Case 1:20-cv-00393-LO-TCB Document 663 Filed 05/26/21 Page 1 of 19 PageID# 14959
`Case 1:20-cv-00393-LO-TCB Document 663 Filed 05/26/21 Page 1 of 19 Page|D# 14959
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`UNITED STATES DISTRICT COURT
`
`FOR THE EASTERN DISTRICT OF VIRGINIA
`
`ALEXANDRIA DIVISION
`
`RAI STRATEGIC HOLDINGS, INC. and
`RJ. REYNOLDS VAPOR COMPANY,
`
`Plaintiffs,
`
`ALTRIA CLIENT SERVICES LLC; PHILIP
`
`MORRIS USA INC .; and PHlLIP MORRIS
`PRODUCTS S.A.
`
`Defendants.
`
`
`
`Civil Action No. 1:20-cv-393
`
`PHILIP MORRIS PRODUCTS S.A.’S OPPOSITION TO REYNOLDS’
`
`PARTIAL MOTION TO STAY INJUNCTIVE RELIEF DISCOVERY
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`

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`Case 1:20-cv-00393-LO-TCB Document 663 Filed 05/26/21 Page 2 of 19 PageID# 14960
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`
`
`I.
`
`II.
`
`III.
`
`TABLE OF CONTENTS
`
`
`
`Page
`
`INTRODUCTION ...............................................................................................................1
`
`FACTUAL BACKGROUND ..............................................................................................2
`
`REYNOLDS’ REQUEST FOR A STAY OF REMAINING INJUNCTION
`DISCOVERY SHOULD BE DENIED ...............................................................................4
`
`A.
`
`B.
`
`A Stay Of The Nearly Complete Injunction Discovery Would Be
`Inefficient And Unproductive ..................................................................................5
`
`The Outcome Of The ITC Proceedings As To PMP’s IQOS Product Is Far
`From Final ................................................................................................................6
`
`1.
`
`2.
`
`3.
`
`4.
`
`The ITC IQOS Investigation Is Still Ongoing .............................................6
`
`The Public Interest Review In The ITC IQOS Investigation Is
`Ongoing........................................................................................................8
`
`Any Finding Of A Violation By The Commission Would Be
`Subject To Presidential Review ...................................................................9
`
`The Commission’s Final Determination Is Subject To Appellate
`Review .......................................................................................................10
`
`C.
`
`PMP’s Injunction Demand Would Not Be Mooted By An ITC IQOS
`Exclusion Order .....................................................................................................10
`
`IV.
`
`CONCLUSION ..................................................................................................................13
`
`
`
`i
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`

