Case 1:20-cv-00393-LMB-WEF Document 1468-4 Filed 04/05/23 Page 1 of 19 PageID# 40781
`
`Exhibit 13
`
`
`
`
`
`Exhibit 13
`
`
`
`
`
`Case 1:20-cv-00393-LMB-WEF Document 1468-4 Filed 04/05/23 Page 2 of 19 PageID# 40782
`429
`
`UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF VIRGINIA
`
`Civil Action
`No. 1:20-cv-00393-LMB/TCB
`June 9, 2022
`2:05 p.m.
`
`)))))))))))))
`
`PHILIP MORRIS PRODCUTS S.A.,
`
`Counterclaim Plaintiff,
`v.
`R.J. REYNOLDS VAPOR COMPANY,
`
`Counterclaim Defendant.
`
`VOLUME 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
`
`
`
`Case 1:20-cv-00393-LMB-WEF Document 1468-4 Filed 04/05/23 Page 3 of 19 PageID# 40783
`439
`
`their Vuse product line. The e-vape products of the Vuse
`product line was covered in that license. That's basically the
`same products here where we have the Solo and Alto, so same
`covered products, definition, and then the scope is
`nonexclusive.
`You know, once again, it's only a use license. You're
`not getting the ownership rights; you're just getting
`nonexclusive rights to use. And so all these terms I matched up
`from Fontem-Reynolds to the hypothetical so I know that I'm
`getting a closer match to what the royalty will be if we use
`that as a baseline.
`Q.
`How did the commercial relationship between -- at the
`time of the execution of the Fontem agreement match up with the
`hypothetical in this case?
`A.
`Well, on one hand, there's some similarities; on the
`other hand, it's very different. And so on first blush, Fontem
`and Reynolds were competitors because Fontem was owned by
`Imperial, and you study the market for the e-cigarettes,
`Imperial is a big company.
`So on first glance in Factor 5 you say it's comparable to
`what we have here, which is Reynolds and Philip Morris, but in
`Factor 4, which I'll get to a little bit later, here with Philip
`Morris and Reynolds, I think there's a very different Factor 4
`about licensing policies because they really are, as we've heard
`in trial, head-to-head, and Philip Morris would not want to
`
`1 2 3 4 5 6 7 8 9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`Scott L. Wallace, RDR, CRR, Official Court Reporter
`
`
`
`Case 1:20-cv-00393-LMB-WEF Document 1468-4 Filed 04/05/23 Page 4 of 19 PageID# 40784
`440
`
`license Reynolds, so it's different.
`Q.
`Let's go to Slide 15, and again we have the cover page of
`PX 125, which is the Reynolds agreement. Once you determined
`that economic comparability, how did you go about using this
`agreement in your analysis?
`A.
`Well, once you get through some of the foundational
`comparisons on the economic issues, you have to confront -- an
`important issue is what's the consideration? And royalties can
`come in different forms. This is a lump sum royalty,
`$79 million, and I had to ask the issue, can I unpack that
`$79 million? Can I get behind it and figure out like what went
`into it?
`And so that was something I have done, and I've done that
`for 30 years. I go into licenses and I say, can you understand
`the inputs, because ultimately when you pay a royalty amount,
`whether it runs over time or is paid up front, it's a function
`of use, what are the covered products, what will the use be,
`best expectations, and then, secondarily, what do you pay on a
`per unit or percent of net sales basis?
`So you have the basis, or royalty base, times a royalty
`rate gives you the royalty amount. And the form of royalty is
`just something that the negotiators get to and say, "Sometimes
`we'll just let it run because that's what we want to do,"
`sometimes they want to say, "This has been sort of good, let's
`just be done with each other," and they pay an amount and
`
`1 2 3 4 5 6 7 8 9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`Scott L. Wallace, RDR, CRR, Official Court Reporter
`
`
`
`Case 1:20-cv-00393-LMB-WEF Document 1468-4 Filed 04/05/23 Page 5 of 19 PageID# 40785
`463
`
`Solo and the Alto, how they benefited from using these patents,
`and so if there is an ease of use or customer experience that's
`enhanced with these patents, we want to examine that and
`potentially upward adjust the royalty rate.
