Case 1:20-cv-00393-LO-TCB Document 639 Filed 05/20/21 Page 1 of 14 PageID# 14311
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF VIRGINIA
`ALEXANDRIA DIVISION
`
`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. 1:20-cv-00393-LO-TCB
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`REDACTED
`FILED UNDER SEAL
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`REPLY BRIEF IN SUPPORT OF R.J. REYNOLDS VAPOR COMPANY’S MOTION TO
`COMPEL DEFENDANT PHILIP MORRIS PRODUCTS S.A. TO DESIGNATE RULE 30(b)(6)
`WITNESSES RELATING TO PHILIP MORRIS PRODUCTS S.A.’S CLAIM FOR A
`PERMANENT INJUNCTION
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`

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`Case 1:20-cv-00393-LO-TCB Document 639 Filed 05/20/21 Page 2 of 14 PageID# 14312
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`TABLE OF CONTENTS
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`Page
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`INTRODUCTION ...................................................................................................................................... 1
`ARGUMENT .............................................................................................................................................. 3
`A.
`PMP’s Current Designations On Topics 68, 70, and 72 Leave No One To
`Testify On Most Of The eBay Factors .............................................................................. 3
`PMP Must Either Present Witnesses To Address Topics 76 and 83, Or Else Be
`Bound By Its Refusal .......................................................................................................... 6
`C. When PMP Knew About The Facts Allegedly Supporting Its Claim For
`Injunctive Relief, And What It Did In Response (Topic 69), Is Relevant To
`Irreparable Harm And The Propriety Of Equitable Relief ............................................ 7
`CONCLUSION .......................................................................................................................................... 8
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`B.
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`i
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`Case 1:20-cv-00393-LO-TCB Document 639 Filed 05/20/21 Page 3 of 14 PageID# 14313
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`
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`CASES
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`TABLE OF AUTHORITIES
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`Page(s)
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`800 Adept, Inc. v. Murex Secs., Ltd.,
`505 F. Supp. 2d 1327 (M.D. Fla. Apr. 12, 2007) ................................................................................... 8
`
`Bayoh v. Afropunk LLC,
`No. 18CV5820 (DLC), 2020 WL 7318277 (S.D.N.Y. Dec. 11, 2020) .............................................. 7, 8
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`Cave Consulting Grp., LLC v. Optuminsight, Inc.,
`No. 5:11-CV-00469-EJD, 2016 WL 4658979 (N.D. Cal. Sept. 7, 2016)........................................... 7, 8
`
`eBay Inc. v. MercExchange, LLC,
`547 U.S. 388 (2006) ....................................................................................................................... 2, 3, 5
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`MercExchange, L.L.C. v. eBay, Inc.,
`500 F. Supp. 2d 556 (E.D. Va. 2007) ..................................................................................................... 8
`
`PGBA, LLC v. United States,
`389 F.3d 1219 (Fed. Cir. 2004) .............................................................................................................. 8
`
`TiVo, Inc. v. EchoStar Commc’ns Corp.,
`446 F. Supp. 2d 664 (E.D. Tex. 2006) ................................................................................................... 8
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`OTHER AUTHORITIES
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`Fed. R. Civ. P. 30(b)(6) ............................................................................................................................. 3, 7
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`ii
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`Case 1:20-cv-00393-LO-TCB Document 639 Filed 05/20/21 Page 4 of 14 PageID# 14314
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`INTRODUCTION
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`PMP suggests in its Opposition that RJRV’s Motion is essentially moot—either because
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`PMP already agreed to provide complete testimony in response to certain topics (it did not, and
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`still does not); or because certain topics are more properly within the ken of RJRV than PMP (not
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`a basis to refuse a witness, particularly when PMP has put forward contentions on the very subject
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`matter at issue); or because the topic is, in PMP’s view, irrelevant (wrong as a matter of law and,
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`again, not a proper basis to refuse discovery). Rather than provide straight answers, PMP fills its
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`Opposition with the same artful dodges and qualifiers that led to the necessity of this Motion in
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`the first place.
