Case 1:20-cv-00393-LO-TCB Document 805-1 Filed 08/09/21 Page 1 of 52 PageID# 21208
`Case 1:20-cv-00393-LO-TCB Document 805-1 Filed 08/09/21 Page 1 of 52 Page|D# 21208
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`Case 1:20-cv-00393-LO-TCB Document 805-1 Filed 08/09/21 Page 1 of 52 Page|D# 21208
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`Case 1:20-cv-00393-LO-TCB Document 805-1 Filed 08/09/21 Page 2 of 52 PageID# 21209
`Trials@uspto.gov
`Paper 13
`571-272-7822
`Date: August 5, 2021
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`PHILIP MORRIS PRODUCTS, S.A.,
`Petitioner,
`v.
`RAI STRATEGIC HOLDINGS, INC.
`Patent Owner.
`
`IPR2020-00921
`Patent 9,814,268 B2
`
`
`
`
`
`
`
`
`
`Before JO-ANNE M. KOKOSKI, ELIZABETH M. ROESEL, and
`MICHELLE N. ANKENBRAND, Administrative Patent Judges.
`ROESEL, Administrative Patent Judge.
`
`DECISION
`Granting Request For Rehearing and
`Granting Institution of Inter Partes Review
`35 U.S.C. § 314; 37 C.F.R. § 42.71(d)
`
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`IPR2020-00921
`Patent 9,814,268 B2
`
`INTRODUCTION
`
`I.
`A. Status of the Proceeding
`Philip Morris Products, S.A. (“Petitioner”) filed a Petition seeking
`inter partes review of claims 16 and 17 of U.S. Patent No. 9,814,268 B2
`(Ex. 1001, “the ’268 Patent”). Paper 2 (“Pet.”). RAI Strategic Holdings,
`Inc. (“Patent Owner”) filed a Preliminary Response. Paper 6 (“Prelim.
`Resp.”). With the Board’s prior authorization, the parties filed additional
`briefs limited to the issue of discretion to institute pursuant to NHK1/Fintiv2
`and 35 U.S.C. § 325(d). Paper 7 (“Pet. Reply”); Paper 8 (“PO Sur-reply”).
`We denied institution under § 314(a) in view of the district court’s
`anticipated trial date eight to nine months before the projected statutory
`deadline for issuing a final decision and the other Fintiv factors. Paper 9
`(“Denial Decision” or “Denial Dec.”). Petitioner timely filed a request for
`rehearing, along with copies of the district court’s stay orders. Paper 10
`(“Reh’g Req.” or “Request”); Exs. 1041, 1043. Concurrently therewith,
`Petitioner requested that the Board’s Precedential Opinion Panel (“POP”)
`reconsider the Denial Decision. Paper 11; Ex. 3002 (“POP Request”). The
`POP declined to review the issue raised in Petitioner’s POP Request.
`Paper 12. Thus, we proceed to the rehearing.
`Shortly after the Denial Decision, the district court stayed the parallel
`action. As discussed further below, we conclude that, in light of the district
`court’s stay order, a weighing of the Fintiv factors does not warrant exercise
`of our discretion to deny institution under 35 U.S.C. § 314(a).
`
`
`1 NHK Spring Co. v. Intri-Plex Technologies, Inc., IPR2018-00752, Paper 8
`(PTAB Sept. 12, 2018) (precedential).
`2 Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11 (PTAB Mar. 20, 2020)
`(precedential).
`
`2
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`Patent 9,814,268 B2
`Under 37 C.F.R. § 42.4(a), we have authority to determine whether to
`institute an inter partes review. The standard is set forth in 35 U.S.C.
`§ 314(a), which provides that an inter partes review may not be instituted
`“unless . . . there is a reasonable likelihood that the petitioner would prevail
`with respect to at least 1 of the claims challenged in the petition.” After
`considering the information presented in the Petition and the Preliminary
`Response, we determine that Petitioner has shown a reasonable likelihood
`that it will prevail with respect to at least one claim challenged in the
`Petition. After considering Patent Owner’s arguments, we do not deny the
`Petition under 35 U.S.C. § 312(a)(3) for lack of particularity or under
`35 U.S.C. § 325(d) due to the same or substantially the same art or
`arguments having previously been considered by the Office. Therefore, we
`grant institution of an inter partes review.
