Case 1:20-cv-00393-LO-TCB Document 881-2 Filed 01/21/22 Page 1 of 19 PageID# 23547
`Case 1:20-cv-00393-LO-TCB Document 881-2 Filed 01/21/22 Page 1 of 19 PagelD# 23547
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`EXHIBIT 2
`EXHIBIT2
`(PUBLIC)
`(PUBLIC)
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`Case 1:20-cv-00393-LO-TCB Document 881-2 Filed 01/21/22 Page 2 of 19 PageID# 23548
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`Page 1
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`1 Stacy Ehrlich
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`2 IN THE UNITED STATES DISTRICT COURT
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`3 FOR THE EASTERN DISTRICT OF VIRGINIA
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`4 - - - - - - - - - - - - - -+
` |
`5 RAI STRATEGIC HOLDINGS, |
` INC., et al., |
`6 |
` Plaintiffs, | Civil Action No:
`7 |
` vs. | 1:20-cv-00393
`8 |
` ALTRIA CLIENT SERVICES, |
`9 LLC, et al., |
` |
`10 Defendant. |
` |
`11 - - - - - - - - - - - - - -+
`
`12
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`13
`
`14 Remote Video Deposition of
`
`15 STACY EHRLICH
`
`16 Wednesday, May 12, 2021
`
`17 11:02 a.m.
`
`18
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`19
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`20
`
`21
`
`22
`
`23 Job No. 193358
`
`24 Reported by: Laurie Donovan, RPR, CRR, CLR
`
`25
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`

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`Case 1:20-cv-00393-LO-TCB Document 881-2 Filed 01/21/22 Page 3 of 19 PageID# 23549
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`Page 6
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`Page 7
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`·1· · · · · · · · · · · Stacy Ehrlich
`·2· ·--------------------------------------------------
`·3· · · · · · · · · P R O C E E D I N G S
`·4· · · · · · · · · · · ·11:02 a.m.
`·5· ·--------------------------------------------------
`·6· · · · · · · · · THE VIDEOGRAPHER:· Good morning.
`·7· · · · · · · · · Today's date is May 12, 2021, and
`·8· · · · the time is approximately 11:02 Eastern Time.
`·9· · · · We are on the record.· My name is Joseph
`10· · · · McDermott.· I am a legal videographer in
`11· · · · association with TSG Reporting.
`12· · · · · · · · · Due to the severity of COVID-19 and
`13· · · · following the practice of social distancing,
`14· · · · I will not be in the same room with the
`15· · · · witness.· Instead, I will record this
`16· · · · videotaped deposition remotely.
`17· · · · · · · · · The reporter, Laurie Donovan, also
`18· · · · will not be in the same room and will swear
`19· · · · the witness remotely.
`20· · · · · · · · · Do all parties stipulate to the
`21· · · · validity of the video recording and remote
`22· · · · swearing and that it will be admissible in
`23· · · · the courtroom as if it had been taken
`24· · · · following Rule 30 of the Federal Rules of
`25· · · · Civil Procedure, and the state's rule where
`
`·1· · · · · · · · · · · Stacy Ehrlich
`·2· · · · this case is pending?
`·3· · · · · · · · · Do you all agree?
`·4· · · · · · · · · MS. UNDERWOOD:· Agree.
`·5· · · · · · · · · MR. BAYUK:· Yes.
`·6· · · · · · · · · THE VIDEOGRAPHER:· The deponent
`·7· · · · today is Stacy Ehrlich in the action titled
`·8· · · · RAI Strategic Holdings, Inc., et al,· versus
`·9· · · · Altria Client Services, LLC, et al, case
`10· · · · number 1:20-CV-00393.
`11· · · · · · · · · Counsel may identify themselves at
`12· · · · this time, after which the court reporter
`13· · · · will swear in the witness.
`14· · · · · · · · · MR. BAYUK:· This is Frank Bayuk for
`15· · · · plaintiff R.J. Reynolds.
`16· · · · · · · · · MS. UNDERWOOD:· Jamie Underwood
`17· · · · from Latham & Watkins on behalf of the
`18· · · · counterclaim plaintiffs.
`19· · · · · · · · · (Witness duly sworn.)
