lw.com
`Dale Chang, Esq.
`Latham & Watkins LLP (CA)
`355 South Grand Avenue
`Suite 100
`Los Angeles, CA 90071-1560
`213-891-8050
`Email: Dale.chang@lw.com
`Elizabeth Stotland Weiswasser, Esq.
`Weil Gotshal & Manges, LLP (NY-NA)
`767 5th Avenue
`New York, NY 10153
`212-310-8000
`Email: Elizabeth.weiswasser@weil.com
`Charles Bennett Molster, III, Esq.
`The Law Offices of Charles B.
`Molster III, PLLC
`2141 Wisconsin Avenue NW, Suite M
`Washington, DC 20007
`703-346-1505
`Email: Cmolster@molsterlaw.com
`Stephanie Ethel Parker, Esq.
`Jones Day (GA)
`1420 Peachtree Street, NE
`Suite 800
`Atlanta, GA 30309
`404-521-3939
`Email: Sparker@jonesday.com
`
`Scott L. Wallace, RDR, CRR, Official Court Reporter
`
`
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`3
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`APPEARANCES: (Cont.)
`For the Defendants:
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`Michael Shamus Quinlan, Esq.
`Jones Day (OH-NA)
`901 Lakeside Avenue
`Cleveland, OH 44114-1190
`216-586-3939
`Fax: 216-579-0212
`Email: Msquinlan@jonesday.com
`Jason Todd Burnette, Esq.
`Jones Day (GA)
`1420 Peachtree Street, NE
`Suite 800
`Atlanta, GA 30309
`404-521-3939
`Email: Jburnette@jonesday.com
`David Michael Maiorana, Esq.
`Jones Day (OH)
`901 Lakeside Ave
`Cleveland, OH 44114
`216-586-3939
`Fax: 216-579-0212
`Email: Dmaiorana@jonesday.com
`
`Court Reporter:
`
`Scott L. Wallace, RDR, RMR, CRR
`Official Court Reporter
`United States District Court
`401 Courthouse Square
`Alexandria, VA 2231-5798
`202-277-3739
`scottwallace.edva@gmail.com
`Proceedings reported by machine shorthand, transcript produced
`by computer-aided transcription.
`
`Scott L. Wallace, RDR, CRR, Official Court Reporter
`
`
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`Case 1:20-cv-00393-LO-TCB Document 1316-1 Filed 06/11/22 Page 5 of 13 PageID# 33392
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`4
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`C O N T E N T S
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`EXAMINATIONS
`CONTINUED DIRECT EXAMINATION OF PAUL MEYER
`BY MR. SANDFORD
`CROSS-EXAMINATION OF PAUL MEYER
`BY MR. McCRUM
`REDIRECT EXAMINATION OF PAUL MEYER
`BY MR. SANDFORD
`DIRECT EXAMINATION OF JAMES FIGLAR
`BY MS. PARKER
`CROSS-EXAMINATION OF JAMES FIGLAR
`BY MR. NAPLES
`REDIRECT EXAMINATION OF JAMES FIGLAR
`BY MS. PARKER
`RECROSS-EXAMINATION OF JAMES FIGLAR
`BY MR. NAPLES
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`EXHIBITS
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`DESCRIPTION
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`MR. GRANT: All right. May I proceed, Your Honor?
`THE COURT: Yes, sir.
`MR. GRANT: We'll take them in the order they were
`discussed. This legal standard that was referenced, the wanton
`malicious, acting like a pirate is not the law. It's not the
`appropriate legal standard. It's a totality of circumstances
`based on intentional infringement as set forth in the agreed jury
`instruction, which actually sets forth the correct legal
`standard.
`There is sufficient direct and circumstantial evidence for
`the jury to find that Philip Morris has met its burden to show
`that Reynolds willfully infringed the '911 and '265 patents by a
`preponderance of the evidence based on the totality.
`Reynolds admits it had knowledge of the published patents
`or their applications -- and their applications before selling
`the Alto and G2 products in the United States. They admitted
`that presuit knowledge, and that's set forth in PX 613. Reynolds
`admitted it knew of the '911 application before the national
`release of the G2 and Alto, and that's in the same exhibit. And
`it admitted it knew of the '265 in the published applications
`before the national release of the Alto, as well.
