Case 1:20-cv-00393-LMB-WEF Document 1468-7 Filed 04/05/23 Page 1 of 6 PageID# 40813
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`Exhibit 16
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`Case 1:20-cv-00393-LMB-WEF Document 1468-7 Filed 04/05/23 Page 2 of 6 PageID# 40814
`CONTAINS CONFIDENTIAL BUSINESS INFORMATION
`SUBJECT TO PROTECTIVE ORDER
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`UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF VIRGINIA
`Alexandria Division
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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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`v.
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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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`Case No. 1:20cv00393-LO-TCB
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`RAI STRATEGIC HOLDINGS, INC. AND R.J. REYNOLDS VAPOR COMPANY’S
`SECOND SUPPLEMENTAL OBJECTIONS AND RESPONSES TO ALTRIA CLIENT
`SERVICES LLC, PHILIP MORRIS USA, INC., AND PHILIP MORRIS PRODUCTS
`S.A.’S EIGHTH SET OF INTERROGATORIES (NO. 30)
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`Pursuant to Federal Rules of Civil Procedure 26 and 33, RAI Strategic Holdings, Inc. and
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`R.J. Reynolds Vapor Company (collectively, “Reynolds”) hereby supplements its response to
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`Altria Client Services LLC, Philip Morris USA, Inc., and Philip Morris Products S.A.’s
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`(collectively, “Defendants” or “Counterclaim Plaintiffs”) Eighth Set of Interrogatories (No. 30) as
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`follows.
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`PRELIMINARY STATEMENT AND OBJECTIONS TO DEFINITIONS AND
`INSTRUCTIONS
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`Reynolds incorporates and reiterates its preliminary statement and objections to the
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`Definitions and Instructions.
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`INTERROGATORY NO. 30:
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`INTERROGATORIES
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`To the extent you contend that PMP is not entitled to permanent injunctive relief, describe
`in detail the complete factual and legal basis for Your contention, including but not limited to any
`contention (i) that PMP has not suffered irreparable injury, (ii) that remedies available at law, such
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`CONTAINS CONFIDENTIAL BUSINESS INFORMATION
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`as monetary damages, are adequate to compensate for that injury, (iii) that considering the balance
`of hardships between You and PMP, a remedy in equity is unwarranted, and (iv) that the public
`interest would be disserved by a permanent injunction, and identify the three (3) individuals most
`knowledgeable of the foregoing subjects, as well as all Documents and things on which You intend
`to rely to support Your contention.
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`OBJECTIONS:
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`Reynolds objects to this interrogatory to the extent it seeks information protected by the
`attorney-client privilege, the attorney work product doctrine, the common interest privilege, or any
`other applicable privilege or immunity. Reynolds objects to this interrogatory as overly broad,
`unduly burdensome, and seeking information that is not relevant to any claim or defense in this
`case to the extent it seeks information relating to Defendants’/Counterclaim Plaintiffs’ overly
`broad definition of the terms “You” and “Your.” For instance, this interrogatory seeks information
`regarding entities on whose behalf Reynolds lacks the authority and information to respond and
`regarding entities that have no involvement or relevance to any claims or defenses in this action.
`Reynolds objects to this interrogatory as overly broad, unduly burdensome, and seeking
`information that is not relevant to any claim or defense in this case to the extent it seeks “all”
`factual and legal bases for Reynolds’s contention that PMP is not entitled to permanent injunctive
`relief. Reynolds objects to this interrogatory because it is composed of multiple discrete subparts
`under Fed. R. Civ. P. 33, which, when counted with other interrogatories served by
`Defendants/Counterclaim Plaintiffs that also contain multiple subparts, exceeds the number of
`interrogatories permitted by the Rule 16(b) Scheduling Order and the parties’ Joint Discovery Plan.
`See Dkt. Nos. 97, 99. Reynolds objects to this interrogatory to the extent it seeks information that
`is not in Reynolds’s possession and/or information that is dependent upon discovery from
`Defendants and third parties.
