Case 1:20-cv-00393-LO-TCB Document 751 Filed 06/22/21 Page 1 of 25 PageID# 20438
`
`
`
`UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF VIRGINIA
`ALEXANDRIA DIVISION
`
`
`
`RAI STRATEGIC HOLDINGS, INC. and
`R.J. REYNOLDS VAPOR COMPANY,
`
`
`Plaintiffs,
`
`v.
`
`
`
`
`ALTRIA CLIENT SERVICES LLC; PHILIP
`MORRIS USA INC.; and PHILIP MORRIS
`PRODUCTS S.A.
`
`Defendants.
`
`Civil Action No. 1:20-cv-393
`
`
`
`
`REPLY IN SUPPORT OF COUNTERCLAIM PLAINTIFFS’
`MOTION FOR SUMMARY JUDGMENT
`
`
`
`
`
`
`
`

`

`Case 1:20-cv-00393-LO-TCB Document 751 Filed 06/22/21 Page 2 of 25 PageID# 20439
`
`
`
`
`
`TABLE OF CONTENTS
`
`Page
`
`I.
`
`SUMMARY JUDGMENT OF NO INEQUITABLE CONDUCT FOR THE ’545
`PATENT ..............................................................................................................................1
`
`A.
`
`B.
`
`RJR Does Not Dispute That Its Inequitable Conduct Claim Fails On The
`Merits .......................................................................................................................1
`
`The Court Should Not Permit RJR’s Procedural Tactics .........................................2
`
`II.
`
`SUMMARY JUDGMENT ON RJR’S FIFTH, SIXTH, EIGHTH, AND
`ELEVENTH AFFIRMATIVE DEFENSES ........................................................................5
`
`A.
`
`B.
`
`C.
`
`RJR Has Raised No Genuine Disputes of Material Fact to Support Its Fifth
`Affirmative Defense Of Waiver, Acquiescence, and Estoppel ................................7
`
`RJR’s Speculative “Future Facts” Do Not Support Its Ensnarement
`Defense ....................................................................................................................9
`
`The Court Should Grant Summary Judgment On The Remaining Fifth,
`Sixth, and Eleventh Affirmative Defenses .............................................................10
`
`III.
`
`PARTIAL SUMMARY JUDGMENT OF NO INVALIDITY FOR THE ’374
`PATENT ............................................................................................................................11
`
`RJR Concedes That Liu Is Not “By Another” And Is Not Prior Art Under
`Pre-AIA § 102(a) ...................................................................................................12
`
`Pre-AIA § 102(d) Does Not Apply ........................................................................15
`
`The Liu Reference Is Not Prior Art Under Pre-AIA § 102(b) ...............................18
`
`A.
`
`B.
`
`C.
`
`
`
`
`
`i
`
`

`

`Case 1:20-cv-00393-LO-TCB Document 751 Filed 06/22/21 Page 3 of 25 PageID# 20440
`
`
`
`
`
`TABLE OF AUTHORITIES
`
`CASES
`
`Bayer AG v. Schein Pharm., Inc.,
`129 F. Supp. 2d 705 (D.N.J. 2001), aff’d, 301 F.3d 1306 (Fed. Cir. 2002) ........................ 16, 17
`
`Bayer AG v. Schein Pharm., Inc.,
`301 F.3d 1306 (Fed. Cir. 2002) ................................................................................................. 16
`
`Civix-DDI, LLC v. Cellco P’ship,
`387 F. Supp. 2d 869 (N.D. Ill. 2005) ........................................................................................... 4
`
`Colluci v. Callaway Golf Co.,
`750 F. Supp. 2d 767 (E.D. Tex. 2010) ...................................................................................... 17
`
`Dane Techs., Inc. v. Gatekeeper Sys.,
`135 F. Supp. 3d 970 (D. Minn. 2015) ......................................................................................... 8
`
`Depuy Spine, Inc. v. Medtronic Sofamor Danek, Inc.,
`567 F.3d 1314 (Fed. Cir. 2009) ................................................................................................. 10
`
`H. Jay Spiegel & Assocs., P.C. v. Spiegel,
`652 F. Supp. 2d 639 (E.D. Va. 2009) .......................................................................................... 8
`
`In re Bass,
`474 F.2d 1276 (CCPA 1973) ............................................................................................... 12, 17
`
`In re Kathawala,
`9 F.3d 942 (Fed. Cir. 1993) ....................................................................................................... 16
`
`Kewazinga Corp. v. Google LLC,
`No. 20 Civ. 1106 (LGS), 2021 WL 466877 (S.D.N.Y. Feb. 9, 2021) ........................................ 9
`
`Mahurkar v. C.R. Bard, Inc.,
`79 F.3d 1572 (Fed. Cir. 1996) ................................................................................................... 13
`
`Marshall v. Univ. of Md. Med. Ctr.,
`No. TDC-17-2779, 2018 WL 3727947 (D. Md. Aug. 6, 2018) .................................................. 7
`
`Master Craft v. Stanley Works,
`No. 04-132 (JMR/JSM), 2006 WL 8438190 (D. Minn. Apr. 27, 2006) ..................................... 3
`
`Munchkin, Inc. v. Int’l Refills Co.,
`IPR2016-01154, Paper 13 (PTAB Dec. 12, 2016) .............................................................. 17, 18
`
`1
`
`