`

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`
`
`TABLE OF AUTHORITIES
`
`CASES
`
`
`
`Page(s)
`
`Amgen Inc. v. Sandoz Inc.,
`No. 16-cv-02581-RS (MEJ), 2017 WL 3641813 (N.D. Cal. Aug. 24, 2017) ............................. 4
`
`Amkor Tech, Inc. v. ITC,
`692 F.3d 1250 (Fed. Cir. Aug. 22, 2012) .................................................................................. 10
`
`Certain Automatic Crankpin Grinders, Inv.
`No. 337-TA-60, 0079 WL 419349 (Dec. 1979) .......................................................................... 9
`
`Certain Baseband Processor Chips & Chipsets, Transmitter & Receiver (Radio) Chips, Power
`Control Chips, & Prods. Containing Same, Including Cellular Tel. Handsets,
`Inv. No. 337-TA-543, 2007 WL 9676556, (June 19, 2007) ........................................................ 9
`
`Certain Inclined Field Acceleration Tubes,
`Inv. No. 337-TA-67, 0080 WL 594319 (Dec. 1980) ................................................................... 8
`
`Certain Male Prophylactic Devices,
`Inv. No. 337-TA-546, 2008 WL 2952724 (May 2008) ............................................................... 7
`
`Certain Personal Data & Mobile Commc’ns Devices & Related Software,
`Inv. No. 337-TA-710, 2011 WL 12488979 (Dec. 29, 2011) ....................................................... 9
`
`Certain Television Sets, Television Receivers, Television Tuners, & Components Thereof,
`Inv. No. 337-TA-910, 2015 WL 13818922 (Feb. 27, 2015) ....................................................... 9
`
`Crocs, Inc. v. ITC,
`598 F.3d 1294 (Fed. Cir. Feb. 24, 2010) ................................................................................... 10
`
`Elec. Connectors, Components Thereof, & Prods Containing the Same,
`Inv. No. 337-TA-1043, Comm’n Op., 2019 WL 9596562 (Sept. 5, 2019) ................................. 7
`
`Kreb v. Jacksons Food Stores, Inc.,
`No. 3:16-cv-00444-REB, 2020 WL 497156 (D. Idaho Jan. 30, 2020) ..................................... 12
`
`Lamon v. City of Shawnee,
`No. 88-4200-S, 1990 WL 120831 (D. Kan. Jul. 10, 1990) ......................................................... 4
`
`LG Elecs. MobileComm USA v. ITC,
`243 F. App’x 598 (Fed. Cir. 2007) ........................................................................................ 9, 10
`
`Techtronic Indus. Co. v. ITC,
`944 F.3d 901 (Fed. Cir. Dec. 12, 2019) ..................................................................................... 10
`
`ii
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`

`

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`
`
`Vizio Inc. v. ITC,
`605 F.3d 1330 (Fed. Cir. 2010) ................................................................................................... 9
`
`RULES
`
`19 C.F.R. § 210.42(a)(1)(ii)(A) ...................................................................................................... 6
`
`19 C.F.R. § 210.42(h) ..................................................................................................................... 7
`
`19 C.F.R. § 210.42(i) .......................................................................................................................7
`
`19 C.F.R. § 210.45(c)...................................................................................................................... 7
`
`19 C.F.R. § 210.50 .......................................................................................................................... 8
`
`19 C.F.R. § 210.50(a)(2) ................................................................................................................. 8
`
`19 C.F.R. § 210.50(a)(4) ................................................................................................................. 8
`
`19 C.F.R. § 210.50(a)(4)(v) ............................................................................................................ 8
`
`19 U.S.C. § 1337(d) ........................................................................................................................ 8
`
`19 U.S.C. § 1337(j) ......................................................................................................................... 9
`
`iii
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`

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`Case 1:20-cv-00393-LO-TCB Document 663 Filed 05/26/21 Page 5 of 19 PageID# 14963
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`
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`I.
`
`INTRODUCTION
`
`Reynolds’ request that injunction-related discovery be stayed at this juncture makes no
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`sense. The parties have worked diligently to complete all fact discovery—including injunction
`
`fact discovery—and are within weeks of doing so. First, PMP and Reynolds have agreed to
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`complete their injunction-related document productions by June 7.1 Second, just three fact
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`witnesses remain to be deposed—two of which will be deposed regardless of any stay because
`
`they are also relevant to liability and damages issues. Although Reynolds stonewalled in providing
`
`a deposition date for its one remaining witness—presumably hoping the forthcoming ITC Initial
`
`Determination might bolster its case for delay—Reynolds has now stipulated to make its remaining
`
`witness available for deposition on June 24 in response to PMP’s motion to compel. Deposition
`
`discovery will be completed by June 25. Efficiency dictates that the parties complete this limited
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`additional injunction fact discovery now.
`
`Like its bloated portrayal of the remaining discovery effort, Reynolds exaggerates the
`
`current posture of the ITC case. Reynolds would have the Court believe that the ITC proceedings
`
`are all but over. But that is far from the truth. The ALJ’s Initial Determination is chock full of
`
`fact and legal issues, both of which will be considered de novo by the Commission and scrutinized
`
`during the course of at least three more levels of potential review.2 And, as Reynolds knows well,
`
`
`1 The Court has not authorized or scheduled expert discovery, nor would such discovery be typical
`for injunction proceedings. Rather, such proceedings are typically handled through post-trial
`briefing and declarations, as needed. In any event, whatever process the Court orders regarding
`experts can readily be accomplished in post-trial proceedings.
`2 The ALJ rejected Reynolds’ claims as to one of its three patents, and there are numerous factual
`and legal errors that will be addressed regarding its other two patents during the Commission and
`subsequent review processes. Additionally, the ALJ’s factual and legal recommendations—on
`both technical and public interest issues—will be considered de novo by the Commission. The
`public interest issue spans all three of the patents, and alone warrants reversal of the ALJ’s Initial
`Determination.
`
`1
`
`