`Q.
`Okay. Let's go to Slide 31, Mr. Meyer. And you've
`titled the slide, "No Design-Arounds for Non-Infringing
`Alternatives."
`In the context of Georgia-Pacific Factors 9 and 10, how
`does the absence of design-arounds or non-infringing
`alternatives influence your opinion?
`A.
`Well, if you have design-arounds, you can come into the
`negotiation as the licensee, as Reynolds, and say, well, we
`really don't need your patents because we can do it this other
`way, and we've determined that our sales will not go down, and
`it won't cost us anything that's not economic. But we're in a
`situation in this case where we don't have that. The assumption
`we have is that there's no design-around on these two patents,
`so that puts them -- that's a relevant factor in 9 and 10.
`There's no design-arounds in this case.
`Q.
`Okay. And the other part of Factors 9 and 10 that you
`mentioned are the consumer benefits. Looking at Slide 32, we
`have PX 315. Can you just explain to the jury what you're
`showing here?
`A.
`Well, I was attempting to go from the inventions to the
`business records of Reynolds and see if they sort of identify or
`
`1 2 3 4 5 6 7 8 9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`Scott L. Wallace, RDR, CRR, Official Court Reporter
`
`
`
`Case 1:20-cv-00393-LMB-WEF Document 1468-4 Filed 04/05/23 Page 6 of 19 PageID# 40786
`464
`
`tout any of these benefits that come from using the '911 and
`'265. And so obviously I listened to Mr. Walbrink's testimony.
`I've seen his reports, and so my understanding with the compact
`heater, I went to this Reynolds' document. And this document,
`it's online, so it looks more like a product sort of summary
`feature -- you know, identifying features.
`It was obviously used internally and I know it was used
`in some level publicly. It's online. What it tells me with the
`heat chamber, that the ceramic wick and alloy heating element,
`you know, basically identified that, which I understand goes
`back to the '265, and then they refer this as a revolutionary
`system engineered to deliver quieter, smoother, and more
`satisfying taste experience. And so it shows me that there's
`benefit coming to Reynolds.
`Q.
`Let's go to Slide 33 and look at a few more documents
`from Reynolds, and let's start with the top one. You've got a
`callout on the top, Mr. Meyer, and then another one on the
`bottom. So let's look at the one that's highlighted in gray
`there. Can you explain to the jury what that is and how it
`impacts your analysis?
`A.
`Well, this one's really important because -- I can't
`explain the entire relationship, but British American Tobacco at
`some level has a financial relationship with Reynolds. I
`believe it's the owner, but regardless, they had an earnings
`call on July 26, 2018, and earnings calls are really important.
`
`1 2 3 4 5 6 7 8 9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`Scott L. Wallace, RDR, CRR, Official Court Reporter
`
`
`
`Case 1:20-cv-00393-LMB-WEF Document 1468-4 Filed 04/05/23 Page 7 of 19 PageID# 40787
`465
`
`Q.
`Why is that?
`A.
`That's where the company's talking to its investors and
`analysts about how they're doing and where they're going, past
`earnings and giving some forecasts out about the future. And
`you've got to tell the truth because you can get in a lot of
`trouble when you're telling your investors something.
`So the thing that was important here -- I have the
`transcript, and the Alto is going to be released in August 2018.
`That's going to be in a few days. So it's quite timely and it
`says, "In August we will be launching the Vuse Alto in the U.S.,
`our first pod mod product. This will be available in four
`variants and we'll new-feature an innovative ceramic wick."
`So my understanding is that that's what Mr. Walbrink
`testified to. So I have that feedback from the analyst call.
`Q.
`And for the record, what you just read is from PX 343 at
`page 864; is that right?
`A.
`Yes, sir.
`Q.
