Case 1:20-cv-00393-LMB-WEF Document 1469-6 Filed 04/05/23 Page 1 of 6 PageID# 41168
`Case 1:20-cv-00393-LMB-WEF Document 1469-6 Filed 04/05/23 Page 1 of 6 PagelD# 41168
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`EXHIBIT 74
`EXHIBIT 74
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`Case 1:20-cv-00393-LMB-WEF Document 1469-6 Filed 04/05/23 Page 2 of 6 PageID# 41169
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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 STACY EHRLICH
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`I, Stacy Ehrlich, declare as follows:
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`I.
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`PROFESSIONAL BACKGROUND AND EXPERTISE
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`I am a partner at the law firm of Kleinfeld, Kaplan & Becker, LLP in Washington,
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`DC. I received my law degree, cum laude, from Harvard Law School, am admitted to practice in
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`the District of Columbia, and have been specializing in regulatory law for over twenty-five years.
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`A significant part of my regulatory experience involves laws and regulations related
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`to the U.S. Food and Drug Administration (“FDA”). At least half of my current practice deals
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`with FDA regulation of tobacco and nicotine products under the Federal Food, Drug, and Cosmetic
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`Act, as amended by the Family Smoking Prevention and Tobacco Control Act (“TCA”). This
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`specialization requires me to keep abreast of FDA’s policies, statements, decisions, and actions
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`related to those products.
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`Types of FDA tobacco and nicotine regulatory work I assist clients with include
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`consulting on and shepherding through important FDA authorization applications.
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`I also have served as an FDA expert twice—once in the above-captioned matter
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`and once in the related investigation before the U.S. International Trade Commission, Inv. No.
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`Case 1:20-cv-00393-LMB-WEF Document 1469-6 Filed 04/05/23 Page 3 of 6 PageID# 41170
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`337-TA-1199. Both were on behalf of Philip Morris Products, S.A. (“Philip Morris”), and I am
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`generally familiar with the FDA-related aspects of both actions.
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`II.
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`THE DEEMING RULE AND ITS EFFECT ON E-CIGARETTE DESIGNS
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`Congress passed the TCA in 2009, giving FDA authority to regulate cigarettes and
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`certain other specified tobacco products.1 The TCA further provided that FDA may promulgate
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`regulations “deeming” other products to be subject to its tobacco product authorities under the
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`statute.2
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`The Deeming Rule, which went into effect on August 8, 2016, expanded the TCA’s
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`applicability to all products meeting the statutory definition of “tobacco product,” including e-
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`cigarettes and e-liquids. This meant that all deemed “new tobacco products” – defined as tobacco
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`or nicotine products that were not marketed in the United States as of February 15, 2007, or were
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`modified after that date3 – had to have premarket authorization in order to be sold legally in the
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`United States.
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`It is generally accepted that no modern e-cigarette product was commercially
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`marketed in the United States as of February 15, 2007, making all current e-cigarettes new tobacco
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`products under the TCA.4 This includes VUSE products from R.J. Reynolds Vapor Company
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`1 21 U.S.C. § 387a(b); Enforcement Priorities for Electronic Nicotine Delivery Systems (ENDS)
`and Other Deemed Products on the Market Without Premarket Authorization (Revised), FDA, at
`3 (Apr. 2020), https://www.fda.gov/media/133880/download (“FDA E-Cigarette Guidance”); see
`Mitch Zeller, Perspective: FDA’s Preparations for the September 9 Submission Deadline, FDA
`(Aug.
`31,
`2020),
`https://www.fda.gov/tobacco-products/ctp-newsroom/perspective-fdas-
`preparations-september-9-submission-deadline (“Director Perspective”).
`2 21 U.S.C. § 321(rr); 21 U.S.C. § 387a(b).
`3 81 Fed. Reg. 28974 at 28975-76 (May 10, 2016); FDA E-Cigarette Guidance at 3-4, 10; Director
`Perspective.
`4 Director Perspective.
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`2
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`Case 1:20-cv-00393-LMB-WEF Document 1469-6 Filed 04/05/23 Page 4 of 6 PageID# 41171
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`(“Reynolds”)—specifically the VUSE Solo G2 and VUSE Alto cartridges that the jury in the
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`above-captioned case found to infringe U.S. Patent Nos. 10,104,911 and 9,814.5
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`Thus, before e-cigarette products can be legally sold in the United States, they must
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`earn premarket tobacco product (“PMT”) authorization from FDA.6 I have worked on
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`approximately forty PMT applications.
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`The PMT authorization requirement triggered by the Deeming Rule rendered all e-
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`cigarettes on sale in the United States as of August 8, 2016, instantaneously illegal.7
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`In order to prevent the total and immediate removal of these e-cigarettes from the
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`U.S. market, however, FDA unveiled a compliance policy whereby e-cigarettes (and other new
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`tobacco products in the newly deemed categories) already on the U.S. market as of the Deeming
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`Rule’s effective date could remain so until a specified deadline for submitting PMT applications.8
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`FDA made clear, however, that the compliance policy did not confer lawful marketing status on
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`new tobacco products being sold without the necessary PMT authorization.9
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`The protections of this compliance policy are extinguished if the design of the new
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`tobacco product is modified from the design that existed as of the effective date of the Deeming
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`Rule, August 8, 2016.10 If such a modification were to occur, the new tobacco product must be
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`removed from the U.S. market until FDA grants PMT authorization to the modified design.11
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`5 Dkt. 1414; see FDA E-Cigarette Guidance at 4; Director Perspective.