`

`Case 1:20-cv-00393-LO-TCB Document 751 Filed 06/22/21 Page 4 of 25 PageID# 20441
`
`
`
`Netscape Commc’ns. Corp. v. Valueclick, Inc.,
`684 F. Supp. 2d 699 (E.D. Va. 2010) .......................................................................................... 8
`
`OddzOn Prods., Inc. v. Just Toys, Inc.,
`122 F.3d 1396 (Fed. Cir. 1997) ..................................................................................... 12, 16, 17
`
`Southwest Bell Tel., L.P. v. Arthur Collins, Inc.,
`454 F. Supp. 2d 600 (N.D. Tex. 2006) ........................................................................................ 4
`
`Sprint Commc’ns Co. L.P. v. Charter Commc’ns, Inc.,
`No. 17-1734-RGA, 2021 WL 982726 (D. Del. Mar. 16, 2021) .................................................. 8
`
`TecSec, Inc. v. Adobe Systems Inc.,
`326 F. Supp. 3d 105 (E.D. Va. 2018) .......................................................................................... 4
`
`Thomas v. FTS USA, LLC,
`No. 3:13-cv-825, 2016 WL 3566657 (E.D. Va. June 24, 2016) ................................................. 6
`
`TMM Data, LLC v. Braganza,
`No. 5:14-cv-729-FL, 2016 WL 1228595 (E.D.N.C. Mar. 28, 2016) ...................................... 3, 4
`
`UCB, Inc. v. Watson Labs., Inc.,
`927 F.3d 1272 (Fed. Cir. 2019) ................................................................................................. 10
`
`Wilkins v. Montgomery,
`751 F.3d 214 (4th Cir. 2014) ....................................................................................................... 7
`
`Williams v. ABM Parking Servs. Inc.,
`296 F. Supp. 3d 779 (E.D. Va. 2017) .......................................................................................... 5
`
`Zimmer Tech., Inc. v. Howmedica Osteonics Corp.,
`453 F. Supp. 2d 1030 (N.D. Ind. 2006) ....................................................................................... 4
`
`STATUTES
`
`35 U.S.C. § 102(d) (pre-AIA) ....................................................................................................... 16
`
`35 U.S.C. § 102(d) .........................................................................................................................18
`
`OTHER AUTHORITIES
`
`MPEP § 2135 ................................................................................................................................ 17
`
`RULES
`
`FED. R. CIV. P. 11(b)(1)-(3) ........................................................................................................ 1, 7
`
`FED. R. CIV. P. 26(e) ................................................................................................................. 6, 10
`
`2
`
`

`

`Case 1:20-cv-00393-LO-TCB Document 751 Filed 06/22/21 Page 5 of 25 PageID# 20442
`
`
`
`FED. R. CIV. P. 37(a)(4) ............................................................................................................... 6, 7
`
`FED. R. CIV. P. 37(c) ............................................................................................................. 6, 7, 10
`
`FED. R. CIV. P. 41(a)(2) ................................................................................................................... 5
`
`FED. R. CIV. P. 56(a) ....................................................................................................................... 2
`
`LOCAL R. CIV. P. 56(B) ................................................................................................................... 2
`
`3
`
`

