Case 1:20-cv-00393-LMB-WEF Document 1485 Filed 04/25/23 Page 1 of 17 PageID# 41539
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`UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF VIRGINIA
`ALEXANDRIA DIVISION
`
`
`PHILIP MORRIS PRODUCTS S.A.
`
`
`
`Plaintiff,
`
`
`v.
`
`R.J. REYNOLDS VAPOR COMPANY
`
`
`Defendant.
`
`
`
`
`
`
`Case No. 1:20-cv-00393-LMB-WEF
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`
`ORAL ARGUMENT REQUESTED
`
`
`
`
`
`
`PHILIP MORRIS PRODUCTS S.A.’S RESPONSE TO R.J. REYNOLDS VAPOR
`COMPANY’S MOTION FOR ENTRY OF JUDGMENT UNDER RULE 54(b) AND
`CROSS-MOTION TO LIFT THE STAY AS TO U.S. PATENT NO. 9,901,123
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`
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`
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`

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`Case 1:20-cv-00393-LMB-WEF Document 1485 Filed 04/25/23 Page 2 of 17 PageID# 41540
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`I.
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`II.
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`TABLE OF CONTENTS
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`Page
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`INTRODUCTION ...............................................................................................................1
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`BACKGROUND .................................................................................................................2
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`A.
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`B.
`
`C.
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`RJRV’s Asserted Patents .........................................................................................2
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`The ’123 Patent IPRs ...............................................................................................3
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`PMP’s Counterclaims In This Case .........................................................................5
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`III.
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`LEGAL STANDARD ..........................................................................................................5
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`A.
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`B.
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`Federal Rule of Civil Procedure 54(b) .....................................................................5
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`The Court’s Authority To Lift A Stay .....................................................................5
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`IV.
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`ARGUMENT .......................................................................................................................6
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`A.
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`B.
`
`C.
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`Lifting The Stay On The ’123 Patent Is Proper Under 28 U.S.C. § 1659(a)
`Because The ITC Determination Is Final ................................................................6
`
`Judgment Of Invalidity In District Court Is Immediately Binding On The
`ITC ...........................................................................................................................7
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`Equity And Fairness Favor Lifting The Stay ...........................................................8
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`i
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`TABLE OF AUTHORITIES
`
`CASES
`
`Almubarak v. Shahin,
`No. 1:19-cv-00358, 2021 WL 1846823 (E.D. Va. Mar. 26, 2021) ......................................... 5, 9
`
`Boyle v. Cty. of Kern,
`No. 03-cv-05162, 2008 WL 220413 (E.D. Cal. Jan. 25, 2008) ................................................... 6
`
`Braswell Shipyards, Inc. v. Beazer E., Inc.,
`2 F.3d 1331 (4th Cir. 1993) ......................................................................................................... 5
`
`Certain Composite Wear Components & Products Containing the Same,
`Inv. No. 337-TA-644, Comm’n Op. (Feb. 10, 2011) .............................................................. 7, 9
`
`Core Lab’ys LP v. Spectrum Tracer Servs., L.L.C.,
`532 F. App’x 904 (Fed. Cir. 2013) .............................................................................................. 6
`
`In re Princo Corp.,
`486 F.3d 1365 (Fed. Cir. 2007) ................................................................................................... 7
`
`In the Inter Partes Review: of U.S. Patent No. 9,901,123,
`2020 WL 2510349 (Sept. 18, 2020) ............................................................................................ 3
`
`In the Matter of Certain Monoclonal Antibodies,
`Inv. No. 337-TA-323, Order No. 2 (Mar. 1991) ......................................................................... 8
`
`In the Matter of Certain Tobacco Heating Articles & Components Thereof,
`Inv. No. 337-TA-1199, 2021 WL 2333742 (May 14, 2021) ................................................... 3, 9
