Case 1:20-cv-00393-LO-TCB Document 874 Filed 01/21/22 Page 1 of 12 PageID# 23266
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF VIRGINIA
`ALEXANDRIA DIVISION
`
`RAI STRATEGIC HOLDINGS, INC. and
`R.J. REYNOLDS VAPOR COMPANY,
`
`Plaintiffs and Counterclaim Defendants,
`
`
`
`v.
`
`ALTRIA CLIENT SERVICES LLC; PHILIP
`MORRIS USA INC.; and PHILIP MORRIS
`PRODUCTS S.A.,
`
`Defendants and Counterclaim Plaintiffs.
`
`Case No. 1:20-cv-00393-LO-TCB
`
`REDACTED
`
`MEMORANDUM IN SUPPORT OF REYNOLDS’S MOTION IN LIMINE NO. 11
`TO EXCLUDE EVIDENCE AND TESTIMONY REGARDING
`PM/ALTRIA’S IQOS PRODUCTS
`
`

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`Case 1:20-cv-00393-LO-TCB Document 874 Filed 01/21/22 Page 2 of 12 PageID# 23267
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`TABLE OF CONTENTS
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`
`Page
`
`
`INTRODUCTION ......................................................................................................................... 1
`BACKGROUND ........................................................................................................................... 2
`A.
`THE ASSERTED PATENTS AND ACCUSED PRODUCTS ............................. 2
`B.
`THE ITC PROCEEDING ...................................................................................... 3
`ARGUMENT ................................................................................................................................. 4
`I.
`EVIDENCE AND ARGUMENT REGARDING IQOS IS IRRELEVANT. .................... 4
`II.
`EVIDENCE AND ARGUMENT REGARDING IQOS IS ALSO PREJUDICIAL
`AND WOULD CONFUSE THE JURY. ........................................................................... 6
`CONCLUSION .............................................................................................................................. 7
`
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`TABLE OF AUTHORITIES
`
`Page(s)
`
`CASES
`
`Abbott Lab’ys v. Sandoz, Inc.,
`743 F. Supp. 2d 762 (N.D.Ill. 2010) oo...cece cece ceceeceeeceeeeseeeseeseeeseeeaeeeeeeseceseesseeeeeeeeeees6
`
`Advanced Tech. Incubator, Inc. v. Sharp Corp.,
`No. 5:09-CV-135, 2010 WL 11451797 (E.D. Tex. Mar. 31, 2010) .00....eeeceeceeeeeeeeeeeeeeeeeeees6
`
`Bilenky v. Ryobi Ltd.,
`No. 2:13CV345, 2014 WL 12591940 (E.D. Va. Oct. 22, 2014) .....eceeeeeccecceeeeeecceseeeeeeeeeeeeeeeees 7
`
`Certain Tobacco Heating Articles &and Components Thereof,
`Inv. No. 337-TA-1199, Comm’n Op. (U.S.LT.C. Sept. 29, 2021) .......eeeeeeeceeeeeteeeceeteeeeeeteeees3
`
`Certain Tobacco Heating Articles & Components Thereof,
`Inv. No. 337-TA-1199, Initial Determination (U.S.I.T.C. May 14, 2021)0...3
`
`Galderma Lab’ys, L.P. v. Tolmar, Inc.,
`737 F.3d 731 (Fed. Cir. 2013).........ccccccccceccceccesceesceseeeseesseeseeaeeseeeseceaeesaeeseceseeeeeeceaeeseeeneeeaeeeaes 5
`
`In re C.R. Bard, Inc.,
`810 F.3d 913 (4th Cir, 2016) ooo. cece ceccceecceecceseeceseeeseeceseeeseeceseceseeeeseeesaeceseeesseeeeeeseeeeeeeses 7
`
`Zenith Lab’ys, Inc. v. Bristol-Myers Squibb Co.,
`19 F.3d 1418 (Fed. Cir, 1994)oo. ceccececccceccceccesceeseeeceeseeesecseeesecsecseeeseceseeseeeseeeaeeseeeeeeseeneeeeeess4
`
`OTHER AUTHORITIES
`
`Fed. R. Evid. 40] o2.....ccecceececccecccescesceesceseeseeeseesseesecesecsaeeseceaecaeeseceaecaeesaeeaeceaesaeeeeeseeseeeneeeaeeeees 1,4
`
`Fed. R. Evid. 402 22.....ececccceccccesccescesceeseesseeseeseesseeseessecsceesecesecsaecseeeseceaeeseeeaeeeseeeeeeeeeseeseeeneeeeeeees 1,4
`
`Fed. R. Evid. 403 2......cceccccccccccecccesceceesceeseeseeseceseesecseesaeeseceaecaecseceseceaeesacesesseceseseseaeeseeeeeeaeeees 1,6
`
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`INTRODUCTION
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`Pursuant to Federal Rules of Evidence 401, 402, and 403, Reynolds respectfully moves the
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`Court in limine to preclude PM/Altria from introducing any evidence or argument before the jury
`
`at trial regarding any IQOS® heat-not-burn tobacco products.1 On December 10, 2021, the parties
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`met and conferred regarding their proposed motion in limine topics, and Reynolds raised the topic
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`of excluding any evidence, testimony, or argument relating to PM/Altria’s IQOS products. The
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`parties were unable to reach a resolution on these issues.
