Case 1:20-cv-00393-LO-TCB Document 476-5 Filed 03/10/21 Page 1 of 6 PageID# 10650
`Case 1:20-cv-00393-LO-TCB Document 476-5 Filed 03/10/21 Page 1 of 6 Page|D# 10650
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`EXHIBIT 5
`EXHIBIT 5
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`Case 1:20-cv-00393-LO-TCB Document 476-5 Filed 03/10/21 Page 2 of 6 PageID# 10651
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`UNITED STATES INTERNATIONAL TRADE COMMISSION
`WASHINGTON, D.C.
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`Before the Honorable Clark S. Cheney
`Administrative Law Judge
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`In the Matter of
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`CERTAIN TOBACCO HEATING
`ARTICLES AND COMPONENTS
`THEREOF
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`Investigation No. 337-TA-1199
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`RESPONDENTS’ POST-HEARING INITIAL BRIEF
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`PUBLIC VERSION
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`Case 1:20-cv-00393-LO-TCB Document 476-5 Filed 03/10/21 Page 3 of 6 PageID# 10652
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`The ’123 and ’915 patents reflect Complainants’ belated and unsuccessful attempts to
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`develop HNB technology—the asserted claims are invalid over Philip Morris’s own prior art
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`patents and devices.
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`For the ’123 patent, Complainants stipulated that Morgan, a Philip Morris patent that
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`predates the ’123 patent by a decade, discloses every limitation of the asserted claims other than a
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`centered heater. But it is undisputed that centered heaters were well-known in the art. A POSA
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`understood that a centered heater was merely a design choice among just three options and would
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`have solved the known disadvantages of Morgan’s heater.
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`For the ’915 patent, Philip Morris’s prior art Accord devices render the asserted claims
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`invalid. Complainants’ expert did not even touch, much less refute, Respondents’ evidence.
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`The unrebutted evidence shows each device anticipates claims 1-3 and renders obvious claim 5.
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`Second, should the ALJ find a violation of Section 337 (there is none), the serious impact
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`that any remedial orders would have on the public interest—specifically, public health and
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`welfare—requires that the Commission take the rare step of forgoing issuance of such remedies.
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`The evidence shows that, despite the longtime and ready availability of a host of alternative
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`nicotine delivery products, some thirty-four million Americans continue to smoke CCs. CC
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`smoking is associated with innumerable illnesses and, according to public health authorities, is a
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`root cause in 500,000 deaths in the U.S. annually. The available alternatives simply have failed to
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`help enough Americans quit CC smoking.
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`Enter IQOS. The evidence shows that IQOS is a unique product that heats tobacco to
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`release nicotine, tobacco flavor, and aroma, but without combusting the tobacco and exposing the
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`consumer to the dangerous carcinogens and harmful chemicals created by combustion. The
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`evidence shows that, unlike other PRRPs, IQOS closely approximates the CC smoking experience,
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`including the (i) cigarette-like experience of the HEET Stick in a user’s mouth, (ii) ritual of
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`preparing the IQOS for use, and (iii) IQOS’s cigarette-like shape and feel in hand. Collectively,
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`these characteristics provide a sense of enjoyment and familiarity for certain smokers that no other
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`product, including e-cigarettes, provides.
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`The evidence establishes that, because of these unique sensory attributes, IQOS helps some
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`committed smokers to move away from CC smoking and reduces their exposure to harmful
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`chemicals. Third party witness Lindsey Lewis, a thirty-year CC smoker, testified that he tried but
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`rejected e-cigarettes and embraces IQOS precisely because it is “extremely similar to actually
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`smoking a cigarette.” Tr. (Lewis) 1260:14-18, 1263:14-20. He testified that IQOS “dramatically
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`improved [his] personal health beyond what [he] ever thought a product could do.” Tr. (Lewis)
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`1243:3-7, 1262:6-14. Other American smokers deserve the choice Mr. Lewis made and the
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`opportunity to enjoy similar health benefits.