`Reynolds's 30(b)(6) witness, Dr. Figlar, testified that
`Reynolds keeps track of Philip Morris's patents and patent
`applications on a monthly basis, is very active in keeping a
`close eye on the patent literature of its competitors, including
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`Philip Morris.
`As the corporate representative and designee on
`willfulness, he admitted that Reynolds had presuit knowledge. He
`explained that their patent review process includes getting ideas
`on where the technology is going and keeping up to date on
`competitor patents.
`Nonetheless, Reynolds kept selling the Alto and G2, and
`Reynolds has also stipulated that it -- its stipulation is that
`it won't present any evidence or arguments of design-around, but
`I think the inference from the evidence that the jury can reach
`that an army of lawyers in this courtroom isn't presenting in
`evidence is pretty good evidence that they don't have any
`design-arounds or non-infringing alternatives; thus, at a
`minimum, a reasonable jury could find that Reynolds was willfully
`blind to these two patents.
`With regards to the '265 Patent, Philip Morris has
`presented ample testimony on documentary evidence for a jury to
`find that Philip Morris has met its burden to show that the
`Reynolds Vuse Alto device infringes Claims 1 and 4 of the '265
`Patent by a preponderance of the evidence.
`Mr. Walbrink, an expert in mechanical and thermal
`engineering, demonstrated that the Alto meets every element of
`the asserted claims. He actually conducted teardown analysis and
`also used admissions from Reynolds's PMTA submission
`demonstrating how the Alto has the claimed mouthpiece that's
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`128
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`the liquids itself and the density of the liquid can also help
`keep things in place and minimize leakage.
`It's my experience that all these products at some point
`in time leak, and it's -- I think it's -- I mean, I just think
`they're always going to leak at some point in time. It's got
`two holes in it, and there's a liquid inside.
`Q.
`What about Vuse products? Did the Vuse products still
`leak?
`A.
`Yes.
`Q.
`Okay. Now, switching gears, you've again been here in
`the courtroom so you understand that Philip Morris is alleging
`in this lawsuit that Reynolds willfully infringed its patents.
`You know that, right?
`A.
`I'm aware, yes.
`Q.
`Okay. Does Reynolds have any corporate policies that are
`related to respecting patent rights of other companies?
`A.
`We do, yes.
`Q.
`And if you can tell the jury who developed the policies,
`what are they, and how they work?
`A.
`Yeah. So they -- the policies would have been derived
`through both the legal department as well as consultation with
`the leadership team.
`Q.
`Did you have any role in them?
`A.
`I did not in writing these specific policies because
`we've had these policies in place for many, many years, probably
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`well before I ever got close to being on a leadership team, but
`the basic essence of the policy is, you know, you respect
`intellectual property and then explains, you know, how you
`respect that. You don't, you know, infringe if you -- you don't
`do any of that stuff, and at the same time, it also speaks to
`what will happen with intellectual property developed by the
`people who work for the company and how it's the company's
`property, et cetera.
`Q.
`And if you could tell the jury, what are the efforts that
`Reynolds takes to ensure that the Reynolds products do not
`infringe other patents?
`A.
`Well, you have to -- you have to be cognizant of what is
`happening in the patent literature landscape, right. So patent
`applications are public domain things, right, so they get
`published and they're public knowledge. They're supposed to be.
`And so when an application is filed and that literature becomes
`available, everyone and anyone can read that and understand
`what's in those applications and in the granted patents, and so
`it's contingent upon a company to stay abreast of that
`information because, as an innovation developer, you know that
`there's more than one person working on ideas all around the
`world, right, and so in some instances it's like a race of, you
`know, who's developing technology first and who's going to file
`first, et cetera, things like that. So you have to keep abreast
`of what's happening in the patent landscape.
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`Case 1:20-cv-00393-LO-TCB Document 1316-1 Filed 06/11/22 Page 10 of 13 PageID# 33397
`130
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`Q.
`Would it be responsible for a company just to ignore the
`research and patents that are out there from competitors?
`A.