`

`Case 1:20-cv-00393-LO-TCB Document 751 Filed 06/22/21 Page 6 of 25 PageID# 20443
`
`
`
`I.
`
`SUMMARY JUDGMENT OF NO INEQUITABLE CONDUCT FOR THE ’545
`PATENT
`
`RJR does not dispute a single one of the 45 material facts that compel judgment on its
`
`inequitable conduct claim. Dkt. 728 at 1-3, 6-8. In the seven months since PMP/Altria argued
`
`RJR’s inequitable conduct pleading was futile (Dkt. 130), RJR failed to conduct even basic
`
`discovery to substantiate its allegations of fraud. RJR’s failure to do so is an implicit but
`
`incontrovertible admission that RJR knew its inequitable conduct defense was unsupportable but
`
`maintained it as a tit-for-tat response to PMP Altria’s detailed inequitable conduct defense in order
`
`to force PMP/Altria to incur needless litigation costs. Cf. FED. R. CIV. P. 11(b)(1)-(3).
`
`RJR now asks the Court to dispose of its knowingly baseless claim through procedural
`
`gamesmanship by granting its after-the-fact/eleventh-hour motion to dismiss. Dkts. 718, 720.
`
`That is improper. RJR made the serious allegation that PMP/Altria committed fraud on the PTO.
`
`Worse, RJR told the Court that it “discovered the true facts” that supported its request for “leave
`
`to amend . . . to assert an affirmative defense and counterclaim of inequitable conduct.” Dkt. 137
`
`at 2.1 After making these severe allegations, RJR failed to litigate its inequitable conduct defense.
`
`Such procedural gamesmanship warrants the Court’s exercise of its discretion to grant an
`
`affirmative summary judgment of no inequitable conduct, not mere dismissal.2
`
`A.
`
`RJR Does Not Dispute That Its Inequitable Conduct Claim Fails On The
`Merits
`
`RJR does not dispute any material fact or statement of law in PMP/Altria’s brief. Dkt.
`
`728 at 1-3, 6-8. “In determining a motion for summary judgment, the Court may assume that facts
`
`identified by the moving party in its listing of material facts are admitted, unless such a fact is
`
`
`1 Emphases added unless otherwise noted.
`2 RJR’s conduct will be a basis for PMP/Altria’s forthcoming request for fees in response to
`Altria’s Motion Dismiss Counterclaim and Affirmative Defenses. Dkts. 718, 720.
`
`1
`
`

`

`Case 1:20-cv-00393-LO-TCB Document 751 Filed 06/22/21 Page 7 of 25 PageID# 20444
`
`
`
`controverted in the statement of genuine issues filed in opposition to the motion.” Local R. Civ.
`
`P. 56(B). PMP/Altria’s facts are all admitted. That is dispositive and compels summary judgment,
`
`not dismissal.
`
`RJR never litigated its defense of fraud beyond its initial pleading. RJR failed to depose
`
`relevant fact witnesses on substantive issues of inequitable conduct. Dkt. 694 at 4. RJR’s expert
`
`failed to opine on issues related to inequitable conduct. Id. at 8-9. And RJR has failed to identify
`
`any documents or evidence that could support its allegation of inequitable conduct. RJR’s
`
`response to PMP/Altria’s contention interrogatory shows this beyond question. RJR merely
`
`parroted its pleading—and never added any purported facts (or legal bases) for its claim. Dkt.
`
`694-1 at 16-21. If RJR had any factual support–any at all–for its inequitable conduct claim, it was
`
`required to disclose it under Rule 26(e). As RJR belatedly admits, there is no support. The record
`
`demonstrates RJR affirmatively and knowingly misrepresented the evidence to the Court to obtain
`
`grant of its motion to amend.
`
`RJR has conceded that no genuine dispute of material exists with respect to its inequitable
`
`conduct claim. LOCAL R. CIV. P. 56(B). The Court should grant summary judgment of no
`
`inequitable conduct as a matter of law for that reason alone. FED. R. CIV. P. 56(a).
`
`B.
`
`The Court Should Not Permit RJR’s Procedural Tactics
`
`RJR’s Motion to Dismiss is a procedural tactic intended to prevent the Court from reaching
`
`the merits of its fraud allegations and entering summary judgment. RJR falsely represented to the
`
`Court (over PMP/Altria’s futility objections) that it had “discovered the true facts” to support its
`
`inequitable conduct claim. Dkt. 137 at 2; see also Dkts. 110, 130. But since October 2020, RJR
`
`2
`
`