`20· · · · · · · · · · · · * * * * *
`21
`22
`23
`24
`25· ·/ / /
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`Page 8
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`Page 9
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`·1· · · · · · · · · · · Stacy Ehrlich
`·2· ·Whereupon,
`·3· · · · · · · · · · ·STACY EHRLICH,
`·4· · · · having been first duly sworn, testified
`·5· · · · upon her oath as follows:
`·6· · · · ·EXAMINATION BY COUNSEL FOR PLAINTIFFS
`·7· · · · · · · ·and COUNTERCLAIM DEFENDANTS
`·8· ·BY MR. BAYUK:
`·9· · · · Q· · Good morning, Ms. Ehrlich.
`10· · · · A· · Good morning.· How are you?
`11· · · · Q· · Good.· How are you doing?
`12· · · · A· · Well.· Thanks.
`13· · · · Q· · We've had a chance to meet a couple
`14· ·times now.· Again, my name is Frank Bayuk.· I'm
`15· ·here today to take your deposition in this case
`16· ·pending in the Eastern District of Virginia.· Are
`17· ·you prepared to offer your opinions and give
`18· ·testimony, having been disclosed as an expert
`19· ·witness by the defense in the case?
`20· · · · A· · I am.
`21· · · · Q· · Can you tell me when you were first
`22· ·contacted to work on this case?
`23· · · · A· · I don't -- I actually don't recall
`24· ·offhand, no.
`25· · · · Q· · Do you recall if it was before or after
`
`·1· · · · · · · · · · · Stacy Ehrlich
`·2· ·you testified in the, the ITC hearing?
`·3· · · · A· · You mean at the, at the hearing itself?
`·4· · · · Q· · Correct.
`·5· · · · A· · I don't recall offhand, actually.· I'm
`·6· ·sorry.
`·7· · · · Q· · Do you recall who it was who first
`·8· ·contacted you to work on this case?
`·9· · · · A· · It was probably Jamie Underwood.
`10· · · · Q· · And what -- when you were contacted
`11· ·about this case, what did you understand the scope
`12· ·of your work to be?
`13· · · · · · · · · MS. UNDERWOOD:· I'm going to just
`14· · · · state that you can answer that in a general
`15· · · · fashion, but I caution you not to reveal any
`16· · · · attorney/client communication.
`17· · · · · · · · · THE WITNESS:· Got it.· As an FDA
`18· · · · expert witness.
`19· ·BY MR. BAYUK:
`20· · · · Q· · Okay, and what topics did you understand
`21· ·you were being retained to give opinions on?
`22· · · · · · · · · MS. UNDERWOOD:· Same caution.
`23· · · · · · · · · THE WITNESS:· Generally, the
`24· · · · FDA-related issues that are associated with
`25· · · · this patent litigation.
`
`

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`Case 1:20-cv-00393-LO-TCB Document 881-2 Filed 01/21/22 Page 4 of 19 PageID# 23550
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`Page 10
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`Page 11
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`1 Stacy Ehrlich
`2 BY MR. BAYUK:
`3 Q Okay. Were you asked to offer opinions
`4 on patent infringement issues?
`5 A No. That's not my area of expertise.
`6 Q Were you asked to offer opinions on the
`7 validity of any patents?
`8 A No. That's not my area of expertise.
`9 Q Were you asked to offer any opinions on
`10 any technical subjects, including engineering,
`11 cigarette design, chemistry, or any other hard
`12 science technical area?
`13 A No.
`14 Q Is your hourly rate that you're charging
`15 still $825 an hour?
`16 A I don't recall what my rate is, offhand,
`17 but it's probably in that ballpark.
`18 Q Has your rate changed at all since you
`19 were involved in the ITC case?
`20 A Yeah, it did go up. That's why I can't
`21 remember what it is currently.
`22 Q Okay. Do you remember how much it went
`23 up by?
`24 A No, because if I did, I could -- I'm not
`25 that bad at math. No. If I did, I would, I would
`
`1 Stacy Ehrlich
`2 tell you what that number is.
`3 Q But was it your decision to increase
`4 your rate between the ITC case and your
`5 involvement in the present case?
`6 A It was just a change in the calendar
`7 year. Our rates typically go up each year.
`8 Q Is your rate that you're charging in
`9 this case the same that you charge for any work
`10 you perform in your role as an attorney at your
`11 law firm?