`

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`
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`any ultimate exclusion of PMP’s IQOS product from the U.S. market is not the end of PMP’s
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`smokeless tobacco presence and plans in the United States. PMP has invested heavily in its other
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`next-generation smokeless products. And if PMP prevails in this case, an injunction is warranted
`
`with or without the IQOS product in the market.
`
`Reynolds would have this Court pre-judge and pre-determine the outcome of injunction
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`proceedings in this case—based on what is at best Reynolds’ hopeful speculation about the ITC
`
`outcome and on Reynolds’ misleading say-so regarding the merits of the injunction proceedings—
`
`all in the interest frustrating the Court’s effort to close fact discovery in order to avoid the limited
`
`remaining injunction discovery. As noted at the outset, this makes no sense, and Reynolds’ motion
`
`to stay should be denied.
`
`II.
`
`FACTUAL BACKGROUND
`
`On April 9, 2020, Reynolds sued PMP/Altria and filed a parallel action in the ITC, alleging
`
`that PMP/Altria’s IQOS products infringed certain Reynolds’ patents. Dkt. 1; Certain Tobacco
`
`Heating Articles & Components Thereof, Inv. No. 337-TA-1199, Am. Compl., 2020 WL 5201035,
`
`at ¶ 3 n.2 (July 31, 2020) (“ITS IQOS Investigation”). On June 29, 2020, PMP/Altria filed
`
`counterclaims against Reynolds, alleging that Reynolds’ VUSE products infringed five of
`
`PMP/Altria’s patents. Dkts. 39, 40.
`
`Following institution of PMP/Altria’s inter partes review petitions related to Reynolds’
`
`patents, this Court stayed the case as to Reynolds’ patents. Dkts. 426, 432. The Court initially
`
`stayed the case as to PMP/Altria’s patents at the same time (id.), but subsequently lifted that stay,
`
`based on the “undesirability and prejudicial effect of a ‘trial-ready’ dispute sitting ‘dormant for
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`three years or more,” when PMP/Altria were “hauled into this Court by Plaintiffs in the first
`
`instance.” Dkt. 456 at 2.
`
`2
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`