`

`Case 1:20-cv-00393-LO-TCB Document 751 Filed 06/22/21 Page 8 of 25 PageID# 20445
`
`
`
`took no action–did nothing–to substantiate its claim.3 Nonetheless, RJR maintained its claim until
`
`after business hours the night before the summary judgment filing deadline. Dkt. 696-1 at 3. RJR
`
`knew–without doubt–that PMP/Altria would incur substantial fees to dispose of inequitable
`
`conduct at summary judgment. RJR should not be permitted to add a baseless allegation of fraud
`
`into this case and remove it when an adverse merits decision is imminent.
`
`RJR contends it tried to avoid its motions practice with a “stipulated dismissal.” Dkt. 728
`
`at 6. But RJR’s purported stipulation—which it proposed by email 7:24 P.M. on the Court’s
`
`summary judgment deadline—improperly required PMP/Altria to waive obtaining an adverse
`
`judgment and to waive any claims to fees and costs. Ex. 24; Dkt. 720-9 at 1 (“Each party will bear
`
`its own costs, expenses, and attorneys’ fees.”).
`
`Regardless, RJR’s procedural arguments are wrong. The Court has discretion to grant
`
`summary judgment rather than dismissal with prejudice. In particular, the Court may deny a
`
`motion for voluntary dismissal with prejudice where there is evidence of “collusion, an imminent
`
`decision on the merits, or other extraordinary circumstances.” TMM Data, LLC v. Braganza, No.
`
`5:14-cv-729-FL, 2016 WL 1228595, at *3 (E.D.N.C. Mar. 28, 2016); Master Craft v. Stanley
`
`Works, No. 04-132 (JMR/JSM), 2006 WL 8438190, at *3 (D. Minn. Apr. 27, 2006) (denying
`
`voluntary motion to dismiss with prejudice in order to retain jurisdiction over the moving party
`
`until a sanctions dispute was resolved). Here, the Court should deny RJR’s motion to dismiss—
`
`and grant summary judgment—for three reasons.
`
`
`3 RJR’s failure to litigate its inequitable conduct claim and the affirmative defenses discussed
`below stands in contrast to PMP/Altria’s litigation of willful infringement. PMP/Altria litigated
`those defenses throughout fact and expert discovery, and ultimately informed RJR it would not
`pursue willfulness as to two of the five Asserted Patents to streamline the issues for trial, but
`developed a full record on the three willfully infringed patents and willfulness claims it will take
`to the jury. Ex. 22 (Watson Email 6/16/2021); see also, e.g., Dkt. 690-7, Exs. O, P; Dkt. 733-8;
`Ex. 23 (PMP/Altria Rog 29); Dkt. 733-3, ¶¶ 313-16; Dkt. 733-11, ¶¶ 633, 638.
`
`3
`
`

`

`Case 1:20-cv-00393-LO-TCB Document 751 Filed 06/22/21 Page 9 of 25 PageID# 20446
`
`
`
`First, summary judgment briefing on the issue is complete and there is “an imminent
`
`decision on the merits” regarding RJR’s inequitable conduct claim. TMM Data, 2016 WL
`
`1228595, at *3. This has particular force where, as here, RJR has admitted all of the material facts
`
`and has not disputed any of the law in PMP/Altria’s opening brief. Dkt. 728 at 1-3, 6-8.
`
`Second, because inequitable conduct is an accusation of fraud on the PTO, PMP/Altria will
`
`suffer prejudice in the absence of the Court’s favorable judgment. That is an “extraordinary
`
`circumstance” for the Court that warrants the Court preventing RJR from merely dismissing its
`
`allegations at the eleventh-hour. TMM Data, 2016 WL 1228595, at *3. Even in hard fought
`
`competitor litigation, claims lacking evidentiary support should not be brought; PMP/Altria is
`
`entitled to clear its name with the Court’s affirmative judgment on the RJR’s allegation of fraud
`
`on the PTO, which has now been demonstrated to be baseless.
`
`Third, RJR’s cited cases do not support the relief it seeks.4 Dkt. 728 at 7-8. In each cited
`
`case, the court denied summary judgment on issues that were withdrawn without procedural
`
`objection and without a hint of the gamesmanship RJR exhibited here. Id. (citing Zimmer Tech.,
`
`Inc. v. Howmedica Osteonics Corp., 453 F. Supp. 2d 1030, 1043 (N.D. Ind. 2006) (refusing to
`
`grant summary judgment on invalidity issues that the defendant withdrew through interrogatory
`
`responses prior to summary judgment briefing); Southwest Bell Tel., L.P. v. Arthur Collins, Inc.,
`
`454 F. Supp. 2d 600, 606 (N.D. Tex. 2006) (dismissing withdrawn infringement contentions where
`
`there was no disputed motion to dismiss those contentions); Civix-DDI, LLC v. Cellco P’ship, 387
`
`F. Supp. 2d 869, 881 (N.D. Ill. 2005) (refusing to grant summary judgment of no infringement
`
`
`4 RJR misstates PMP/Altria’s reliance on TecSec, Inc. v. Adobe Systems Inc., 326 F. Supp. 3d 105,
`111-12 (E.D. Va. 2018) (J. O’Grady). Dkt. 728 at 7. PMP/Altria cited this case for the
`unremarkable proposition that affirmative defenses—like counterclaims—are subject to a court’s
`judgment on the merits. As TecSec confirms, they are.
`
`4
`
`