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`As an initial matter, RJRV notes that, after this Motion and the cross-motion to compel
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`from Defendants (Dkt. 615) were filed, the Initial Determination regarding Defendants’
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`infringement of Reynolds’s patents was issued in the parallel proceeding before the International
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`Trade Commission. The Initial Determination comes after a lengthy hearing before Administrative
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`Law Judge Clark S. Cheney, in which both sides presented numerous fact and expert witnesses, as
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`well as voluminous documents. After considering all of the evidence, exhaustively recounted
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`in his 132-page decision, Judge Cheney found that Defendants’ IQOS products infringe
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` two patents owned by Reynolds, and that those patents are not invalid. Judge
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`Cheney specifically found that Defendants’ continued importation and sale of the IQOS products
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`in the United States constitutes a violation of the Tariff Act,
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`1
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`Case 1:20-cv-00393-LO-TCB Document 639 Filed 05/20/21 Page 5 of 14 PageID# 14315
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`Accordingly, Reynolds will be filing a motion to stay further proceedings on PMP’s claim for
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`injunctive relief, pending decision from the full Commission, which is expected in September
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`2021. If the Court grants the brief stay, then the present Motion will be moot. If the Court deems
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`that proceedings on the injunctive relief claim should move forward, however, the Court should
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`grant the present Motion.
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`First, with respect to Topics 68, 70, and 72, these are simple, straightforward topics seeking
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`the bases for PMP’s contentions around the eBay factors, as to which PMP unquestionably bears
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`the burden of proof. The record shows that, after weeks of chasing by RJRV, the most that PMP
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`would offer were two witnesses to cover certain sub-issues that PMP unilaterally crafted. These
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`were not offered as illustrative or exemplary; they were offered as the sum total of what PMP was
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`willing to designate a witness to address. In its Opposition, PMP now claims that its witnesses
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`will address the full scope of the topics, and thus the present motion is moot. But PMP still laces
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`its concession with hedging language—agreeing that the testimony is “subject to PMP’s
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`objections,” with no explanation what that means, and refusing to designate a witness in a
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`straightforward manner on critical issues like irreparable harm and the public interest. Without
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`clear direction from the Court, PMP is sure to use these carve-outs to later cabin its witnesses’
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`testimony at deposition based on boundaries of PMP’s unilateral choosing.
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`Second, PMP is still beating around the bush with respect to Topics 76 and 83—which seek
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`testimony about the factual bases for any contentions PMP intends to make about the drivers of
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`sales for the VUSE products (76), or the harm to RJRV if the injunction is granted (83). PMP
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`2
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`Case 1:20-cv-00393-LO-TCB Document 639 Filed 05/20/21 Page 6 of 14 PageID# 14316
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`argues that RJRV is the party most likely to possess this information, and that PMP’s “corporate
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`fact witnesses have no testimony to offer on these subjects.” (Opp. at 7.) Fair enough, but if PMP
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`is to avoid presenting a Rule 30(b)(6) designee on these topics on the ground that the company
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`itself has no facts to offer, then the Court should direct that PMP cannot later elicit testimony from
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`any PMP fact witness on these subjects in conjunction with this case, nor offer any expert witness
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`who considers or relies on information from one or more of Defendants’ fact witnesses on these
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`subjects.
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`Third, the facts concerning when PMP learned of the facts that allegedly support its claim
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`for injunctive relief, and what it did in response—as sought in Topic 69—are plainly relevant to
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`PMP’s purported irreparable harm and to the question whether it would be proper for the Court to
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`grant the extraordinary equitable relief that PMP now demands.
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`Accordingly, RJRV respectfully asks that the Court grant its Motion to Compel and order
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`PMP to designate a corporate witness or witnesses to testify on the full scope of noticed Topics
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`68-70, 72, 76, and 83; and for PMP to make those designees available no sooner than 5 days after
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`Defendants complete their production of injunction-related document discovery.1
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`ARGUMENT
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`A.
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`PMP’s Current Designations On Topics 68, 70, and 72 Leave No One To
`Testify On Most Of The eBay Factors
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`PMP has never “unequivocally designated” its corporate witnesses “to address the full
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`scope” of RJRV’s Topics 68, 70, and 72. (Opp. at 1.) Instead, after weeks of RJRV pressing for
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`a clear answer, PMP would only offer
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` and
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` for limited sub-topics of PMP’s
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`own choosing, which PMP decreed to be,
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`1 PMP does not contest RJRV’s request that the Court compel PMP to make its corporate designees
`available no sooner than 5 days after Defendants compete their production of injunction-related
`document discovery.