`12 A We have various rates and various
`13 discount structures, so I can't say that it's
`14 exactly the same for every client.
`15 Q Okay. Is Altria or Philip Morris
`16 getting a discounted rate from you in this case?
`17 A It's -- there's a whole, there's a whole
`18 range, so no, I wouldn't say it's discounted.
`19 Q But some clients do get discounted rates
`20 from you?
`21 A There have been clients, we make the
`22 appropriate decisions. Not really something that
`23 is appropriate to discuss.
`24 Q Did you say nothing that's appropriate
`25 to discuss?
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`Page 12
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`Page 13
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`1 Stacy Ehrlich
`2 A I'm not going to tell you our whole firm
`3 discount structure for various clients. It's not
`4 really relevant here.
`5 Q Okay. Respectfully, I'm not asking
`6 about your whole firm discount structure. I'm
`7 asking about you and what you charge and whether
`8 what you're charging Philip Morris and Altria in
`9 this case is different than what you charge other
`10 clients that you work with, and so is there a
`11 difference?
`12 MS. UNDERWOOD: Asked and answered.
`13 THE WITNESS: Yeah, I do -- there,
`14 there are various rates that we charge
`15 different clients, depending on our
`16 relationship with the client.
`17 BY MR. BAYUK:
`18 Q Do you have any materials with you in
`19 hard copy today?
`20 A I don't have anything in hard copy. I
`21 do have my report open on my computer.
`22 Q Okay, and which version of your report
`23 is open on your computer?
`24 A The most recent one.
`25 Q Is that the supplemental or amended one
`
`1 Stacy Ehrlich
`2 you submitted within the last couple of weeks?
`3 A Yes. Correct.
`4 Q You submitted your opening expert report
`5 in this case back in, in February. Do you recall
`6 that?
`7 A Yes.
`8 Q When did you decide to supplement and
`9 amend your report that culminated in the report
`10 that was served within the last couple of weeks?
`11 MS. UNDERWOOD: And you -- again, I
`12 caution you not reveal any attorney/client
`13 communications. You can answer to the extent
`14 if you recall when you started working on
`15 that report.
`16 THE WITNESS: I think it was within
`17 a week or two of the date that it was filed.
`18 BY MR. BAYUK:
`19 Q Okay, and what was your understanding as
`20 to the reason why you were preparing a
`21 supplemental and amended report in the case?
`22 MS. UNDERWOOD: Again, I caution
`23 you to not reveal any attorney/client
`24 communications.
`25 THE WITNESS: I believe it was
`
`

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`Case 1:20-cv-00393-LO-TCB Document 881-2 Filed 01/21/22 Page 5 of 19 PageID# 23551
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`Page 38
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`Page 39
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`1 Stacy Ehrlich
`2 BY MR. BAYUK:
`3 Q Have you ever done that for any other
`4 client?
`5 A Sure. I've, I've looked at patents and
`6 talked to patent experts about FDA-related -- FDA
`7 issues related to patents.
`8 Q In the context of a PMTA application?
`9 A Maybe. I'm not sure if it was in the
`10 context of a PMTA application, but that's -- you
`11 know, generally I do that with respect to all
`12 kinds of FDA submissions, not just in the tobacco
`13 area.
`14 Q You look at patent issues with respect
`15 to FDA submissions?
`16 A Sometimes we discuss patents.
`17 Q What's -- when you have done it before,
`18 what's been the purpose of your looking at patent
`19 issues with respect to FDA submissions?
`20 A I can't recall specific instances, but
`21 when there are FDA-related implications to
`22 technology covered by patents, sometimes you
`23 discuss the patents.
`24 Q Do you intend to offer any technical
`25 opinions about the design of any of the VUSE
`
`1 Stacy Ehrlich
`2 products?
`3 A Technical opinions?
`4 Q Correct.
`5 A No.
`6 Q Do you intend to offer any opinions on
`7 the design of the battery used in any of the VUSE
`8 products?
`9 A What kind of opinion are you
`10 referencing?
`11 Q Any opinion.
`12 MS. UNDERWOOD: Objection; vague.
`13 THE WITNESS: I'm not going to
`14 offer a technical, any kind of technical
`15 opinions relating to the design of the
`16 battery.