`

`Case 1:20-cv-00393-LO-TCB Document 751 Filed 06/22/21 Page 10 of 25 PageID# 20447
`
`
`
`related to patents claims that were dropped with the defendant’s consent)). By contrast,
`
`PMP/Altria opposes RJR’s Motion to Dismiss as a procedural tactic aimed at avoiding summary
`
`judgment after PMP/Altria expended significant resources defending that claim. Until the Court
`
`resolves the merits of RJR’s Motion to Dismiss, its inequitable conduct claim remains ripe for
`
`decision on the merits. FED. R. CIV. P. 41(a)(2) (“[A]n action may be dismissed at the plaintiff's
`
`request only by court order, on terms that the court considers proper.”).
`
`RJR relies on Williams v. ABM Parking Servs. Inc., 296 F. Supp. 3d 779, 783-84 (E.D. Va.
`
`2017) for the proposition that the Court need not address the merits of a dispute where the
`
`“defendant stipulates to a fact[.]” Dkt. 728 at 7. But the only “stipulation” in effect is RJR’s
`
`summary judgment opposition which concedes all the facts and the meritless nature of its
`
`inequitable conduct claim entirely. Dkt. 728 at 1-3, 6-8. Given RJR’s failure to contest any of
`
`PMP/Altria’s arguments on the merits, summary judgment is proper.
`
`* * *
`
`RJR had seven months to conduct discovery and find factual support for its inequitable
`
`conduct claim. The fact that it failed to do so, for even the most basic aspects, speaks volumes.
`
`The Court should not reward RJR’s gamesmanship with mere dismissal. The Court should grant
`
`summary judgment of no inequitable conduct against the ’545 Patent.
`
`II.
`
`SUMMARY JUDGMENT ON RJR’S FIFTH, SIXTH, EIGHTH, AND ELEVENTH
`AFFIRMATIVE DEFENSES
`
`As with its inequitable conduct claim, RJR had months to substantiate its conclusory
`
`affirmative defenses pleadings. RJR did not. In response to PMP/Altria’s contention
`
`interrogatory, RJR failed to identify any factual basis for its defenses – none. Nonetheless, RJR
`
`hopes to maintain its assertion of the equitable defenses of acquiescence, waiver, and equitable
`
`estoppel as to the ’545 Patent (Fifth Affirmative Defense), and ensnarement (Eighth Affirmative
`
`5
`
`

`

`Case 1:20-cv-00393-LO-TCB Document 751 Filed 06/22/21 Page 11 of 25 PageID# 20448
`
`
`
`Defense) while (still) failing to identify to which of the five Asserted Patents it applies. RJR
`
`purports to identify factual bases for its defenses for the first time in its Opposition. Dkt. 728 at
`
`18-19, 20-22. RJR’s untimely attempt to identify for the first time post-discovery the factual bases
`
`for its defenses violates the Federal Rules and means these affirmative defenses are waived. FED.
`
`R. CIV. P. 26(e); 37(a)(4), (c)(1); Thomas v. FTS USA, LLC, No. 3:13-cv-825, 2016 WL 3566657,
`
`at *7 (E.D. Va. June 24, 2016) (“If a party fails to identify witnesses or documents as required by
`
`Rules 26(a) and 26(e) . . . that party is subject to sanctions pursuant to Fed. R. Civ. P. 37(a)(1),”
`
`including precluding the use of that evidence at trial). In any event, on the merits, RJR’s “facts”
`
`are merely a recitation of dates and speculative expert opinions that will purportedly be provided
`
`at a later date, yet are not provided in the expert reports, even though expert discovery is closed.
`
`That fails.
`
`The Court should separately grant summary judgment on the remaining three affirmative
`
`defenses that RJR tried to withdraw with its 6:42 p.m. eve of summary judgment deadline email
`
`or later (unclean hands as to all Asserted Patents; acquiescence, waiver, and equitable estoppel as
`
`to the ’374, ’556, ’265, and ’911 Patents (Fifth Affirmative Defense); limitation on damages (Sixth
`
`Affirmative Defense); and extraterritorial claims (Eleventh Affirmative Defense)). Dkt. 696-1 at
`
`4; Dkt. 728-24. RJR should not be permitted to evade adverse judgment through an after-hours /
`
`eleventh-hour withdrawal of its defenses or procedural maneuvering in the form of a motion to
`
`dismiss its own defenses.
`
`The Court should grant summary judgment on RJR’s Fifth, Sixth, Eighth, and Eleventh
`
`Affirmative Defenses.
`
`6
`
`