`
`Kirsch Rsch. & Dev., LLC v. Epilay, Inc.,
`No. 20-cv-03773, 2021 WL 4732578 (C.D. Cal. May 7, 2021),
`reconsideration denied, 2021 WL 4704721 (C.D. Cal. Aug. 18, 2021) ................................... 10
`
`Nken v. Holder,
`556 U.S. 418 (2009) .................................................................................................................... 6
`
`Oyster Optics, LLC v. Ciena Corp.,
`No. 17-cv-05920, 2019 WL 4729468 (N.D. Cal. Sept. 23, 2019) ............................................ 10
`
`Pathway Innovations and Technologies, Inc. v. Adesso, Inc.,
`No. 15-cv-01538, Dkt. 17 (S.D. Cal. Jan. 11, 2016) ................................................................... 7
`
`Philip Morris Prods. S.A. v. Int’l Trade Comm’n,
`63 F.4th 1328 (Fed. Cir. 2023) .................................................................................................... 3
`
`i
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`
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`Pro Stage Gear, LLC v. Guangzhou Rantion Trading Co.,
`No. 17-cv-30, 2019 WL 10960473 (E.D. Tenn. Nov. 19, 2019) ................................................ 6
`
`SSIH Equip. S.A. v. U.S. Int’l Trade Comm’n,
`718 F.2d 365 (Fed. Cir. 1983) ................................................................................................. 8, 9
`
`Ultravision Tech., LLC v. CreateLED Elecs. Co.,
`No. 2:18-cv-00148, Dkt. 14 (E.D. Tex. Apr. 10, 2019) .............................................................. 7
`
`United States ex rel. A1 Procurement, LLC v. Thermcor, Inc.,
`173 F. Supp. 3d 320 (E.D. Va. 2016) ...................................................................................... 6, 7
`
`Zee Co. v. Williams, Mullen, Clark & Dobbins, P.C.,
`No. 1:11-cv-00458, 2012 WL 12902711 (E.D. Va. May 31, 2012) ........................................... 5
`
`STATUTES
`
`28 U.S.C. § 1659(a) .................................................................................................................... 5, 6
`
`28 U.S.C. §1659(b) ....................................................................................................................... 11
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`ii
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`I.
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`INTRODUCTION
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`R.J. Reynolds Vapor Company (“RJRV”) asks the Court to exercise its discretion to enter
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`a Rule 54(b) partial judgment to avoid the purported “harm” of paying an ongoing royalty for its
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`infringing post-verdict sales while related proceedings conclude. Yet, at the same time, RJRV
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`contends that the Court should hold RJRV’s infringement claim regarding U.S. Patent No.
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`9,901,123 (“the ’123 patent”) in abeyance while Philip Morris Products S.A.’s (“PMP”) flagship
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`heat-not-burn (“HNB”) products are barred from the United States market, even though the related
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`ITC proceeding on the ’123 patent is final. That is not an equitable result. RJRV cannot have it
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`both ways. If the Court grants RJRV’s Motion For Entry of Judgment Under Rule 54(b)
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`(“Motion,” Dkt. Nos. 1478-1480), the Court should also grant PMP’s cross-motion to lift the stay
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`as to the ’123 patent (“Cross-Motion”). As RJRV concedes—and as the statute requires—that stay
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`was entered only “until the determination of the Commission becomes final.” That occurred when
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`the Federal Circuit affirmed the ITC’s determination on March 31, 2023. Lifting the stay is thus
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`warranted under 28 U.S.C. § 1659(a).1
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`Any delay in lifting the stay on RJRV’s ’123 patent would unfairly prejudice PMP. The
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`ITC’s determination excluded PMP’s flagship IQOS products from the United States market based
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`on a finding of infringement of the ’123 patent. PMP should be allowed to prove the invalidity of
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`the ’123 patent to a jury in this district and, once proven, reintroduce its IQOS HNB Products in
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`the United States. This is particularly true because PMP (i) has successfully invalidated every
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`other asserted RJRV patent and (ii) was only able to present a limited subset of invalidity
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`arguments as to the ’123 patent at the ITC. At the very least, RJRV should not be allowed to use
`
`
`1 Although the certiorari deadline is June 29, 2023, PMP will not seek review of the Federal
`Circuit’s decision.