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`RESPONSE:
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`Subject to and without waiving its objections, Reynolds responds as follows:
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`Reynolds contends that no injunctive relief should be awarded with respect to any alleged
`infringement of the PMP asserted patents because the PMP asserted patents are not infringed
`directly, indirectly, literally, or under the doctrine of equivalents as described in Reynolds’s
`responses to Defendants’ Interrogatory No. 1 and in the rebuttal expert reports of Kelly R. Kodama
`and Jeffrey C. Suhling served March 24, 2021. Moreover, the claims of the PMP asserted patents
`are invalid under one or more sections of the Patent Act, for the reasons described in Reynolds’s
`responses to Defendants’ Interrogatory No. 2 and in the expert invalidity reports of Kelly R.
`Kodama and Jeffrey C. Suhling served February 24, 2021. Injunctive relief can only be awarded
`upon a finding of infringement, and there can be no infringement of an invalid patent. See, e.g.,
`Viskase Corp. v. Am. Nat’l Can Co., 261 F.3d 1316, 1323 (Fed. Cir. 2001).
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`Reynolds maintains that PMP must set forth a theory and basis for its requested injunctive
`relief and explain in detail why PMP allegedly is entitled to such relief. When PMP does so,
`Reynolds will respond. Reynolds further states that it is premature to identify the three persons
`most knowledgeable about its contention that PMP is not entitled to injunctive relief because
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`2
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`CONTAINS CONFIDENTIAL BUSINESS INFORMATION
`SUBJECT TO PROTECTIVE ORDER
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`Reynolds will be formulating those theories in response to PMP’s theory and basis for requesting
`injunctive relief.
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`Preliminarily, however, Reynolds identifies PMP’s request for “[a]n award of damages
`adequate to compensate PMP for the infringement that has occurred, pursuant to 35 U.S.C. § 284,
`including prejudgment and post-judgment interest” and other money damages in its prayer for
`relief in its second amended counterclaims, as well as the Opening Expert Report of Paul K. Meyer,
`as evidence, should PMP prevail on liability, that PMP has not suffered irreparable injury and that
`remedies available at law, such as monetary damages, are adequate to compensate PMP for any
`alleged injury. Reynolds will supplement its response to this interrogatory as discovery on PMP’s
`request for injunctive relief progresses and to the extent that PMP provides its contentions with
`respect to why it claims to be entitled to injunctive relief for alleged infringement by any Reynolds
`accused product of any asserted claim of the PMP asserted patents in response to Reynolds’s
`Interrogatory Nos. 23-24 and/or in an expert report.
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`FIRST SUPPLEMENTAL RESPONSE TO INTERROGATORY NO. 30 (Apr. 30, 2021):
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`Subject to and without waiving its objections, Reynolds supplements its response as
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`follows:
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`I.
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`PMP’s Irreparable Harm Theory Relies Exclusively On The Alleged Impact That
`The Reynolds Accused Products Have On Sales Of IQOS Products, Which Theory
`Will Disappear If And When The Infringing IQOS Products Are Excluded From
`The US Market.
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`PMP rests its new claim of irreparable harm on the notion that sales of the VUSE Solo,
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`Vibe, Ciro, and Alto (collectively, the “Reynolds Accused Products”) are somehow impeding the
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`success of, and taking sales away from, the IQOS products. (PMP Resp. to 6th Set of
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`Interrogatories (Nos. 23-24), at 6-7 (April 9, 2021) [hereinafter “PMP Resp.”].) As discussed in
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`Part II below, this theory is groundless as a matter of fact, since—according to PMP’s own market
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`research and experts before the U.S. International Trade Commission (“ITC”)—the abject failure
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`of the IQOS products in the marketplace (and particularly in the United States) has absolutely no
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`relation to the Reynolds Accused Products. Before turning to those facts, however, it is important
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`to note that PMP’s entire theory of irreparable harm, and thus its entire claim for injunctive relief,
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`will evaporate should Reynolds prevail in parallel proceedings before the ITC, which will be
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`decided this year.