`

`Case 1:20-cv-00393-LO-TCB Document 751 Filed 06/22/21 Page 12 of 25 PageID# 20449
`
`
`
`A.
`
`RJR Has Raised No Genuine Disputes of Material Fact to Support Its Fifth
`Affirmative Defense Of Waiver, Acquiescence, and Estoppel
`
`As to its Fifth Affirmative Defense of estoppel, acquiescence, and waiver for the ’545
`
`Patent, RJR contends for the first time—after the close of fact discovery—that the “delay” between
`
`the issuance of the ’545 Patent and PMP/Altria’s assertion of counterclaims establishes the factual
`
`support for each of its three remaining equitable defenses. Dkt. 728 at 19. That is an improper
`
`new argument that RJR was required to disclose during discovery and is waived. FED. R. CIV. P.
`
`37(a)(4); Wilkins v. Montgomery, 751 F.3d 214, 233 (4th Cir. 2014) (excluding expert disclosure
`
`made after close of discovery). During discovery, RJR’s “disclosure” of the factual bases for its
`
`defense was as follows: “Defendants’/Counterclaim Plaintiffs’ attempted enforcement of the ’265,
`
`’556, ’911, ’545, ’374 Patents against Reynolds is barred by one or more of the equitable doctrines,
`
`such as estoppel, acquiescence, waiver, and unclean hands.” Dkt. 694-1 at 4-5. That “disclosure”
`
`is deficient as a matter of law. See, e.g., Marshall v. Univ. of Md. Med. Ctr., No. TDC-17-2779,
`
`2018 WL 3727947, at *5 (D. Md. Aug. 6, 2018) (finding interrogatory response deficient where it
`
`failed to address the facts and details sought in the interrogatory). Moreover, RJR actively ignored
`
`its obligation under Rule 26(e) to supplement its interrogatory response. That is unsurprising,
`
`however, because RJR failed to conduct discovery on the issue. Dkt. 694-9; FED. R. CIV. P.
`
`11(b)(3). That should be dispositive. RJR never identified the purported facts in its interrogatory
`
`response and should not be permitted to rely on them to oppose summary judgment. FED. R. CIV.
`
`P. 37(c).
`
`In any event, RJR’s untimely new “factual disputes” are legally insufficient to create a
`
`genuine dispute. First, RJR erroneously ignores its burden, arguing instead that PMP/Altria
`
`“make[s] no attempt to show the ‘the absence [sic] . . . of a genuine dispute’ on whether they had
`
`a good reason for the delay.” Dkt. 728 at 19. That misstates the law. Each of the three equitable
`
`7
`
`

