Case 1:20-cv-00393-LMB-WEF Document 1462-15 Filed 04/05/23 Page 1 of 8 PageID# 39701
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`Exhibit 15
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`Case 1:20-cv-00393-LMB-WEF Document 1462-15 Filed 04/05/23 Page 2 of 8 PageID# 39702
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`UNITED STATES INTERNATIONAL TRADE COMMISSION
`WASHINGTON, D.C.
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`Before the Honorable Clark S. Cheney
`Administrative Law Judge
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`In the Matter of
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`CERTAIN TOBACCO HEATING
`ARTICLES AND COMPONENTS
`THEREOF
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`Investigation No. 337-TA-1199
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`RESPONDENTS’ POST-HEARING INITIAL BRIEF
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`PUBLIC VERSION
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`Case 1:20-cv-00393-LMB-WEF Document 1462-15 Filed 04/05/23 Page 3 of 8 PageID# 39703
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`including the (i) cigarette-like experience of the HEET Stick in a user’s mouth, (ii) ritual of
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`preparing the IQOS for use, and (iii) IQOS’s cigarette-like shape and feel in hand. Collectively,
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`these characteristics provide a sense of enjoyment and familiarity for certain smokers that no other
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`product, including e-cigarettes, provides.
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`The evidence establishes that, because of these unique sensory attributes, IQOS helps some
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`committed smokers to move away from CC smoking and reduces their exposure to harmful
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`chemicals. Third party witness Lindsey Lewis, a thirty-year CC smoker, testified that he tried but
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`rejected e-cigarettes and embraces IQOS precisely because it is “extremely similar to actually
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`smoking a cigarette.” Tr. (Lewis) 1260:14-18, 1263:14-20. He testified that IQOS “dramatically
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`improved [his] personal health beyond what [he] ever thought a product could do.” Tr. (Lewis)
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`1243:3-7, 1262:6-14. Other American smokers deserve the choice Mr. Lewis made and the
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`opportunity to enjoy similar health benefits.
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`Complainants argue that the available alternatives (which have not been accepted by thirty-
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`four million American users of CCs) are adequate substitutes for IQOS. They are wrong. There
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`are no substitutes for IQOS on the market today—none. The evidence shows that oral tobacco,
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`snus, nicotine patches and other cessation products are all niche products, providing distinct
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`experiences from CC smoking, and having limited appeal. None can fairly be considered an IQOS
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`substitute. Meanwhile e-cigarettes, Complainants’ purported champion,: (i) are currently illegal
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`in the U.S.; (ii) do not appeal to a wide swath of consumers who genuinely enjoy the combustible
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`smoking experience; and (iii) face, at best, a highly uncertain regulatory future.
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`The record and applicable case law demonstrate that no e-cigarette has FDA authorization
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`and that, in the absence of authorization, the sale of e-cigarettes is illegal in the U.S. today. While
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`many e-cigarette manufactures have applied for authorization, the evidence also shows that there
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`Case 1:20-cv-00393-LMB-WEF Document 1462-15 Filed 04/05/23 Page 4 of 8 PageID# 39704
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`are many open questions surrounding e-cigarettes, ranging from epidemic youth use to unknown
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`chemistry and their unknown long-term effects on users. Because tens of thousands of e-cigarette
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`products are under consideration, FDA’s analysis is complicated by the practical impossibility of
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`timely considering that volume. Thus, the record undisputedly establishes that no one can predict
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`if or when any e-cigarette products will earn FDA authorization. In contrast, IQOS is the only
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`aerosolized PRRP with PMTA and MRTP authorizations from the FDA. E-cigarettes cannot fairly
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`be considered as substitutes for IQOS, either as a factual matter or as a matter of regulatory law.
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`Tellingly, the ALJ heard testimony from three disinterested witnesses who were not paid
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`by a party for their time: Dr. Julie Gunther (private family physician); Lindsey Lewis (PPI); and
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`Dr. Brad Rodu (University of Louisville, endowed chair for harm reduction). All were presented
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`by Respondents. All passionately testified that American smokers need more choices and that
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`IQOS is an exceptional product without substitutes that uniquely appeals to CC smokers. After
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`(i) months of questioning the integrity of third parties who spoke up for IQOS with demonstrably
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`false claims of “tainted” testimony; (ii) issuing ten subpoenas on third-party submitters and taking
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`seven depositions; and (iii) “dragging” these third parties “through the mud” (per Dr. Gunther),
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`Complainants failed to call a single third-party witness to testify. Third parties who take the
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`Commission’s role in protecting the public interest seriously deserve better.