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`3
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`Case 1:20-cv-00393-LO-TCB Document 639 Filed 05/20/21 Page 7 of 14 PageID# 14317
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`. (Dkt. 610-12 at 1
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`[May 13, 2021, Koh Letter to Smith].) In its Opposition, PMP appears to agree, finally, that the
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`testimony of these witnesses should not be so limited, but instead should encompass the full
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`measure of testimony sought by these topics. To avoid any confusion at the depositions that would
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`necessitate further Court intervention, however, RJRV asks that the Court grant its Motion.
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`To be clear, PMP’s statement that it already assured RJRV before this Motion was filed
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`that
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` and
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` “will collectively testify regarding the full scope” (Opp. at 6) of
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`Topics 68, 70, and 72 is belied by the facts. PMP parroted its carve-outs in its most recent
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`correspondence with RJRV, stating: “
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` will testify on Topics 68, 70, and 72 with
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`respect to
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`topics with respect to
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`, and
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` will testify on the same
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`
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`.” (Dkt. 610-
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`12 at 1 [May 13, 2021, Koh Letter to Smith] (emphasis added).)
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`But RJRV’s topics are not so limited. The topics are straightforward and go to the very
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`heart of PMP’s claim for injunctive relief:
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`• Topic 68: The factual bases underlying PMP’s contention, including PMP’s
`response to Interrogatory Nos. 23–24, that (i) PMP has suffered irreparable injury,
`(ii) remedies available at law, such as monetary damages, are inadequate to
`compensate for that injury, (iii) considering the balance of hardships between
`PMP and Reynolds, a remedy in equity is warranted, and (iv) the public interest
`would be properly served by a permanent injunction.
`• Topic 70: Any and all harms or injury PMP alleges PMP has suffered or will
`suffer from Reynolds’s alleged infringement, absent entry of an injunction.
`• Topic 72: All equitable considerations applicable to PMP’s request for injunctive
`relief.
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`4
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`Case 1:20-cv-00393-LO-TCB Document 639 Filed 05/20/21 Page 8 of 14 PageID# 14318
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`(Dkt. 610-1 at 8 [Apr. 7, 2021, RJRV’s 30(b)(6) Notice].)
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`It is not clear at all what portions of Topics 68, 70, or 72_ or-
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`pmported testimony will cover, let alone whether their collective testimony will cover the full
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`” does not equal (i) irreparable injury, (ii) inadequate remedies
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`available at law, (iii) considerations of the balance of hardships, and (iv) public interest. See eBay
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`Inc. v. MerCErchange, LLC, 547 US. 388, 291 (2006).
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`The limited subjects that PMP selected for_ and- would not appear to
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`rumma—
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`PMP injected each of these issues into the case in its interrogatory
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`response. (See, e.g., Dkt. 610—13 at 6, 16-17 [Apr. 4, 2021, PMP’s Response to Inteu‘ogatory No.
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`231-)
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`RJRV asked PMP to “confirm whether you intend to offer additional designees to speak to
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`the full scope of Topics 68, 70, 72, beyond just the sub-topics you have unilaterally chosen for
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`_ and-,” or “[i]n the alternative, confmn that you will not do so, and that PMP
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`thus does not intend to offer any factual evidence or testimony on the eBay factors beyond the
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`limited areas to be addressed by_ and- (Dkt. 610-9 at 2 [May 10, 2021,
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`'JI
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`Smith Letter to Koh].) PMP did neither.
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`Then, at the parties’ meet and confer, RJRV’s counsel asked PMP’s counsel whether
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`_ “Would testify on the full scope ofthese topics, excepting the- issues reserved
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`for-.” (Dkt. 610-11 at 1 [May 13, 2021, Smith Email to Koh].) PMP’s counsel replied
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`that she needed to confmn with her team.
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`(Id.) However, in response, PMP merely repeated its
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`same narrow carve-outs, and refused to confirm that_ would be testifying on the full
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`scope of the topics, excepting the- issues covered by- or that PMP would not
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`offer any factual evidence on the issues beyond the scope of their carve-outs.