`

`Case 1:20-cv-00393-LO-TCB Document 751 Filed 06/22/21 Page 13 of 25 PageID# 20450
`
`
`
`defenses at issue imposes the burden on RJR to establish some affirmative action taken by
`
`PMP/Altria or PMP/Altria’s state of mind.
`
`For example, for its acquiescence defense, RJR must prove by a preponderance of the
`
`evidence that “[Altria] by conveying to [RJR] through affirmative word or deed, expressly or
`
`impliedly consents to the infringement.” H. Jay Spiegel & Assocs., P.C. v. Spiegel, 652 F. Supp.
`
`2d 639, 652 (E.D. Va. 2009). For its waiver defenses, RJR “must establish that [PMP/Altria] had
`
`‘an existing right, knowledge of the right, [and] an actual intention to relinquish the right.’”
`
`Sprint Commc’ns Co. L.P. v. Charter Commc’ns, Inc., No. 17-1734-RGA, 2021 WL 982726, at
`
`*11 (D. Del. Mar. 16, 2021) (citation omitted). For its estoppel defense, RJR must establish: “(i)
`
`that [PMP/Altria], through misleading conduct, represented that enforcement of the patent was
`
`not intended; (ii) that [RJR] relied on that conduct; and (iii) that [PMP/Altria’s] enforcement would
`
`materially prejudice [RJR].” Netscape Commc’ns. Corp. v. Valueclick, Inc., 684 F. Supp. 2d 699,
`
`726 (E.D. Va. 2010). RJR’s untimely “factual disputes” are immaterial to these defenses.
`
`RJR points solely to PMP/Altria’s own statement of undisputed facts to purportedly
`
`“establish[] the predicates for equitable defenses based on undue delay.” Dkt. 728 at 19. But the
`
`only facts that RJR has identified are that: the ’545 Patent issued on October 12, 2004; the VUSE
`
`Solo was brought to market in March 2013; and that PMP/Altria sued RJR for infringement of the
`
`’545 Patent on June 29, 2020. Id. at 18. A mere recitation of dates is legally insufficient to be the
`
`factual basis for any of the three equitable defenses. See, e.g., Dane Techs., Inc. v. Gatekeeper
`
`Sys., 135 F. Supp. 3d 970, 998 (D. Minn. 2015) (granting summary judgment of no acquiescence
`
`where “[t]here is no evidence of record of any express or implied affirmation from [Plaintiff]
`
`consenting to [Defendant’s] alleged infringement”); Sprint Commc’ns, 2021 WL 982726, at *11
`
`(“Plaintiff’s silence is not enough to show that it had an ‘actual intention’ to relinquish its patent
`
`8
`
`

`

`Case 1:20-cv-00393-LO-TCB Document 751 Filed 06/22/21 Page 14 of 25 PageID# 20451
`
`
`
`rights.”); Kewazinga Corp. v. Google LLC, No. 20 Civ. 1106 (LGS), 2021 WL 466877, at *6
`
`(S.D.N.Y. Feb. 9, 2021) (granting summary judgment of no equitable estoppel because “the
`
`evidence does not support a finding that Plaintiff engaged in misleading conduct”). RJR’s effort
`
`to maintain this defense is baseless.
`
`B.
`
`RJR’s Speculative “Future Facts” Do Not Support Its Ensnarement Defense
`
`Next, for the first time in its Opposition, RJR contends that an asserted equivalent with
`
`respect to the ’265 Patent “ensnares the very prior art on which the ’265 patent purports to
`
`improve—a heating coil wrapped around a fiber strand wick.” Dkt. 728 at 21, n.9. That was never
`
`disclosed in discovery; it is an improper new contention. RJR does not even attempt to mention a
`
`new “factual basis” to support ensnarement as to the remaining Asserted Patents. Indeed, RJR
`
`identified no facts that it contends support its ensnarement defense during fact or expert discovery.
`
`Dkt. 694-9 at 6. RJR never supplemented its contention interrogatory response with the factual
`
`basis for its defense. See Dkt. 694-9 at 10-11. And not one of RJR’s technical expert reports
`
`contains any opinions regarding ensnarement; it can be found nowhere in their reports, whether on
`
`the ’265 Patent or otherwise. RJR should be precluded from relying on this new contention under
`
`Rules 26(e) and 37(c) for the same reasons as above.
`
`RJR tells this Court that it “was not required to come forward with ‘factual bases and
`
`documents that support’ the defense,” Dkt. 728 at 21, and claims it will rely on “new expert
`
`equivalence opinions at a later date” and the “benefit of the trial record and admitted evidence” in
`
`a post-trial proceeding, to hide its total absence of evidence. See id. First, expert discovery on
`
`liability issues is complete.5 Second, it is wrong as a matter of law. Ensnarement is a question of
`
`
`5 While the Court suspended expert discovery on PMP/Altria’s entitlement to injunctive relief on
`June 7, 2021, ensnarement is an issue of liability on which discovery has already ended. Dkt. 702.
`
`9
`
`

