Case 1:20-cv-00393-LMB-TCB Document 1406-21 Filed 08/12/22 Page 1 of 7 PageID# 35130
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`Exhibit 21
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`Case 1:20-cv-00393-LMB-TCB Document 1406-21 Filed 08/12/22 Page 2 of 7 PageID# 35131
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`UNITED STATES INTERNATIONAL TRADE COMMISSION
`WASHINGTON, DC
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`In the Matter of
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`CERTAIN TOBACCO HEATING
`ARTICLES AND COMPONENTS
`THEREOF
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`Inv. No. 337-TA-
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`COMPLAINANTS' STATEMENT ON PUBLIC INTEREST
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`Pursuant to U.S. International Trade Commission ("Commission") Rule 19 C.F.R. §
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`210.S(b), Complainants RAI Strategic Holdings, Inc. ("RAI"), R.J. Reynolds Vapor Company
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`("RJRV"), and R.J. Reynolds Tobacco Company ("RJR T") (collectively, "Complainants")
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`respectfully submit this Statement on Public Interest with respect to the remedial orders they
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`seek against proposed Respondents Altria Client Services LLC ("ACS"), Altria Group, Inc.
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`("AGI"), Philip Morris USA, Inc. ("PM USA"), Philip Morris International Inc. ("PMI''), and
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`Philip M01ris Products S.A. ("PMP") ("Proposed Respondents").
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`Complainants seek a permanent, limited exclusion order, specifically directed to
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`Proposed Respondents and their agents, prohibiting from entry into the United States certain
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`tobacco heating articles and components thereof that infringe one or more of U.S. Patent No.
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`9,839,238 ("the '238 patent"), U.S. Patent No. 9,901,123 ("the' 123 patent"), and U.S. Patent
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`No. 9,930,915 ("the '915 patent") (collectively, "the Asserted Patents"). Complainants also seek
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`a cease and desist order pursuant to 19 U.S.C. § 1337(£). The Commission's grant of these
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`remedial orders will serve the public interest.
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`I.
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`THE REQUESTED REMEDIAL ORDERS ARE IN ACCORD WITH THE
`PUBLIC INTEREST
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`There is a strong public interest in protecting intellectual property rights. Certain
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`Baseband Processor Chips and Chipsets, Transmitter and Receiver (Radio) Chip, Power Control
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`Chips, & Products Containing Same, Including Cellular Telephone Handsets, Inv. No. 337-TA-
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`543, USITC Pub. 4258 (Nov.2011). As the Commission has noted, "protection of intellectual
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`property rights in the United States provides foreign and domestic businesses alike with a climate
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`of predictability that fosters investment, innovation, and the exchange of technology and
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`associated intellectual property rights." Certain Digital Televisions and Certain Products
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`Containing the Same and Methods of Using the Same, Inv. No. 337-TA-617, Comm'n Op., at 17
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`(April 2009). The public interest in protecting intellectual property rights can only be precluded
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`in the rarest circumstances. Certain Baseband Processor Chips, Comm'n Op., at 153-54 (June
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`2007). Here, the strong public interest in protecting Complainants' intellectual property rights
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`outweighs any alleged adverse impact on the public.
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`A.
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`How The Articles Potentially Subject To The Requested Remedial Orders
`Are Used In The United States
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`The infringing products are tobacco heating articles and components thereof, including
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`disposable tobacco sticks, marketed as "the IQOS® system." Proposed Respondents are
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`authorized by FDA to import, offer for sale, and sell the products in the United States and have
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`done so since approximately October 2019.
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`The IQOS® system is part of a category known as "potentially reduced-risk products."
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`Some such products, like IQOS®, include tobacco; these are commonly known as "tobacco
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`heating products." Other such products include a nicotine-containing liquid, and are commonly
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`known as "electronic nicotine delivery systems" or "ENDS." Still other such products include
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`oral tobacco and nicotine products.
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`The infringing IQOS® system is a tobacco heating product with three components: a
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`holder, disposable tobacco sticks, and a charger. The IQOS® holder is an electrically powered
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`and rechargeable unit that holds and heats the disposable tobacco sticks during use to generate a
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`nicotine-containing aerosol. The IQOS® holder includes a casing or housing, control electronics,
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`a battery, and a heating blade. The IQOS® holder has an end for receiving the tobacco stick, and
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`it heats the disposable tobacco stick using a ceramic blade, which is pushed into the tobacco stick
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`by the act of inse1iing the tobacco stick into the holder.
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`The user turns on the device by a pushbutton switch, which causes the battery to produce
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`and supply electrical current to the heating blade, heating the aerosol forming materials in the
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`tobacco stick, generating an inhalable nicotine-containing aerosol for the user. The temperature
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`of the heating blade is reported not to exceed 350°C, which heats the tobacco below the level of
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`combustion, producing an aerosol.
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`B.
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`Identification Of Any Public Health, Safety, Or Welfare Concerns Relating
`To The Requested Remedial Orders
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`Public health, safety, and welfare concerns do not bar Complainants' requested relief.