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`On March 12, 2021, the Court granted PMP leave to amend to add the remedy of injunctive
`
`relief to its counterclaims and allowed the parties to conduct additional “limited” discovery on
`
`injunctive relief. Dkt. 483.3 The parties have nearly completed that discovery. PMP and Reynolds
`
`have agreed to complete injunction related document productions by June 7. Following that, just
`
`three fact depositions remain. Although Reynolds refused to provide a date for its sole remaining
`
`witness, after PMP/Altria moved to compel, Reynolds provided that date. All three remaining
`
`depositions will be completed by June 25. Two of those three witnesses, the one Reynolds witness
`
`and one of the two PMP witnesses, are being deposed on liability and damages issues, meaning
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`that a stay in this case would eliminate only one injunction-related deposition of a PMP corporate
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`representative.
`
`In just four weeks, all discovery will be complete, pre-trial disclosures will be submitted,
`
`and the case will be ready for trial. See Dkts. 534, 535, 634. The Court held a final pretrial
`
`conference on May 21, and scheduled trial to begin no later than April 4, 2022. Dkt. 657.
`
`On May 14, 2021, in the ITC IQOS Investigation, the ALJ issued an Initial Determination.
`
`The ALJ recommended that the Commission issue a “limited exclusion order” against the accused
`
`IQOS products, if the Commission determines that a violation of Section 337 has occurred and if
`
`consideration of the statutory public interest factors does not require that remedies be set aside or
`
`modified. Dkt. 647, Ex. A at 125. The ALJ did not recommend the issuance of a cease and desist
`
`order in the event a violation is found. Id. at 128. Petitions for review in the ITC IQOS
`
`
`3 The present motion to stay is not the first time that Reynolds has grossly overstated the required
`injunction-related discovery effort. Reynolds’ opposition to PMP’s motion to amend included a
`detailed explication of unnecessary injunction-related discovery it planned to take. See Dkt. 476.
`In granting PMP’s motion for leave to amend, the Court rejected Reynolds’ characterization of the
`required injunction-related discovery effort. Dkt. 532 (3/12/21 Hr’g Tr. at 10-11 (“I’d encourage
`you to limit this as much as you can, because I just don’t think it’s necessary to have that much
`discovery on it.”).
`
`3
`
`

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`Investigation are due on May 28, 2021. The Commission’s Final Determination is due no earlier
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`than September 14, 2021, and the earliest any remedies may be imposed is 60 days later, or no
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`earlier than November 14, 2021.4
`
`III. REYNOLDS’ REQUEST FOR A STAY OF REMAINING INJUNCTION
`DISCOVERY SHOULD BE DENIED
`
`Reynolds’ argument, distilled to its essence, is that it believes it will prevail in opposing an
`
`injunction in this case, so consequently remaining injunction discovery should be stayed in the
`
`interest of purported efficiency. But staying the limited remaining injunction discovery is neither
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`efficient, nor supported by the current posture of the case. That Reynolds apparently believes it
`
`can prevail on the merits is no basis for precluding injunction-related discovery. See, e.g., Amgen
`
`Inc. v. Sandoz Inc., No. 16-cv-02581-RS (MEJ), 2017 WL 3641813, at *1 (N.D. Cal. Aug. 24,
`
`2017) (denying motion to stay discovery on injunctive relief based on the argument that plaintiff
`
`may not prevail at trial on liability and thus would not be entitled to injunctive relief); Lamon v.
`
`City of Shawnee, No. 88-4200-S, 1990 WL 120831, at *1 (D. Kan. Jul. 10, 1990) (denying request
`
`to stay discovery on damages and ordering that “discovery should proceed as scheduled,” even
`
`though damages issues were bifurcated from liability issues). This is particularly so here, where
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`Reynolds’ predictions as to the outcome of the ITC IQOS Investigation are speculative at best, and
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`the ITC outcome is not determinative of PMP’s injunction demand in this case in any event.
`
`Proceeding now to complete the limited remaining injunction discovery will allow the Court to
`
`address Reynolds’ arguments against an injunction in the normal course after trial in this case with
`
`the benefit of the full post-trial briefing record.
`
`
`4 Because of delays arising from the COVID-19 pandemic and otherwise, the Commission has
`been commonly delaying issuance of its Final Determinations 30 to 60 days.
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`4
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`