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`1
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`

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`this Court’s discretion to try to avoid royalty payments for its infringing sales by obtaining a partial
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`judgment, yet simultaneously deprive the United States market of the FDA-authorized IQOS HNB
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`Products by blocking PMP’s ability to challenge the validity of the ’123 patent in this court.
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`The Court should only grant RJRV’s Motion if the Court also grants PMP’s Cross-Motion
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`to lift the stay on the ’123 patent. Otherwise, RJRV’s Motion should be denied.
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`II.
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`BACKGROUND
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`A.
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`RJRV’s Asserted Patents
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`In this case, RJRV accused PMP of infringing five patents: U.S. Patent Nos. 9,839,238 (the
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`“’238 patent”); 9,930,915 (the “’915 patent”); 9,814,268 (the “’268 patent”); 10,492,542 (the
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`“’542 patent”); and the ’123 patent. Dkt. 1. Of those five patents, RJR asserted three (the ’238,
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`’123, and ’915 patents) in the ITC. On June 19, 2020, the Court stayed proceedings related to
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`those three patents until the ITC determination “becomes final.” Dkt. 27. On December 7, 2020,
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`the Court stayed proceedings as to the remaining two patents (the ’268 and ’542 patents) pending
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`the PTAB’s decision on those two patents. Dkt. 432.
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`PMP has successfully invalidated the claims of RJRV’s ’268, ’542, and ’915 patents at the
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`PTAB, and invalidated the claims of RJRV’s ’238 patent at the ITC. Dkt. 1480 at 4. RJRV did
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`not appeal the invalidity determinations for the ’238 and ’268 patents, and RJR dismissed those
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`patents with prejudice on April 24, 2023. Dkt. 1482. RJRV’s appeals as to the PTAB’s
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`invalidation of the ’542 and ’915 patents are pending.2 Dkt. 1480 at 4.
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`RJRV asserted the ’123 patent in the ITC and in this case. The ITC found infringement of
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`claims 27-30 and that those claims were not invalid based on a single prior art reference (an
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`2 The ’542 and ’915 patents are part of a different patent family from the ’123 patent, and those
`appeals cannot impact the ’123 patent.
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`2
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`

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`invalidity ground not presented in this case). See In the Matter of Certain Tobacco Heating
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`Articles & Components Thereof, Inv. No. 337-TA-1199, 2021 WL 2333742, at *21 (May 14,
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`2021). The ITC’s determination is the sole reason that PMP’s IQOS 2.4, IQOS 3, and IQOS 3.1
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`systems and HeatSticks (collectively, the “IQOS HNB Products”) cannot be sold in the United
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`States market.3 The Federal Circuit affirmed the ITC’s determination on March 31, 2023. See
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`Philip Morris Prods. S.A. v. Int’l Trade Comm’n, 63 F.4th 1328, 1332 (Fed. Cir. 2023).
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`B.
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`The ’123 Patent IPRs
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`PMP filed two inter partes reviews (“IPRs”) challenging the validity of two groups of
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`claims from the ’123 patent: IPR2020-00919 (the “919 IPR”) and IPR2020-01602 (the “1602
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`IPR”). First, in the 919 IPR, PMP challenged claims 27-30 of the ’123 patent, which relate to
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`HNB products like the IQOS product that RJR accused PMP of infringing both in this case and at
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`the ITC. See In the Inter Partes Review: of U.S. Patent No. 9,901,123, 2020 WL 2510349 (Sept.
`
`18, 2020); Dkt. 1 ¶ 80; In the Matter of Certain Tobacco Heating Articles & Components Thereof,
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`Inv. No. 337-TA-1199, 2021 WL 2333742, at *8 (May 14, 2021). Second, in the 1602 IPR, PMP
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`challenged claims 1-7, 9, 11-19, 21, and 23-26 of the ’123 patent, which relate solely to RJRV’s
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`own e-vapor devices that RJRV relied on to satisfy “the technical prong of the domestic industry
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`requirement” at the ITC. In re Inter Partes Review of: U.S. Patent No. 9,901,123, 2020 WL
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`5611776; see In the Matter of Certain Tobacco Heating Articles & Components Thereof, Inv. No.