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`Even now, PMP hedges its bets, saying it will present witnesses to cover the fill] scope of
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`these topics, “subject to PMP’s objections,” without clarifying what that means in terms of what
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`testimony will or will not be offered, nor confirming that this carve-out will not be used to limit
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`the testimony of_ or- to just the sub-issues that PMP previously set forth. If
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`PMP is indeed finally offering designees to address the fill] scope of Topics 68, 70, and 72, then it
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`should have no objection to the Corut granting RJRV’s motion as to the full scope of those Topics.
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`B.
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`PMP Must Either Present Witnesses To Address Topics 76 and 83, Or Else
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`Be Bound By Its Refusal
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`Topics 76 and 83 seek testimony on PMP’s contentions regarding the drivers of sales of
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`the VUSE products and the harm to RJRV ifthe injunction is granted, respectively. In its response
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`to Interrogatory 23, PMP offered extensive contentions on at least the first issue.
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`(See, e.g., Dkt.
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`610-13 at 6, 9-13 [Apr. 4, 2021, PMP’s Response to Interrogatory No. 23].)
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`In its Opposition, however, PMP now states for the first time that “its corporate fact
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`witnesses have no testimony to offer on these subjects.” (Opp. at 7.) To this point, PMP would
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`only say that it did not intend to ofler any corporate testimony on these issues; not that it had none.
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`(See Dkt. 610-12 at 2-3 [May 13, 2021, Koh Letter to Smith].) Yet, after having told this Court
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`previously that experts were not even necessary for injunction related issues (Apr. 16, 2021,
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`Motion Hearing Tr. at 14), PMP now says that it “will also provide any expert testimony, analysis,
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`and opinions [about these topics] at the time to do so.” (Opp. at 7.) If PMP is refusing to offer a
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`Rule 30(b)(6) witness to address these topics on the ground that the company itself has no factual
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`knowledge, then so be it. But that decision has consequences, which should be made clear. If
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`PMP will not offer a witness, then the Court should order that PMP is barred from eliciting
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`testimony from any fact witness associated with Defendants on the subject matter that falls within
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`the scope of Topics 76 or 83 in conjunction with this case, and from offering any expert witness
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`who considers or relies on information from one or more of Defendants’ fact witnesses on these
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`subjects.
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`C. When PMP Knew About The Facts Allegedly Supporting Its Claim For
`Injunctive Relief, And What It Did In Response (Topic 69), Is Relevant To
`Irreparable Harm And The Propriety Of Equitable Relief
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`
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`The record is clear that PMP literally waited years to assert its patents against Reynolds,
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`despite its adamant contentions that the VUSE products are infringing and pose a significant threat
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`to PMP’s business. And even once PMP got around to asserting the patents, it waited nearly nine
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`more months before even seeking to add a claim for injunctive relief. Topic 69 is a straightforward
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`request for testimony about when PMP knew of the facts that allegedly support its bid for an
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`injunction, and what it did in response. The Court should compel PMP to designate a witness on
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`this topic because PMP’s delay in seeking injunctive relief is relevant to PMP’s claim that it was
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`irreparably harmed and to the overall question whether the equities of this case support the Court
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`exercising its powers to grant the extraordinary relief that PMP now seeks. See, e.g., Bayoh v.
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`Afropunk LLC, No. 18CV5820 (DLC), 2020 WL 7318277, at *5 (S.D.N.Y. Dec. 11, 2020)
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`(“Finally, the fact that Bayoh delay[ed] in seeking a permanent injunction’ weighs against a finding
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`that he was irreparably harmed.”); Cave Consulting Grp., LLC v. Optuminsight, Inc., No. 5:11-
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`7
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`

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`Case 1:20-cv-00393-LO-TCB Document 639 Filed 05/20/21 Page 11 of 14 PageID# 14321
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`CV-00469-EJD, 2016 WL 4658979, at *22 (N.D. Cal. Sept. 7, 2016) (finding that plaintiff’s delay
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`in seeking an injunction “suggests that [plaintiff] did not suffer irreparable harm”).
