Case 1:20-cv-00393-LMB-TCB Document 1388 Filed 07/14/22 Page 1 of 11 PageID# 34660
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF VIRGINIA
`ALEXANDRIA DIVISION
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`
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`v.
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`RAI STRATEGIC HOLDINGS, INC. and
`R.J. REYNOLDS VAPOR COMPANY,
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`Plaintiffs and Counterclaim Defendants,
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`
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`ALTRIA CLIENT SERVICES LLC; PHILIP
`MORRIS USA INC.; and PHILIP MORRIS
`PRODUCTS S.A.,
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`Defendants and Counterclaim Plaintiffs.
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`
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`Case No. 1:20-cv-00393-LO-TCB
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`REYNOLDS’S MEMORANDUM IN RESPONSE TO, AND IN SUPPORT OF, PHILIP
`MORRIS’ MOTION TO SEAL PHILIP MORRIS’ BRIEF ON JURY INSTRUCTIONS AND
`THE VERDICT FORM PERTAINING TO THE PERMISSIBLE MEASURE OF DAMAGES
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`AND ACCOMPANYING EXHIBITS
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`

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`Case 1:20-cv-00393-LMB-TCB Document 1388 Filed 07/14/22 Page 2 of 11 PageID# 34661
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`Pursuant to Rule 5.2(d) of the Federal Rules of Civil Procedure and Rule 5(C) of the Local
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`Civil Rules, RAI Strategic Holdings, Inc. and R.J. Reynolds Vapor Company (collectively,
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`“Reynolds”) respectfully submit this memorandum in response to, and in support of, Philip Morris
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`Products S.A.’s (PMP’s) Motion to Seal Philip Morris’ Brief on Jury Instructions and the Verdict
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`Form Pertaining to the Permissible Measure of Damages (“Brief”) and accompanying exhibits
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`(Dkt. 1324). Pursuant to the Court’s guidance (see Trial Tr. at 1066:23-1067:20), Reynolds
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`informed Philip Morris that only portions of Exhibits 3 and 4 contain Reynolds’s confidential
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`business information and should be redacted on the public record. On July 11, PMP responded
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`that Reynolds should file a response to its motion to seal seeking to keep portions of Exhibits 3
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`and 4 sealed.
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`The proposed sealed material includes (1) design arounds and related costs for the ’265
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`and ’911 patents which were never presented to the jury and (2) damages information related to
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`patents that were never presented to the jury, including the apportioned lump-sum royalty amounts
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`derived from the Fontem-RJRV agreement, present values of the VUSE sales forecasted through
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`2025, and the royalty rates for the ’556, ’545, and ’374 patents. (See Dkt. 1291 (stipulation that
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`Reynolds will not present any argument, evidence, or testimony of alleged design arounds or non-
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`infringing alternatives); see Dkt. 1271 (order granting dismissal of the ’556 patent); Dkt. 1300
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`(order granting Altria Client Services LLC and Philip Morris USA Inc’s and Reynolds’s stipulation
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`of dismissal with prejudice of the ’545 and ’374 patents).)
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`Specifically, Reynolds supports filing under seal copies of Exhibits 3 and 4 to Dkt. 1317.
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`It is Reynolds’s position, however, that nothing in Philip Morris’ Brief or the other accompanying
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`exhibits needs to sealed. As Reynolds informed Philip Morris, the following limited portions of
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`Exhibits 3 and 4 to Dkt. 1317 should be redacted from the publicly filed copy:
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`Case 1:20-cv-00393-LMB-TCB Document 1388 Filed 07/14/22 Page 3 of 11 PageID# 34662
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`• Pages 7 to 13 of Exhibit 3 (interrogatory response describing design arounds and
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`costs to implement design arounds for the ’265 and ’911 patents not presented to
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`the jury); and
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`• Paragraphs 267-271, 366, 367, and 370 of Exhibit 4 (damages expert report
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`describing financial information including forecasts and royalty rates for patents
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`not presented to the jury).