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`Based on the PM/Altria’s proposed trial exhibits and deposition designations, and the
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`parties’ December 10, 2021 meet and confer, it appears that PM/Altria intends to feature IQOS
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`prominently in its trial presentation, including touting IQOS’s regulatory authorizations, in order
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`to suggest to the jury that IQOS is a better/safer product than Reynolds’s accused VUSE® e-
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`cigarette products, or to establish PM/Altria (incorrectly) as better actor than Reynolds in the
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`development of alternatives to combustible cigarettes. But the issues that the jury must decide at
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`trial have nothing whatsoever to do with IQOS.
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`Because the claims brought by Reynolds as plaintiff remain stayed, the only matters that
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`the jury will assess at trial concern (i) whether the accused VUSE products marketed and sold by
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`Reynolds infringe one or more of the patents asserted by PM/Altria in its counterclaims; and (ii)
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`whether PM/Altria’s asserted patents are invalid. PM/Altria’s own product, IQOS, has no bearing
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`on either issue. PM/Altria cannot prove its infringement case by comparing VUSE to IQOS, for
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`example. Not only is such a comparison impermissible as a matter of law, but there is no dispute
`
`Inc. and R.J.
`to RAI Strategic Holdings,
`refers collectively
`1 “Reynolds”
`Reynolds Vapor Company. “PM/Altria” refers collectively to Defendants Altria Client Services
`LLC (“ACS”), Philip Morris USA, Inc. (“PM USA”), and Philip Morris Products S.A. (“PMP”).
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`in this case that
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`. Nor can PM/Altria
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`prove infringement (or defend validity) by presenting evidence of the resources it expended in the
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`development and/or regulatory approval of IQOS. Such evidence is purely self-congratulatory; it
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`does not tend to make any issue that the jury must decide more or less likely to be true. It is,
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`quintessentially, irrelevant.
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`Moreover, allowing PM/Altria to introduce evidence about IQOS can only complicate this
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`case and confuse the jury. For example, if PM/Altria is permitted to present evidence touting the
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`virtues of the IQOS product, then for the sake of fairness and completeness, Reynolds would need
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`to share with the jury the ample evidence showing that whatever positive qualities IQOS may have
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`originated with Reynolds; that PM/Altria copied Reynolds’s own patented technologies in the
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`development of IQOS; and that, for this reason, IQOS has been banned from the US marketplace
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`by the International Trade Commission (“ITC”). A collateral mini-trial would inexorably ensue
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`on these issues, distracting the jury from the actual matters they will be called upon to decide.
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`To prevent a waste of resources, prejudice to Reynolds, and confusion of the jury, the Court
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`should enter an Order barring PM/Altria from introducing any argument or evidence relating to
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`the IQOS products at trial.
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`BACKGROUND
`
`A.
`
`THE ASSERTED PATENTS AND ACCUSED PRODUCTS
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`The patents asserted by Plaintiff Reynolds in this case actually do relate to the IQOS
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`products. But Reynolds’s claims were stayed by the Court in view of parallel proceedings before
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`the ITC and the Patent Trial and Appeal Board (“PTAB”) involving the same patents. (See Dkt.
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`Nos. 27, 426, 432.) Reynolds’s claims directed to the IQOS products remain stayed to this day,
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`and thus will not be a part of the upcoming trial. (Dkt. No. 456.)
