`
`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 TO
`EXCLUDE THE TESTIMONY OF STACY EHRLICH
`
`
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`Case 1:20-cv-00393-LO-TCB Document 881 Filed 01/21/22 Page 2 of 25 PageID# 23454
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`TABLE OF CONTENTS
`
`PAGE
`
`
`INTRODUCTION .............................................................................................................. 1
`BACKGROUND ................................................................................................................ 2
`LEGAL STANDARD ........................................................................................................ 6
`ARGUMENT ...................................................................................................................... 7
`I.
`MS. EHRLICH’S OPINIONS ARE UNRELIABLE AND SHOULD BE
`EXCLUDED. ........................................................................................................... 7
`A. Ms. Ehrlich’s Opinions Should Be Excluded As Not Supported By
`A Reliable Methodology And Not Based On Sufficient Facts Or
`Data. ............................................................................................................. 7
`B. Ms. Ehrlich’s Opinions Should Be Excluded As Speculative. .................. 12
`II. MS. EHRLICH’S LEGAL OPINIONS SHOULD BE EXCLUDED................... 16
`III. MS. EHRLICH’S DISCUSSION OF EXTRANEOUS TOPICS SHOULD
`BE EXCLUDED. .................................................................................................. 18
`CONCLUSION ................................................................................................................ 19
`
`
`
`
`
`
`
`
`i
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`
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`Case 1:20-cv-00393-LO-TCB Document 881 Filed 01/21/22 Page 3 of 25 PageID# 23455
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`TABLE OF AUTHORITIES
`
`Page
`
`
`
`CASES
`
`Adalman v. Baker, Watts & Co.,
`807 F.2d 359 (4th Cir. 1986), abrogated on other grounds by Pinter v. Dahl,
`486 U.S. 622 (1988) .................................................................................................................17
`
`Audio MPEG, Inc. v. Dell, Inc.,
`No. 2:15-cv-73, Docket No. 830 (E.D. Va. Aug. 28, 2017) ..............................9, 11, 12, 15, 16
`
`Belville v. Ford Motor Co.,
`919 F.3d 224 (4th Cir. 2019) ...................................................................................................14
`
`Cooper v. Smith & Nephew, Inc.,
`259 F.3d 194 (4th Cir. 2001) .....................................................................................................7
`
`Daubert v. Merrill Dow Pharm., Inc.,
`509 U.S. 579 (1993) .......................................................................................................6, 10, 19
`
`ePlus, Inc. v. Lawson Software, Inc.,
`764 F. Supp. 2d 807 (E.D. Va. 2011), aff’d, 700 F.3d 509 (Fed. Cir. 2012) ...............10, 11, 15
`
`Kumho Tire Co., v. Carmichael,
`526 U.S. 137 (1999) ...................................................................................................................6
`
`Limelight Networks, Inc. v. XO Commc’ns, LLC,
`No. 3:15-cv-720, 2018 WL 678245 (E.D. Va. Feb. 2, 2018) ..................................................12
`
`Nease v. Ford Motor Co.,
`848 F.3d 219 (4th Cir. 2017) .....................................................................................................6
`
`Oglesby v. Gen. Motors Corp.,
`190 F.3d 244 (4th Cir. 1999) ...............................................................................................6, 12
`
`Rumsfeld v. United Tech. Corp.,
`315 F.3d 1361 (Fed. Cir. 2003)................................................................................................17
`
`United States v. Mallory,
`988 F.3d 730 (4th Cir. 2021) ...............................................................................................8, 14
`
`
`
`ii
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`
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`Case 1:20-cv-00393-LO-TCB Document 881 Filed 01/21/22 Page 4 of 25 PageID# 23456
`
`TABLE OF AUTHORITIES
`(continued)
`
`
`
`Page
`
`
`Westberry v. Gislaved Gummi AB,
`178 F.3d 257 (4th Cir. 1999) ...............................................................................................6, 10
`
`OTHER AUTHORITIES
`
`Fed. R. Evid. 702 .......................................................................................................................6, 10
`
`
`
`iii
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`
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`Case 1:20-cv-00393-LO-TCB Document 881 Filed 01/21/22 Page 5 of 25 PageID# 23457
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`INTRODUCTION
`
`RAI Strategic Holdings, Inc. and R.J. Reynolds Vapor Company (collectively,
`
`“Reynolds”) respectfully move the Court for an order excluding the opinions and testimony
`
`of Stacy Ehrlich, an expert witness proffered by Altria Client Services LLC, Philip Morris
`
`USA, Inc., and Philip Morris Products S.A. (collectively, “PM/Altria”). 1 Ms. Ehrlich
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`opines that Reynolds derives “particular benefit” from the patented technology because it
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`purportedly is “important” to the premarket tobacco application (PMTA) and modified risk
`
`tobacco product application (MRTPA) review processes for Reynolds’s VUSE products.