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`There is belief among public health officials (and Complainants and Proposed Respondents) that
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`ENDS products may be a potentially reduced-risk alternative to traditional combustible
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`cigarettes. (See FDA Finalizes Enforcement Policy on Unauthorized Flavored Cartridge-Based
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`E-Cigarettes That Appeal to Children, Including Fruit and Mint, January 2, 2020,
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`https://www.hhs.gov/about/news/2020/01/02/fda-finalizes-enforcement-policy-unauthorized(cid:173)
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`flavored-caiiridge-based-e-cigarettes.html; How FDA is Regulating E-Cigarettes, Ned Sharpless,
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`M.D., Acting FDA Commissioner, July 10, 2019, https://www.fda.gov/news-events/fda-voices(cid:173)
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`perspectives-f da-leadership-and-experts/how-f da-regulating-e-cigarettes.) Certain complainants
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`currently sell ENDS products in the U.S. market, as do multiple other companies. Thus, there
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`are ENDS products in the U.S. currently available to adult American smokers looking for a
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`potentially reduced-risk alternative to traditional cigarettes. If the Commission grants
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`Complainants' requested reliefregarding the IQOS® system, adult American smokers looking for
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`potentially reduced-risk alternatives could turn to Complainants' ENDS and other products on
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`the market at that time, as discussed below.
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`One or more Proposed Respondents have stated publicly that ENDS products have the
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`potential to be reduced-risk alternatives to traditional cigarettes. For example, proposed
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`Respondent AGI invested $12.8 billion in JUUL Labs, Inc., a U.S. ENDS products company.
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`AGI stated that the deal "will accelerate JUUL's mission to switch adult smokers toe-vapor
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`products." (See http://investor.altria.com/file/Index?KeyFile=396 l 69695.) Thus, the availability
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`in the U.S. of Complainants' ENDS and other products belies any argument by Proposed
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`Respondents that Complainants' requested relief would harm the public interest by denying adult
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`smokers access to a potentially reduced-risk alternative.
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`C.
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`Identification Of Like Or Directly Competitive Articles That Complainants,
`Their Licensees, Or Third Parties Make Which Could Replace The Subject
`Articles If They Were Excluded
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`Were the Commission to exclude Proposed Respondents' infringing tobacco heating
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`products and components thereof from entry into the U.S., there are several non-infringing
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`ENDS products available in the U.S. that are directly competitive with the Accused Products.
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`These products include Complainants' VUSE® products: VUSE® Vibe, VUSE® Solo, VUSE®
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`Alto, and VUSE® Ciro. (www.vusevapor.com). Complainants' Eclipse® product is another
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`alternative available in the U.S. Like IQOS®, Eclipse® is a tobacco heating product that heats
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`but does not burn the tobacco. Several oral tobacco and nicotine products are also available in
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`the U.S., including, but not limited to, Camel® Snus, Grizzly® Snuff, Kodiak® Snuff,
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`(www.northerner.com/us), VELO® nicotine pouches, REVEL nicotine lozenges, and Nicorette®
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`Gum (www.nicorette.com/products/nicorette-gum.html).
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`Such products would continue to be available to adult American smokers looking for a
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`potentially reduced-risk alternative to traditional combustible cigarettes. Should the Commission
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`enter an exclusion order in this Investigation, a variety of ready replacement products would
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`remain on the market for public consumption, and so no public harm would result.
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`D. Whether Complainants, Their Licensees, And/Or Third Parties Have The
`Capacity To Replace The Volume Of Articles Subject To The Requested
`Remedial Orders In A Commercially Reasonable Time In The United States
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`Complainants have sold and will continue to sell potentially reduced-risk alternatives to
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`traditional smoking products in the U.S., unaffected by Complainants' requested relief.
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`Complainants have the manufacturing capacity to replace the volume ofIQOS® products subject
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`to the Complainants' requested relief. Complainants will be able to replace the infringing
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`products subject to the requested remedial orders in the U.S. within a commercially reasonable
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`time.
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`E.
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`How The Requested Remedial Orders Would Impact Consumers
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`Complainants' requested relief will only potentially affect those consumers who
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`specifically use the infringing IQOS® System. The Centers for Disease Control and Prevention
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`estimates that only 13.7% of the U.S. adult population currently smoke traditional combustible
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`cigarettes. Cigarette Smoking Among US. Adults Hits All-Tilne Low,
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`https://www.cdc.gov/media/releases/2019/pl 114-smoking-low.html (Nov. 14, 2019). Thus, the
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`overall impact on U.S. consumers would be relatively small. In any event, Complainants have
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`the capacity to replace the infringing products in the United States with other potentially
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`reduced-risk and other tobacco and nicotine products. The requested remedial orders in this
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`matter will not significantly impact U.S. consumers.
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`II.
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`CONCLUSION
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`For the foregoing reasons, there are no public interest concerns that should preclude the
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`issuance of Complainants' requested remedies in this Investigation.
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`Case 1:20-cv-00393-LMB-TCB Document 1406-21 Filed 08/12/22 Page 7 of 7 PageID# 35136
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`Dated: April 9, 2020
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`Respectfully submitted,
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`David M. Maiorana
`Ryan B. McCrum
`JONES DAY
`901 Lakeside Avenue
`Cleveland, OH 44114
`Tel: (216) 586-3939
`Fax: (216) 579-0212
`Email: dmaiorana@jonesday.com
`Email: rbmccrum@jonesday.com
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`Stephanie E. Parker
`JONES DAY
`1420 Peachtree Street, N.E.
`Suite 800
`Atlanta, GA 30309
`Tel: (404) 521-3939
`Fax: (404) 581-8330
`Email: separker@jonesday.com
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`Anthony M. Insogna
`JONES DAY
`4655 Executive Drive
`Suite 1500
`San Diego, CA 92121
`Tel: (858)314-1200
`Fax: (844) 345-3178
`Email: aminsogna@jonesday.com
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`John J. Normile
`JONES DAY
`250 Vesey Street
`New York, NY 10281
`Tel: (212) 326-3939
`Fax: (212) 755-7306
`Email: jjnormile@jonesday.com
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`Counsel for Complainants
`RAJ Strategic Holdings, Inc.,
`R.J. Reynolds Vapor Company, and
`R.J. Reynolds Tobacco Company
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