`Case 1:20-cv-00393-LO-TCB Document 874-3 Filed 01/21/22 Page 1 of 10 PagelD# 23292
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`EXHIBIT 3
`EXHIBIT 3
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`Case 1:20-cv-00393-LO-TCB Document 874-3 Filed 01/21/22 Page 2 of 10 PageID# 23293
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`UNITED STATES INTERNATIONAL TRADE COMMISSION
`Washington, D.C.
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`In the Matter of
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`Investigation No. 337-TA-1199
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`CERTAIN TOBACCO HEATING
`ARTICLES AND COMPONENTS
`THEREOF
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` CEASE AND DESIST ORDER
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`IT IS HEREBY ORDERED THAT Philip Morris USA, Inc. cease and desist from
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`conducting any of the following activities in the United States: importing, selling, marketing,
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`advertising, distributing, transferring (except for exportation), soliciting United States agents or
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`distributors, and aiding or abetting other entities in the importation, sale for importation, sale
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`after importation, transfer (except for exportation), or distribution of tobacco heating articles and
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`components thereof that infringe one or more of claims 1-3 and 5 of U.S. Patent No. 9,930,915
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`(“the ’915 patent”) or claims 27-30 of U.S. Patent No. 9,901,123 (“the ‘123 patent”)
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`(collectively, “the Asserted Patents”) in violation of section 337 of the Tariff Act of 1930, as
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`amended (19 U.S.C. § 1337).
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`As used in this order:
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`I.
`Definitions
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`(A)
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`(B)
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`“Commission” shall mean the United States International Trade Commission.
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`“Complainants” shall mean RAI Strategic Holdings, Inc.; R.J. REYNOLDS
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`Vapor Company; and R.J. REYNOLDS Tobacco Company, all of Winston-
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`Salem, North Carolina.
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`(C)
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`“Respondent” shall mean Philip Morris USA, Inc., 6601 W. Broad Street,
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`Richmond, VA 23230.
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` (D)
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`“Person” shall mean an individual, or any non-governmental partnership, firm,
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`association, corporation, or other legal or business entity other than Respondent or
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`its majority-owned or controlled subsidiaries, successors, or assigns.
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`(E)
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`“United States” shall mean the fifty States, the District of Columbia, and
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`Puerto Rico.
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`(F)
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`The terms “import” and “importation” refer to importation for entry for
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`consumption under the Customs laws of the United States.
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`(G)
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`The term “covered products” shall mean electric tobacco heating device systems
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`and the associated tobacco sticks sold for use with the device systems that
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`infringe one or more of claims 1-3 and 5 of the ’915 patent or claims 27-30 of the
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`’123 patent. Covered products shall not include articles for which a provision of
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`law or license avoids liability for infringement.
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`II.
`Applicability
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`The provisions of this Cease and Desist Order shall apply to Respondent and to any of its
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`principals, stockholders, officers, directors, employees, agents, licensees, distributors, controlled
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`(whether by stock ownership or otherwise) and majority-owned business entities, successors, and
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`assigns, and to each of them, insofar as they are engaging in conduct prohibited by section III,
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`infra, for, with, or otherwise on behalf of, Respondent.
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`III.
`Conduct Prohibited
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`The following conduct of Respondent in the United States is prohibited by this Order.
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`For the remaining term of the Asserted Patents, Respondent shall not:
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`(A)
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`import or sell for importation into the United States covered products;
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`(B) market, distribute, sell, or otherwise transfer (except for exportation) imported
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`(C)
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`(D)
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`(E)
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`covered products;
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`advertise imported covered products;
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`solicit U.S. agents or distributors for imported covered products; or
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`aid or abet other entities in the importation, sale for importation, sale after
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`importation, transfer, or distribution of covered products.
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`IV.
`Conduct Permitted
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`Notwithstanding any other provision of this Order, specific conduct otherwise prohibited
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`by the terms of this Order shall be permitted if:
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`(A)
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`in a written instrument, the owner of the Asserted Patents licenses or authorizes
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`such specific conduct; or
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`(B)
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`such specific conduct is related to the importation or sale of covered products by
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`or for the United States.
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`V.
`Reporting
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`For purposes of this requirement, the reporting periods shall commence on January 1 of
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`each year and shall end on the subsequent December 31. The first report required under this
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`section shall cover the period from the date of issuance of this order through December 31, 2021.