`17 BY MR. BAYUK:
`18 Q Okay. Do you intend to offer any
`19 technical opinion on the, the design of any of the
`20 VUSE products as it relates to containing e-liquid
`21 or preventing the leakage of e-liquid?
`22 A I'm not a patent expert, and I'm not
`23 going to offer opinions on the technical issues
`24 related to that design. I'm an FDA expert. I
`25 will opine on the FDA importance and implications
`
`Page 40
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`Page 41
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`1 Stacy Ehrlich
`2 of those aspects of the technology.
`3 Q Do you intend to offer any opinions
`4 about patent damages or any damages stemming from
`5 alleged infringement of the patents in this case?
`6 MS. UNDERWOOD: Objection; vague.
`7 THE WITNESS: I will not offer
`8 testimony on amounts of damage -- damages,
`9 because I'm not a damages expert, but I might
`10 offer testimony on the impact of some of the
`11 issues on -- or how the issues should impact,
`12 potentially, the calculation or the, the
`13 scope of the calculation.
`14 BY MR. BAYUK:
`15 Q On what issue?
`16 MS. UNDERWOOD: Objection; vague.
`17 (Reporter clarification.)
`18 BY MR. BAYUK:
`19 Q So what issues are you talking about
`20 there?
`21 A I'm talking about the issues that are in
`22 my report, the FDA-related issues, the importance
`23 of the technology from an FDA perspective.
`24 Q How did those issues relate to damages?
`25 MS. UNDERWOOD: Objection; vague.
`
`1 Stacy Ehrlich
`2 THE WITNESS: Correct.
`3 BY MR. BAYUK:
`4 Q I'm asking you: How did those issues
`5 relate to the damages?
`6 MS. UNDERWOOD: Same objection.
`7 (Discussion held off the record.)
`8 THE WITNESS: As indicated in my
`9 report, I'm going to testify that the
`10 infringement of the asserted patents is of
`11 value to -- of significant value to Reynolds,
`12 and that, that value should have an impact on
`13 the damages calculation.
`14 BY MR. BAYUK:
`15 Q You cut out there for one part of the
`16 sentence you said there. At least to me.
`17 (Whereupon, reporter reads
`18 requested material.)
`19 BY MR. BAYUK:
`20 Q Okay. What is your opinion of how that
`21 value should impact damages?
`22 A I'm sorry. I missed the beginning of
`23 what you just said.
`24 Q What is your opinion of how that value
`25 should impact damages?
`
`

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`Case 1:20-cv-00393-LO-TCB Document 881-2 Filed 01/21/22 Page 6 of 19 PageID# 23552
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`Page 54
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`1 Stacy Ehrlich
`2 products would end one year after the date of the
`3 application?
`4 A Absolutely. That's what the court's
`5 order says.
`6 Q Okay. So there are a number of products
`7 currently on the market that have had a PMTA
`8 application pending for longer than a year, right?
`9 MS. UNDERWOOD: Objection; lacks
`10 foundation, assumes facts not in evidence.
`11 THE WITNESS: That's my
`12 understanding, yes.
`13 BY MR. BAYUK:
`14 Q Okay, and has FDA taken enforcement
`15 action against those products?
`16 A I'm not aware that they have, but just
`17 because they haven't doesn't mean they can't.
`18 Q Why, why haven't they? If we accept
`19 your interpretation, if we accept your
`20 interpretation of this, why hasn't FDA instituted
`21 immediate enforcement action at the expiration of
`22 the year period?
`23 MS. UNDERWOOD: Objection; lacks
`24 foundation.
`25 THE WITNESS: I can't tell you why
`
`1 Stacy Ehrlich
`2 FDA does or doesn't do things that it does or
`3 does do, if it doesn't or does do, but I know
`4 that the court order only allows FDA to defer
`5 enforcement, their enforcement action under
`6 the compliance policy for one year from the
`7 date of the PMTA. That's what the court
`8 order states.
`9 Whether FDA enforces or not is up
`10 to them. It's in their enforcement
`11 discretion, but the enforcement discretion
`12 policy, per the court's order, which is what
`13 FDA cites here in its clarification, is that
`14 the one-year period extends one year from the
`15 date the application is submitted.
`16 BY MR. BAYUK:
`17 Q And so for products that have had an
`18 application pending for longer than a year that
`19 are still on the market, why hasn't FDA not
`20 instituted enforcement action against those
`21 products?