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`
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`A.
`
`A Stay Of The Nearly Complete Injunction Discovery Would Be Inefficient
`And Unproductive
`
`A stay of injunction fact discovery at this juncture would have a minimal impact in
`
`reducing overall discovery efforts, and would introduce significant inefficiencies. Injunction-
`
`related discovery is nearly complete, and that effort should be wrapped up along with the parties’
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`other pre-trial disclosures before the end of June.
`
`The parties are at the tail-end of their injunction-related discovery. Both sides have already
`
`propounded and responded to written discovery, including interrogatories, requests for production,
`
`and requests for admission. There are no outstanding written discovery requests. Reynolds and
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`PMP have agreed to complete any remaining document productions by June 7. Although PMP
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`disagrees that full-blown expert reports and depositions on the injunction issue are warranted or
`
`appropriate, if permitted, they would only be completed after a jury verdict as part of post-trial
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`briefing.5 Following PMP’s motion to compel (Dkt. 620), the parties have submitted a written
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`stipulation fixing the dates for the three remaining fact depositions (two PMP witnesses, and one
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`Reynolds witness) relating to injunctive relief, by June 25. As noted, two of those three depositions
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`will proceed regardless because those witnesses are also being deposed on liability and damages
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`issues.6
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`Given that injunction discovery is near the finish line, it is most efficient to complete the
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`limited remaining injunction discovery in June as currently contemplated, along with the parties’
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`other pretrial disclosures. It would be highly inefficient to restart this nearly completed discovery
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`effort months later. The parties should complete the ongoing process of collecting and producing
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`5 More appropriately, any such submissions can be handled by declaration.
`6 Far from being efficient, the requested stay creates the very real risk that these two witnesses
`would need be deposed again after the liability trial.
`
`5
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`

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`their remaining documents, and should complete the remaining depositions on all topics without
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`creating the probability that those witnesses will need to be re-deposed at some point in the future.
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`A stay accomplishes little, and would require additional fact depositions and impose future
`
`inefficiencies.7
`
`B.
`
`
`The Outcome Of The ITC Proceedings As To PMP’s IQOS Product Is Far
`From Final
`
`Reynolds represents to the Court that the ITC “will likely render PMP’s bid for an
`
`injunction moot”8 because having the Commission set aside or materially limit the Initial
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`Determination would be an “extraordinary action” that “rarely happens.” Dkt. 647 at 1, 2, 5, 8.
`
`Reynolds’ is counting its chickens prematurely. As its title suggests, the ALJ’s Initial
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`Determination is just that—initial, akin to a Magistrate Judge’s report and recommendation and
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`subject to de novo review by the Commission of both its factual and legal findings. Regardless,
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`the ALJ’s decision is fraught with errors that will be addressed by the parties in their briefing to
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`the Commission. And, as the Court is well aware, even the Commission’s finding is subject to
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`additional levels of review before Reynolds can fairly rely on it.
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`1.
`
`The ITC IQOS Investigation Is Still Ongoing
`
`The proceedings before the ITC involve a two-step administrative agency review. In the
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`ITC IQOS investigation, the ALJ has just completed the first step in this process by providing a
`
`“recommended determination concerning the appropriate remedy,” the interim nature of which is
`
`recognized in the Initial Determination itself. 19 C.F.R. § 210.42(a)(1)(ii)(A); Dkt. 647 Ex. A at
`
`
`7 Through no fault of the parties or the Court (and owing entirely to the COVID-19 pandemic),
`this case has already been delayed substantially. While the parties are awaiting trial, all
`discovery—including injunction discovery—should be completed now, rather than introducing the
`risk of further delay to re-start and complete such discovery.
`8 Unless otherwise noted, any emphasis to quotations herein is added.
`
`6
`
`