`
`Ms. Ehrlich did not quantify any such “particular benefit” or how “important” the patented
`
`technology is to the review process. Nevertheless, PM/Altria’s damages expert relies on
`
`Ms. Ehrlich’s conclusory opinion to add a
`
` kicker to his proposed royalty rate for one
`
`of the asserted patents.
`
`Ms. Ehrlich’s opinions should be excluded because they are not reliable as they are
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`not supported by a reasonable methodology, are not based on sufficient facts or data, and
`
`are speculative. Ms. Ehrlich concedes that she does not know what the FDA considers in
`
`evaluating the applications and, in particular, does not know how the FDA would view the
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`patented technology during the review process. In rendering her opinions regarding the
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`purported value of the patented technology to Reynolds’s PMTAs, Ms. Ehrlich did not
`
`analyze the technical aspects of Reynolds’s PMTAs, nor did she identify or analyze any
`
`
`1 Pursuant to L.R. 7(E), undersigned counsel certifies that they conferred with
`PM/Altria’s counsel on January 11, 2022, and that they were unable to reach a resolution prior to
`the filing of this motion.
`
`
`
`1
`
`
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`Case 1:20-cv-00393-LO-TCB Document 881 Filed 01/21/22 Page 6 of 25 PageID# 23458
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`
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`asserted patent claim. Ms. Ehrlich did not even attempt to quantify the purported value of
`
`the patented technology. Significantly, she acknowledges that she does not know how
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`much more likely PMTA authorization may be based on the patented technology. Ms.
`
`Ehrlich’s speculative and unreliable testimony has a greater potential to mislead than to aid
`
`the jury.
`
`In addition to her primary opinions, Ms. Ehrlich litters her report with impermissible
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`legal opinions and extraneous topics that are not relevant to any issue in the case. Ms.
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`Ehrlich’s interpretation of the law to opine that Reynolds’s VUSE products are illegal is
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`not the proper subject of expert testimony. And Ms. Ehrlich’s testimony regarding topics
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`such as youth vaping and PM/Altria’s IQOS product are not relevant to any issue
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`proceeding to trial and should be excluded.
`
`BACKGROUND
`
`PM/Altria submitted an expert report from Stacy Ehrlich “regarding certain aspects
`
`of damages.” Ex. 1, Amended and Supplemented Opening Expert Report of Stacy Ehrlich,
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`April 26, 2021 (“Report”), at ¶ 1. In particular, Ms. Ehrlich “was asked to opine on the
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`importance of the Asserted Patents to Reynolds in relation to its pursuit of premarket
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`authorization via premarket tobacco applications (PMTAs) and its pursuit of modified risk
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`authorization via modified risk tobacco product applications (MRTPAs) from the U.S.
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`Food and Drug Administration (FDA) for its VUSE e-cigarettes.” Report, at ¶ 1 (footnote
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`omitted).
`
`
`
`2
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`
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`Case 1:20-cv-00393-LO-TCB Document 881 Filed 01/21/22 Page 7 of 25 PagelD# 23459
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`Ms. Ehrlich opines that Reynolds derives “particular benefit” from the patented
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`technology because it purportedly is “important” to the PMTA and MRTPA review
`
`processes, and further notes that premarket authorization is “valuable” to Reynolds.
`
`Specifically, Ms. Ehrlich opined:
`
`(1) It is my opinion that, from a regulatory perspective, Reynolds derives
`particular benefit from its infringement of the Asserted Patents because this
`technology is involved in and important to FDA’s PMTAreview ofReynolds’
`
`
`VUSEe-cigarettes.