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`This reporting requirement shall continue in force until such time as Respondent has truthfully
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`reported, in two consecutive timely filed reports, that it has no inventory of covered products in
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`the United States.
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`Within thirty (30) days of the last day of the reporting period, Respondent shall report to
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`the Commission: (a) the quantity in units and the value in dollars of covered products that it has
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`(i) imported and/or (ii) sold in the United States after importation during the reporting period,
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`and (b) the quantity in units and value in dollars of reported covered products that remain in
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`inventory in the United States at the end of the reporting period.
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`When filing written submissions, Respondent must file the original document
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`electronically on or before the deadlines stated above and submit eight (8) true paper copies to
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`the Office of the Secretary by noon the next day pursuant to section 210.4(f) of the
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`Commission’s Rules of Practice and Procedure (19 C.F.R. § 210.4(f)). Submissions should refer
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`to the investigation number (“Inv. No. 337-TA-1199”) in a prominent place on the cover pages
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`and/or the first page. See Handbook for Electronic Filing Procedures,
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`http://www.usitc.gov/secretary/fed_reg_notices/rules/handbook_on_electronic_filing.pdf.
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`Persons with questions regarding filing should contact the Secretary (202-205-2000). If
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`Respondent desires to submit a document to the Commission in confidence, it must file the
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`original and a public version of the original with the Office of the Secretary and must serve a
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`copy of the confidential version on Complainant’s counsel.1 As of September 29, 2021, the
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`Commission’s paper filing requirements in 19 C.F.R. § 210.4(f) are currently waived. 85 Fed.
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`Reg. 15798 (March 19, 2020). Respondent should confirm the status of the rules prior to filing.
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`Any failure to make the required report or the filing of any false or inaccurate report shall
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`constitute a violation of this Order, and the submission of a false or inaccurate report may be
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`referred to the U.S. Department of Justice as a possible criminal violation of 18 U.S.C. § 1001.
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`1 Complainants must file a letter with the Secretary identifying the attorney to receive
`reports and bond information associated with this Order. The designated attorney must be on the
`protective order entered in the investigation.
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`VI.
`Record-Keeping and Inspection
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`(A)
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`For the purpose of securing compliance with this Order, Respondent shall retain
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`any and all records relating to the sale, marketing, or distribution in the United
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`States of covered products, made and received in the usual and ordinary course of
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`business, whether in detail or in summary form, for a period of three (3) years
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`from the close of the fiscal year to which they pertain.
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`(B)
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`For the purposes of determining or securing compliance with this Order and for
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`no other purpose, subject to any privilege recognized by the federal courts of the
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`United States, and upon reasonable written notice by the Commission or its staff,
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`duly authorized representatives of the Commission shall be permitted access and
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`the right to inspect and copy, in Respondent’s principal offices during office
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`hours, and in the presence of counsel or other representatives if Respondent so
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`chooses, all books, ledgers, accounts, correspondence, memoranda, and other
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`records and documents, in detail and in summary form, that must be retained
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`under subparagraph VI(A) of this Order.
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`VII.
`Service of Cease and Desist Order
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`Respondent is ordered and directed to:
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`(A)
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`Serve, within fifteen (15) days after the effective date of this Order, a copy of this
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`Order upon each of its respective officers, directors, managing agents, agents, and
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`employees who have any responsibility for the importation, marketing,
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`distribution, or sale of imported covered products in the United States;
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`(B)
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`Serve, within fifteen (15) days after the succession of any persons referred to in
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`subparagraph VII(A) of this order, a copy of the Order upon each successor; and
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`(C) Maintain such records as will show the name, title, and address of each person
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`upon whom the Order has been served, as described in subparagraphs VII(A) and
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`VII(B) of this order, together with the date on which service was made.
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`The obligations set forth in subparagraphs VII(B) and VII(C) shall remain in effect until
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`the expiration of the Asserted Patents.
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`VIII.
`Confidentiality
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`Any request for confidential treatment of information obtained by the Commission
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`pursuant to section VI of this order should be made in accordance with section 201.6 of the
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`Commission’s Rules of Practice and Procedure (19 C.F.R. § 201.6). For all reports for which
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`confidential treatment is sought, Respondent must provide a public version of such report with
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`confidential information redacted.
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`IX.