`Okay. Now, we have the red callout on the bottom from
`Reynolds' website. Can you explain to the jury what that is?
`A.
`That's right. So this is on the website. They had a
`description of some of the products and this is the Vuse Alto,
`and they said it's the large capacity pod-based system with an
`innovative ceramic wick and alloy heating element. So they're
`identifying the product through this technology that I
`believe -- at least it's the position of Dr. Walbrink, reads on
`
`1 2 3 4 5 6 7 8 9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`Scott L. Wallace, RDR, CRR, Official Court Reporter
`
`
`
`Case 1:20-cv-00393-LMB-WEF Document 1468-4 Filed 04/05/23 Page 8 of 19 PageID# 40788
`466
`
`the '265 Patent.
`Q.
`Okay. Let's turn to the leakage preventer patent in
`'911. We're looking at Slide 34 in PX 348. Can you explain to
`the jury what this document shows?
`A.
`Yes. I did some analysis, once again, trying to figure
`out do I see the '911 being practiced in the products of
`Reynolds. So this is from January 2017, and this was -- in the
`bottom right there, it's -- I think it's RAI, and I believe
`that's like the research group at Reynolds and they do --
`they'll team up and do research into what maybe products want --
`what maybe consumers want in the future.
`And so they went out and did some surveys and were trying
`to think about, what do we need to sort of have to meet these
`consumer demands. So they call up the target consumer paying
`points and they say what they want, and one is identified as
`less mess and leaking, and then he says, what can we provide,
`leak-proof claim. And my understanding is that if the '911 is
`practiced, that you have an opportunity to have less leakage,
`you know, around the device that was described by Mr. Abraham.
`Q.
`Okay. Well, let's look at PX 748, which is Slide 35
`shown here. And you've got two callouts from this general
`market assessment. Can you just, again, explain to the jury how
`this document PX 748 informs your analysis?
`A.
`Yes. This is -- this was in the files of Reynolds, and
`this was where Reynolds was, once again, trying to figure out
`
`1 2 3 4 5 6 7 8 9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`Scott L. Wallace, RDR, CRR, Official Court Reporter
`
`
`
`Case 1:20-cv-00393-LMB-WEF Document 1468-4 Filed 04/05/23 Page 9 of 19 PageID# 40789
`496
`
`the -- strike that. Let me just move to a different topic here,
`Mr. Meyer.
`I want to talk about -- you're responsible for the
`content of your expert reports submitted in this case?
`A.
`Yes, sir.
`Q.
`And when preparing those, you were trying to be as
`accurate and as precise as possible, right?
`A.
`Correct.
`Q.
`And you stand by what you said in those?
`A.
`Yes, sir.
`Q.
`And one of your opinions in this case is, "I assumed that
`the parties to the hypothetical negotiations would consider all
`available information, data, and documents, whether dated before
`or after the hypothetical negotiations."
`That's what you said, right?
`Right. That's the Book of Wisdom, yes, I stand by that.
`You stand by that.
`And finally, Mr. Meyer, I think you said on direct you --
`that Philip Morris and Reynolds are head-to-head competitors,
`right?
`A.
`Well, I would defer to the business people in the case to
`address that, but -- I heard that from Dr. Gilchrist. I
`understand the businesses from the outside, but my understanding
`is that they compete on a variety of products.
`MR. McCRUM: Thank you. I have no further questions.
`
`A.
`Q.
`
`1 2 3 4 5 6 7 8 9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`Scott L. Wallace, RDR, CRR, Official Court Reporter
`
`
`
`Case 1:20-cv-00393-LMB-WEF Document 1468-4 Filed 04/05/23 Page 10 of 19 PageID#
`40790
`
`542
`
`product to be created.
`Q.
`And, if you will, again just kind of top line, tell the
`jury about the time and effort and money that went into
`developing Premier, the very top line.
`A.
`Sure. The time requirement for Premier was about eight
`years in development before launch. I know Reynolds has spent
`about a billion dollars in research with regard to all of its
`heat-not-burn products, because we have more after this, so a
`portion of that billion was on Premier, so hundreds of millions
`of dollars.