`
`(2) It is my opinionthat, from a regulatory perspective, Reynolds derives
`particular benefit from its infringement of the Asserted Patents because this
`technology is involved in and important to FDA’s MRTPA review of
`Reynolds’ VUSEe-cigarettes. Reynolds’ plan, whichit already hasinitiated,
`is to seek MRTP authorization for all of its non-combustible products,
`including its VUSEe-cigarettes. I understandthat it is merely waiting to see
`if those products are able to obtain PMTAauthorization (using the Asserted
`Patents) before submitting MRTPAs for these products, as premarket
`authorizationis a prerequisite to obtaining MRTPauthorization.
`
`Report, at § 3-4.
`
`Ms. Ehrlich rendered her opinions regarding the purported value of the patented
`
`technology despite admittedly not being either a damagesor a technical expert. Ex. 2,
`
`Deposition Transcript of Stacy Ehrlich, May 12, 2021 (“Ehrlich Tr.”), 10:9-13, 38:24-
`
`40:13. Rather, she is an attorney in private practice who counsels clients on the FDA’s
`
`regulation of tobacco products. Report, at §§ 5, 7.
`
`Based onher discussion with PM/Altria’s technical experts, Ms. Ehrlich purports to
`
`have gained a general understanding that the asserted patents relate to the safety of the
`
`
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`Case 1:20-cv-00393-LO-TCB Document 881 Filed 01/21/22 Page 8 of 25 PageID# 23460
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`
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`battery, e-liquid, and heater of e-cigarettes. See, e.g., Report, at ¶¶ 11, 86, 95, 98, 104, 111,
`
`118. Ms. Ehrlich contends that the FDA considers many factors in its review of PMTAs
`
`and MRTPAs, including the safety of the battery, e-liquid, and heater of e-cigarettes.
`
`Report, at ¶¶ 87-90, 99-100, 106, 112-113, 119-121, 168. Ms. Ehrlich concludes that
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`information regarding any of these factors may strengthen a PMTA and MRTPA and may
`
`improve the chances of PMTA and MRTPA authorization. Report, at ¶¶ 127, 160, 168,
`
`172.
`
`Interpreting the FDCA, Ms. Ehrlich concludes that without premarket authorization,
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`Reynolds’s e-cigarettes “will remain illegal and may be forced off the U.S. market pursuant
`
`to enforcement of provisions within the FDCA.” Report, at ¶ 84. Ms. Ehrlich, thus, opines
`
`that PMTAs are “valuable” to Reynolds. Report, at ¶ 84.
`
`Ms. Ehrlich concedes, however, that she does not know what the FDA considers in
`
`evaluating PMTAs. Report, at ¶ 146 (“it remains unclear to the entire industry how the
`
`Agency will evaluate these applications”); Ehrlich Tr., 98:13-15 (“there’s no way to know
`
`exactly what FDA considers in issuing a PMTA authorization”); Ehrlich Tr., 56:14-17 (“I
`
`don’t know why FDA does or doesn’t do the things it does or doesn’t do. That’s not -- I’m
`
`not privy to FDA’s decision-making process.”); see also Ehrlich Tr., 54:18-55:15. In
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`particular, Ms. Ehrlich concedes that she does not know how the FDA would view the
`
`patented technology during PMTA review. Ehrlich Tr., 140:14-17 (“I don’t know what
`
`FDA thinks about anything unless they directly addressed it in public statements, which
`
`they haven’t with respect to this patent”); see id. at 135:18-23 (“No one knows that.”),
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`
`
`4
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`Case 1:20-cv-00393-LO-TCB Document 881 Filed 01/21/22 Page 9 of 25 PageID# 23461
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`
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`140:19-141:4 (“We won’t know until FDA issues authorization.”), 146:5-22 (“I’m not
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`aware that FDA has indicated that publicly.”), 164:18-165:11 (“I’m not in any position to
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`assess whether something is going to meet FDA’s current standard”), 166:4-12 (“No, I
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`wouldn’t have any basis to make that conclusion.”).