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`3
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`CONTAINS CONFIDENTIAL BUSINESS INFORMATION
`SUBJECT TO PROTECTIVE ORDER
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`VUSE products were to be excluded from the marketplace. The Reynolds Accused Products are
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`central to Reynolds’s present and future business, Reynolds has invested heavily in these products,
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`and (unlike IQOS) the Reynolds Accused Products have been very successful in the marketplace.
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`VUSE is Reynolds’s flagship e-cigarette product line, and permanent injunction of the
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`Reynolds Accused Products would irreparably harm Reynolds’s reputation as an innovator, and in
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`particular Reynolds’s recognized standing as a digital vapor technology pioneer, as well as
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`Reynolds’s U.S. vapor market share and the goodwill that Reynolds has built up over the years
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`since VUSE was first marketed. Reynolds first entered the U.S. market with the launch of VUSE
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`Solo in 2013, followed by Vibe in 2015, and then Ciro and Alto. (See, e.g., VUSE Website,
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`Devices, https://vusevapor.com/devices (accessed 4/30/2021) (“Vuse has pioneered vapor
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`technology since launching the world’s first truly digital vapor cigarette in 2013.”); R.J. Reynolds
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`Vapor Company Website, Vapor, https://www.rjrvapor.com/products/vapor
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`(accessed
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`4/30/2021).)
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`Upon its release of Solo, significant market analysts noted that VUSE was “technologically
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`interesting,” and that “[n]ear-term, [VUSE] clearly raises the competitive stakes[.]” (Morgan
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`Stanley, “Reynolds American Blazing a Digital Vapor Trail with VUSE Launch,” 6/6/2013, at 1.)
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`Reynolds was the market share leader from 2015 to 2017 (Levy, David T. et al. (2019), “An
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`Economic Analysis of the Pre-Deeming U.S. Market for Nicotine Vaping Products,” Tobacco
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`Regulatory Science, at 6, and 20, Table 2), and e-vapor developments have been part of Reynolds’s
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`“multi-decade track-record of thought-leading innovation” in the U.S. tobacco industry. (Cowen
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`and Company, “MA+Innovation = Structurally Advantaged Growth; Groans Over Guidance
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`Priced In,” 8/15/2016, at 1. (“As seen in Figure 1, RAI has a multidecade track-record of thought-
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`25
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`Case 1:20-cv-00393-LMB-WEF Document 1468-7 Filed 04/05/23 Page 6 of 6 PageID# 40818
`CONTAINS CONFIDENTIAL BUSINESS INFORMATION
`SUBJECT TO PROTECTIVE ORDER
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`Dated: April 30, 2021
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`Stephanie E. Parker
`JONES DAY
`1420 Peachtree Street, N.E.
`Suite 800
`Atlanta, GA 30309
`Telephone: (404) 521-3939
`Facsimile: (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
`Telephone: (858) 314-1200
`Facsimile: (844) 345-3178
`Email: aminsogna@jonesday.com
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`William E. Devitt
`JONES DAY
`77 West Wacker
`Suite 3500
`Chicago, IL 60601
`Telephone: (312) 269-4240
`Facsimile: (312) 782-8585
`Email: wdevitt@jonesday.com
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`Sanjiv P. Laud
`JONES DAY
`90 South Seventh Street
`Suite 4950
`Minneapolis, MN 55402
`Telephone: (612) 217-8800
`Facsimile: (844) 345-3178
`Email: slaud@jonesday.com
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` Respectfully submitted,
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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 Avenue
`Cleveland, OH 44114
`Telephone: (216) 586-3939
`Facsimile: (216) 579-0212
`Email: dmaiorana@jonesday.com
`Email: rbmccrum@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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`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
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`Charles B. Molster, III (VA Bar No. 23613)
`The Law Offices of Charles B. Molster III PLLC
`2141 Wisconsin Ave., N.W., Suite M
`Washington, DC 20007
`Telephone: (703) 346-1505
`Email: cmolster@molsterlaw.com
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`Counsel for Plaintiffs RAI Strategic Holdings,
`Inc. and R.J. Reynolds Vapor Company
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`45
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