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`
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`Instead, the trial is limited exclusively to the counterclaims asserted by PM/Altria, which
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`charge that the VUSE e-cigarette products marketed and sold by Reynolds infringe five of
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`PM/Altria’s patents. (Dkt. Nos. 193, 198, 473, 483.) The jury must decide these claims of
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`infringement, and also adjudicate Reynolds’s defense that the asserted PM/Altria patents are
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`invalid. (Dkt Nos. 274, 279, 523.) PM/Altria’s counterclaims are not in any way directed to the
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`IQOS products; indeed, it is undisputed that
`
`
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`.
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`B.
`
`THE ITC PROCEEDING
`
`As noted above, Reynolds’s affirmative claims in this case—alleging that PM/Altria’s
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`IQOS products infringe certain of Reynolds’s patents—were stayed by the Court in part due to
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`related proceedings before the ITC involving the same parties and patents. After hearing extensive
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`testimony and evidence, ITC Administrative Law Judge Cheney made an Initial Determination on
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`May 14, 2021, finding that the IQOS products do in fact infringe valid claims of two patents
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`asserted by Reynolds (the ’915 and ’123 patents, also asserted, and currently stayed, in this case).
`
`See Certain Tobacco Heating Articles & Components Thereof, Inv. No. 337-TA-1199, Initial
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`Determination at 99-100 (U.S.I.T.C. May 14, 2021). ALJ Cheney rejected PM/Altria’s arguments
`
`opposing a limited exclusion order, which relied in large part on the supposed benefits that IQOS
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`offers to the public, and instead recommended that importation of IQOS into the United States
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`should be barred. Id. at 125-26.
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`Over PM/Altria’s vehement objection, the Initial Determination was upheld in its entirety
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`by the full ITC Commission on September 29, 2021. See Certain Tobacco Heating Articles &
`
`Components Thereof, Inv. No. 337-TA-1199, Comm’n Op. (U.S.I.T.C. Sept. 29, 2021). The
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`Commission entered a Limited Exclusion Order (“LEO”), which provides that the infringing IQOS
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`products “are excluded from entry for consumption into the United States, entry for consumption
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`from a foreign trade zone, or withdrawal from a warehouse for consumption, for the remaining
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`term of the patent, except under license of, or with the permission of, the patent owner or as
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`provided by law.” (Ex. 1 at 2.) The Commission also issued Cease and Desist Orders (“CDOs”)
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`against PM USA and ACS precluding them from, inter alia, importing, marketing, or selling the
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`infringing IQOS products in the United States. (Exs. 2, 3.) The President elected not to exercise
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`his power to disturb the ITC’s decision, again despite strong efforts by PM/Altria, and thus the
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`LEO remains in effect.
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`ARGUMENT
`
`I.
`
`EVIDENCE AND ARGUMENT REGARDING IQOS IS IRRELEVANT.
`
`To be admissible at trial, evidence must have a tendency to “make a fact . . . of consequence
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`in determining the action” more or less probable. Fed. R. Evid. 401. Otherwise, it is irrelevant,
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`and should be excluded. Fed. R. Evid. 402. That is just the case for any evidence or argument
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`relating to the IQOS products.
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`PM/Altria’s infringement claims are directed to the VUSE products – i.e., Reynolds’s
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`products, not IQOS. And it is black letter law that PM/Altria must prove infringement by
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`comparing VUSE to the asserted patent claims; how VUSE may or may not compare IQOS is
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`irrelevant. See Zenith Lab’ys, Inc. v. Bristol-Myers Squibb Co., 19 F.3d 1418, 1423 (Fed. Cir.
`
`1994) (“[I]t is error for a court to compare in its infringement analysis the accused product or
`
`process with the patentee’s commercial embodiment or other version of the product or process;
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`the only proper comparison is with the claims of the patent.”). That is doubly so here, because
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`PM/Altria has conceded,
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`
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`Ex. 5 at 7 (as to the ’265, ’556, and ’911 patents).) Evidence comparing IQOS to VUSE thus
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`. (See Ex. 4 at 7 (as to the ’545 and ’374 patents);
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`offers nothing probativeatall on the critical question of whether VUSEinfringes one or more of
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`the asserted counterclaim patents.”
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`Noris evidence around IQOSrelevant to any damages issues that the jury will decide.