`Q.
`Did Reynolds obtained any patents on Premier?
`A.
`Yes, I believe there are about 40 patents that were
`directly applicable to the Premier product and processes.
`Q.
`All right. So after Premier --
`THE COURT: Hold on a second because the jury might be
`curious, and I'm certainly curious, if it's a noncombustible
`cigarette, how did one smoke it? Did you still light the end of
`it?
`
`THE WITNESS: You do, Your Honor. The construction of the
`cigarette is quite unique. It has -- so it has a filter, as you
`see, on the picture, and it looks like a cigarette, and it has a
`tobacco substrate in the center, but it also has inserted within
`it a -- an aluminum capsule, long capsule tube, and inside that
`tube are alpha-alumina beads, at the time, that were coated with
`glycerine and tobacco extract, and that sat inside the cigarette.
`
`1 2 3 4 5 6 7 8 9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`Scott L. Wallace, RDR, CRR, Official Court Reporter
`
`
`
`Case 1:20-cv-00393-LMB-WEF Document 1468-4 Filed 04/05/23 Page 11 of 19 PageID#
`40791
`
`543
`
`And then the very outside, where the heat source is, was a
`little -- what I like to call like a little charcoal briquette,
`so it was actually an extruded piece of carbon, charcoal, that
`sat on the end of the cigarette, and you lit it with a lighter
`and puffed on it like a cigar for a little while to get it heated
`up, and then, just like in your barbecue when the charcoal
`briquette is red, it passed heat down the column and then it
`volatilized the tobacco extracts within the beads and heated up
`the substrate, which was really soaked in glycerine and PG, and
`extruded tobacco flavor because it was also made of tobacco, and
`that's how you smoke the cigarette.
`THE COURT: Thank you.
`BY MS. PARKER:
`Q.
`All right. So that was Premier. What was next?
`A.
`Well, Premier did -- Premier was very, very different
`than anything in the marketplace, and it, of course, didn't
`taste exactly like a combusted cigarette and it suffered from
`it. It was difficult to light and there was a number of
`deficiencies with the product, and so Reynolds -- but Reynolds
`was not deterred by Premier's lack of performance in the
`marketplace. So they continued to innovate against this
`platform, and eventually by the mid-1990s, came up with yet
`another version of heat-not-burn products, which became known as
`Eclipse.
`Q.
`And did you work on Eclipse yourself?
`
`1 2 3 4 5 6 7 8 9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`Scott L. Wallace, RDR, CRR, Official Court Reporter
`
`
`
`Case 1:20-cv-00393-LMB-WEF Document 1468-4 Filed 04/05/23 Page 12 of 19 PageID#
`40792
`
`554
`
`has heard about earlier.
`The jury's heard about e-liquid. What is e-liquid?
`A.
`Yes. So e-liquid is what's in all of these products that
`is the base that generates the aerosol. So I think I described
`it earlier. It's mostly comprised of vegetable glycerine,
`propylene glycol, a little bit of water, and then flavorings and
`pharmaceutical-grade nicotine, and that's all the liquid is.
`And so depending on how these products are configured,
`once the heater is activated, it is in contact, the liquid is in
`contact with that heater and it forms an aerosol that the
`consumer can then draw into their mouth and hold in their mouth,
`inhale, to basically smoke the product. So that's the basics on
`how it works.
`Q.
`Is the e-liquid important to the product?
`A.
`It's very important to the product, yes.
`Q.
`And does Reynolds have its own formulations of e-liquid
`for the product?
`A.
`We do, yes.
`Q.
`Okay. And could you describe those very generally for
`the jury? And I understand that they're proprietary, so if
`you'll tell the jury what "proprietary" means also?
`A.