`
`B. Real Parties in Interest
`Petitioner identifies Philip Morris Products, S.A.; Philip Morris
`International, Inc.; Altria Client Services LLC; and Philip Morris USA as
`real parties in interest. Pet. 5. Petitioner additionally states that Altria
`Group, Inc. is not a real party in interest but nevertheless agrees to be bound
`by any final written decision in this proceeding. Id. (citing 35 U.S.C.
`§ 315(e)).
`Patent Owner identifies RAI Strategic Holdings, Inc.; R.J. Reynolds
`Vapor Company; RAI Innovations Company; and R.J. Reynolds Tobacco
`Company as real parties in interest. Paper 5, 1 (Mandatory Notice).
`
`C. Related Matters
`The parties identify the following district court action in which Patent
`Owner is asserting the ’268 Patent against Petitioner: RAI Strategic
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`Holdings, Inc. v. Altria Client Services LLC, No. 1:20-cv-393 (E.D. Va. filed
`Apr. 9, 2020). Pet. 5; Paper 5, 2.
`The parties also identify IPR2020-00919 involving U.S. Patent
`No. 9,901,123 (“the ’123 Patent”), which is related to the ’268 Patent.3
`Pet. 5–6; Paper 5, 2.
`
`II.
`
`REQUEST FOR REHEARING AND BOARD’S DISCRETION TO
`DENY INSTITUTION UNDER 35 U.S.C. § 314(a)
`A. Standard of Review and Fintiv Factors
`A party requesting rehearing of a Board decision has the burden to
`show that the decision should be modified. Pursuant to 37 C.F.R.
`§ 42.71(d), the rehearing request must identify, specifically, all matters the
`party believes the Board misapprehended or overlooked and the place where
`each matter was previously addressed in a motion, an opposition, or a reply.
`When rehearing a decision on a petition, we review the decision for an abuse
`of discretion. 37 C.F.R. § 42.71(c) (2019). An abuse of discretion may arise
`if a decision is based on an erroneous interpretation of law, if a factual
`finding is not supported by substantial evidence, or if an unreasonable
`judgment is made in weighing relevant factors. In re Gartside, 203 F.3d
`1305, 1315–16 (Fed. Cir. 2000)
`The Board’s precedential Fintiv order identifies the following factors
`that should be considered and balanced when the patent owner raises an
`argument for discretionary denial under NHK:
`
`
`3 The ’268 Patent and the ’123 Patent both claim the benefit of Application
`No. 11/550,634, filed October 18, 2006, through a series of continuation
`and/or division applications. The Board denied institution of an inter partes
`review in IPR2020-00919.
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`1. whether the court granted a stay or evidence exists that one
`may be granted if a proceeding is instituted;
`2. proximity of the court’s trial date to the Board’s projected
`statutory deadline for a final written decision;
`3. investment in the parallel proceeding by the court and the
`parties;
`4. overlap between issues raised in the petition and in the parallel
`proceeding;
`5. whether the petitioner and the defendant in the parallel
`proceeding are the same party; and
`6. other circumstances that impact the Board’s exercise of
`discretion, including the merits.
`Fintiv, Paper 11 at 5–6. According to Fintiv, these factors relate to
`“efficiency, fairness, and the merits” and require the Board to take “a
`holistic view of whether efficiency and integrity of the system are best
`served by denying or instituting review.” Id. at 6.
`
`B. Discussion on Rehearing
`1. Whether the court granted a stay and the proximity of court’s trial
`date
`After our Denial Decision, the district court ordered a stay of the
`related civil action “pending a decision by the PTAB on whether to institute
`post-grant petitions on [U.S. Patent Nos. 9,814,268 and 10,492,542].”4
`Ex. 1043. Subsequently, the district court partially lifted the stay only as to
`Petitioner’s counterclaims against Patent Owner. Ex. 3003 (district court’s
`Feb. 16, 2021 order). The stay of the district court action order remains in
`place as to the ’268 and ’542 patents. Citing the relief it requested from the
`
`
`4 U.S. Patent No. 10,492,542 (“the ’542 patent”) is being challenged by
`Petitioner in PGR2020-00071, where institution was granted on
`January 13, 2021.
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`district court, Petitioner represents that “the stay will remain in place if the
`Board institutes review.” Reh’g Req. 4 (citing Ex. 1038, 23; Ex. 1040, 2–4,
`6–8; Ex. 1041; Ex. 1042, 6–9; Ex. 1043).
`Petitioner argues that Fintiv factors 1 and 2 strongly favor institution.