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`Complainants argue that the available alternatives (which have not been accepted by thirty-
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`four million American users of CCs) are adequate substitutes for IQOS. They are wrong. There
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`are no substitutes for IQOS on the market today—none. The evidence shows that oral tobacco,
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`snus, nicotine patches and other cessation products are all niche products, providing distinct
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`experiences from CC smoking, and having limited appeal. None can fairly be considered an IQOS
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`substitute. Meanwhile e-cigarettes, Complainants’ purported champion,: (i) are currently illegal
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`in the U.S.; (ii) do not appeal to a wide swath of consumers who genuinely enjoy the combustible
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`smoking experience; and (iii) face, at best, a highly uncertain regulatory future.
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`The record and applicable case law demonstrate that no e-cigarette has FDA authorization
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`and that, in the absence of authorization, the sale of e-cigarettes is illegal in the U.S. today. While
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`many e-cigarette manufactures have applied for authorization, the evidence also shows that there
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`are many open questions surrounding e-cigarettes, ranging from epidemic youth use to unknown
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`chemistry and their unknown long-term effects on users. Because tens of thousands of e-cigarette
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`products are under consideration, FDA’s analysis is complicated by the practical impossibility of
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`timely considering that volume. Thus, the record undisputedly establishes that no one can predict
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`if or when any e-cigarette products will earn FDA authorization. In contrast, IQOS is the only
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`aerosolized PRRP with PMTA and MRTP authorizations from the FDA. E-cigarettes cannot fairly
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`be considered as substitutes for IQOS, either as a factual matter or as a matter of regulatory law.
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`Tellingly, the ALJ heard testimony from three disinterested witnesses who were not paid
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`by a party for their time: Dr. Julie Gunther (private family physician); Lindsey Lewis (PPI); and
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`Dr. Brad Rodu (University of Louisville, endowed chair for harm reduction). All were presented
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`by Respondents. All passionately testified that American smokers need more choices and that
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`IQOS is an exceptional product without substitutes that uniquely appeals to CC smokers. After
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`(i) months of questioning the integrity of third parties who spoke up for IQOS with demonstrably
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`false claims of “tainted” testimony; (ii) issuing ten subpoenas on third-party submitters and taking
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`seven depositions; and (iii)
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` (per Dr. Gunther),
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`Complainants failed to call a single third-party witness to testify. Third parties who take the
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`Commission’s role in protecting the public interest seriously deserve better.
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`Respondents respectfully request that the ALJ recommend to the Commission that there
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`has been no infringement of a valid patent claim and no violation of Section 337. But if the ALJ
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`finds a violation, IQOS should be exempted from remedial measures because removing IQOS from
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`the market will cost lives and badly disserve the public interest.
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`“be required to file quarterly reports on the first day of each calendar quarter describing the status
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`of FDA approval of its domestic industry product and its continued . . . expenditures” for the
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`domestic industry products for a period of 18 months. Id. The ALJ should further recommend the
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`limited exclusion order be rescinded if Complainants’ domestic industry product has not been
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`approved for use in the U.S. by the expiration of that 18 month reporting period, or if Complainants
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`have ceased making substantial expenditures to exploit the patents during the reporting period. Id.
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`VIII. CONCLUSION
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`Respondents respectfully request that no violation of Section 337 be found and no remedies
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`issued.
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`Dated: February 12, 2021
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`Respectfully submitted,
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`/s/ Bert C. Reiser
`Maximilian A. Grant
`Bert C. Reiser
`Jamie D. Underwood
`LATHAM & WATKINS LLP
`555 Eleventh Street, N.W.
`Suite 1000
`Washington, DC 20004
`Telephone: (202) 637-2200
`Facsimile: (202) 637-2201
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`Brenda L. Danek
`LATHAM & WATKINS LLP
`330 North Wabash Avenue, Suite 2800
`Chicago, IL 60611
`Telephone: (312) 876-7700
`Facsimile: (312) 993-9767
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`Counsel for Respondents
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`92
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