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`337-TA-1199, 2021 WL 2333742, at *8 (May 14, 2021). RJRV did not assert the latter claims
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`against PMP in this case or at the ITC because they relate to e-vapor, not HNB, devices.
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`3 The ITC also found that PMP’s HNB Products infringed certain claims of the ’915 patent, but
`the PTAB invalidated that patent and if the Federal Circuit affirms that decision, that patent will
`not be a basis for the ITC’s exclusion order.
`
`3
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`

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`A table summarizing the relevant information is below:
`
`’123 patent claims asserted against PMP
`in the ITC and this case, and challenged in
`919 IPR
`
`’123 patent claims used to support RJRV’s
`domestic industry at the ITC and
`challenged in 1602 IPR
`
`Claims 27-30 (HNB claims)
`
`Claims 1, 4, 6, 11, 13-15, 17, 19, and 23-26
`(e-vapor claims)
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`On November 16, 2020, the PTAB denied institution of the 919 IPR (claims 27-30, HNB
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`claims) solely on procedural grounds because it “anticipated [a] final determination from the ITC
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`prior to the Board’s final decision on validity.” Ex. 1 (IPR 919 Institution Decision) at 12.4 In
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`other words, the PTAB denied institution of the 919 IPR based on the timing of the ITC procedural
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`schedule, not the merits of PMP’s invalidity challenge. Id. (the “merits do not tip the scale”).
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`Importantly, PMP had voluntarily stipulated it would not present prior art challenges at the ITC
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`duplicative of those presented in the 919 IPR. See Ex. 3 (Petitioner’s Reply to POPR in 919 IPR)
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`at 4 (PMP’s “final ITC [invalidity] contentions … do not raise the same grounds as the IPR”). As
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`a result, no court, tribunal, or jury has considered the invalidity grounds raised against the ’123
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`patent in IPR 919 based on their merits, which PMP can and will raise in this case and that PMP
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`contends invalidates the ’123 patent.
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`The PTAB instituted the 1602 IPR (claims 1, 4, 6, 11, 13-15, 17, 19, and 23-26) and
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`determined that the challenged claims were not unpatentable. Ex. 4 (IPR 1602 Final Written
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`Decision). PMP’s appeal of the 1602 IPR has no impact on this proceeding because the claims at
`
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`4 The PTO has since explained that denials based on parallel ITC proceedings are contrary to the
`PTO’s current policy. But the PTO recognized the PTAB has (contrary to this practice) denied
`institution based on parallel ITC litigation, specifically identifying the Board’s denial of the 919
`IPR as the example of discretionary procedural denials that are improper under current policy. See
`Ex. 2 (Katherine K. Vidal, Interim Procedure for Discretionary Denials in AIA Post-Grant
`Proceedings with Parallel District Court Litigation, USPTO, at 2-3, 6 n.9 (June 21, 2022)).
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`4
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`

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`issue relate solely to RJRV’s e-vapor devices, and RJRV does not accuse PMP’s HNB devices of
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`infringing those claims. See supra at 3.
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`C.
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`PMP’s Counterclaims In This Case
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`In June 2020, PMP filed counterclaims alleging that certain of RJRV’s e-vapor products
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`infringed U.S. Patent Nos. 9,814,265 and 10,104,911. In June 2022, a jury found both patents
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`were infringed and not invalid, awarding PMP about $10.7 million in damages. Dkt. 1361. On
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`March 30, 2023, the Court denied PMP’s requested injunction but granted PMP ongoing royalties
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`for RJRV’s post-verdict infringement. Dkt. 1456.
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`III. LEGAL STANDARD
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`A.