`Sure. So, I mean, proprietary means there are kind of
`secret formulas, right, so, you know, it's like the Coke recipe,
`and Reynolds, when they developed Solo, we developed all of our
`own e-liquids, and we wanted to keep those proprietary because
`
`1 2 3 4 5 6 7 8 9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`Scott L. Wallace, RDR, CRR, Official Court Reporter
`
`
`
`Case 1:20-cv-00393-LMB-WEF Document 1468-4 Filed 04/05/23 Page 13 of 19 PageID#
`40793
`
`555
`
`we thought that was, you know, basically the Coca-Cola formula
`for us and these products. And they have specific formulations,
`right, and they offer specific consumer benefits when applied
`especially in the Solo format.
`Q.
`And can you tell the jury, again just very top line, how
`is the e-liquid manufactured and where and just a little bit
`about that process?
`A.
`Sure. It's basically a food-grade operation, mixing
`operation, where you mix the individual components to the
`specification that's necessary, and for Solo for many years we
`made it -- we started making it first in the R&D facilities and
`in Winston-Salem, and now we make it kind of up the street at
`the factory just outside of Winston-Salem for Vuse Solo.
`Q.
`Now, I know you've been sitting here with us during the
`trial, so you probably heard this yourself, but there's been
`some talk in front of the jury about leakage of e-liquids, okay?
`So can you tell the jury about that?
`A.
`Well, all these products have liquid in them. By -- the
`only way that they can work is -- everything that's holding the
`liquid in, there's still holes, two holes, minimally, on every
`product that is in existence today, so they kind of have a
`propensity to leak. I mean, you've got liquid trying to be held
`into a matrix and it's got two holes in it.
`Now, you can try to minimize leakage by the design of the
`cartridge that it sits in through gaskets, but also design of
`
`1 2 3 4 5 6 7 8 9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`Scott L. Wallace, RDR, CRR, Official Court Reporter
`
`
`
`Case 1:20-cv-00393-LMB-WEF Document 1468-4 Filed 04/05/23 Page 14 of 19 PageID#
`40794
`
`571
`
`MR. NAPLES: Absolutely, Your Honor.
`THE COURT: All right. Go ahead.
`BY MR. NAPLES:
`Q.
`Now, Dr. Figlar, you talked about these two products, the
`Premier and the Eclipse, correct?
`A.
`Sure, yeah.
`Q.
`Okay. And those are not vapor products?
`A.
`They are not vapor products; they are heat-not-burn
`products.
`Q.
`Okay. And you said those are alternatives to combustible
`cigarettes, correct?
`A.
`They are.
`Q.
`All right. Now, Reynolds does not sell the Premier
`product any longer; is that right?
`A.
`No, they do not.
`Q.
`Okay. And the Premier was removed from the market, I
`think you said because people didn't really like the product; is
`that right?
`A.
`At that time, that's correct, yes.
`Q.
`Okay. But it was also removed from the market because
`there was considerable criticism from the public health
`community; isn't that right?
`A.
`The public health community panned the idea of a
`potentially safer product being out on the market, and so there
`was -- there was quite a heated debate at that time when Premier
`
`1 2 3 4 5 6 7 8 9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`Scott L. Wallace, RDR, CRR, Official Court Reporter
`
`
`
`Case 1:20-cv-00393-LMB-WEF Document 1468-4 Filed 04/05/23 Page 15 of 19 PageID#
`40795
`
`572
`
`came out. So, yeah, there were -- that was part of -- that was
`definitely part of the controversy, yes.
`Q.
`Right. It wasn't just the taste of the Premier, it was
`also because the public health community criticized Premier; is
`that right?
`A.
`I think there -- I think it's always -- in many of these
`situations, of course it's complicated, but that's one of the
`factors. The product did not taste that good, for sure, and
`that is a -- that is a problem with consumers. But then with
`the public health community coming out against it, or at least
`some in the public health community coming out against it,
`because there were others that were for it, doesn't help either.
`Q.
`Right. And then Reynolds removed that product from the
`market, correct?
`A.
`Right, and then started working on Eclipse.
`Q.
`Right. And Eclipse, I think -- well, is it true that
`Eclipse was initially launched in a small market in 1996?
