Case 1:20-cv-00393-LO-TCB Document 889-3 Filed 01/21/22 Page 1 of 41 PageID# 23886
`Case 1:20-cv-00393-LO-TCB Document 889-3 Filed 01/21/22 Page 1 of 41 PagelD# 23886
`
`EXHIBIT 3
`EXHIBIT3
`(PUBLIC)
`(PUBLIC)
`
`

`

`Case 1:20-cv-00393-LO-TCB Document 889-3 Filed 01/21/22 Page 2 of 41 PageID# 23887
`
`CONFIDENTIAL BUSINESS INFORMATION – SUBJECT TO PROTECTIVE ORDER
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF VIRGINIA
`ALEXANDRIA DIVISION
`
`
`
`SECOND SUPPLEMENTAL REBUTTAL EXPERT REPORT OF
`JOSEPH C. McALEXANDER III
`REGARDING VALIDITY OF U.S. PATENT NUMBERS:
`6,803,545 AND 10,420,374
`
`
`
`
`
`
`RJR STRATEGIC HOLDINGS, INC. AND R.J. REYNOLDS VAPOR COMPANY
`vs.
`ALTRIA CLIENT SERVICES LLC; PHILIP MORRIS USA INC.; and
`PHILIP MORRIS PRODUCTS S.A.
`
`
`
`
`Civil Action No. 1:20-cv-00393-LO-TCB
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`May 10, 2021
`
`
`
`
`
`
`
`

`

`Case 1:20-cv-00393-LO-TCB Document 889-3 Filed 01/21/22 Page 3 of 41 PageID# 23888
`
`CONFIDENTIAL BUSINESS INFORMATION – SUBJECT TO PROTECTIVE ORDER
`
`94.
`
`Dr. Fuller furthers states that the specification in the '545 Patent was inaccurate
`
`when it states “[l]ithium ion batteries are not suitable for other portable equipment, e.g., cordless
`
`power tools, because these devices require a great amount of current when performing work, e.g.,
`
`driving a screw with a cordless electric power drill.”7 Yet, as I describe below, that was well-
`
`known and repeated throughout the prior art. The references cited by Dr. Fuller to attempt to
`
`support his statement are further discussed below.
`
`7.1.1 Development of the '545 Patent
`
`95.
`
`I understand that ACS was interested in using lithium batteries in their “beta”
`
`project. However, when the project started around 1990, ACS recognized that the current
`
`emphasis for lithium-ion battery technology was in “low power applications.”8 In fact, ACS
`
`recognized that “the realization of the required power densities will require significant advances
`
`over the current state-of-art and is by no means certain.”9 As such, ACS was uncertain as to
`
`whether it could in fact use lithium-ion batteries in its electrically heated smoking systems.10
`
`96.
`
`In an August 16, 1990 study, ACS looked at the potential usage of lithium-ion and
`
`other battery technologies. During the study, ACS recognized that the lithium-ion technology was
`
`“only just emerging” and “intended mostly for smaller current drain devices.”11 Further, while the
`
`study showed lithium-ion batteries had improved advantages in delivering energy, ACS also found
`
`that those advantages diminished at higher rates of discharge. ACS also recognized that the lithium
`
`liquid electrolyte systems it was testing were “unsuitable for the β-articles from a safety viewpoint”
`
`
`7 Id., at ¶ 53.
`8 1990 Document on Longer Term Development, DEF_PUB_EDVA000055476, at
`DEF_PUB_EDVA000055476.
`9 Id.
`10 Id.
`11 August 16, 1990 Memo, DEF_PUB_EDVA000055481, at DEF_PUB_EDVA000055482.
`
`1:20-cv-00393-LO-TCB, McAlexander Rebuttal Expert Report – Validity
`
`27
`
`

`

`Case 1:20-cv-00393-LO-TCB Document 889-3 Filed 01/21/22 Page 4 of 41 PageID# 23889
`
`CONFIDENTIAL BUSINESS INFORMATION – SUBJECT TO PROTECTIVE ORDER
`
`and that “[t]he present polymer electrolyte battery technology is inadequate for the β-program.”12
`
`They recognized that it would be “unlikely that a battery company w[ould] have a high-
`
`energy/high-power density ambient temperature battery for [ACS’] application in five years.”13
`
`97.
`
`In September 1991, ACS continued running tests on both Ni-Cd and lithium-ion
`
`batteries. Those tests showed that “[t]he Ni-Cd system overwhelmingly demonstrated superiority
`
`over the lithium system for the eight-puff device.”14 Again, the testing noted that lithium-ion
`
`batteries were “undergoing a major change” and that a “more conscious effort” was being made
`
`“towards safety of rechargeable lithium cells at the expense of energy density.”15 Further, this
`
`document noted that more development was needed for a “solid polymer electrolyte” lithium
`
`battery.16 The special features of these systems were that they were safer than the then available
`
`lithium metal anode cells. However, lithium polymer batteries were reported to require
`
`“considerable development effort to demonstrate these features” including “safety” and “cycle
`
`life.”17
`
`98.
`
`In 1992, ACS’ pipe dream of using lithium-ion batteries continued. In testing that
`
`ACS conducted using pulse recharging, ACS recognized that “[i]mplementation of [lithium]
`
`technology is probably too far off to be considered in our first generation articles.”18
`
`99.
`
`Based on its testing, ACS concluded that “[l]iquid electrolyte secondary lithium
`
`batteries might provide significant reductions to the size and weight of the pack battery, but some
`
`
`12 Id., at DEF_PUB_EDVA000055489-90.
`13 Id., at DEF_PUB_EDVA000055490.
`14 Sep. 11, 1991 Memo, DEF_PUB_EDVA000055533, at DEF_PUB_EDVA000055534.
`15 Id., at DEF_PUB_EDVA000055541.
`16 Id.
`17 Id..
`18 April 8, 1992 Document, DEF_PUB_EDVA000055555, at DEF_PUB_EDVA000055559.
`
`1:20-cv-00393-LO-TCB, McAlexander Rebuttal Expert Report – Validity
`
`28
`
`