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`Federal Rule of Civil Procedure 54(b)
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`Rule 54(b) requires the Court to analyze whether (1) the judgment in question is final, and
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`(2) there is just reason for delaying entry of judgment. Braswell Shipyards, Inc. v. Beazer E., Inc.,
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`2 F.3d 1331, 1335 (4th Cir. 1993). Whether there is any just reason for delay is a decision within
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`the discretion of the Court. Zee Co. v. Williams, Mullen, Clark & Dobbins, P.C., No. 1:11-cv-
`
`00458, 2012 WL 12902711, at *2 (E.D. Va. May 31, 2012). But “Rule 54(b) certification is the
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`exception, not the rule, and is not meant to be granted routinely.” Almubarak v. Shahin, No. 1:19-
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`cv-00358, 2021 WL 1846823, at *2 (E.D. Va. Mar. 26, 2021) (citing Braswell, 2 F.3d at 1335).
`
`B.
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`The Court’s Authority To Lift A Stay
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`“In a civil action involving parties that are also parties to a proceeding before the United
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`States International Trade Commission under section 337 . . . the district court shall stay, until the
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`determination of the Commission becomes final, proceedings in the civil action with respect to
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`any claim that involves the same issues involved in the proceeding before the Commission . . . .”
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`28 U.S.C. § 1659(a) (emphasis added).
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`5
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`

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`The power to stay proceedings “is incidental to the power inherent in every court to control
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`the disposition of the causes on its docket with economy of time and effort for itself, for counsel,
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`and for litigants.” Core Lab’ys LP v. Spectrum Tracer Servs., L.L.C., 532 F. App’x 904, 911 (Fed.
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`Cir. 2013). A stay is “an exercise of judicial discretion, and the propriety of its issue is dependent
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`upon the circumstances of the particular case.” Nken v. Holder, 556 U.S. 418, 433 (2009) (internal
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`quotes and citation omitted). “The corollary to this power is the ability to lift a stay previously
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`imposed.” Boyle v. Cty. of Kern, No. 03-cv-05162, 2008 WL 220413, at *5 (E.D. Cal. Jan. 25,
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`2008). “A district court may lift a stay if the circumstances that persuaded the court to impose the
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`stay in the first place have changed significantly.” Pro Stage Gear, LLC v. Guangzhou Rantion
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`Trading Co., No. 17-cv-30, 2019 WL 10960473, at *2 (E.D. Tenn. Nov. 19, 2019) (internal quotes
`
`and citation omitted); see also, e.g., United States ex rel. A1 Procurement, LLC v. Thermcor, Inc.,
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`173 F. Supp. 3d 320, 325 (E.D. Va. 2016) (granting motion to lift stay where “the purpose of the
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`stay has been satisfied and continuing the stay is unnecessary”) (“Thermcor”).
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`IV. ARGUMENT
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`The Court should only grant RJRV’s Motion if the Court also grants PMP’s Cross-Motion
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`and lifts the stay related to the ’123 patent. Lifting the stay on the ’123 patent is warranted because,
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`consistent with the statute, “the determination of the Commission” has “become[] final,” which is
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`a material change in circumstances. 28 U.S.C. § 1659(a). The purpose of the stay has been
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`satisfied; there is no reason to continue to impose it. Any delay in lifting the stay unfairly
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`prejudices PMP while granting RJRV a windfall.
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`A.
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`Lifting The Stay On The ’123 Patent Is Proper Under 28 U.S.C. § 1659(a)
`Because The ITC Determination Is Final
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`Consistent with the statutory language, courts routinely grant motions (often unopposed)
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`to lift the automatic stay under 28 U.S.C. § 1659(a) when an ITC determination becomes final.
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`6
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`

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`For example, in Pathway Innovations and Technologies, Inc. v. Adesso, Inc., the court granted the
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`parties’ joint request to lift the stay after the ITC determination became final. No. 15-cv-01538,
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`Dkt. 17 (S.D. Cal. Jan. 11, 2016); see also, e.g., Ultravision Tech., LLC v. CreateLED Elecs. Co.,
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`2:18-cv-00148, Dkt. 14 (E.D. Tex. Apr. 10, 2019) (lifting stay after final ITC determination).