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`123 (Initial Determination). The second step of the two-step administrative agency process, which
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`has yet to occur, requires the Commission to decide whether it will review the Initial Determination
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`in whole or in part. 19 C.F.R. § 210.42(h)-(i). PMP/Altria will file their petition for review in the
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`IQOS ITC investigation on May 28, 2021, which will address erroneous findings of material fact
`
`and erroneous legal conclusions.
`
`Commission review of an Initial Determination is de novo. See, e.g., Certain Male
`
`Prophylactic Devices, Inv. No. 337-TA-546, Comm’n Op., 2008 WL 2952724, at *5 (May 2008)
`
`(reporting Commission’s reversal of Initial Determination). “[T]he Commission may affirm,
`
`reverse, modify, set aside or remand for further proceedings, in whole or in part, the initial
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`determination of the administrative law judge.” 19 C.F.R. § 210.45(c). It “also may make any
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`findings or conclusions that in its judgment are proper based on the record in the proceeding.” Id.
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`These rules “reflect[] the fact that the Commission is not an appellate court, but is the body
`
`responsible for making the final agency decision.” Male Prophylactic Devices, Inv. No. 337-TA-
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`546, Comm’n Op., 2008 WL 2952724, at *6. Contrary to Reynolds’ representations to the Court,
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`it is NOT “extraordinary” or “rare” for the Commission to review an Initial Determination, or to
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`reverse its outcome. See, e.g., Elec. Connectors, Components Thereof, & Prods Containing the
`
`Same, Inv. No. 337-TA-1043, Comm’n Op.. 2019 WL 9596562 at *1 (Sept. 5, 2019) (reporting
`
`Commission’s reversal of Initial Determination violation finding); Male Prophylactic Devices,
`
`Inv. No. 337-TA-546, Comm’n Op., 2008 WL 2952724, at *2 (same). In fact, review is not
`
`uncommon, as can be seen by dozens of recent cases. See Comm’n Notices, ITC (last visited May
`
`26, 2021), https://www.usitc.gov/commission_notices?search=reverse.
`
`
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`Reynolds’ contention that “[t]here is no reason to believe that the Initial Determination will
`
`be overturned completely” is hopeful conjecture based on its self-serving selection from the
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`7
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`

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`fulsome evidentiary record. Dkt. 647 at 9 n.2. Reynolds’ prognostications notwithstanding, this
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`Court should not, and is not equipped with the record to, prejudge and predetermine the outcome
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`of the Commission’s future decision in the ITC IQOS investigation. With regard to liability,
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`PMP/Altria will present powerful grounds for reversal of the ALJ’s Initial Determination on two
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`of the three asserted patents,9 including by way example, the ALJ’s failure to credit unrebutted
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`trial evidence fatal to Reynolds’ claims, as well as key findings on IQOS from the U.S. Food and
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`Drug Administration.
`
`2.
`
`The Public Interest Review In The ITC IQOS Investigation Is
`Ongoing
`
`As part of the second step of ITC review, in every investigation the Commission considers
`
`the effect of any recommended remedy on the statutorily delineated public interest factors. 19
`
`U.S.C. § 1337(d); 19 C.F.R. § 210.50. This, too, has yet to occur in the ITC IQOS Investigation.
`
`The Commission will “[r]eceive submissions from the parties, interested persons, and other
`
`Government agencies and departments” on public interest. 19 C.F.R. § 210.50(a)(4). This
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`includes consultation with the U.S. Department of Health and Human Services, the U.S.
`
`Department of Justice, the U.S. Federal Trade Commission, and the U.S. Customs Service. 19
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`C.F.R. § 210.50(a)(2). Review of public interest also can involve oral argument or a hearing. 19
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`C.F.R. § 210.50(a)(4)(v).
`
`
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`Notably, should the Commission determine in the ITC IQOS investigation that any remedy
`
`would harm the public interest, that determination would apply across the board to all of Reynolds’
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`patent claims, resulting in the denial of any exclusion order. See, e.g., Certain Inclined Field
`
`Acceleration Tubes, Inv. No. 337-TA-67, 0080 WL 594319, at *10, Comm’n Op. (Dec. 1980);
`
`
`9 The third Reynolds patent was found not infringed and invalid.
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`8
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`