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`This information was not discussed in open court, these documents were not admitted as
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`exhibits, and the information they disclose falls within the scope of the Stipulated Protective Order.
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`(Dkt. 103.) These confidential materials should remain under seal. If the Court agrees, Reynolds
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`respectfully requests that the Court grant Philip Morris’ motion to seal (Dkt. 1324) and order Philip
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`Morris to file an amended public redacted copy of its Brief (Dkt. 1317) with only the limited
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`redactions noted above to Exhibits 3 and 4.
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`I.
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`LEGAL STANDARD
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`The law of the regional circuit applies to non-substantive issues of patent law, including
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`the question whether to seal district court records. See Uniloc 2017 LLC v. Apple, Inc., 964 F.3d
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`1351, 1357 (Fed. Cir. 2020). A motion to seal implicates both substantive and procedural
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`requirements. Va. Dep’t of State Police v. Wash. Post, 386 F.3d 567, 576 (4th Cir. 2004).
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`Substantively, the Court must determine the nature of the information and the public’s right
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`to access. Stone v. Univ. of Md. Med. Sys. Corp., 855 F.2d 178, 180-81 (4th Cir. 1988). “The right
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`of public access to documents or materials filed in a district court derives from two independent
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`sources: the common law and the First Amendment.” Va. Dep’t of State Police, 386 F.3d at 575.
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`“While the common law presumption in favor of access attaches to all ‘judicial records and
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`documents,’ the First Amendment guarantee of access has been extended only to particular judicial
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`records and documents.” Stone, 855 F.2d at 180 (internal citation omitted). Moreover, the
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`common law right to inspect records and documents “is not absolute.” Nixon v. Warner
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`Communications, Inc., 435 U.S. 589, 598 (1978). Accordingly, some documents “fall within the
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`common law presumption of access, while others are subject to the greater right of access provided
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`by the First Amendment. Still others may not qualify as ‘judicial records’ at all.” U.S. v.
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`Moussaoui, 65 F. App’x 881, 889 (4th Cir. 2003) (internal citation omitted).1
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`Although “the Supreme Court has not addressed whether the First Amendment’s right of
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`access extends to civil trials or other aspects of civil cases . . . , the Fourth Circuit[ ] ha[s]
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`recognized that the First Amendment right of access extends to civil trials and some civil filings.”
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`Am. Civil Liberties Union v. Holder, 673 F.3d 245, 252 (4th Cir. 2011). Even so, public access to
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`civil trial records “is not absolute,” and restrictions can be justified by concerns that such records
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`“might . . . become a vehicle for improper purposes,” such as where the records serve “as sources
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`of business information that might harm a litigant’s competitive standing.” Nixon, 435 U.S. at
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`598.
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`As set forth in the Fourth Circuit’s decision in Ashcraft v. Conoco, Inc., a court has the
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`authority to seal court documents “if the public’s right of access is outweighed by competing
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`interests.” 218 F.3d 288, 302 (4th Cir. 2000). Before granting a motion to seal, a court must
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`consider the following: “(1) provide public notice of the request to seal and allow interested parties
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`a reasonable opportunity to object, (2) consider less drastic alternatives to sealing the documents,
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`and (3) provide specific reasons and factual findings supporting its decision to seal the documents
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`and for rejecting the alternatives.” Id.; Adams v. Object Innovation, Inc., No. 3:11CV00272-REP-
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`1 “Judicial records” are “documents filed with the court [that] play a role in the adjudicative
`process, or adjudicate substantive rights.” In re U.S. for an Order Pursuant to 18 U.S.C. Section
`2703(D), 707 F.3d 283, 290 (4th Cir. 2013).
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`DWD, 2011 WL 7042224, at *4 (E.D. Va. Dec. 5, 2011), report & recommendation adopted, 2012
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`WL 135428 (E.D. Va. Jan. 17, 2012).