`22 MS. UNDERWOOD: Objection; asked
`23 and answered, calls for speculation.
`24 THE WITNESS: I do believe I
`25 directly answered that question. We can have
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`Page 56
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`Page 57
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`1 Stacy Ehrlich
`2 the reporter read it back if you want.
`3 BY MR. BAYUK:
`4 Q No. I was just asking you, because it
`5 seems like there was a lot of stuff about a court
`6 order and all that stuff. I'm asking about FDA.
`7 Why has FDA not instituted enforcement action
`8 against those products that have been -- have a
`9 PMTA submission pending for longer than a year?
`10 MS. UNDERWOOD: Objection; asked
`11 and answered, calls for speculation.
`12 THE WITNESS: Yeah, that's, that's
`13 the answer that -- you asked that question
`14 just like a minute ago, and I said I don't
`15 know why FDA does or doesn't do the things it
`16 does or doesn't do. That's not -- I'm not
`17 privy to FDA's decision-making process, but
`18 there are a lot of illegal products on the
`19 market, generally, in every category, and FDA
`20 doesn't take enforcement action against all
`21 of them all at the same time.
`22 So that's the essence of
`23 enforcement discretion, but the court's order
`24 only allows FDA to defer enforcement under
`25 the compliance policy for one year from the
`
`1 Stacy Ehrlich
`2 date that the PMTA is filed. That's clear if
`3 you read the court's order.
`4 BY MR. BAYUK:
`5 Q Is JUUL -- are the JUUL products made by
`6 Altria or owned by Altria an illegal product, in
`7 your opinion?
`8 MS. UNDERWOOD: Objection; lacks
`9 foundation, calls for speculation, assumes
`10 facts not in evidence.
`11 THE WITNESS: All ENDS products are
`12 illegal.
`13 BY MR. BAYUK:
`14 Q I'm asking about a product called JUUL.
`15 Is JUUL an illegal product, in your opinion?
`16 MS. UNDERWOOD: Same objections.
`17 THE WITNESS: JUUL is an ENDS
`18 product. It was not on the market on
`19 February 15, 2007, it's not grandfathered,
`20 and it's not covered by a premarket
`21 authorization. Just like every other ENDS
`22 product, including all of the VUSE products,
`23 it is an illegal product, yes.
`24 BY MR. BAYUK:
`25 Q The district court in Maryland has no
`
`

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`Case 1:20-cv-00393-LO-TCB Document 881-2 Filed 01/21/22 Page 7 of 19 PageID# 23553
`Case 1:20-cv-00393-LO-TCB Document 881-2 Filed 01/21/22 Page 7 of 19 PagelD# 23553
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`wowwosnnFWDNBP
`
`14
`
`15
`
`17.
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`Page 86
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`Stacy Ehrlich
`I can talk to you about -- my
`understanding is that this patent generally
`relates to battery safety and the issues that
`we've already discussed, and those are issues
`that are of importance to FDA, and my area of
`expertise and what I'm testifying about is
`what is important to FDA in its review.
`
`+~BY MR. BAYUK:
`
`Q We're going to get to the aay
`in a little bit, but one of the things you
`say in your report -- this is at paragraph 86 --
`you say, "Based on my general understanding of the
`attributes of the '545 patent,
`there are multiple
`features of that patent FDA will consider in
`evaluating the VUSE e-cigarette PMTA, which may
`improve Reynolds' chances of receiving PMTA
`authorization."
`
`MS. UNDERWOOD: Objection; asked
`and answered, calls for technical expertise.
`THE WITNESS: Right.
`So as I
`mentioned earlier and as you continue on
`the
`reading the next sentence, "For example,
`ability to protect the lithium-ion battery
`from inconsistent power and from becoming
`hot, catching fire, or even exploding," those
`right?
`are examples of the features that are
`
`Page 88
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`there are features of the '545 patent that are
`
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`wowwosnnFWDNBP
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`Stacy Ehrlich
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`Page 87
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`Right.
`A
`Okay, and so when you say, you discuss
`Q
`the attributes of the '545 patent and that there
`are multiple features of that patent that FDA will
`consider in evaluating the PMTA, what are the
`specific features that you say will be important
`to FDA?