`
`Despite opining on the purported value of the patented technology to Reynolds’s
`
`PMTAs, Ms. Ehrlich did not even review the technical aspects of Reynolds’s VUSE
`
`PMTAs. Ehrlich Tr., at 88:21-89:7, 211:5-213:21. Indeed, Ms. Ehrlich testified that she
`
`is not qualified to do so:
`
`[T]hat’s not my area of expertise either. I’m not a technical FDA reviewer.
`I mean when FDA reviews PMTAs, they have people with subspecialties
`reviewing the data and information in the PMTAs. They’re not having
`lawyers review PMTAs. They’re not having anyone in the Office of Chief
`Counsel at FDA reviewing PMTAs. They’re not having -- even the director
`of the Center for Tobacco Products is not qualified to review a PMTA. You
`have to have scientists to do that.
`
`Ehrlich Tr., at 209:9-210:9.
`
`In rendering her opinions, Ms. Ehrlich does not quantify the “particular benefit” of
`
`the patented technology or how much more likely PMTA authorization may be based on
`
`the patented technology. Indeed, Ms. Ehrlich concedes that no one can quantify how much
`
`more likely PMTA authorization may be based on the patented technology:
`
`I don’t think anyone can provide that opinion. There’s no way of knowing.
`I mean there are a million different variables there, and FDA isn’t transparent
`about its reviews, and no ENDS product has ever received PMTA
`authorization, so there’s no one in the world that can provide the answer to
`that question, and I can’t.
`
`
`
`5
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`
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`Case 1:20-cv-00393-LO-TCB Document 881 Filed 01/21/22 Page 10 of 25 PageID# 23462
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`
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`Ehrlich Tr., at 206:20-207:11. Nevertheless, PM/Altria’s damages expert, Paul Meyer,
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`relies on Ms. Ehrlich’s opinions to add a
`
` kicker to his proposed royalty rate for the ’545
`
`patent accounting for an additional
`
` in damages through 2020 alone. Ex. 3,
`
`Amended and Supplemental Opening Expert Report of Paul K. Meyer, April 26, 2021
`
`(“Meyer Report”), at ¶¶ 513-515, Attachment 5A.U.
`
`LEGAL STANDARD
`
`Expert testimony must be based on “scientific, technical, or other specialized
`
`knowledge,” “based on sufficient facts or data,” and the “product of reliable principles and
`
`methods . . . reliably applied . . . to the facts of the case.” Fed. R. Evid. 702. Because
`
`jurors may give undue weight to expert opinions, courts must exercise a gatekeeping
`
`function to admit only those opinions that are relevant and reliable. Kumho Tire Co., v.
`
`Carmichael, 526 U.S. 137, 141 (1999); Nease v. Ford Motor Co., 848 F.3d 219, 230-31
`
`(4th Cir. 2017). Thus, expert testimony that is speculative and not based on sufficient facts
`
`or data must be excluded. Daubert v. Merrill Dow Pharm., Inc., 509 U.S. 579, 590 (1993);
`
`Oglesby v. Gen. Motors Corp., 190 F.3d 244, 250 (4th Cir. 1999).
`
`In considering the relevance of an expert’s testimony, a court inquires “whether
`
`expert testimony proffered . . . is sufficiently tied to the facts of the case that it will aid the
`
`jury in resolving a factual dispute.” Daubert, 509 U.S. at 591. This inquiry has also been
`
`described as one of “fit.” Id. at 591. Courts also must be mindful that expert testimony
`
`has the potential to be misleading. Thus, expert testimony with a greater potential to
`
`
`
`6
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`
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`Case 1:20-cv-00393-LO-TCB Document 881 Filed 01/21/22 Page 11 of 25 PageID# 23463
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`
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`mislead than to aid the jury should be excluded. Westberry v. Gislaved Gummi AB, 178
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`F.3d 257, 261 (4th Cir. 1999).
`
`Finally, the proponent of expert testimony bears the burden of establishing, by a
`
`preponderance of the evidence, that the testimony is admissible. Cooper v. Smith &
`
`Nephew, Inc., 259 F.3d 194, 199 (4th Cir. 2001).
`
`ARGUMENT
`
`I. MS. EHRLICH’S OPINIONS ARE UNRELIABLE AND SHOULD BE
`EXCLUDED.
`Ms. Ehrlich’s opinions are unreliable and should be excluded because they are not
`
`supported by a reliable methodology, are not based on sufficient facts or data, and are
`
`speculative.