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`The same result follows here. The ITC’s determination became final on March 31, 2023,
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`when the Federal Circuit affirmed the ITC’s determination. Philip Morris, 63 F.4th at 1332. PMP
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`will not petition for rehearing at the Federal Circuit or for writ of certiorari to the Supreme Court
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`of the United States and, thus, the ITC proceeding is “final.” In re Princo Corp., 486 F.3d 1365,
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`1369 (Fed. Cir. 2007) (holding that ITC proceedings become final when all appeals are exhausted).
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`In view of these materially changed circumstances, the Court should grant PMP’s Cross-Motion
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`to lift the stay as to the ’123 patent because “the purpose of the stay has been satisfied and
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`continuing the stay is unnecessary.” Thermcor, 173 F. Supp. 3d at 325 (granting motion to lift
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`stay); see also, e.g., Ultravision, 2:18-cv-00148, Dkt. 14 (same).
`
`B.
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`Judgment Of Invalidity In District Court Is Immediately Binding On The
`ITC
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`A final judgment of invalidity from a U.S. District Court is binding on the ITC.
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`Consequently, in this case, a final judgment of invalidity on the ’123 patent by this court would
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`enable PMP to immediately sell its FDA-authorized, flagship IQOS HNB Products in the United
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`States. In Certain Composite Wear Components & Products Containing the Same, the ITC
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`suspended its limited exclusion order after a district court invalidated the claims of the asserted
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`patent. Inv. No. 337-TA-644, Comm’n Op. at 8-9 (Feb. 10, 2011). Pending resolution of the
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`district court’s decision on appeal, the Commission stated that the remedies will be permanently
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`rescinded if the Federal Circuit affirms the decision and reinstated if the Federal Circuit reverses
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`with respect to the claims at issue. Id.; see also SSIH Equip. S.A. v. U.S. Int’l Trade Comm’n, 718
`
`7
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`

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`
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`F.2d 365, 370 (Fed. Cir. 1983) (holding that the Commission acted properly in partially rescinding
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`a remedial order based on a district court’s finding that two of the remedial order’s subject patents
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`are invalid); 19 U.S.C. § 1337(k)(l). Similarly, In the Matter of Certain Monoclonal Antibodies,
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`the ITC suspended its investigation for the pendency of district court proceedings because a finding
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`of invalidity “either before or after the Commission issues its final determination” would be
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`binding on the ITC. Inv. No. 337-TA-323, Order No. 2 (Mar. 1991). The stay on the ’123 patent
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`should thus be lifted so PMP can promptly present the invalidity arguments that have yet to be
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`presented to any tribunal to this Court and, if needed, a jury.
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`C.
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`Equity And Fairness Favor Lifting The Stay
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`Any delay in lifting the stay would unfairly prejudice PMP while giving RJRV an
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`unwarranted windfall. As discussed, PMP’s IQOS HNB Products are currently banned from the
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`United States market based on the ITC’s determination that those products infringe the ’123 patent.
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`See supra at 2-3. No other basis exists for excluding those products from the United States. Id.
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`Every day that the stay remains in place, PMP is harmed by not being able to sell its IQOS HNB
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`Products in the United States. So, too, is the American public, as it is deprived of the only FDA-
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`authorized HNB product.
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`Now that the ITC proceeding as to the ’123 patent is final, PMP should have the
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`opportunity to challenge its validity in front of a jury. Importantly, that will be the first time that
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`any tribunal will consider on the merits the strong invalidity grounds that PMP raised against the
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`’123 patent in IPR 919.5 That is because, as discussed, the PTAB declined to address the merits
`
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`5 The prior art grounds that PMP intends to present in this case—which the PTAB did not consider
`on the merits and were not before the ITC—include: (1) U.S. Patent Application Publication No.