`

`Case 1:20-cv-00393-LO-TCB Document 751 Filed 06/22/21 Page 15 of 25 PageID# 20452
`
`
`
`law that “‘may be subject to underlying facts’” and requires RJR to identify prior art that would
`
`be encompassed (“ensnared”) by an asserted equivalent. Depuy Spine, Inc. v. Medtronic Sofamor
`
`Danek, Inc., 567 F.3d 1314, 1324 (Fed. Cir. 2009); UCB, Inc. v. Watson Labs., Inc., 927 F.3d
`
`1272, 1283 (Fed. Cir. 2019) (“[T]he district court must assess the prior art introduced by the
`
`accused infringer.”). RJR has failed to do so.
`
`RJR’s speculation that “Defendants will be granted permission to introduce new expert
`
`equivalence opinions at a later date” based on the Court’s May 7, 2021 order contradicts that order.
`
`Dkt. 728 at 21. The Court previously granted PMP/Altria leave “for good cause” to supplement
`
`its expert reports with citations to fact testimony to support already-disclosed opinions, Dkt. 600,
`
`not to disclose “new [] opinions at a later date.” Dkt. 728 at 21. None of RJR’s experts opined on
`
`ensnarement in their reports. Thus, RJR’s experts are precluded from later introducing new
`
`opinions on this defense. FED. R. CIV. P. 26(e), 37(c).
`
`There is no genuine dispute of material fact as to ensnarement because RJR has failed to
`
`identify any evidence or provide any expert testimony that could support that defense.
`
`C.
`
`The Court Should Grant Summary Judgment On The Remaining Fifth, Sixth,
`and Eleventh Affirmative Defenses
`
`Despite failing to litigate these defenses or develop any factual record on them, RJR
`
`demanded that PMP/Altria stipulate to their dismissal at the eleventh hour without entry of
`
`judgment. Dkt. 728 at ¶ 3. RJR argues the parties’ stipulation on pre-suit damages is
`
`“inconsisten[t]” with PMP/Altria’s entitlement to summary judgment in the instant Motion. That
`
`is incorrect. The stipulation provided that RJR would not pursue its Sixth Affirmative Defense for
`
`the ’374 Patent, and that PM USA would not pursue its claim for pre-suit damages for infringement
`
`
`RJR’s speculation about new expert opinions shows that it will seek to improperly continue expert
`discovery after the Court’s deadlines.
`
`10
`
`

`

`Case 1:20-cv-00393-LO-TCB Document 751 Filed 06/22/21 Page 16 of 25 PageID# 20453
`
`
`
`of the ’545 Patent. Dkt. 549 ¶¶ 2, 4. That previous stipulation occurred over two months ago and
`
`saved both parties time and resources on expert and fact discovery. By contrast, here, a decision
`
`on the merits of RJR’s affirmative defenses is imminent.
`
`The Court should grant summary judgment on RJR’s baseless and unsupported (RJR
`
`mischaracterizes them as “withdrawn”) affirmative defenses of unclean hands as to all Asserted
`
`Patents; acquiescence, waiver, and equitable estoppel as to the ’374, ’556, ’265, and ’911 Patents
`
`(Fifth Affirmative Defense); limitation on damages (Sixth Affirmative Defense); and
`
`extraterritorial claims (Eleventh Affirmative Defense).
`
`* * *
`
`For the foregoing reasons, the Court should grant summary judgment on RJR’s Fifth, Sixth,
`
`Eighth, and Eleventh Affirmative Defenses.
`
`III.
`
`PARTIAL SUMMARY JUDGMENT OF NO INVALIDITY FOR THE ’374
`PATENT
`
`
`
`RJR now concedes that the Liu reference is not “by another” and that long-established
`
`Federal Circuit precedent confirms that, as a matter of law, the Liu reference is not prior art under
`
`pre-AIA § 102(a). That is dispositive and compels grant of this portion of PMP/Altria’s motion.
`
`But nonetheless refusing to concede on any issue, RJR claims to preserve for appeal its
`
`argument that Federal Circuit precedent going back 40 years is wrongly decided. As the pot calling
`
`the kettle black, see Section II.A-B supra, RJR also argues that PMP/Altria should be “barred”
`
`from relying on the fact that Mr. Liu is the inventor of the Liu reference because they purportedly
`
`“fail[ed] to reveal” that information “until after close of discovery.” First, that is irrelevant to
`
`whether the Liu reference constitutes prior art under § 102(a). RJR has already conceded that, as
`
`a matter of law, it cannot. Second, RJR is wrong about the disclosure issue because the allegedly
`
`11
`
`

`

`Case 1:20-cv-00393-LO-TCB Document 751 Filed 06/22/21 Page 17 of 25 PageID# 20454
`
`
`
`“