`Reh’g Req. 9–10. We agree. The district court action is stayed pending
`resolution of the PTAB proceedings. Ex. 1043. The district court’s stay
`allays concerns about inefficiency and duplication of effort. Snap, Inc., v.
`SRK Tech. LLC, IPR2020-00820, Paper 15 at 8–9 (PTAB Oct. 21, 2020)
`(precedential) (“Snap”); Fintiv, Paper 11 at 6.
`Accordingly, Fintiv factors 1 and 2 weigh strongly against exercising
`discretion to deny institution.
`
`2. Investment in the parallel proceeding by the court and the parties
`In our Denial Decision, we determined that Fintiv factor 3 weighs
`against exercising discretion to deny institution. Denial Dec. 18. In
`reaching that determination, we relied on the fact that, at the time of the
`Denial Decision, the district court had not issued any substantive order
`related to the ’268 Patent and the parties had completed some work in the
`district court action, e.g., claim construction briefing, but much remained to
`be completed in advance of trial. Id. We also relied on Petitioner’s
`diligence in filing the Petition less than one month after Patent Owner filed
`its complaint in the related district court action. Id. (citing Fintiv, Paper 11
`at 11).
`Petitioner argues that Fintiv factor 3 still favors institution. Reh’g
`Req. 10. According to Petitioner, “[n]ot enough changed” during the two-
`week period between the Board’s Denial Decision and the district court’s
`stay order “to shift this factor to a negative.” Id. Petitioner acknowledges
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`that, in the meantime, the district court issued a claim construction order. Id.
`at 11. Petitioner argues, however, that the claim construction order does not
`demonstrate a high level of investment because the district court merely
`agreed with Patent Owner that the sole disputed claim term should be
`interpreted according to its plain and ordinary meaning. Reh’g Req. 11
`(citing Ex. 1044).
`We agree with Petitioner that not enough changed during the two-
`week period between our Denial Decision and district court’s stay order to
`warrant a change in our determination that Fintiv factor 3 weighs against
`exercising discretion to deny institution. Although the parties and the
`district court completed some work in the district court action prior to the
`stay, the investment by the parties and the district court related to the
`’268 Patent does not appear to be significant, and the case as it relates to that
`patent is still at an early stage. Nor is there any indication that the parties
`will make a significant investment in the district court action as it relates to
`the ’268 Patent before the due date of a final written decision in this
`proceeding. We continue to rely on Petitioner’s diligence in filing the
`Petition less than one month after Patent Owner filed its complaint in the
`related district court action.
`Accordingly, Fintiv factor 3 weighs against exercising discretion to
`deny institution.
`
`3. Overlap between the issues raised in the petition and in the
`parallel proceeding
`In our Denial Decision, we determined that Fintiv factor 4 weighs
`marginally against exercising discretion to deny institution. Denial Dec. 20.
`In reaching that determination, we relied on the fact that, at the time of the
`Denial Decision, Petitioner had not yet disclosed its invalidity contentions in
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`the district court action, making it impossible to determine the extent of any
`overlap. Id. at 19 (citing Prelim. Resp. 62; Pet. Reply 4). We also relied on
`Petitioner’s stipulation not to pursue any IPR grounds in the district court, if
`the Board institutes an inter partes review, finding that, although the
`stipulation is narrowly crafted, it “will lessen to some degree the concerns
`about duplicative efforts and the possibility of conflicting decisions.” Id.
`(citing PO Sur-reply 7; Ex. 1037).
`On rehearing, Petitioner argues that Factor 4 strongly favors
`institution. Reh’g Req. 11. Petitioner is correct that, upon entry of a final
`written decision in this proceeding, statutory estoppel will preclude
`Petitioner from raising any invalidity grounds that it “raised or reasonably
`could have raised during [this IPR]” in district court. Id.; 35 U.S.C.
`§ 315(e)(2). As in Snap,
`due to the stay of the parallel District Court proceeding, the
`Board will likely address patentability issues prior to the District
`Court reaching invalidity issues at trial, thereby obviating
`concerns of inefficiency and conflicting decisions while
`providing the possibility of simplifying issues for trial in the
`parallel District Court proceeding.
`Snap, Paper 15 at 15–16.
`Accordingly, Fintiv factor 4 weighs against exercising discretion to
`deny institution.