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`RJRV already provided case law to PMP through correspondence, but PMP rejected the
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`authority. The case law that PMP cites in its Opposition is inapposite. The court in 800 Adept,
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`Inc. v. Murex Secs., Ltd. based its opinion that the movant’s delay was not relevant for purposes
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`of permanent injunctive relief on the fact that “the Court’s research . . . uncovered only one opinion
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`that considered such delay on motion for a permanent injunction.” 505 F. Supp. 2d 1327, 1335
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`(M.D. Fla. Apr. 12, 2007).2 PMP’s case law is outdated. Since the 800 Adept opinion, several
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`other courts have held that delay is relevant in considering the irreparable harm factor of permanent
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`injunctive relief, including Bayoh v. Afropunk LLC and Cave Consulting Grp., LLC, cited above.
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`Moreover, this district—relying upon Federal Circuit precedent—also has held that a patentee’s
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`delay in seeking injunctive relief is a relevant “factor in the calculus indicating that both [the
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`patentee] is not being irreparably harmed by eBay’s infringement and that money damages are
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`adequate.” MercExchange, L.L.C. v. eBay, Inc., 500 F. Supp. 2d 556, 573 (E.D. Va. 2007) (citing
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`PGBA, LLC v. United States, 389 F.3d 1219, 1229–31 (Fed. Cir. 2004) (finding no error of law
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`when the lower court considered, as one of the factors weighing against injunctive relief, the fact
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`that plaintiff failed to pursue a preliminary injunction)).
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`CONCLUSION
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`
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`RJRV respectfully requests that the Court order PMP to designate a corporate witness or
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`witnesses to testify on the full scope of noticed Topics 68-70, 72, 76, and 83; and for PMP to make
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`those designees available at least five days after Defendants complete their production of
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`injunction-related document discovery. As to Topics 76 and 83, if PMP is allowed to avoid
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`2 The opinion that the 800 Adept court found is the only other case that PMP cites: TiVo, Inc. v.
`EchoStar Commc’ns Corp., 446 F. Supp. 2d 664, 670 (E.D. Tex. 2006).
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`8
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`Case 1:20-cv-00393-LO-TCB Document 639 Filed 05/20/21 Page 12 of 14 PageID# 14322
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`presenting a witness on the ground that PMP as a company has no factual knowledge relating to
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`either topic, then the Court should Order that PMP is barred from eliciting testimony from any fact
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`witness of Defendants on the subject matter that falls within the scope of Topics 76 or 83 in
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`conjunction with this case, and from offering any expert witness who considers or relies on
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`information from one or more fact witnesses of Defendants on these subjects.
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`9
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`Case 1:20-cv-00393-LO-TCB Document 639 Filed 05/20/21 Page 13 of 14 PageID# 14323
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`Respectfully submitted,
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`
`
`
` /s/ David M. Maiorana
`David M. Maiorana (VA Bar No. 42334)
`Ryan B. McCrum
`JONES DAY
`901 Lakeside Ave.
`Cleveland, OH 44114
`Telephone: (216) 586-3939
`Facsimile: (216) 579-0212
`Email: dmaiorana@jonesday.com
`Email: rbmccrum@jonesday.com
`
`John J. Normile
`JONES DAY
`250 Vesey Street
`New York, NY 10281
`Telephone: (212) 326-3939
`Facsimile: (212) 755-7306
`Email: jjnormile@jonesday.com
`
`
`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
`
`Charles B. Molster, III Va. Bar No. 23613
`THE LAW OFFICES OF
`CHARLES B. MOLSTER, III PLLC
`2141 Wisconsin Avenue, N.W. Suite M
`Washington, DC 20007
`Telephone: (703) 346-1505
`Email: cmolster@molsterlaw.com
`
`Counsel for Plaintiffs RAI Strategic Holdings,
`Inc. and R.J. Reynolds Vapor Company
`
`Dated: May 20, 2021
`
`
`
`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
`
`
`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
`
`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
`
`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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`

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`Case 1:20-cv-00393-LO-TCB Document 639 Filed 05/20/21 Page 14 of 14 PageID# 14324
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`CERTIFICATE OF SERVICE
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`I hereby certify that on this 20th day of May, 2021, 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.
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`
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`/s/ David M. Maiorana
`David M. Maiorana (VA Bar No. 42334)
`JONES DAY
`901 Lakeside Ave.
`Cleveland, OH 44114
`Telephone: (216) 586-3939
`Facsimile: (216) 579-0212
`Email: dmaiorana@jonesday.com
`
`Counsel for Plaintiffs RAI Strategic Holdings,
`Inc. and R.J. Reynolds Vapor Company
`
`
`
`