`Enforcement
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`Violation of this order may result in any of the actions specified in section 210.75 of the
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`Commission’s Rules of Practice and Procedure (19 C.F.R. § 210.75), including an action for
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`civil penalties under section 337(f) of the Tariff Act of 1930 (19 U.S.C. § 1337(f)), as well as
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`any other action that the Commission deems appropriate. In determining whether Respondent is
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`in violation of this order, the Commission may infer facts adverse to Respondent if it fails to
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`provide adequate or timely information.
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`X.
`Modification
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`The Commission may amend this order on its own motion or in accordance with the
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`procedure described in section 210.76 of the Commission’s Rules of Practice and Procedure
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`(19 C.F.R. § 210.76).
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`XI.
`Bonding
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`The conduct prohibited by section III of this order may be continued during the sixty (60)
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`day period in which this Order is under review by the United States Trade Representative, as
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`delegated by the President (70 Fed. Reg. 43,251 (Jul. 21, 2005)), subject to Respondent’s posting
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`of a bond in the amount of zero (0) percent of the entered value of the covered products (i.e., no
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`bond). This bond provision does not apply to conduct that is otherwise permitted by section IV
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`of this Order. Covered products imported on or after the date of issuance of this Order are
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`subject to the entry bond as set forth in the exclusion order issued by the Commission, and are
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`not subject to this bond provision.
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`The bond is to be posted in accordance with the procedures established by the
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`Commission for the posting of bonds by complainants in connection with the issuance of
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`temporary exclusion orders. (See 19 C.F.R. § 210.68.) The bond and any accompanying
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`documentation are to be provided to and approved by the Commission prior to the
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`commencement of conduct that is otherwise prohibited by section III of this Order. Upon the
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`Secretary’s acceptance of the bond, (a) the Secretary will serve an acceptance letter on all
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`parties, and (b) Respondent must serve a copy of the bond and accompanying documentation on
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`Complainant’s counsel.2
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`2 See Footnote 1.
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`The bond is to be forfeited in the event that the United States Trade Representative
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`approves this Order (or does not disapprove it within the review period), unless (i) the U.S. Court
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`of Appeals for the Federal Circuit, in a final judgment, reverses any Commission final
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`determination and order as to Respondent on appeal, or (ii) Respondent exports or destroys the
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`products subject to this bond and provides certification to that effect that is satisfactory to the
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`Commission.
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`This bond is to be released in the event (i) the United States Trade Representative
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`disapproves this Order and no subsequent order is issued by the Commission and approved (or
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`not disapproved) by the United States Trade Representative, (ii) the U.S. Court of Appeals for
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`the Federal Circuit, in a final judgment, reverses any Commission final determination and order
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`as to Respondent on appeal, or (iii) Respondent exports or destroys the products subject to this
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`bond and provides certification to that effect that is satisfactory to the Commission, upon service
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`on Respondent of an order issued by the Commission based upon application therefor made by
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`Respondent to the Commission.
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`By order of the Commission.
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`Issued: September 29, 2021
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`Lisa R. Barton
`Secretary to the Commission
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`CERTAIN TOBACCO HEATING ARTICLES AND
`COMPONENTS THEREOF
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`Inv. No. 337-TA-1199
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`PUBLIC CERTIFICATE OF SERVICE
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`I, Lisa R. Barton, hereby certify that the attached COMMISSION OPINION has been
`served via EDIS upon the Commission Investigative Attorney, Sarah Sladic, Esq., and the
`following parties as indicated, on September 29, 2021.
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`On Behalf of Complainants RAI Strategic Holdings, Inc., R.J.
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`Reynolds Vapor Company, and R.J. Reynolds Tobacco
`Company:
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`David M. Maiorana, Esq.
`JONES DAY
`901 Lakeside Avenue
`Cleveland, OH 44114
`Email: dmaiorana@jonesday.com
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`On Behalf of Respondents Altria Client Services LLC, Philip
`Morris USA, Inc., and Philip Morris Products S.A.:
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`Maximilian A. Grant, Esq.
`LATHAM & WATKINS LLP
`555 Eleventh Street, NW, Suite 1000
`Washington, DC 20004
`Email: max.grant@lw.com
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`Lisa R. Barton, Secretary
`U.S. International Trade Commission
`500 E Street, SW, Room 112
`Washington, DC 20436
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