`
`4. Whether the petitioner and defendant in the parallel proceeding
`are the same party
`It is undisputed that the district court action involves the same parties
`as this proceeding. See Pet. Reply 7; Prelim. Resp. 62 (Patent Owner asserts
`that “Petitioner is a named defendant in the district court action.”).
`
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`Because the related district court action is stayed and the amount of
`overlap between the invalidity contentions and the Petition challenges is
`presently unknown, we regard Fintiv factor 5 as neutral or, at most,
`weighing slightly in favor of exercising discretion to deny institution. Snap,
`Paper 15 at 16.
`
`5. Other circumstances, including the merits
`In our Denial Decision, we determined that Fintiv factor 6 weighs
`against a discretionary denial of institution. Denial Dec. 27. At that time,
`we viewed the merits of Petitioner’s grounds as “particularly strong on the
`preliminary record” and “Patent Owner’s substantive response as weak.” Id.
`at 26.
`
`Our preliminary view of the merits has not changed since the Denial
`Decision. A preliminary analysis of the merits is provided in Section IV
`below.
`Accordingly, Fintiv factor 6 weighs against a discretionary denial of
`institution.
`
`6. Conclusion on Rehearing and § 314(a) Discretion
`Under Fintiv, we are required to take “a holistic view of whether
`efficiency and integrity of the system are best served by denying or
`instituting review.” Fintiv, Paper 11 at 6. No single factor is determinative
`of whether we exercise our discretion to deny institution under § 314(a).
`Balancing all of the Fintiv factors, we determine that the circumstances
`weigh against exercising discretion under § 314(a) to deny institution of
`inter partes review and that Petitioner has met its burden to show that our
`Denial Decision should be modified.
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`III. BACKGROUND OF THE PROCEEDING
`A. The ’268 Patent (Ex. 1001)
`The ’268 Patent describes and claims a tobacco-containing,
`electrically-powered smoking article. Ex. 1001, codes (54), (57), 1:19–20,
`32:41–42, 34:13–14 (preamble of independent claims 1 and 16). One
`objective is “to provide a smoking article that provides a smoker with an
`ability to enjoy using tobacco without the necessity of burning any
`significant amount of tobacco.” Id. at 4:27–29.
`A first embodiment is depicted in Figure 1, reproduced below:
`
`
`
`Figure 1 of the ’268 Patent is a longitudinal cross-sectional view of an
`electrically powered, tobacco-containing smoking article. Ex. 1001,
`8:28–30, 19:31–35.
`As shown in Figure 1, smoking article 10 includes outer container or
`housing 20 that is generally tubular in shape and has distal end 13 and
`mouth-end 15. Ex. 1001, 19:40–44, 19:53–55. “[T]he mouth-end comprises
`an opening adapted for egress of an aerosol generated within the smoking
`article and the distal end comprises an opening adapted for intake of air into
`the smoking article 10.” Id. at 19:55–58. Within outer container 20 is
`electric power source 36, such as a battery. Id. at 20:6–7.
`
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`As shown in Figure 1, smoking article 10 includes controller 50
`having microchips that provide control of time of operation, current, and
`electrical resistance heat generation. Ex. 1001, 20:27–28, 20:31–36, Figs. 4,
`5. Smoking article 10 also includes sensor 60 for sensing draw, i.e., intake
`of air by the user of the smoking article. Id. at 20:43–46, 20:61–63.
`Controller 50 and sensor 60 are powered by battery 36 and function in
`concert as a puff-actuated controller for regulating the flow of current
`through the resistance heating elements. Id. at 20:36–37, 20:53–54, 20:57–
`61.
`
`Smoking article 10 of Figure 1 includes electrical resistance heating
`elements 70, 72, which are configured to allow airflow through the heating
`elements. Ex. 1001, 21:10–11, 21:21–22. First electrical resistance heating
`element 70 heats drawn air passing through the smoking article from distal
`end 13 of outer housing 20. Id. at 21:11–15. Second electrical resistance
`heating element 72 heats an aerosol-forming material supported by or in
`close proximity to the heating element. Id. at 21:26–40. Aerosol-forming
`material can be transferred to the heating element by the wicking action of a
`high surface area absorbent material that either forms the heating element or
`is in close proximity to the heating element. Id.