`
`MS. UNDERWOOD: Objection; asked
`and answered.
`BY MR. BAYUK:
`
`I'm not, I'm not looking for the general
`Q
`topic that they're concerned about battery safety.
`I'm asking you: What are the specific features
`that you think FDA will care about in the '545
`patent?
`
`That's what you say in your report,
`
`oADMFWDY
`
`Stacy Ehrlich
`important to FDA relating to batteries.
`BY MR. BAYUK:
`
`Okay. What are the, what are the
`Q
`features in the '545 patent that address those
`issues?
`
`MS. UNDERWOOD: Objection;
`mischaracterizes the testimony, asked and
`answered, calls for technical opinion.
`THE WITNESS: My understanding from
`talking to the experts of which I am not,
`the
`patent experts, that the -- this patented
`technology helps prevent the,
`the lithium-ion
`battery from inconsistent power and from
`Those are the features.
`becoming hot.
`I am not a technical expert, I
`certainly am not a battery expert, I'm not a
`patent expert, and I can't explain it in any
`more detail than that.
`BY MR. BAYUK:
`
`Have you gone and looked at the VUSE
`Q
`PMTAs for their discussion of the batteries and
`
`the battery technology and battery safety?
`MS. UNDERWOOD: Objection; vague.
`THE WITNESS:
`I don't recall
`
`Stacy Ehrlich
`whether I read that section or not.
`
`I
`
`haven't recently.
`BY MR. BAYUK:
`
`Have you ever?
`Q
`Again, I said I don't recall if I read
`A
`that section.
`I don't recall reading it.
`10
`
`BY MR. BAYUK:
`
`Q Well, it sounds like -- I mean you say
`
`

`

`Case 1:20-cv-00393-LO-TCB Document 881-2 Filed 01/21/22 Page 8 of 19 PageID# 23554
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`Page 94
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`Page 95
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`1 Stacy Ehrlich
`2 argumentative, mischaracterizes the
`3 testimony, outside the scope of the report,
`4 calls for technical opinion.
`5 THE WITNESS: As I indicated
`6 earlier, I'm attributing that statement to
`7 Mr. McAlexander, and I just stated what he
`8 told me. I don't know if that -- if what he
`9 is saying meant that there's no product on
`10 the market that doesn't use that technology.
`11 I just understand that he says that it's
`12 foundational for any modern e-cigarette
`13 product.
`14 BY MR. BAYUK:
`15 Q Do you know anything about the prior art
`16 underlying the technology in the '545 patent?
`17 MS. UNDERWOOD: Objection; outside
`18 the scope of the report, calls for a
`19 technical opinion.
`20 THE WITNESS: No.
`21 BY MR. BAYUK:
`22 Q In your report at paragraph 84 -- just
`23 let me know when you get there.
`24 A Okay.
`25 Q In paragraph 84 you say, "Reynolds
`
`1 Stacy Ehrlich
`2 derives particular benefit from certain aspects of
`3 its infringement of the Asserted Patents, as this
`4 technology is involved in and important to FDA's
`5 PMTA review of Reynolds' VUSE e-cigarettes."
`6 Do you see where I read from?
`7 A I do.
`8 Q Do you know if any of the VUSE products
`9 actually use any of the patented technology in the
`10 asserted patents?
`11 MS. UNDERWOOD: Objection; asked
`12 and answered, calls for a technical opinion.
`13 THE WITNESS: I believe I indicated
`14 earlier, and I think it says it clear in my
`15 report, that I am assuming that the patents
`16 are infringed for purposes of my opinion.
`17 BY MR. BAYUK:
`18 Q So here you say Reynolds derives a
`19 benefit from its infringement of the patents. In
`20 the next paragraph, paragraph 85, you say, "at a
`21 minimum, this technology strengthens the PMTA's
`22 for the VUSE e-cigarettes."
`23 Do you see that?
`24 A Yes.
`25 Q All right. So those are -- in
`
`Page 96
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`Page 97
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`1 Stacy Ehrlich
`2 paragraphs 84 and 85, what I just read, the
`3 portions I just read, those are affirmative
`4 opinions by you that there, there is a benefit to
`5 Reynolds and that use of the technology makes the
`6 PMTAs stronger; that's your opinion?