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`Following a logical path that could scarcely be more attenuated, PM/Altria’s experts apparently
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`intend to try and prop up the value of the counterclaim patents for damages purposes by suggesting
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`— based on PM/Altria’s own experience with IQOS — that the patented features are important to
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`FDA,andthusare of greater value to Reynolds. For example, PM/Altria expert Stacy Ehrlich
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`argues in her report that “FDA’s review of the IQOS PMTAconfirmsthat the Agency examines
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`closely information related to battery performanceandsafety ‘to ensure product consistency and
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`reduce concemsof malfunction.’” (Ex. 6 (Ehrlich Rpt.) 91.) Ehrlich’s entire methodology is so
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`bereft of scientific merit that she should not be allowed to testify at all, for reasons that Reynolds
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`explains im its Motion to Exclude the Testimony of Stacy Ehrlich. Even if Stacy Ehrlich is allowed
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`to offer certain opinions, however, this reliance on IQOS should be barred. And so should the
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`related opinions of PM/Altria expert Paul Meyer, whorelies on these groundless opinions from
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`Ehvich around whats inpotnt toFD
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`PO (See, e.g., Ex. 7 (Meyer Report) ¥ 514.) This is a house of
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`cards.
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`2 To the extent that PM/Altria argues that evidencerelating to IQOS’s purported regulatory
`or commercial success is relevant to the invalidity issues that Reynolds has raised, that too is
`wrong. Evidence that a commercial product is successful “is only significant if there is a nexus
`between the claimed invention and the commercial success.” Galderma Lab’ys, L.P. v. Tolmar,
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`Inc., 737 F.3d 731, 740 (Fed. Cir. 2013) (cleaned up). No such nexus exists here _
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`II.
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`EVIDENCE AND ARGUMENT REGARDING IQOS IS ALSO PREJUDICIAL
`AND WOULD CONFUSE THE JURY.
`
`Even if evidence about IQOS were marginally relevant (it is not), “its probative value is
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`substantially outweighed by a danger of . . . unfair prejudice, confusing the issues, misleading the
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`jury, undue delay, wasting time, or needlessly presenting cumulative evidence.” Fed. R. Evid. 403.
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`PM/Altria’s primary aim appears to be to use evidence around the development and
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`regulatory approval of IQOS to establish PM/Altria in the minds of the jury as a real innovator and
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`leader in the effort to develop safer alternatives to combustible cigarettes. This line of evidence
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`and argument of course has no bearing on whether the asserted counterclaim patents are valid or
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`infringed. It will be offered exclusively to paint PM/Altria in a good light, to cast unfair aspersions
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`on Reynolds and its VUSE products, and ultimately to encourage the jury to decide the case based
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`on factors that have no connection to the merits. This is improper. See, e.g., Advanced Tech.
`
`Incubator, Inc. v. Sharp Corp., No. 5:09-CV-135, 2010 WL 11451797, at *10 (E.D. Tex. Mar. 31,
`
`2010) (“Any probative value of allegations that Japanese companies generally engaged in illegal
`
`or inappropriate business conduct … is substantially outweighed by the dangers of unfair
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`prejudice, jury confusion, and waste of time.”); Abbott Lab’ys v. Sandoz, Inc., 743 F. Supp. 2d
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`762, 773 (N.D. Ill. 2010) (barring party from using negative terms that “would unfairly prejudice
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`Abbott under Rule 403 by . . . improperly inviting the jury to view Abbott in a negative light”).
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`As noted above,
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`, so any features of IQOS that
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`PM/Altria may want to tout to the jury
`
`.
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`Indeed, if PM/Altria were allowed to present evidence about the supposedly important or
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`beneficial features of IQOS at trial, Reynolds would have no choice but to respond with evidence
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`showing that the IQOS technology was actually stolen from Reynolds; that IQOS has been found
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`to infringe Reynolds’s own valid patents; and for this reason IQOS has been barred from
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`importation or sale in the United States. This would inexorably devolve into a collateral mini-trial
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`on issues that are unrelated to the patent claims at issue, multiplying the trial as well as confusing
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`and distracting the jury. The Court should not allow it. See In re C.R. Bard, Inc., 810 F.3d 913,
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`921-22 (4th Cir. 2016) (holding district court did not abuse its discretion by excluding evidence of
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`disclosures to FDA because “having a ‘mini-trial’” on “complex testimony about regulatory
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`compliance” could “easily inflate the perceived importance of compliance and distract the jury
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`from the central question before it”); see also Bilenky v. Ryobi Ltd., No. 2:13CV345, 2014 WL
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`12591940, at *7 (E.D. Va. Oct. 22, 2014) (“Trials within a trial are the prototypical dangers warned
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`of by Rule 403’s ‘confusing the issues’ and ‘undue delay.’”).3
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`CONCLUSION
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`For the foregoing reasons, Reynolds respectfully requests that Court enter an Order barring
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`PM/Altria from introducing or eliciting at trial any evidence, testimony, or argument relating to
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`PM/Altria’s IQOS products.