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`Procedurally, Local Civil Rule 5(C) requires that, when a party moves to file material under
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`seal that another party has designated as confidential, “the party designating the material as
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`confidential must file a response to the motion complying with requirements (2), (3), and (4) above
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`along with a proposed order” that “shall recite the findings required by governing case law to
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`support the proposed sealing.” Loc. R. Civ. P. 5(C). These requirements are: “(2) A statement
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`why sealing is necessary, and why another procedure will not suffice, as well as appropriate
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`evidentiary support for the sealing request; (3) References to the governing case law, an analysis
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`of the appropriate standard to be applied for that specific filing, and a description of how that
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`standard has been satisfied; [and] (4) Unless permanent sealing is sought, a statement as to the
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`period of time the party seeks to have the matter maintained under seal and how the matter is to be
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`handled upon unsealing.” Id.
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`II.
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`DESCRIPTION OF MATERIALS SOUGHT TO BE SEALED
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`Philip Morris seeks leave to file under seal un-redacted versions of its Brief and
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`accompanying Exhibits 2-5, 7, and 9-10. (Dkt. 1324). Reynolds supports filing under seal copies
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`of Exhibits 3 and 4 to Dkt. 1317. It is Reynolds’s position, however, that nothing in Philip Morris’
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`Brief or the other accompanying exhibits needs to sealed. As Reynolds informed Philip Morris,
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`the following limited portions of Exhibits 3 and 4 to Dkt. 1317 should be redacted from the publicly
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`filed copy:
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`• Pages 7 to 13 of Exhibit 3 (interrogatory response describing design arounds and
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`costs to implement design arounds for the ’265 and ’911 patents not presented to
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`the jury); and
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`• Paragraphs 267-271, 366, 367, and 370 of Exhibit 4 (damages expert report
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`describing financial information including forecasts and royalty rates for patents
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`not presented to the jury that were derived from an agreement with third-party
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`Fontem).
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`This information was not discussed in open court, the jury did not consider, it, and it falls
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`within the scope of the Stipulated Protective Order. (Dkt. 103.) These confidential materials
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`should remain under seal.
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`III.
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`ARGUMENT
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`Reynolds supports Philip Morris’ motion to seal (Dkt. 1324) as portions of Exhibits 3 and
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`4 to Dkt. 1317 contain confidential business information of Reynolds and of third-party Fontem.
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`“Judicial records” are “documents filed with the court [that] play a role in the adjudicative process,
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`or adjudicate substantive rights.” In re U.S. for an Order Pursuant to 18 U.S.C. Section 2703(D),
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`707 F.3d at 290. Because the material sought to be sealed in these exhibits were never considered
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`by the jury, they did not play a role in the adjudicative process or adjudicate substantive rights.
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`They are therefore not “judicial records.” Accordingly, there is no presumption of public access
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`under either the common law standard or the First Amendment. See United States v. Amodeo, 44
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`F.3d 141, 145 (2d Cir. 1995) (“We think that the mere filing of a paper or document with the court
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`is insufficient to render that paper a judicial document subject to the right of public access.”).
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`Regardless, all the substantive and procedural factors are met and the limited portions of
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`Exhibits 3 and 4 to Philip Morris’ Brief should be sealed.
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`A. THE PUBLIC HAS HAD AMPLE NOTICE.
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`The public has received notice of the request to seal and has had reasonable opportunity to
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`object. Philip Morris’ sealing motion was publicly docketed in accordance with Local Civil Rule
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`5, and Reynolds now files this memorandum in support of sealing. The “public has had ample
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`Case 1:20-cv-00393-LMB-TCB Document 1388 Filed 07/14/22 Page 7 of 11 PageID# 34666
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`opportunity to object” to Philip Morris’ motion and, since “the Court has received no objections,”
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`the first requirement under Ashcraft, 218 F.3d at 302, has been satisfied. GTSI Corp. v. Wildflower
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`Int’l, Inc., No. 1:09CV123 (JCC), 2009 WL 1248114, at *9 (E.D. Va. Apr. 30, 2009); United
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`States. ex rel. Carter v. Halliburton Co., No. 1:10CV864 (JCC/TCB), 2011 WL 2077799, at *3
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`(E.D. Va. May 24, 2011) (“[T]he parties provided public notice of the request to seal that allowed
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`interested parties a reasonable opportunity to object—nearly two weeks.”).