`7 A My opinion is entirely in the context of
`8 the statement I provided previously, which is, if
`9 you look at Footnote 1 of my report, for purposes
`10 of my report, I have assumed that Reynolds
`11 infringes the asserted patents. I offer no
`12 technical opinion related thereto. So I am just
`13 testifying on the FDA implications, assuming that
`14 the patents are valid and infringed.
`15 Q I understand, and I understand you
`16 saying you're making that assumption. What I'm
`17 asking you is: With that assumption, you're
`18 saying that there is a, there is a definitive
`19 benefit to Reynolds from using the patents?
`20 A From an FDA regulatory perspective, it
`21 is a benefit to be able to demonstrate, for
`22 example, with the '545, that the battery is safe.
`23 Q Okay, and you're saying that use of the
`24 asserted patents makes Reynolds' PMTA submissions
`25 for the VUSE products stronger; it makes those
`
`1 Stacy Ehrlich
`2 applications stronger, right?
`3 A Yes, assuming that the -- on the basis
`4 of my understanding of the patented technology, it
`5 would make the PMTA stronger, because it would
`6 address issues that FDA is very concerned about,
`7 for example, in the '545, battery safety.
`8 Q Okay, and when you say it makes the
`9 submissions or the applications stronger, are you
`10 saying that they're stronger than the applications
`11 would be if Reynolds did not use that technology?
`12 A That's my understanding. It's possible
`13 that they could adjust those concerns with
`14 different technology, but this technology directly
`15 addresses battery safety, which is something that
`16 FDA is concerned about and would make the
`17 application stronger if you have technology that
`18 addresses those issues.
`19 Q All right. So then in the next
`20 paragraph, paragraph 86 -- and I think this is the
`21 same language that you used in each of the initial
`22 paragraphs for your discussion of each of the
`23 patents. You say -- this one is about the '545
`24 patent in paragraph 86, but you said, "Based on my
`25 general understanding of the attributes of the
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`Page 98
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`Page 99
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`1 Stacy Ehrlich
`2 '545 patent, there are multiple features of that
`3 patent FDA will consider in evaluating the VUSE
`4 e-cigarette PMTAs, which may improve Reynolds'
`5 chances of receiving PMTA authorization."
`6 Do you see that?
`7 A Yes.
`8 Q And so you say that -- I want to focus
`9 on the part where you say "which may improve
`10 Reynolds' chances of receiving PMTA
`11 authorization."
`12 Why did you use the word "may" there?
`13 A Because there's no way to know exactly
`14 what FDA considers in issuing a PMTA
`15 authorization, so -- and it, and it may still not
`16 be enough for FDA to issue PMTA authorization, but
`17 it's certainly something that FDA would consider
`18 important.
`19 Q Well, in the prior -- we just looked at
`20 the prior two paragraphs where you say there is a
`21 benefit, and the use of the technology makes the
`22 PMTAs stronger, and so if both of those things are
`23 true, that there is a benefit to Reynolds and that
`24 the PMTAs are stronger by use of the technology,
`25 then how would Reynolds' chances not be improved
`
`1 Stacy Ehrlich
`2 of getting authorization?
`3 A That's a good point.
`4 Q Right. It's a great point. So why did
`5 you follow up these two paragraphs, 84 and 85,
`6 with language that it "may" improve it?
`7 MS. UNDERWOOD: Objection;
`8 argumentative.
`9 THE WITNESS: It's possible that --
`10 you know, there's no way to know for sure
`11 that it will, that it will improve chances.
`12 You know, if they get rejected, we may not
`13 know what, what caused that. So yes, it may
`14 improve their chances. It's something that's
`15 important to FDA, but I can't say 100 percent
`16 for sure that it will.
`17 BY MR. BAYUK:
`18 Q Well, it may not improve Reynolds'
`19 chances either, right?
`20 MS. UNDERWOOD: Objection;
`21 mischaracterizes the testimony,
`22 argumentative.
`23 THE WITNESS: I think it
`24 strengthens the application. Whether they
`25 get an authorization or not is something that
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`Page 100
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`Page 101
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`1 Stacy Ehrlich
`2 is very hard to predict, impossible to
`3 predict, but it definitely will strengthen
`4 the application.