`Smoking article 10 of Figure 1 includes cartridge 85, which has
`upstream segment 95 composed of tobacco filler or processed tobacco filler
`material 89 incorporating aerosol-forming material and downstream
`segment 98 composed of substrate 101 carrying flavors and/or aerosol-
`forming material. Ex. 1001, 21:58–59, 21:63–21:1, 22:8–14. The ’268
`Patent discloses that “smoking article 10 is assembled such that a certain
`amount of aerosol-forming material and tobacco components can be wicked
`or otherwise transferred to heating element 72 or the region in close
`
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`proximity to the heating element.” Id. at 22:14–18. As shown in Figure 1,
`“extreme mouth end region of cartridge 85 is sealed, and as such, tobacco
`components and aerosol-forming material have a tendency to travel
`upstream towards the resistance heater 72.” Id. at 22:19–22.
`Smoking article 10 of Figure 1 has mouth-end piece 120, which is
`“typically removable” and can be maintained in place by friction fit or
`complementary threaded screw mechanisms on the mouth-end piece and
`outer housing. Ex. 1001, 23:63–24:1.
`Another embodiment is depicted in Figure 2, reproduced below:
`
`
`
`Figure 2 of the ’268 Patent is a longitudinal cross-sectional view of an
`electrically powered, tobacco-containing smoking article. Ex. 1001,
`8:28–30, 24:42–43. According to the ’268 Patent, the smoking article of
`Figure 2 has “certain components comparable to” the Figure 1 embodiment;
`“[h]owever, the smoking article is adapted to incorporate a cigarette 150.”
`Id. at 24:45–49.
`The ’268 Patent discloses that cigarette 150 has a charge or roll of
`tobacco 89 wrapped in wrapping material 160 so as to form a generally
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`cylindrical cigarette rod or tobacco rod. Ex. 1001, 24:50–53, 25:1–3.
`According to the ’268 Patent, “wrapping material 160 is formed into a
`generally tubular shape, and the tobacco is positioned within the hollow
`region within that tube,” and “wrapping material 160 is formed such that
`each end of the tobacco rod is open to expose the tobacco contained therein,
`and to allow the passage of drawn air therethrough.” Id. at 25:3–9.
`As shown in Figure 2, cigarette 150 has a type of cartridge 85 at its
`distal end within the wrapping material 160 and in fluid communication with
`the tobacco rod. Ex. 1001, 25:21–24. Cartridge 85 contains aerosol-
`generating material composition 101 and has a tubular shape with open ends
`such that air can flow through the cartridge. Id. at 25:24–25, 25:31–32. The
`’268 Patent describes an alternative embodiment in which cartridge 85 is not
`incorporated within cigarette 150 and the region of cigarette 150 that is
`wrapped in paper wrapper 160 is composed entirely of tobacco material and
`aerosol-forming materials, which are not necessarily arranged in a
`segmented fashion. Id. at 26:43–52.
`As shown in Figure 2, cigarette 150 has filter element 200 composed
`of filter material 215 wrapped in circumscribing plug wrap 218 and attached
`to the tobacco rod using tipping material 222 that circumscribes the length of
`the filter element 200 and an adjacent region of the tobacco rod at its
`downstream end. Ex. 1001, 26:53–61. The ’268 Patent discloses that
`tubular mouth-end piece 120 can act as a support for filter element 200 of
`cigarette 150, and can be removably attached to outer housing 20. Id. at
`26:62–27:7.
`
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`Another embodiment is depicted in Figure 3, reproduced below:
`
`
`
`Figure 3 of the ’268 Patent is a longitudinal cross-sectional view of an
`electrically powered, tobacco-containing smoking article. Ex. 1001,
`8:28–30, 27:28–29. According to the ’268 Patent, the smoking article of
`Figure 3 has “certain components comparable to” the Figure 1 embodiment
`and is “adapted to incorporate a type of cigarette 150.” Id. at 27:30–35.
`In the Figure 3 embodiment, smoking article 10 has tube-shaped third
`resistance heating element 300 that fits snuggly around a portion of tobacco
`rod 89 and provides heat to at least a portion of tobacco 89 of cigarette 150.
`Ex. 1001, 27:49–51, 27:63–28:2. First, second, and third resistance heating
`elements 70, 72, 300 can each be separately controlled in response to timing
`mechanisms, switching mechanisms, and/or sensing mechanism 60 so that
`each resistance heating element can provide differing amounts of heat and
`during differing periods. Id. at 28:6–26. As shown in Figure 3, second
`resistance heating element 72 can have an elongated portion that extends
`into tobacco segment 89 and is “in close contact with a significant amount of
`substrate and aerosol-forming material within the tobacco.” Id. at 28:28–35.