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`B. REYNOLDS SEEKS THE LEAST DRASTIC MEASURES.
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`Reynolds seeks to seal and redact from the public record only information that the parties
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`must keep confidential pursuant to the Stipulated Protective Order. (Dkt. 103.) Philip Morris has
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`already filed a publicly redacted version of its Brief (Dkt. 1032). However, it is Reynolds’s
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`position that the Brief and exhibits can be filed publicly with the exception of the limited portions
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`of Exhibits 3 and 4 that should be redacted as described above.
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`This selective and narrow protection of confidential material constitutes the least drastic
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`method of shielding the information at issue. Adams, 2011 WL 7042224, at *4 (The “proposal to
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`redact only the proprietary and confidential information, rather than seal the entirety of his
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`declaration, constitutes the least drastic method of shielding the information at issue.”). The public
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`has no legitimate interest in information that is confidential to Reynolds or third-party Fontem. Id.
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`The information that Reynolds seeks to seal includes confidential, proprietary, and competitively
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`sensitive business information of Reynolds and of third-party Fontem, each of which could face
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`harm if such information were to be released publicly. No procedure other than filing this
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`information under seal is sufficient to preserve the confidential and sensitive nature of the
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`information.
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`Case 1:20-cv-00393-LMB-TCB Document 1388 Filed 07/14/22 Page 8 of 11 PageID# 34667
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` C. THE MATERIALS ARE HIGHLY SENSITIVE AND CONFIDENTIAL.
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`There is support for filing portions of Exhibits 3 and 4 to Philip Morris’ Brief under seal
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`with a publicly filed version containing strictly limited redactions. Exhibits 3 and 4 to Philip
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`Morris’ Brief contain material that falls within the scope of the Stipulated Protective Order. (Dkt.
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`103.) Placing these materials under seal is proper because the public’s interest in access is
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`outweighed by a party’s interest in “preserving confidentiality” of the limited amount of
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`confidential information that is “normally unavailable to the public.” Flexible Benefits Council v.
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`Feltman, No. 1:08CV00371 (JCC), 2008 WL 4924711, at *1 (E.D. Va. Nov. 13, 2008); United
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`States ex rel. Carter, 2011 WL 2077799, at *3. As noted, the portions of Exhibits 3 and 4 to Philip
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`Morris’ Brief confidential information of Reynolds and third-party Fontem that was never
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`presented to the jury as part of the recent trial. In granting motions to seal exhibits to dispositive
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`and non-dispositive briefing, this Court and others have recognized that the type of information at
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`issue here is confidential that requires sealing from public access.2
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`IV.
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`CONCLUSION
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`For the foregoing reasons, Reynolds respectfully requests that Philip Morris’ Motion to
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`Seal (Dkt. 1324) be granted and that such sealing be maintained until further Order of this Court.
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`2 See, e.g., LifeNet Health v. LifeCell Corp., No. 2:13cv486, 2015 WL 12517430, at *4 (E.D. Va.
`Feb. 12, 2015 (granting motion to redact trial transcripts to seal future product plans, licensing
`agreements with third-parties, and financial information as “trade secret[s]” “significant enough
`to outweigh the First Amendment right of access in this case”); In re Genworth Fin. Sec. Litig.,
`No. 3:14-cv-682-JAG, 2015 WL 12830373, at *2 (E.D. Va. Dec. 10, 2015) (granting motions to
`seal exhibits to a declaration and portions of a motion to compel containing commercially sensitive
`information such as business strategy, product development strategy, and future business
`planning); ATI Indus. Automation, Inc. v. Applied Robotics, Inc., No. 1:09CV471, 2014 WL
`2607364, at *5 (M.D.N.C. June 11, 2014) (granting motion to seal information concerning
`customers, customer purchase history, pricing, and costs); SMD Software, Inc. v. EMove Inc., No.