`
`A. Ms. Ehrlich’s Opinions Should Be Excluded As Not Supported By A
`Reliable Methodology And Not Based On Sufficient Facts Or Data.
`In opining that Reynolds derives a “particular benefit” from the patented technology
`
`related to premarket authorization, Ms. Ehrlich neither uses a reliable methodology, nor
`
`bases her opinions on sufficient facts or data.
`
`Ms. Ehrlich’s methodology largely consisted of (1) gaining an understanding from
`
`PM/Altria’s technical experts that the patented technology generally relates to the safety of
`
`the battery, e-liquid, and heater of e-cigarettes, (2) identifying these safety characteristics
`
`as factors the FDA considers in reviewing PMTAs, and (3) concluding that because it is
`
`purportedly challenging to obtain authorization for PMTAs any advantageous information
`
`
`
`7
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`
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`Case 1:20-cv-00393-LO-TCB Document 881 Filed 01/21/22 Page 12 of 25 PageID# 23464
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`
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`supplied in such applications is valuable. Report, at ¶¶ 86-160.2 Yet, Ms. Ehrlich concedes
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`that she does not know the methodology used by the FDA in issuing a PMTA authorization.
`
`Ehrlich Tr., 98:13-15 (“there’s no way to know exactly what FDA considers in issuing a
`
`PMTA authorization”). And significantly, Ms. Ehrlich testified that “[t]here’s no way of
`
`knowing” to what extent the patented technology may affect the chances of PMTA
`
`authorization because “there are a million different variables there, and FDA isn’t
`
`transparent about its reviews.” Ehrlich Tr., at 206:20-207:7. Without knowledge of the
`
`FDA’s methodology, Ms. Ehrlich’s ipse dixit opinion regarding the purported value of the
`
`patented technology to PMTA authorization should be excluded. See United States v.
`
`Mallory, 988 F.3d 730, 742 (4th Cir. 2021) (finding district court did not abuse its
`
`discretion to exclude an expert’s testimony as to “Medicare’s reimbursement code
`
`calculations, [because the expert] lacked personal knowledge about Medicare’s precise
`
`methodology”).
`
`Not only does Ms. Ehrlich lack personal knowledge of the FDA’s methodology, but
`
`her methodology is not reliable as it did not take into account pertinent facts and data. For
`
`example, despite opining that Reynolds derives “particular benefit” by including the
`
`patented technology in its PMTAs, Ms. Ehrlich did not review the technical aspects of
`
`Reynolds’s PMTAs. Ehrlich Tr., 88:21-89:3, 211:5-213:21. Ms. Ehrlich admits that she
`
`
`2 Ms. Ehrlich uses a similar methodology in rendering her opinion regarding the
`purported value of MRTPAs (Report, at ¶¶ 167-173) referencing her PMTA discussion.
`Report, at ¶ 168.
`
`
`
`8
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`
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`Case 1:20-cv-00393-LO-TCB Document 881 Filed 01/21/22 Page 13 of 25 PageID# 23465
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`
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`is not even qualified to analyze such portions of the PMTAs. Ehrlich Tr., at 209:9-210:9
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`(“[T]hat’s not my area of expertise either. I’m not a technical FDA reviewer . . . . You
`
`have to have scientists to do that.”) Yet, any reliable methodology in opining on the value
`
`of the patented technology to a PMTA would have evaluated the corresponding portions
`
`of the PMTAs. For example, what specifically do Reynolds’s PMTAs state regarding the
`
`technology? How does the technical subject matter recited in the PMTAs pertain to the
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`asserted patent claims? Ms. Ehrlich did not perform or address any such analysis.
`
`Ms. Ehrlich’s methodology also did not include an analysis of the claims of the
`
`asserted patents. Although she purports to have gained a general understanding of the
`
`patented technology from PM/Altria’s technical experts, she does not identify any asserted
`
`patent claim or purport to rely on any information from the technical experts regarding any
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`asserted patent claim. Ms. Ehrlich states her understanding that the patented technology
`
`generally relates to the safety of the battery, e-liquid, and heater of e-cigarettes. See, e.g.,
`
`Report, at ¶¶ 86, 95, 98, 104, 111, 118. But she does not analyze how any technical
`
`information in Reynolds’s PMTAs pertains to any asserted patent claim.