`As shown in Figure 3, thermally insulated region 400 circumscribes
`resistance heating element 300 of smoking article 10. Id. at 28:36–40.
`
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`B. Illustrative Claim
`The ’268 Patent includes 17 claims. Claims 16 and 17 are challenged
`in the Petition. Claim 16 is representative of the challenged subject matter,
`and is reproduced below:
`16. A tobacco-containing, electrically-powered smoking
`article comprising:
`(a) a tubular outer housing having a mouth-end and an end
`distal to the mouth-end, the housing comprising an opening
`adapted for intake of air into the smoking article;
`(b) an electrical power source within the outer housing;
`(c) a controller adapted for regulating current flow through
`the heater;
`(d) a rod-shaped carrier device removably engaged with
`the mouth-end of the outer housing and comprising a tubular
`mouth-end piece and a tubular cartridge with two open ends
`allowing air to flow therethrough, wherein the cartridge includes
`a tobacco material and an aerosol-generating material; and
`(e) an electrical resistance heater in contact with the
`tobacco material and the aerosol-generating material and adapted
`for heating at least a portion of the tobacco material and the
`aerosol-generating material.
`Ex. 1001, 34:13–31.
`
`C. Asserted Grounds and Evidence
`Petitioner asserts the following grounds of unpatentability:
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`Claim(s)
`Challenged 35 U.S.C. Reference(s)
`16
`§ 103(a)5 Morgan,6 Collins,7 Adams,8 Brooks9
`17
`§ 103(a) Morgan, Collins, Adams, Brooks, Counts-96210
`16 and 17
`§ 103(a)
`Counts-962, Brooks
`Petitioner relies on a Declaration of Seetharama C. Deevi, Ph.D. Ex. 1003
`(“Deevi Declaration”).
`
`IV. ANALYSIS
`
`A. Legal Standards
`“In an [inter partes review], the petitioner has the burden from the
`onset to show with particularity why the patent it challenges is
`unpatentable.” Harmonic Inc. v. Avid Tech., Inc., 815 F.3d 1356, 1363 (Fed.
`Cir. 2016) (citing 35 U.S.C. § 312(a)(3) (requiring inter partes review
`petitions to identify “with particularity . . . the evidence that supports the
`grounds for the challenge to each claim”)); see also 37 C.F.R. § 42.104(b)
`(requiring a petition for inter partes review to identify how the challenged
`claim is to be construed and where each element of the claim is found in the
`prior art patents or printed publications relied upon).
`
`
`5 The Leahy-Smith America Invents Act (“AIA”), Pub. L. No. 112-29, 125
`Stat. 284, 287–88 (2011), amended 35 U.S.C. § 103, effective March 16,
`2013. Because the ’268 Patent issued on an application that is a division of
`an application filed before this date, the pre-AIA version of § 103 applies.
`Ex. 1001, code (60).
`6 Ex. 1005, US 5,249,586, issued Oct. 5, 1993.
`7 Ex. 1006, US 5,865,185, issued Feb. 2, 1999.
`8 Ex. 1007, US 2007/0102013 A1, published May 10, 1997.
`9 Ex. 1009, US 4,947,874, issued Aug. 14, 1990.
`10 Ex. 1008, US 5,144,962, issued Sept. 8, 1992.
`
`16
`
`
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`A patent claim is unpatentable under 35 U.S.C. § 103 if the
`differences between the claimed subject matter and the prior art are such that
`the subject matter, as a whole, would have been obvious at the time the
`invention was made to a person having ordinary skill in the art to which said
`subject matter pertains. KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 406
`(2007). The question of obviousness is resolved based on underlying factual
`determinations including: (1) the scope and content of the prior art; (2) any
`differences between the claimed subject matter and the prior art; (3) the level
`of ordinary skill in the art; and, when presented, (4) objective evidence of
`nonobviousness, i.e., secondary considerations. Graham v. John Deere Co.,
`383 U.S. 1, 17–18 (1966).
`Additionally, the obviousness inquiry typically requires an analysis of
`“whether there was an apparent reason to combine the known elements in
`the fashion claimed by the patent at issue.” KSR, 550 U.S. at 418 (citing In
`re Kahn, 441 F.3d 977, 988 (Fed. Cir. 2006) (requiring “articulated
`reasoning with some rational underpinning to support the legal conclusion of
`obviousness”)). Petitioner cannot satisfy its burden of proving
`obviousness by employing “mere conclusory statements,” but “must
`instead articulate specific reasoning, based on evidence of record, to support
`the legal conclusion of obviousness.” In re Magnum Oil Tools Int’l, Ltd.,
`829 F.3d 1364, 1380 (Fed. Cir. 2016).