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`Respondents respectfully request that the ALJ recommend to the Commission that there
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`has been no infringement of a valid patent claim and no violation of Section 337. But if the ALJ
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`finds a violation, IQOS should be exempted from remedial measures because removing IQOS from
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`the market will cost lives and badly disserve the public interest.
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`Case 1:20-cv-00393-LMB-WEF Document 1462-15 Filed 04/05/23 Page 5 of 8 PageID# 39705
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`1279:17-1283:2. HeatStick sales reflect this strong IQOS adoption. JX-0035 at -3417, -3432, -
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`3442, -3444-46, -3450, -3464. Tobacco control experts, including Dr. Rodu and the American
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`Cancer Society, have found that IQOS has reduced CC smoking and improved public health. JX-
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`0021 at -0652-53; JX-0026 at -1610-12; JX-0030 at -1844; JX-0031 at -1868; RX-0312.5; Tr.
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`(Rodu) 1280:3-1284:12; compare JX-0026 at -1600-01 with Tr. (Rodu) 1278:15-23.
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`There can be no doubt that some significant number of the 34 million U.S. CC smokers
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`need and will adopt the IQOS alternative as it is introduced beyond the current limited test markets.
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`According to the CDC, smoking is the leading cause of preventable death and disease. RX-0315.1,
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`.5; Tr. (Rodu) 1275:3-10; Nicopure Labs, LLC v. FDA, 266 F. Supp. 3d 360, 371 (D.D.C. 2017)
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`(“Nicopure I”). According to public health authorities: (1) on an annual basis, more Americans
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`die of smoking-related diseases (480,000) than have perished in the COVID-19 pandemic, RX-
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`0315.5; Tr. (Rodu) 1275:3-19; (2) without intervention, in 10 years, 5 million Americans will die
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`from CC smoking, Tr. (Rodu) 1275:21-23; see Tr. (Arnold) 1140:8-1141:9; and (3) 16 million
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`Americans live with a serious smoking-related disease, costing $300 billion in annual healthcare
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`costs, RX-0315.5.
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`According to the CDC, most CC smokers want to quit, 50% attempt to quit each year, but
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`only 10% succeed. RX-0315.4, .6-.7; CX-1284 at -2082; Tr. (Rodu) 1275:24-1276:8, 1286:2-7.
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`The existing alternatives are neither sufficient solutions nor IQOS substitutes. Tr. (Rodu) 1276:9-
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`16, 1284:13-23. In its “Strategic Policy Roadmap,” FDA pledged to “take a fresh look at products
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`that can deliver satisfying levels of nicotine to adults who want access to it without burning
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`tobacco” but that also have undergone “an appropriate series of regulatory checkpoints”—a
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`revolutionary policy shift that “could truly make a positive public health impact.” JX-0024 at -
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`0892; Tr. (Rodu) 1277:1-1278:3. IQOS exemplifies the type of product FDA needs to fulfill its
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`Tr. (Ehrlich) 1419:15-20, 1470:4-9. Notably, the grace period for Complainants’ Vuse Solo
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`already expired in October 2020, and, absent highly unlikely action by FDA, the grace period for
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`the other Vuse e-cigarettes will expire this year in April (Vibe and Ciro) and September (Alto)—
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`all prior to the Final Determination in this Investigation. See JX-0112C (Figlar) at 116:3-14; Tr.
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`(Figlar) 81:13-17, 98:17-23, 100:1-7, 134:4-16; Tr. (Clissold) 537:13-17; Tr. (Ehrlich) 1416:25-
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`1417:17, 1471:11-22.
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`E-cigarette PMTA enforcement delays experienced over the last few years will not
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`continue indefinitely. The district court judge explicitly retained jurisdiction over the case to
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`ensure he could take further action, as needed, and both FDA experts agree that any deviations
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`from the judge’s order can only be made with leave of court. Tr. (Clissold) 571:3-18; Tr. (Ehrlich)
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`1417:6-9, 1422:24-1423:4, 1494:6-13; Pediatrics, 399 F. Supp. 3d at 487. Moreover, FDA has
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`warned that “[m]anufacturers cannot have settled expectations to market unlawful products,
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`especially in the face of evolving public health concerns.” RX-0324.28.
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`4.
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`Lack Of FDA Authorization Renders
`The E-Cigarette Market Highly Uncertain
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`Another reason e-cigarettes cannot be IQOS substitutes is that the U.S. market for such
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`products is uncertain and unreliable. Tr. (Ehrlich) 1417:10-23. First, no one knows whether or
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`when any or which e-cigarettes will receive PMTA-authorization. Tr. (Ehrlich) 1448:11-1449:17,
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`1486:13-17. To date, no e-cigarette has received such authorization. See, e.g., JX-0039 at -6450.