`
`In discussing the patents generally, without reference to any claim, Ms. Ehrlich does
`
`not analyze whether the technical information in Reynolds’s PMTAs is pertinent to any
`
`asserted claim, an unasserted claim, or merely described in the patent specification.
`
`Without analyzing (or even opining) that the technical information in Reynolds’s PMTAs
`
`is pertinent to the asserted patent claims, Ms. Ehrlich’s opinions lack a reliable
`
`methodology and are irrelevant. See Audio MPEG, Inc. v. Dell, Inc., No. 2:15-cv-73,
`
`
`
`9
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`
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`Case 1:20-cv-00393-LO-TCB Document 881 Filed 01/21/22 Page 14 of 25 PageID# 23466
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`
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`Docket No. 830, at 16 (E.D. Va. Aug. 28, 2017) (excluding testimony regarding relative
`
`importance of patents stating that the expert’s “reports and opinions about such matters are
`
`almost entirely conclusory. Aside from listing the patents reviewed and briefly describing
`
`them, his tabular form of reporting sets out no further facts or data and moves straight to
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`his conclusion for each patent. He does not, for example, advise what claims of the thirty-
`
`seven patents he considered.”).
`
`By not analyzing whether and how the technical information in Reynolds’s PMTAs
`
`relate to the patented technology, Ms. Ehrlich’s opinions essentially relate to PMTAs in
`
`general and that the inclusion in a PMTA of any information that may help obtain PMTA
`
`authorization is valuable. These generalized opinions, however, are not sufficiently tied to
`
`the facts of this case and should be excluded. In Daubert, the Court explained that “an
`
`additional consideration under Rule 702 – and another aspect of relevancy – is whether
`
`expert testimony proffered in the case is sufficiently tied to the facts of the case that it will
`
`aid the jury in resolving a factual dispute.” Daubert, 509 U.S. at 591. Ms. Ehrlich’s
`
`opinions, which are not based on an analysis of the technical aspects of Reynolds’s PMTAs
`
`or the asserted patent claims, lack the required “fit” and should be excluded. See ePlus,
`
`Inc. v. Lawson Software, Inc., 764 F. Supp. 2d 807, 815 (E.D. Va. 2011), aff’d, 700 F.3d
`
`509 (Fed. Cir. 2012) (“the ipse dixit nature of the ultimate opinion . . . quite simply fails
`
`the ‘fit’ requirement for the facts of this case”).
`
`Despite not analyzing the technical aspects of Reynolds’s PMTAs, Ms. Ehrlich
`
`opines that the patented technology is valuable to Reynolds’s PMTAs. This testimony has
`
`
`
`10
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`
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`Case 1:20-cv-00393-LO-TCB Document 881 Filed 01/21/22 Page 15 of 25 PageID# 23467
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`
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`a greater potential to mislead than to enlighten the jury. The Fourth Circuit has recognized
`
`that the potentially powerful and persuasive nature of expert testimony requires its
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`exclusion when there exists “a greater potential to mislead than to enlighten.” Westberry,
`
`178 F.3d at 261. As noted above, Ms. Ehrlich’s opinions essentially relate to PMTAs in
`
`general and that the inclusion in a PMTA of any information that may help obtain PMTA
`
`authorization is valuable. Consequently, presenting Ms. Ehrlich’s testimony that the
`
`patented technology is valuable to Reynolds’s PMTAs, when she did not analyze the
`
`technical aspects of Reynolds’s PMTAs, did not address the asserted patent claims, and
`
`can only speculate concerning how the FDA evaluates PMTA applications, has the greater
`
`potential to mislead than to enlighten the jury and should be excluded. See Audio MPEG,
`
`Inc., No. 2:15-cv-73, at 21 n. 8 (excluding expert testimony stating that the expert’s “failure
`
`to sufficiently explain his analysis and results makes it unlikely that his testimony will aid
`
`the jury in understanding the evidence”); ePlus, Inc., 764 F. Supp. 2d at 815 (excluding
`
`testimony providing for, inter alia, an “unarticulated quantum of ‘higher’ royalty rate”
`
`because it “merely confuses the finder of the fact and asks the jury to accept the expert’s
`
`view merely because it was expressed by an expert.”).