`2007/0102013 (“Adams”) and Morgan (and/or with U.S. Patent No. 4,947,874, “Brooks”);
`(2) Morgan and Adams (and/or with Brooks); (3) U.S. Patent No. 5,144,962 (“Counts-962”) alone
`or in combination with Brooks; (4) an October 11, 1988 invention disclosure from PMI for
`
`8
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`

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`of that petition on purely procedural grounds. Supra at 4. And, also for procedural reasons, PMP
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`was limited to a single prior art reference at the ITC. Id.; In the Matter of Certain Tobacco Heating
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`Articles & Components Thereof, Inv. No. 337-TA-1199, 2021 WL 2333742, at *27 (noting that
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`PMP could only argue that “asserted claims 27-30 of the ’123 patent are rendered obvious by U.S.
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`Patent No. 5,249,586 … (hereinafter ‘Morgan’) in view of the general knowledge of a person of
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`ordinary skill in the art”). PMP’s opportunity to promptly challenge the validity of the ’123 patent
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`is particularly important because (i) PMP has invalidated all claims of every other patent that RJRV
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`asserted against PMP in this case or at the ITC, and (ii) a judgment of invalidity in district court is
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`binding as collateral estoppel on the ITC. See, e.g., In Certain Composite Wear Components &
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`Prods. Containing the Same, Inv. No. 337-TA-644, Comm’n Op. at 8-9 (Feb. 10, 2011); SSIH
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`Equip., 718 F.2d at 370.
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`Against this backdrop, it would be fundamentally unfair to allow RJRV to invoke the Rule
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`54(b) “exception” yet prevent PMP from challenging the validity of the ’123 patent. Almubarak,
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`2021 WL 1846823, at *2. RJRV argues that any delay in entering a Rule 54(b) judgment “would
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`be unjust” because “ongoing royalties continue to accrue.” Dkt. 1480 at 1. There is nothing
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`“unjust” about an adjudicated infringer paying royalties to a patent owner for its intentional, post-
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`verdict infringement of two separate patents covering distinct technologies. This argument falls
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`particularly flat because RJRV can seek to bond the amount of its (modest) ongoing royalty
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`payments or ask to deposit them with the Court pending appeal. In any event, RJRV’s argument
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`underscores that each day the stay remains in place is another day PMP cannot sell, and the
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`American consumer cannot benefit from, PMP’s IQOS HNB Products. Such concrete and
`
`
`centered heaters; (5) a similar May 1994 Invention Record; and (6) Collins. See generally In the
`Inter Partes Review of U.S. Patent No. 9,901,123, 2020 WL 2510349.
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`Case 1:20-cv-00393-LMB-WEF Document 1485 Filed 04/25/23 Page 14 of 17 PageID# 41552
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`pervasive harm substantially outweighs any harm RJRV may incur from paying post-verdict
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`royalties to PMP.
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`RJRV’s suggestion (in a footnote) that its pending appeals related to the ’542 and ’915
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`patents weigh against lifting the stay as to the ’123 patent is wrong for three reasons. Dkt. 1480
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`at 10 n.7. First, the ’542 patent was not at issue in the ITC and thus has no bearing on lifting the
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`’123 patent stay. See supra at 2. Second, the pending ’542 and ’915 appeals do not overcome
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`Section 1659(a)’s plain language, which mandates a stay only “until the determination of the [ITC]
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`becomes final.” See supra at 6-7. The statute says nothing about non-ITC proceedings related to
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`patents invalidated by the PTAB. Third, those appeals are highly unlikely to succeed. The Federal
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`Circuit reviews the PTAB’s decisions for substantial evidence and routinely affirms the PTAB’s
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`decisions approximately 90% of the time.6 Here, the PTAB found all challenged claims of the
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`’542 and ’915 patents invalid after a full trial on the merits. See supra at 2. RJRV has not (and
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`cannot) shown a likelihood of success of appeal.
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`Under these circumstances, it would be unjust to hold the proceedings on the ’123 patent
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`in abeyance and prevent PMP from having its day in court merely because of two patents the PTAB
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`already found are invalid. See, e.g., Oyster Optics, LLC v. Ciena Corp., No. 17-cv-05920, 2019
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`WL 4729468, at *3 (N.D. Cal. Sept. 23, 2019); cf. Kirsch Rsch. & Dev., LLC v. Epilay, Inc., No.