`6 81 Fed. Reg. at 28975-76; FDA E-Cigarette Guidance at 4, 10; Director Perspective.
`7 See FDA E-Cigarette Guidance at 10-11.
`8 See FDA E-Cigarette Guidance at 4; Director Perspective.
`9 FDA E-Cigarette Guidance at 4; see Director Perspective.
`10 FDA E-Cigarette Guidance at 4, 10.
`11 See id.
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`3
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`Case 1:20-cv-00393-LMB-WEF Document 1469-6 Filed 04/05/23 Page 5 of 6 PageID# 41172
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`III. THE DESIGN OF REYNOLDS’ VUSE ALTO E-CIGARETTE CARTRIDGES
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`I understand that cartridges embodying the design of the VUSE Alto cartridges
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`were offered for sale in the United States as of August 8, 2016, the effective date of the Deeming
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`Rule’s enactment, under the name Wabling by an entity other than Reynolds.12
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`I further understand that Reynolds did not develop the design for the VUSE Alto
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`cartridges itself but instead licensed that design from Shenzhen Smoore Technology Ltd. during
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`the second half of 2018.13 Reynolds then relaunched that design in the U.S. market as VUSE Alto
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`in August 2018.14
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`I also understand that Reynolds has only one pending PMT application for the
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`VUSE Alto cartridges, and that application reflects the Wabling cartridge design that was on sale
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`as of August 8, 2016.15
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`In order for Reynolds to continue to sell the VUSE Alto cartridges in the United
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`States prior to FDA granting the pending VUSE Alto PMT application, Reynolds may not make
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`any changes to the cartridges’ design as it existed on August 8, 2016.16
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`12 Ex. 1 (Hunt Dep.) 299:2-300:4 (Apr. 14, 2021) (testifying that the Wabling cartridge is the same
`product as the Alto cartridge and was sold in the United States prior to August 8, 2016).
`13 Ex. 2 (Gilly Dep.) 70:24-71:15 (Dec. 3, 2020) (testifying that Reynolds “obtained a license to
`sell that [Alto] product in the send half of 2018” from Smoore); Ex. 3 (Figlar Hr’g Tr. 553:2-16
`(June 9, 2022) (testifying that Alto “was a product that we [Reynolds] licensed from one of our
`suppliers”), 558:22-559:15 (testifying that Reynolds “negotiated with [its] supplier to get a license
`to use that [Alto] product”), 575:9-20 (testifying that a Chinese company called Smoore designed
`the Alto, not Reynolds).
`14 Ex. 1 (Hunt Dep.) 299:2-8 (testifying that Alto was first sold by Reynolds in August 2018).
`15 Ex. 3 (Figlar Hr’g Tr.) 566:1-11 (testifying that single Alto PMT application is still pending);
`Ex. 1 (Hunt Dep. 299:2-300:4) (testifying that the Wabling cartridge is the same product as the
`Alto).
`16 Ex. 3 (Figlar Hr’g Tr.) 553:2-16 (“[A]ny new innovations have to either be off of this [Alto]
`design or any new design has to go straight to the FDA before you can go into market.”); see FDA
`E-Cigarette Guidance at 4, 10. Notably, even if the VUSE Alto cartridge does not change its
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`4
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`Case 1:20-cv-00393-LMB-WEF Document 1469-6 Filed 04/05/23 Page 6 of 6 PageID# 41173
`Case 1:20-cv-00393-LMB-WEF Document 1469-6 Filed 04/05/23 Page 6 of 6 PagelD# 41173
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`16.—[f Reynolds wereto alter the August 8. 2016, design of the VUSEAlto cartridges
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`in any manner. Reynolds wouldnot be able tosell that product on the U.S. market until it received
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`PMT authorization from FDAforthat modified design.’
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`I declare under the penalty ofperjury that the foregoing is true and correct to the best of by
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`knowledge.
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`Executed on September, 2022
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`Stacy Ehrlich
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`design from that on sale in the United States on August 8, 2016, FDA hasstated that products not
`PMT-reviewed by September 9, 2021, “risk FDA enforcement per FDA’s guidance.” Mitch
`Zeller, Perspective: FDA's Progress on Reviewof Tobacco Product Applications Submitted bythe
`Sept.
`9, 2020 Deadline, FDA (Feb.
`16, 2021), https://www.fda.gov/tobacco-products/ctp-
`newsroom/perspective-fdas-progress-review-tobacco-product-applications-submitted-sept-9-
`2020-deadline.
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`'7 F-Cigarette Guidanceat 4, 10.
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