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`
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`3 Notably, while PM/Altria apparently intends to feature IQOS prominently in their trial
`presentation, they also plan to move in limine to exclude rebuttal evidence from Reynolds
`concerning FDA’s pre-market tobacco application (“PMTA”) and modified-risk tobacco product
`application (“MRTPA”) authorizations of IQOS (PM/Altria MIL Topic 20); to exclude any
`discussion of the ITC proceeding and the resulting LEO and CDOs against PM/Altria (PM/Altria
`MIL Topic 15); and to exclude any discussion of Reynolds’s patent infringement claims against
`IQOS in this action (PM/Altria Topic 14). Such one-sided presentation of evidence would unfairly
`prejudice Reynolds, and should not be permitted.
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`Case 1:20-cv-00393-LO-TCB Document 874 Filed 01/21/22 Page 11 of 12 PageID# 23276
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`Dated: January 21, 2022
`
`Respectfully submitted,
`
`Stephanie E. Parker
`JONES DAY
`1420 Peachtree Street, N.E.
`Suite 800
`Atlanta, GA 30309
`Telephone: (404) 521-3939
`Facsimile: (404) 581-8330
`Email: separker@jonesday.com
`
`Anthony M. Insogna
`JONES DAY
`4655 Executive Drive
`Suite 1500
`San Diego, CA 92121
`Telephone: (858) 314-1200
`Facsimile: (844) 345-3178
`Email: aminsogna@jonesday.com
`
`William E. Devitt
`JONES DAY
`77 West Wacker
`Suite 3500
`Chicago, IL 60601
`Telephone: (312) 269-4240
`Facsimile: (312) 782-8585
`Email: wdevitt@jonesday.com
`
`Sanjiv P. Laud
`JONES DAY
`90 South Seventh Street
`Suite 4950
`Minneapolis, MN 55402
`Telephone: (612) 217-8800
`Facsimile: (844) 345-3178
`Email: slaud@jonesday.com
`
`/s/ David M. Maiorana
`David M. Maiorana (VA Bar No. 42334)
`Ryan B. McCrum
`JONES DAY
`901 Lakeside Ave.
`Cleveland, OH 44114
`Telephone: (216) 586-3939
`Facsimile: (216) 579-0212
`Email: dmaiorana@jonesday.com
`Email: rbmccrum@jonesday.com
`
`John J. Normile
`JONES DAY
`250 Vesey Street
`New York, NY 10281
`Telephone: (212) 326-3939
`Facsimile: (212) 755-7306
`Email: jjnormile@jonesday.com
`
`Alexis A. Smith
`JONES DAY
`555 South Flower Street
`Fiftieth Floor
`Los Angeles, CA 90071
`Telephone: (213) 243-2653
`Facsimile: (213) 243-2539
`Email: asmith@jonesday.com
`
`Charles B. Molster
`THE LAW OFFICES OF
`CHARLES B. MOLSTER, III PLLC
`2141 Wisconsin Avenue, N.W. Suite M
`Washington, DC 20007
`Telephone: (202) 787-1312
`Email: cmolster@molsterlaw.com
`
`Counsel for RAI Strategic Holdings, Inc. and
`R.J. Reynolds Vapor Company
`
`

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`Case 1:20-cv-00393-LO-TCB Document 874 Filed 01/21/22 Page 12 of 12 PageID# 23277
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`CERTIFICATE OF SERVICE
`
`I hereby certify that on this 21st day of January, 2022, a true and correct copy of the
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`foregoing was served using the Court’s CM/ECF system, with electronic notification of such filing
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`to all counsel of record.
`
`/s/ David M. Maiorana
`David M. Maiorana (VA Bar No. 42334)
`JONES DAY
`901 Lakeside Ave.
`Cleveland, OH 44114
`Telephone: (216) 586-3939
`Facsimile: (216) 579-0212
`Email: dmaiorana@jonesday.com
`
`Counsel for RAI Strategic Holdings, Inc. and
`R.J. Reynolds Vapor Company
`
`