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`20-cv-03773, 2021 WL 4732578, at *2 (C.D. Cal. May 7, 2021), reconsideration denied, 2021
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`WL 4704721 (C.D. Cal. Aug. 18, 2021) (lifting stay after final ITC determination despite pending
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`IPR proceedings).
`
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`6 See https://cafc.uscourts.gov/wp-content/uploads/reports-stats/appeals/AppealsFY2022.pdf;
`https://cafc.uscourts.gov/wp-content/uploads/reports-stats/appeals/AppealsFY2021.pdf
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`Case 1:20-cv-00393-LMB-WEF Document 1485 Filed 04/25/23 Page 15 of 17 PageID# 41553
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`Moreover, lifting the stay would not impose a substantial burden on the Court or the parties.
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`Due to the cross-use parties’ agreement, discovery on the ’123 patent is largely complete. Dkt.
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`97 (“The parties…agree that all materials produced in the ITC Case by any party shall be treated
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`by the parties as those produced in this matter, under the Protective Order entered in this matter.”);
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`28 U.S.C. §1659(b) (“the record of the proceeding before the [ITC] shall be transmitted to the
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`district court and shall be admissible in the civil action”). And the parties could readily complete
`
`any remaining discovery, as well as a trial where the jury will have the first opportunity to consider
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`PMP’s strong invalidity arguments on the merits, this year. PMP’s challenge to the validity of the
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`’123 patent can, and should, proceed.
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`V.
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`CONCLUSION
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`For the foregoing reasons, if the Court grants RJRV’s Motion, PMP respectfully requests
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`that the Court should also grant PMP’s Cross-Motion and lift the stay as to the ’123 patent so that
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`PMP can pursue a prompt judgment on the merits on the ’123 patent.
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`Dated: April 25, 2023
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`Respectfully submitted,
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`
`
`/s/ Maximilian A. Grant
`Maximilian A. Grant (VSB No. 91792)
`max.grant@lw.com
`Matthew J. Moore (pro hac vice)
`matthew.moore@lw.com
`Jamie Underwood
`jamie.underwood@lw.com (pro hac vice)
`LATHAM & WATKINS LLP
`555 Eleventh Street, N.W., Ste. 1000
`Washington, DC 20004
`Tel: (202) 637-2200; Fax: (202) 637-2201
`
`Clement J. Naples (pro hac vice)
`clement.naples@lw.com
`LATHAM & WATKINS LLP
`885 Third Avenue
`New York, NY 10022-4834
`Tel: (212) 906-1200; Fax: (212) 751-4864
`
`
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`Case 1:20-cv-00393-LMB-WEF Document 1485 Filed 04/25/23 Page 16 of 17 PageID# 41554
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`
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`Gregory K. Sobolski (pro hac vice)
`Greg.sobolski@lw.com
`LATHAM & WATKINS LLP
`505 Montgomery Street, Suite 2000
`San Francisco, CA 94111
`Tel: (415) 391-0600; Fax: (415) 395-8095
`
`Counsel for Plaintiff Philip Morris Products
`S.A.
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`Case 1:20-cv-00393-LMB-WEF Document 1485 Filed 04/25/23 Page 17 of 17 PageID# 41555
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`CERTIFICATE OF SERVICE
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`I hereby certify that on this 25th day of April, 2023, a true and correct copy of the foregoing
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`was served using the Court’s CM/ECF system, with electronic notification of such filing to all
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`counsel of record.
`
`
`
`
`
`/s/ Maximilian A. Grant
`Maximilian A. Grant (VSB No. 91792)
`max.grant@lw.com
`LATHAM & WATKINS LLP
`555 Eleventh Street, N.W., Ste. 1000
`Washington, DC 20004
`Tel: (202) 637-2200; Fax: (202) 637-2201
`
`
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`13
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