`
`Ms. Ehrlich also did not use a reliable methodology in valuing the patented
`
`technology. For example, even though PM/Altria are asserting five patents against
`
`Reynolds in this case, Ms. Ehrlich opines that Reynolds derives a “particular benefit” from
`
`the patented technology, collectively. Ms. Ehrlich does not in any way analyze the relative
`
`value of each asserted patent. As another example, Ms. Ehrlich does not in any way
`
`
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`11
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`Case 1:20-cv-00393-LO-TCB Document 881 Filed 01/21/22 Page 16 of 25 PageID# 23468
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`
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`analyze the relative value of any patented technology to the many other variables the FDA
`
`considers during PMTA review. Indeed, Ms. Ehrlich confirmed that “[t]here’s no way of
`
`knowing” to what extent the patented technology may affect the chances of PMTA
`
`authorization because “there are a million different variables there, and FDA isn’t
`
`transparent about its reviews.” Ehrlich Tr., 206:9-207:7. Without such an analysis,
`
`Ms. Ehrlich’s opinions lack a reliable methodology to quantify the “particular benefit”
`
`purportedly derived from the patented technology in obtaining PMTA authorization.
`
`Ms. Ehrlich’s opinions, thus, are not supported by a reliable methodology and not
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`based on sufficient facts or data. Ms. Ehrlich did not review the technical aspects of the
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`PMTAs, analyze the claimed subject matter, nor did she analyze and value the many
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`variables the FDA considers in reviewing PMTAs. Her opinions should be excluded. See
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`Limelight Networks, Inc. v. XO Commc’ns, LLC, No. 3:15-cv-720, 2018 WL 678245, at *3
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`(E.D. Va. Feb. 2, 2018) (excluding expert testimony that treated patents the same way
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`whether they were a fundamental patent or not at all valuable because such testimony did
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`not “tether the methodology to the facts of th[e] case”); Audio MPEG, Inc., No. 2:15-cv-
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`73, at 17 (excluding expert testimony regarding relative importance of patents because it
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`was not the product of reliable methodology and was not based on sufficient facts or data).
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`B. Ms. Ehrlich’s Opinions Should Be Excluded As Speculative.
`To be deemed reliable, expert testimony must be grounded in “scientific, technical,
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`or other specialized knowledge and not on belief or speculation.” Oglesby, 190 F.3d at
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`250. Ms. Ehrlich’s opinions are speculative and, thus, should be excluded.
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`Case 1:20-cv-00393-LO-TCB Document 881 Filed 01/21/22 Page 17 of 25 PageID# 23469
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`Ms. Ehrlich opines that Reynolds derives “particular benefit” from the patented
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`technology because it purportedly is “important” to the PMTA and MRTPA review
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`processes. Report, at ¶ 3. But in rendering such opinions, Ms. Ehrlich merely contends
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`that features of the asserted patents “may improve Reynolds’ chances of receiving PMTA
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`authorization.” Report, at ¶¶ 86, 98, 102, 104, 109, 111, 115, 118, 124 (emphasis added).
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`Her repeated use of the word “may” confirms that her opinions are speculative.3
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`Indeed, Ms. Ehrlich concedes that “there’s no way to know exactly what FDA
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`considers in issuing a PMTA authorization.” Ehrlich Tr., 98:13-15; see also Report, at
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`¶ 146 (“it remains unclear to the entire industry how the Agency will evaluate these
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`applications”); Ehrlich Tr., 54:25-55:8 (“I can’t tell you why FDA does or doesn’t do things
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`that it does or does do, if it doesn’t or does do.”); Ehrlich Tr., 56:14-17 (“I don’t know why
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`FDA does or doesn’t do the things it does or doesn’t do. That’s not -- I’m not privy to
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`FDA’s decision-making process.”). Ms. Ehrlich also concedes that she does not know how
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`the FDA would view the patented technology during PMTA review. Ehrlich Tr., 135:18-
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`23 (“No one knows that.”), 140:14-17 (“I don’t know what FDA thinks about anything
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`unless they directly addressed it in public statements, which they haven’t with respect to
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`this patent.”), 140:19-141:4 (“We won’t know until FDA issues an authorization.”),
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`3 During her deposition, Ms. Ehrlich suggested a possible change in her testimony
`by saying that instead of “may improve,” “maybe, in hindsight, I should have said ‘will
`improve.’” Ehrlich Tr., 100:6-17. Yet she still confirmed that “there’s no way to know for
`sure that it will, that it will improve chances.” Ehrlich Tr., at 99:10-11. In any event, her
`opinions are speculative for the reasons explained further herein.