`5 BY MR. BAYUK:
`6 Q Okay, but here you didn't say, you know,
`7 increases their -- makes it more likely that
`8 they're going to get authorization. You said "may
`9 improve" their chances, right?
`10 A I'm not --
`11 MS. UNDERWOOD: Objection;
`12 mischaracterizes the testimony,
`13 mischaracterizes the report.
`14 THE WITNESS: I'm not sure I see
`15 the distinction between those two statements.
`16 Yeah, maybe, in hindsight, I should have said
`17 "will improve."
`18 BY MR. BAYUK:
`19 Q That was your opinion -- is that your
`20 opinion? It's your opinion that it will improve
`21 the chances?
`22 MS. UNDERWOOD: Objection; asked
`23 and answered.
`24 THE WITNESS: Yeah, I think it
`25 will -- the technology will improve their
`
`1 Stacy Ehrlich
`2 chances. Again, whether they -- whether this
`3 application will still meet FDA standards for
`4 authorization is not something that I can
`5 predict, and that's I think the reason why I
`6 didn't use as strong language as you suggest,
`7 but yeah, I -- my testimony is that it will
`8 improve their chances.
`9 BY MR. BAYUK:
`10 Q Okay. So tell me, explain to me then
`11 what, what specific aspects of the '545 patent,
`12 how that translates to an opinion that use of that
`13 will improve Reynolds' chances of getting
`14 authorization.
`15 A I think we already had this
`16 conversation, but I'll answer it again.
`17 The fact that this technology enables
`18 these batteries to be used safely without
`19 inconsistent power, without risk of explosion or
`20 fire, all of which have happened and are very
`21 concerning to FDA, the fact that this technology
`22 addresses those issues will -- and if you use such
`23 technology, it will make FDA much more confident
`24 in these battery safety issues.
`25 Q Okay. Where -- point me to something
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`Page 134
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`Page 135
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`1 Stacy Ehrlich
`2 address e-liquid leakage is a sufficient way to
`3 address FDA's concern for a PMTA authorization?
`4 MS. UNDERWOOD: Objection;
`5 mischaracterizes the testimony.
`6 THE WITNESS: No, FDA has not said
`7 that.
`8 BY MR. BAYUK:
`9 Q Let me switch gears and ask you about
`10 the '374 patent.
`11 Similar to the other two patents, you
`12 say there are multiple features of the '374 patent
`13 that FDA will consider in evaluating the VUSE
`14 PMTAs.
`15 So what are, what are the multiple
`16 features that you believe FDA will consider?
`17 A My understanding is that the technology
`18 embodied in the '374 patent, the features
`19 described in that patent prevent inadvertent
`20 activation of the device, which is of concern to
`21 FDA, because if it activates when not in use, it
`22 can cause -- if it activates, for example, in
`23 someone's pocket or elsewhere or where it's
`24 stored, it can be a safety issue. It also can be
`25 a safety hazard to children or pets, so that's
`
`1 Stacy Ehrlich
`2 something that FDA has expressed concern about.
`3 Q What are the features of the '374 patent
`4 that address activation of the e-cigarette or
`5 inadvertent activation?
`6 MS. UNDERWOOD: Objection; calls
`7 for a technical opinion, outside the scope of
`8 the report.
`9 THE WITNESS: Again, I described
`10 what my understanding is of the technology
`11 embodied in the patent. If you want to delve
`12 into more detail about how that actually
`13 works from a technical perspective, it will
`14 make a lot more sense for you to ask those
`15 questions of the technical experts. I don't
`16 know the answer to that.
`17 BY MR. BAYUK:
`18 Q Is the technology embodied in the '374
`19 patent sufficient to address FDA's concerns about
`20 device activation in its review of a PMTA?
`21 MS. UNDERWOOD: Objection; calls
`22 for speculation.
`23 THE WITNESS: No one knows that.
`24 BY MR. BAYUK:
`25 Q Has FDA ever said that the technology
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`Page 136
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`Page 137
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`1 Stacy Ehrlich
`2 used in the '374 patent, that that way or those
`3 means of addressing battery -- a device activation
`4 is sufficient to address FDA's concerns in the
`5 context of the PMTA application?
`6 MS. UNDERWOOD: Objection;
`7 mischaracterizes the testimony.
`8 THE WITNESS: I'm not aware that
`9 FDA has said anything to that e