`A.
`Yeah, I think it was launched in three small test markets
`in '96 and then went national in 2000.
`Q.
`Okay. And then Reynolds starting -- started selling the
`Eclipse nationwide in about 2000?
`A.
`Yes, in 2000, that's correct.
`Q.
`Okay. But the Eclipse has actually never been a big
`seller for Reynolds, has it?
`A.
`Sadly, no, it's not.
`
`1 2 3 4 5 6 7 8 9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`Scott L. Wallace, RDR, CRR, Official Court Reporter
`
`
`
`Case 1:20-cv-00393-LMB-WEF Document 1468-4 Filed 04/05/23 Page 16 of 19 PageID#
`40796
`
`573
`
`Q.
`Okay. And I think the last time we spoke, you told me
`that sales of Eclipse products started declining in 2004 and
`they've basically been on that trajectory ever since; is that
`right?
`A.
`Heat-not-burn products have not done well in the U.S.,
`that is for sure. And Eclipse, as one of them, has not
`performed as well as we would hope or want.
`Q.
`Right. I mean, my question was specifically about the
`Eclipse, okay?
`A.
`Understood.
`Q.
`So the Eclipse's sales have been declining since about
`2004, correct?
`A.
`That's fair.
`Q.
`Okay. And I think you said during your direct
`examination that Reynolds invested well over a billion dollars
`in the Eclipse and the Premier heat-not-burn products; is that
`right?
`A.
`That is correct.
`Q.
`Okay. And is it true that after spending that billion
`dollars, Reynolds learned that it was difficult to get consumers
`to convert to heat-not-burn products because they really just
`couldn't just compete with cigarettes; is that right?
`A.
`I think that's generally correct. I mean, Reynolds spent
`about 30 years trying to attract consumers to heat-not-burn so I
`think that's a fair statement.
`
`1 2 3 4 5 6 7 8 9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`Scott L. Wallace, RDR, CRR, Official Court Reporter
`
`
`
`Case 1:20-cv-00393-LMB-WEF Document 1468-4 Filed 04/05/23 Page 17 of 19 PageID#
`40797
`
`575
`
`Q.
`I think this is the same slide that Ms. Parker used in
`her opening, correct?
`A.
`Maybe so. I don't have an eidetic memory in terms of
`what was shown, but, yeah, probably that's fair.
`Q.
`Okay. And you testified in your direct examination that
`the Alto, which is the last product here, that is the
`best-selling product or best-selling Vuse product, right?
`A.
`Today, yes.
`Q.
`Today, today, correct. Now, it is true, Dr. Figlar, that
`Reynolds didn't even design the Alto product, right?
`A.
`Alto, no. We were not part of the design. We -- we
`evaluated the product and liked it with one of our suppliers and
`licensed it.
`Q.
`Right. A Chinese company called Smoore actually designed
`the Alto product, right?
`A.
`Yes, they were one of our suppliers and they offered that
`up.
`Q.
`And then a different company in China called Feelm, they
`designed the heater in the Alto product, correct?
`A.
`I believe that is correct, yes.
`Q.
`Okay. Now, the Vibe product, Reynolds didn't design that
`product either, did it?
`A.
`Nope, and I don't believe I testified that we did.
`Q.
`Well, Reynolds didn't design the Ciro product either; is
`that right?
`
`1 2 3 4 5 6 7 8 9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`Scott L. Wallace, RDR, CRR, Official Court Reporter
`
`
`
`Case 1:20-cv-00393-LMB-WEF Document 1468-4 Filed 04/05/23 Page 18 of 19 PageID#
`40798
`
`577
`
`to do and get a successful PMTA. We did that for those
`products.
`Q.
`Just to confirm, Dr. Figlar, Reynolds acquired or
`purchased the designs for the Ciro, the Vibe and the Alto from a
`supplier, correct?
`A.
`That is correct.
`Q.
`Thank you. In the short time Ms. Parker had during
`direct she also talked about this PMTA clearance; is that right?