`
`B. Level of Ordinary Skill in the Art
`Petitioner provides the following contention regarding a person of
`ordinary skill in the art (“POSA”):
`A POSA at the time of the purported invention (the
`October 2006 timeframe) would have had a Bachelor’s degree in
`mechanical engineering, electrical engineering, chemistry, or
`
`17
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`Patent 9,814,268 B2
`physics, or a related field, and three to four years of industry
`experience, or a Master’s degree in mechanical engineering,
`electrical engineering, chemistry, or physics, or a related field,
`and one to two years of industry experience. Such a POSA
`would have been familiar with electrically powered smoking
`articles and/or the components and underlying technology used
`therein.
`Pet. 14 (citing Ex. 1003 ¶¶ 26–30). Patent Owner accepts Petitioner’s
`description of a POSA for purposes of the Preliminary Response. Prelim.
`Resp. 20. For purposes of this Decision, we accept Petitioner’s contention,
`which is supported by Dr. Deevi’s testimony (Ex. 1003 ¶ 28) and is
`consistent with the scope and content of the ’268 Patent and the asserted
`prior art.
`
`C. Claim Construction
`In an inter partes review, we apply the same claim construction
`standard as would be used by a district court to construe a claim in a civil
`action involving the validity or infringement of a patent. 37 C.F.R.
`§ 42.100(b). Under that standard, claim terms are given their ordinary and
`customary meaning, as would have been understood by a person of ordinary
`skill in the art at the time of the invention, in light of the language of the
`claims, the specification, and the prosecution history of record. Id.; Phillips
`v. AWH Corp., 415 F.3d 1303, 1312–19 (Fed. Cir. 2005) (en banc); Thorner
`v. Sony Comput. Entm’t Am. LLC, 669 F.3d 1362, 1365–66 (Fed. Cir. 2012).
`The Petition is based on alternative constructions for the terms
`“controller,” “removably engaged,” and “a rod-shaped carrier device . . .
`comprising a tubular mouth-end piece and a tubular cartridge with two open
`ends.” Pet. 14–22. According to Patent Owner, its arguments for denial of
`
`18
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`institution “do not require addressing the construction of claim terms.”
`Prelim Resp. 20.
`We determine that no claim term requires express construction for
`purposes of this Decision. Vivid Techs., Inc. v. Am. Sci. & Eng’g, Inc., 200
`F.3d 795, 803 (Fed. Cir. 1999) (“[O]nly those terms need be construed that
`are in controversy, and only to the extent necessary to resolve the
`controversy.”); see also Nidec Motor Corp. v. Zhongshan Broad Ocean
`Motor Co., 868 F.3d 1013, 1017 (Fed. Cir. 2017) (applying Vivid Techs. in
`the context of inter partes review).
`
`D. Petitioner’s First Ground: Morgan, Collins, Adams, Brooks
`Petitioner challenges claim 16 based on Morgan, Collins, Adams, and
`Brooks. Pet. 7, 23–56. Patent Owner opposes. Prelim. Resp. 63–66. We
`provide an overview of the asserted references before turning to the parties’
`contentions.
`
`1. Morgan (Ex. 1005)
`Morgan relates to electrical smoking articles “in which tobacco flavor
`media are heated but not burned to release tobacco flavors.” Ex. 1005,
`1:11–15. Morgan discloses “a smoking article for delivering to a smoker an
`inhalable tobacco flavor substance” where the article “can be used, for
`example, to simulate a cigarette.” Id. at 2:17–19, 3:9–11. According to
`Morgan, the electrical article includes:
`a removable disposable portion which includes the tobacco
`flavor medium and, if desired, a filter, and a reusable
`“permanent” portion including a source of electrical energy, a set
`of reusable heating elements, and control circuitry for energizing
`the heaters in an appropriate sequence, in response to manual
`actuation or puff-induced actuation.
`Id. at 3:13–22.
`
`19
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`Patent 9,814,268 B2
`Figures 1 and 2 of Morgan are reproduced below.
`
`
`
`Morgan Figures 1 and 2 depict an electrical smoking article with a
`pe
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