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`Case 1:20-cv-00393-LO-TCB Document 881 Filed 01/21/22 Page 18 of 25 PageID# 23470
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`146:15-22 (“I’m not aware that FDA has indicated that publicly.”), 164:18-165:4 (“I’m not
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`in any position to assess whether [the patented technology] is going to meet FDA’s current
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`standard”), 166:4-12 (“No, I wouldn’t have any basis to make that conclusion.”). Thus,
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`Ms. Ehrlich’s opinions that Reynolds derives “particular benefit” from the patented
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`technology because it purportedly is “important” to the PMTA and MRTPA review is mere
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`conjecture. Ms. Ehrlich’s speculative opinions should be excluded. See Mallory, 988 F.3d
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`at 742 (finding district court did not abuse its discretion to exclude an expert’s testimony
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`as to “Medicare’s reimbursement code calculations, [because the expert] lacked personal
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`knowledge about Medicare’s precise methodology”); Belville v. Ford Motor Co., 919 F.3d
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`224, 234 (4th Cir. 2019) (finding district court did not erroneously exclude an expert
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`opinion when the expert’s “projections were purely theoretical” and his “opinion was partly
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`ipse dixit.”).
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`Ms. Ehrlich’s opinions also are speculative in that she does not in any way even
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`attempt to quantify the “particular benefit” Reynolds purportedly derives from the patented
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`technology, or how “important” the patented technology is to the FDA review process.
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`Even though she acknowledges that there are “a million different variables” the FDA
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`considers in reviewing a PMTA (Ehrlich Tr., 207:5-6), Ms. Ehrlich does not attempt to
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`quantify how valuable the patented technology may be in comparison to the numerous
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`other variables. Indeed, she concedes that no one can quantify this:
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`I don’t think anyone can provide that opinion. There’s no way of knowing.
`I mean there are a million different variables there, and FDA isn’t transparent
`about its reviews, and no ENDS product has ever received PMTA
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`authorization, so there’s no one in the world that can provide the answer to
`that question, and I can’t.
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`Ehrlich Tr., at 206:20-207:11.
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`Despite opining that the patented technology is “important” to the FDA review
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`process, Ms. Ehrlich does not quantify how much more likely PMTA authorization may be
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`due to the patented technology. Without quantifying whether the patented technology may
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`provide a 1%, 100%, or some other increased likelihood of authorization, Ms. Ehrlich’s
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`opinion is not helpful to a jury. ePlus, Inc., 764 F. Supp. 2d at 815 (excluding expert
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`testimony providing for an “unarticulated quantum of ‘higher’ royalty rate”).
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`Ms. Ehrlich’s opinion regarding the purported value of Reynolds’s MRTPAs is even
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`more speculative as Reynolds has not filed any MRTPAs for the VUSE products. Report,
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`at ¶ 171. Ms. Ehrlich’s opinion is based on mere conjecture contending that “[i]f” Reynolds
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`files MRTPAs for the VUSE products, the patented technology purportedly would assist
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`Reynolds in obtaining approval. Report, at ¶ 172. But Ms. Ehrlich did not analyze, and
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`could not have analyzed, how the patented technology may be addressed in any MRTPAs
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`for the VUSE products as no such applications have been filed. Ms. Ehrlich’s ipse dixit
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`opinion should be excluded.
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`The exclusion of Ms. Ehrlich’s speculative opinions regarding the purported value
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`of the patented technology is particularly warranted as PM/Altria’s damages expert relies
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`on Ms. Ehrlich’s opinion to add a
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`royalty rate for the ’545 patent accounting for an
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`additional
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` in damages through 2020 alone. Similarly, in Audio MPEG, Inc. v. Dell
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`Inc., the Court excluded expert testimony regarding the relative importance of patents
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`Case 1:20-c