`In my opinion it would not be responsible because then
`you wouldn't know what has come -- what has happened before.
`Q.
`Does Reynolds monitor other companies' patents in order
`to copy and infringe them?
`A.
`No, not -- we monitor the whole tobacco landscape patent
`literature so that we know what's happening from a competitive
`landscape perspective and understand if we're developing things,
`are we -- you know, are we kind of being -- are we on top of
`somebody else's development or are we way ahead of somebody else
`in some other area. I mean those are the things you try to get
`an assessment of.
`Q.
`Did Reynolds copy any other e-cigarette product when
`developing the Vuse Solo?
`A.
`No.
`Q.
`Did Reynolds copy any other company's patents when
`developing the Vuse Solo?
`MR. NAPLES: Objection, Your Honor.
`THE COURT: Yes, I'm going to sustain that objection.
`BY MS. PARKER:
`Q.
`Now, you mentioned earlier that Reynolds had purchased
`the Vuse Alto from another company or companies. Can you tell
`us a little bit more about that? Can you tell the jury a little
`bit more about that?
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`Case 1:20-cv-00393-LO-TCB Document 1316-1 Filed 06/11/22 Page 11 of 13 PageID# 33398
`131
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`A.
`Sure, so we -- we've done surveys of the market
`landscape, and worked with our suppliers in China and other
`places and, of course, were introduced to this product, which I
`think was originally called TF16 -- or at least one version of
`it was -- and it had a market presence in the U.S., though
`small, at the time when we saw it with a supplier, and we found
`it highly interesting, and we thought, this is the -- this is
`where consumers are going, is they -- they're moving away from
`these cigalike products, like Vuse Solo, and moving more to
`these what we call pod mods in the marketplace, and so we wanted
`a decent pod mod, but if we were to develop it all by ourselves
`on our own, which we do have developments of doing that, but we
`know that that's a long road because you have to get through
`FDA, and that's going to be several years. This was already on
`the market.
`And so that's why we negotiated with our supplier to get
`a license to use that product because it's really quite good.
`Q.
`So in your role as head of R&D at Reynolds, at the time
`that these e-cigarettes were being developed, can you tell the
`jury whether Reynolds copied any other e-cigarettes as part of
`that process?
`A.
`I would say no.
`Q.
`Now, I want to switch gears one more time, and this is
`the last area I'm going to ask you about this afternoon, and
`that's about the FDA, and you told the jury a little bit about
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`Q.
`It's got to come off, right?
`A.
`It has to come off the market, that's correct.
`Q.
`Right. Dr. Figlar, you also testified about a patent
`policy, right, where Reynolds reviews competitor patents, but
`it's got this policy where it will say, well, we don't want to
`infringe patents. You testified about that, right?
`A.
`I said we did have -- we do have an intellectual property
`policy at Reynolds, and we do.
`Q.
`Right. The lawyers are involved in that, corrected?
`A.
`I mean, I think so, yeah. I didn't write the policy, but
`I presume that legal had some input, yeah.
`Q.
`Right. You just read the policy; is that right?
`A.
`I did not write the policy, that's correct. I've read
`the policy, yes.
`Q.
`Sure, sure, I understand. Now, Dr. Figlar, you didn't
`show the jury any opinions from Reynolds that it doesn't
`infringe the asserted patents in this case, did you, Dr. Figlar?
`MS. PARKER: Objection.
`THE COURT: That one I sustain.
`BY MR. NAPLES:
`Q.
`Okay.
`MR. NAPLES: No further questions, Your Honor.
`THE COURT: All right.
`REDIRECT EXAMINATION OF JAMES FIGLAR
`BY MS. PARKER:
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`go for the evening and we'll recess court till tomorrow evening.
`(Jury out at 5:58 p.m.)
`(Proceedings adjourned at 5:58 p.m.)
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` C E R T I F I C A T E
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` I, Scott L. Wallace, RDR-CRR, certify that
`the foregoing is a correct transcript from the record of
`proceedings in the above-entitled matter.
`
`^
` /s/ Scott L. Wallace
` ---------------------------- ----------------
` Scott L. Wallace, RDR, CRR
` Date
` Official Court Reporter
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