Case 1:20-cv-00393-LMB-WEF Document 1468-2 Filed 04/05/23 Page 1 of 6 PageID# 40772
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`Exhibit 5
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`Exhibit 5
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`Case 1:20-cv-00393-LMB-WEF Document 1468-2 Filed 04/05/23 Page 2 of 6 PageID# 40773
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`UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF VIRGINIA
`ALEXANDRIA DIVISION
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`PHILIP MORRIS PRODUCTS S.A.,
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`Plaintiff,
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`v.
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`R.J. REYNOLDS VAPOR COMPANY,
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`Defendant.
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`Case No. 1:20-cv-00393-LMB-TCB
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`DECLARATION OF DR. MOIRA GILCHRIST
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`I, Dr. Moira Gilchrist, declare as follows:
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`1.
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`I am the Vice President of Strategic and Scientific Communications at Philip Morris
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`International (“PMI”) and am employed by Philip Morris Products S.A. (“Philip Morris”). Philip
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`Morris owns the ’265 and ’911 patents that are being asserted in this case.
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`2.
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`Philip Morris is a Swiss company headquartered in Neuchâtel, Switzerland. It is a
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`global leader and pioneer in creating and commercializing smoke-free alternatives to combustible
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`cigarettes (“CCs”). In fact, Philip Morris has publicly committed to transitioning away completely
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`from manufacturing and selling CCs to only offering smoke-free products. To my knowledge,
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`Philip Morris is the only tobacco company in the world to make such a commitment.
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`3.
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`To accomplish this unprecedented smoke-free transformation, since 2008, Philip
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`Morris has invested billions of U.S. dollars in the development, scientific substantiation,
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`manufacturing, commercialization, and continuous innovation of smoke-free products. Other
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`Philip Morris-related entities have made additional investments in such pursuits.
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`Case 1:20-cv-00393-LMB-WEF Document 1468-2 Filed 04/05/23 Page 3 of 6 PageID# 40774
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`4.
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`Philip Morris’ above-described investment has yielded a number of patents.
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`Patenting its innovations is important to the company because it is how Philip Morris protects its
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`ideas and R&D in both the short term and the longer term.
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`5.
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`For example, it may take many years to commercialize products after the company
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`develops a particular technology. A patent ensures that Philip Morris can choose when and how
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`its innovation is introduced and protects against the risk of competitors unfairly appropriating that
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`innovation in the interim. The ability to do this is key, as first-mover status in a product category,
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`technology, or market is incredibly valuable to Philip Morris.
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`6.
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`It also is important for the success of Philip Morris’ smoke-free transformation to
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`maintain and build its brand, reputation, and good will as a leader and innovator in the non-
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`combustible space.
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`7.
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`All of Philip Morris’ smoke-free alternatives fall under the IQOS brand. This
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`includes, but is not limited to, the IQOS heat-not-burn device (“HNB”) and the IQOS VEEV e-
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`cigarette. Any damage done to the IQOS brand overall damages both existing and planned IQOS
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`products.
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`8.
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`I understand that the jury in the above-captioned case found that the cartridges
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`Reynolds sells in the United States for its VUSE Alto and VUSE Solo G2 e-cigarettes use Philip
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`Morris’ technology claimed in the ’265 and ’911 patents, respectively. Such use teaches the U.S.
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`market to associate that innovative technology with Reynolds, not Philip Morris. This lost
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`opportunity to further establish itself as an innovator through the technology Philip Morris
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`developed has diluted, and continues to dilute, the IQOS and Philip Morris brands, consumer
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`loyalty, reputation, and good will.
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`2
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`Case 1:20-cv-00393-LMB-WEF Document 1468-2 Filed 04/05/23 Page 4 of 6 PageID# 40775
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`9.
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`Reynolds’ use of Philip Morris’ technology in the cartridges for the VUSE Alto and
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`VUSE Solo G2 e-cigarettes also took away sales from the IQOS HNB, and consumables and
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`accessories related thereto, during the business-critical time of its U.S. launch (beginning in
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`September 2019), causing financial harm to Philip Morris. Philip Morris International
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`Management S.A., which was merged into Philip Morris in April 2019, contracted with Altria
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`Client Services LLC (“Altria”) to sell and distribute in the U.S. market those IQOS HNB-related
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`products.
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`10.
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`In addition to harm done to Philip Morris involving the IQOS HNB, Reynolds’
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`past, present, and future U.S. sales of cartridges for Reynolds’ VUSE Alto and VUSE Solo G2 e-
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`cigarettes inhibit the success of the IQOS VEEV. The IQOS VEEV already is offered in multiple
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`countries, and is making significant commercial strides. For example,
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` Philip Morris has
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`announced plans for expansion into additional markets, including the U.S. market.
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`11.
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`By the time Philip Morris introduces its IQOS VEEV in the United States, however,
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`the market will no longer view the technology claimed in the ’265 and ’911 patents as innovative,
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`given Reynolds’ years of use. Such a consequence illustrates yet another lost opportunity for
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`Philip Morris to benefit from its own innovations, resulting in further erosion of the IQOS and
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`Philip Morris brands, consumer loyalty, reputation, and good will.
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`12.
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`The above-described harms caused by Reynolds’ past, present, and future use of
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`Philip Morris’ technology are particularly acute because they have benefitted, and continue to
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`benefit, the company’s primary competitor, Reynolds, in a market in which Philip Morris has sold
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`3
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`Case 1:20-cv-00393-LMB-WEF Document 1468-2 Filed 04/05/23 Page 5 of 6 PageID# 40776
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`and/or plans to sell competing smoke-free alternatives. Indeed, through such use, Reynolds has
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`gained a significant share of the U.S. non-combustible market, making it more difficult for Philip
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`Morris to obtain successful entry into that same market for the IQOS HNB and the IQOS VEEV—
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`both of which have competed and will compete with Reynolds’ VUSE Alto and VUSE Solo G2
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`e-cigarettes.
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`13.
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`Despite the challenges presented by Reynolds’ use of Philip Morris’ technology,
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`the company continues to commit substantial resources to enable a U.S. launch of IQOS VEEV.
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`.
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`14.
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`15.
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`16.
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` plans to submit that application to FDA in Spring 2023.
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`17.
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`Philip Morris also is taking steps to begin manufacturing IQOS HNBs and/or
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`components thereof in the United States. Philip Morris expects such production to begin by the
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`first half of 2023.
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`Case 1:20-cv-00393-LMB-WEF Document 1468-2 Filed 04/05/23 Page 6 of 6 PageID# 40777
`Case 1:20-cv-00393-LMB-WEF Document 1468-2 Filed 04/05/23 Page 6 of 6 PagelD# 40777
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`I declare under the penalty of perjury that the foregoingis true and correct to the best of by
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`knowledge.
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`Executed on August 12, 2022
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`Dr. Moira Gilchrist
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