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`
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`Certain Automatic Crankpin Grinders, Inv. No. 337-TA-60, 0079 WL 419349, Comm’n Op. at 18
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`(Dec. 1979). The ITC also could issue a limited exclusion order that contains exemptions for
`
`certain products or a delayed effective date. See, e.g., Certain Personal Data & Mobile Commc’ns
`
`Devices & Related Software, Inv. No. 337-TA-710, Comm’n Op., 2011 WL 12488979, at *42,
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`*46-47 (Dec. 29, 2011); Certain Baseband Processor Chips & Chipsets, Transmitter & Receiver
`
`(Radio) Chips, Power Control Chips, & Prods. Containing Same, Including Cellular Tel.
`
`Handsets, Inv. No. 337-TA-543, Comm’n Notice, 2007 WL 9676556, at *2-3 (June 19, 2007);
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`Certain Television Sets, Television Receivers, Television Tuners, & Components Thereof, Inv. No.
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`337-TA-910, Initial Determination, 2015 WL 13818922, at *137 (Feb. 27, 2015).
`
`The Commission is clearly cognizant of the potentially severe public interest impact that
`
`exclusion of IQOS could cause, as it directed the ALJ specifically to collect evidence on public
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`interest issues. Ex. 1 (ITC IQOS Investigation Notice of Institution of Investigation) at 2 (May
`
`11, 2020), and has already solicited additional comments from the public. 86 FR 28382.
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`3.
`
`Any Finding Of A Violation By The Commission Would Be Subject
`To Presidential Review
`
`
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`Should the Commission determine that there is a Section 337 violation and that injunctive
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`relief is warranted, the matter must then undergo Presidential review. 19 U.S.C. § 1337(j). If
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`within sixty days the President “disapproves” of the ITC’s determination for “policy reasons,” then
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`it “shall have no force or effect.” 19 U.S.C. § 1337(j). Importantly, “an ITC determination does
`
`not become final for purposes of judicial review until the President has either approved of the
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`determination or failed to disapprove within 60 days.” LG Elecs. MobileComm USA v. ITC, 243
`
`F. App’x 598, 602 (Fed. Cir. 2007); see Vizio Inc. v. ITC, 605 F.3d 1330, 1336 (Fed. Cir. 2010)
`
`(“The Commission’s determination became final . . . at the conclusion of the sixty-day presidential
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`review period.”). The current target date for completion of the IQOS Investigation is September
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`9
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`