`A.
`Um-hmm.
`Q.
`And the Alto is not cleared by the PMTA, correct?
`A.
`It is still under review with FDA.
`Q.
`And that is the best-selling Reynolds Vapor product
`today, correct?
`A.
`That is true, but that was our last submission, so kind
`of last, last in, last out.
`Q.
`Sure, sure. And if the FDA decides not to clear the Alto
`for sale in the U.S., then Reynolds has to take it off the
`market, correct?
`A.
`Well, there are a number of provisions that would happen
`first. There's administrative review that you can go through,
`an appeal, basically, through the FDA, as well as potential
`judicial review before it would come off the market, but if,
`ultimately, after Reynolds runs through the complete gamut of
`options to keep Alto on the market, if the FDA doesn't change
`its mind and they say -- then, yeah, it's --
`
`1 2 3 4 5 6 7 8 9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`Scott L. Wallace, RDR, CRR, Official Court Reporter
`
`
`
`Case 1:20-cv-00393-LMB-WEF Document 1468-4 Filed 04/05/23 Page 19 of 19 PageID#
`40799
`
`580
`
`then support those applications through the FDA, because the FDA
`has questions after you do an application. There's a lot of
`back-and-forth that goes on. So -- yeah, it's a heavy lift.
`THE COURT: You mentioned earlier that the liquid
`component of these e-cigarettes is an important aspect. When you
`purchased these three cigarettes from other manufacturers, were
`you also purchasing the liquid or were you supplying the liquid?
`THE WITNESS: We purchased the liquids that were on the
`market at that time because we couldn't -- as much as we may want
`to put our own liquids in there, because the FDA had locked the
`marketplace, we would have to use the liquids that already were
`in those products on the marketplace as of August 8, 2016.
`Now, we have plans, of course, to change that, but you
`have to go through this PMTA process first before you can then
`make alterations to say the liquids that you want to have in your
`products. We have plans to do that, but you had to -- we had to
`wait for the FDA to clear them first before we could make
`addendums to those PMTAs. Does that make sense?
`THE COURT: Yes, thank you.
`BY MS. PARKER:
`Q.
`So for the products that Reynolds purchased, we acquired
`the technology compared to the one that Reynolds developed --
`I'm going to say from scratch, is there any difference in terms
`of the PMTA requirements and the amount of time, money, effort
`that Reynolds spent on something through the PMTA process for
`
`1 2 3 4 5 6 7 8 9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`Scott L. Wallace, RDR, CRR, Official Court Reporter
`
`
Accessing this document will incur an additional charge of $.
After purchase, you can access this document again without charge.
Accept $ Charge
Still Working On It
This document is taking longer than usual to download. This can happen if we need to contact the court directly to obtain the document and their servers are running slowly.
Give it another minute or two to complete, and then try the refresh button.
A few More Minutes ... Still Working
It can take up to 5 minutes for us to download a document if the court servers are running slowly.
Thank you for your continued patience.
This document could not be displayed.
We could not find this document within its docket. Please go back to the docket page and check the link. If that does not work, go back to the docket and refresh it to pull the newest information.
Your account does not support viewing this document.
You need a Paid Account to view this document. Click here to change your account type.
Your account does not support viewing this document.
Set your membership
status to view this document.
With a Docket Alarm membership, you'll
get a whole lot more, including:
- Up-to-date information for this case.
- Email alerts whenever there is an update.
- Full text search for other cases.
- Get email alerts whenever a new case matches your search.
One Moment Please
The filing “” is large (MB) and is being downloaded.
Please refresh this page in a few minutes to see if the filing has been downloaded. The filing will also be emailed to you when the download completes.
Your document is on its way!
If you do not receive the document in five minutes, contact support at support@docketalarm.com.
Sealed Document
We are unable to display this document, it may be under a court ordered seal.
If you have proper credentials to access the file, you may proceed directly to the court's system using your government issued username and password.
Access Government Site