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`David Kessler, former FDA Commissioner and Co-Chair of President Biden’s Coronavirus
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`Taskforce, “wouldn’t want to bet on” any e-cigarettes surviving the FDA review due to “the
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`explosion in youth use” of those products and the uncertainty in the industry it has caused. RX-
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`0325.3-.4; Tr. (Ehrlich) 1449:18-1450:10; see Tr. (Clissold) 572:21-573:25, 574:4-575:1.
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`Complainants’ Dr. Figlar and Mr. Clissold both conceded there is no guarantee that any e-cigarette
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`will receive PMTA authorization. Tr. (Figlar) 99:20-25, 104:10-105:6; Tr. (Clissold) 564:10-16.
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`And PMTAs for flavored e-cigarettes, like many submitted by Complainants, will be particularly
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`difficult to obtain. Tr. (Figlar) 93:11-16; Tr. (Ehrlich) 1450:21-24, 1486:22-1487:19.
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`Respondents’ expert, Dr. Stacy Benson, testified that the chemistry and health effects of e-
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`cigarettes—particularly flavored liquids—are uncertain, concerning, and require massive FDA
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`analysis. Tr. (Benson) 1350:12-1351:14.
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`Second, if any e-cigarette is PMTA-authorized, no one knows when that may happen. Tr.
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`(Ehrlich) 1450:17-21. FDA received a massive influx of PMTAs, “several orders of magnitude
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`greater than anything the Agency has ever experienced,” that it is still struggling to process. JX-
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`0039 at -6450-51; Tr. (Ehrlich) 1422:4-16, 1459:9-23. Even before the 2020 deluge, it took years
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`to process PMTAs, and the recent flood of applications will make the time to decision even longer,
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`similar to what happened with a previous SE deadline. See JX-0029 at -1706; JX-0018 at -0615;
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`Tr. (Ehrlich) 1413:18-25, 1422:17-23, 1466:1-10; see JX-0039 at -6450-51. Even Mitch Zeller,
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`FDA’s CTP Director, acknowledged the likelihood that review of all PMTAs will take place in
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`one year is “low.” JX-0039 at -6450; Tr. (Ehrlich) 1420:23-1421:23.
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`Third, no one knows how the epidemic youth use of e-cigarettes will affect the outcome or
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`timing of PMTAs for these products. According to federal government surveys, as of September
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`2020, there were 3.6 million U.S. youth using e-cigarettes—with more than 8 in 10 using flavors.
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`JX-0038 at -5127. Regular use of e-cigarettes among high school students increased from 20% in
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`2017 to 38.9% in 2020, although it declined from 2019 to 2020. Compare JX-0038 at -5126 with
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`JX-0038 at -5127 and RX-0324.9. Given this, relying on e-cigarettes as IQOS substitutes would
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`be replacing one public harm (purported patent infringement) with another (children’s abuse of
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`nicotine and tobacco products)—a choice that certainly is not in the public’s interest.
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`Case 1:20-cv-00393-LMB-WEF Document 1462-15 Filed 04/05/23 Page 8 of 8 PageID# 39708
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`“be required to file quarterly reports on the first day of each calendar quarter describing the status
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`of FDA approval of its domestic industry product and its continued . . . expenditures” for the
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`domestic industry products for a period of 18 months. Id. The ALJ should further recommend the
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`limited exclusion order be rescinded if Complainants’ domestic industry product has not been
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`approved for use in the U.S. by the expiration of that 18 month reporting period, or if Complainants
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`have ceased making substantial expenditures to exploit the patents during the reporting period. Id.
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`VIII. CONCLUSION
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`Respondents respectfully request that no violation of Section 337 be found and no remedies
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`issued.
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`Dated: March 31, 2021
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`Respectfully submitted,
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`/s/ Bert C. Reiser
`Maximilian A. Grant
`Bert C. Reiser
`Jamie D. Underwood
`LATHAM & WATKINS LLP
`555 Eleventh Street, N.W.
`Suite 1000
`Washington, DC 20004
`Telephone: (202) 637-2200
`Facsimile: (202) 637-2201
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`Brenda L. Danek
`LATHAM & WATKINS LLP
`330 North Wabash Avenue, Suite 2800
`Chicago, IL 60611
`Telephone: (312) 876-7700
`Facsimile: (312) 993-9767
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`Counsel for Respondents
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