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`15, 2021, and the Commission can and frequently does extend such target dates. ITC IQOS
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`Investigation Order No. 5, at 4 (June 11, 2020); see, Comm’n Notices, ITC (last visited May 26,
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`2021), https://www.usitc.gov/commission_notices?search=extend.. Thus, at the earliest, any
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`violation opinion in the IQOS Investigation would be “final,” following Presidential review,
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`around mid-November 2021. Although Presidential review does not commonly result in
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`Commission reversal, the unique public health component of the IQOS investigation cries out for
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`Presidential review in the event the Commission otherwise orders exclusion.
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`4.
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`The Commission’s Final Determination Is Subject To Appellate
`Review
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`The Federal Circuit reviews the ITC’s legal determinations de novo and its factual findings
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`for substantial evidence. Techtronic Indus. Co. v. ITC, 944 F.3d 901, 906 (Fed. Cir. Dec. 12,
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`2019). Reversals of ITC determinations are not uncommon. See, e.g., id. at 910; Amkor Tech, Inc.
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`v. ITC, 692 F.3d 1250, 1261 (Fed. Cir. Aug. 22, 2012); Crocs, Inc. v. ITC, 598 F.3d 1294, 1311
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`(Fed. Cir. Feb. 24, 2010); LG Elecs. MobileComm USA, 243 F. App’x at 600. A Federal Circuit
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`appeal could take years and result in a remand back to the ITC.
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`* * *
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`In sum, the ITC IQOS Investigation is nowhere near final. Even Reynolds was forced to
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`concede it was speculating as to the outcome of the ITC proceedings. See Dkt. 647 at 1-2 (stating
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`that IQOS “could be barred” and could “potentially be[] excluded”). A stay of the limited ongoing
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`injunction discovery premised on Reynolds’ speculation is not warranted.
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`C.
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`PMP’s Injunction Demand Would Not Be Mooted By An ITC IQOS
`Exclusion Order
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`PMP’s injunction demand is not solely reliant on IQOS,
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`Case 1:20-cv-00393-LO-TCB Document 663 Filed 05/26/21 Page 15 of 19 PageID# 14973
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`. Reynolds’ assertion that PMP’S request for injunctive relief “rests exclusively 011
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`the alleged loss of future sales of IQOS” is misplaced—and Reynolds knows it. Dld. 647 at 1-2.
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`The harm from Reynolds” infringement goes beyond IQOS
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`-Dkt. 647. EX. B at 7 (PMP’s Response to Inten‘ogatory No. 23).—
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`11
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`Case 1:20-cv-00393-LO-TCB Document 663 Filed 05/26/21 Page 16 of 19 PageID# 14974
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`.10
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`This is not a situation in which PMP’s injunctive relief case “completely dissolves” even
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`in the at best speculative event that the Commission issues an exclusion order against IQOS. See,
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`e.g., Kreb v. Jacksons Food Stores, Inc., No. 3:16-cv-00444-REB, 2020 WL 497156, at *2 (D.
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`Idaho Jan. 30, 2020). Although Reynolds would like to eradicate its injunction risk at this
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`10 In any event, even if the ITC imposed an exclusion order against IQOS at some point in the
`future, such exclusion order would have no affect on IQOS products already imported into the
`U.S. market, since the Initial Determination in the ITC IQOS Investigation did not recommend
`issuance of a cease and desist order, and products already in the U.S. could continue to be sold in
`competition with Reynolds’ infringing products. Dkt. 647, Ex. A at 128 (ITC IQOS Investigation
`Initial Determination). Accordingly, an injunction would also be required to avoid infringing
`competition with regard to PMP’s lawful sale of those IQOS products.
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`12
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`Case 1:20-cv-00393-LO-TCB Document 663 Filed 05/26/21 Page 17 of 19 PageID# 14975
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`premature stage of the case, the risk remains and injunction-related discovery should proceed to
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`completion.
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`* * * * *
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`The decision about whether an infringing product should be enjoined is made by the Court,
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`sitting in equity, after a jury verdict on liability. The substantive arguments that Reynolds
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`prematurely raises now to forestall discovery can be raised in post-trial briefing. There is nothing
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`to do now but complete the minor remaining spade work necessary to complete discovery so that
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`the Court can fairly decide at the appropriate time whether to impose an injunction on a complete
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`record.
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`IV. CONCLUSION
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`PMP respectfully requests that the Court deny Reynolds’ Partial Motion to Stay Injunctive
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`Relief Proceedings in its entirety.
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`Dated: May 26, 2021
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`Respectfully submitted,
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`/s/ Maximilian A. Grant
`Maximilian A. Grant (VSB No. 91792)
`max.grant@lw.com
`Lawrence J. Gotts (VSB No. 25337)
`lawrence.gotts@lw.com
`Matthew J. Moore (pro hac vice)
`matthew.moore@lw.com
`Jamie D. Underwood (pro hac vice)
`jamie.underwood@lw.com
`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
`
`13
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`Case 1:20-cv-00393-LO-TCB Document 663 Filed 05/26/21 Page 18 of 19 PageID# 14976
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`
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`Tel: (212) 906-1200; Fax: (212) 751-4864
`
`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
`
`Brenda L. Danek (pro hac vice)
`brenda.danek@lw.com
`LATHAM & WATKINS LLP
`330 North Wabash Avenue, Suite 2800
`Chicago, IL 60611
`Tel: (312) 876-7700; Fax: (312) 993-9767
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`Counsel for Defendant-Counterclaim
`Plaintiff Philip Morris Products S.A.
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`14
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`Case 1:20-cv-00393-LO-TCB Document 663 Filed 05/26/21 Page 19 of 19 PageID# 14977
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`CERTIFICATE OF SERVICE
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`
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`I hereby certify that on this 26th day of M