`5:08-CV-403-FL, 2013 WL 1091054, at *6 (E.D.N.C. Mar. 15, 2013) (granting motion to seal
`financial, market share, pricing, and marketing information).
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`Case 1:20-cv-00393-LMB-TCB Document 1388 Filed 07/14/22 Page 9 of 11 PageID# 34668
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`Reynolds respectfully requests, however, that the Court order Philip Morris to file a revised
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`public version of its Brief and accompanying exhibits with redactions applied to only the
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`confidential information of Reynolds and of third-party Fontem at pages 7 to 13 of Exhibit 3 and
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`paragraphs 267-271, 366, 367, and 370 of Exhibit 4.
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`Case 1:20-cv-00393-LMB-TCB Document 1388 Filed 07/14/22 Page 10 of 11 PageID# 34669
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`Dated: July 14, 2022
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`
`
`Stephanie E. Parker
`JONES DAY
`1221 Peachtree Street, N.E.
`Suite 400
`Atlanta, GA 30361
`Telephone: (404) 521-3939
`Facsimile: (404) 581-8330
`Email: separker@jonesday.com
`
`
`Anthony M. Insogna
`JONES DAY
`4655 Executive Drive
`Suite 1500
`San Diego, CA 92121
`Telephone: (858) 314-1200
`Facsimile: (844) 345-3178
`Email: aminsogna@jonesday.com
`
`William E. Devitt
`JONES DAY
`110 North Wacker
`Suite 4800
`Chicago, IL 60606
`Telephone: (312) 269-4240
`Facsimile: (312) 782-8585
`Email: wdevitt@jonesday.com
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`
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`Respectfully submitted,
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`
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`
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`
`
` /s/ David M. Maiorana
`David M. Maiorana (VA Bar No. 42334)
`Ryan B. McCrum
`JONES DAY
`901 Lakeside Ave.
`Cleveland, OH 44114
`Telephone: (216) 586-3939
`Facsimile: (216) 579-0212
`Email: dmaiorana@jonesday.com
`Email: rbmccrum@jonesday.com
`
`John J. Normile
`JONES DAY
`250 Vesey Street
`New York, NY 10281
`Telephone: (212) 326-3939
`Facsimile: (212) 755-7306
`Email: jjnormile@jonesday.com
`
`
`Alexis A. Smith
`JONES DAY
`555 South Flower Street
`Fiftieth Floor
`Los Angeles, CA 90071
`Telephone: (213) 243-2653
`Facsimile: (213) 243-2539
`Email: asmith@jonesday.com
`
`Charles B. Molster, III Va. Bar No. 23613
`THE LAW OFFICES OF
`CHARLES B. MOLSTER, III PLLC
`2141 Wisconsin Avenue, N.W. Suite M
`Washington, DC 20007
`Telephone: (703) 346-1505
`Email: cmolster@molsterlaw.com
`
`Counsel for RAI Strategic Holdings, Inc. and
`R.J. Reynolds Vapor Company
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`10
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`Case 1:20-cv-00393-LMB-TCB Document 1388 Filed 07/14/22 Page 11 of 11 PageID# 34670
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`CERTIFICATE OF SERVICE
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`I hereby certify that on this 14th day of July, 2022, a true and correct copy of the foregoing
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`was served using the Court’s CM/ECF system, with electronic notification of such filing to all
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`counsel of record.
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`/s/ David M. Maiorana
`David M. Maiorana (VA Bar No. 42334)
`JONES DAY
`901 Lakeside Ave.
`Cleveland, OH 44114
`Telephone: (216) 586-3939
`Facsimile: (216) 579-0212
`Email: dmaiorana@jonesday.com
`
`Counsel for RAI Strategic Holdings, Inc. and
`R.J. Reynolds Vapor Company
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