`

`Case 1:20-cv-00393-LO-TCB Document 889-3 Filed 01/21/22 Page 5 of 41 PageID# 23890
`
`CONFIDENTIAL BUSINESS INFORMATION – SUBJECT TO PROTECTIVE ORDER
`
`question of their safety remain[ed].”19 ACS was looking for improvements in its technology to
`
`safely use a lithium-ion battery in its products.
`
`100. Recognizing its inability to use a lithium-ion battery in its smoking systems, ACS
`
`again determined, due to their rate limitations and lower energy density, it was “unlikely that a
`
`small size may be ever available for a cigarette size device.”20 Meanwhile, while “li polymer”
`
`batteries seemed promising, ACS anticipated that “it may be at least 5 to 10 years with heavy
`
`developmental backing from [ACS] when this technology may be in a position to be applied for
`
`the cigarette size device.”21 Indeed, for high-energy requirements, ACS recognized that “there
`
`[was] no system currently, and nor will there be one in ten years time that will provide an all-day
`
`smoke from a cigarette size device.”22
`
`101.
`
`I understand that ACS brought in a consulting firm “Arthur D Little” to help with
`
`getting lithium-ion batteries to work in the project. In February 1993, Arthur D. Little provided
`
`input as to the technical issues for battery options for the beta project.23 It compared Ni-Cd, Ni-
`
`metal hydride, and lithium-ion. It recognized that lithium-ion technology had “limitations within
`
`the timeframe of interest” and that “[s]afety of [lithium-ion] system [was] not fully
`
`demonstrated.”24
`
`102. By 1994, ACS considered trying to use lithium-ion batteries by reducing power
`
`requirements for its electrically heated smoking system. In one memo, Grier Fleischhauer reported
`
`that they could potentially pursue a different type of heater that could be “designed” for “higher
`
`
`19 April 13, 1992 Document, DEF_PUB_EDVA000055565, at DEF_PUB_EDVA000055567.
`20 April 23, 1992 Document, DEF_PUB_EDVA000055569, at DEF_PUB_EDVA000055570.
`21 Id.
`22 Id..
`23 Feb. 22, 1993 Arthur Little, DEF_PUB_EDVA000055573.
`24 Id., at DEF_PUB_EDVA000055579.
`
`1:20-cv-00393-LO-TCB, McAlexander Rebuttal Expert Report – Validity
`
`29
`
`

`

`Case 1:20-cv-00393-LO-TCB Document 889-3 Filed 01/21/22 Page 6 of 41 PageID# 23891
`
`CONFIDENTIAL BUSINESS INFORMATION – SUBJECT TO PROTECTIVE ORDER
`
`voltage lithium batteries.”25 However, when asked about this document, Mr. Fleischhauer testified
`
`.26
`
`
`
`103. By 1996, ACS still was unable to get a lithium-ion battery to work in an electrically
`
`heated smoking system. Arthur D. Little, who was continuing to provide consulting to ACS at
`
`that time, noted that it was still an open issue as to the “safety hazard of operating a Li ion battery
`
`and/or a capacitor in a hand-held product.”27 Yet, even in the designs provided by Arthur D. Little,
`
`there were still guidelines to “[l]imit the maximum discharge current of Li Ion cells to 1C.”
`
`104. Around this time, ACS had finalized a system using pulse modulation and Ni-Cd
`
`batteries that is described in the application that became Fleischhauer. However, at the filing date
`
`of Fleischhauer, I understand that ACS did not design a system to use a lithium-ion battery, as that
`
`was considered a mere “pipe dream”28 and
`
`29 Instead, ACS used Ni-Cd batteries.
`
`
`
`105. Grier Fleischhauer, a named inventor on Fleischhauer, testified:30
`
`
`25 Deposition of G. Fleischhauer, dated Mar. 11, 2021, Ex. 4.
`26 Deposition of G. Fleischhauer, dated Mar. 11, 2021, at 165:5-167:23.
`27 Arthur Little 1996 document, DEF_PUB_EDVA000055581, at DEF_PUB_EDVA000055599.
`28 Deposition of G. Fleischhauer, dated Mar. 11, 2021, at 125:23-127:12, 165:2-15.
`29 Deposition of R. Ripley, dated Mar. 15, 2021, at 131:5-132:9.
`30 Deposition of G. Fleischhauer, dated Mar. 11, 2021, at 165:2-166:17.
`
`1:20-cv-00393-LO-TCB, McAlexander Rebuttal Expert Report – Validity
`
`30
`
`

`

`Case 1:20-cv-00393-LO-TCB Document 889-3 Filed 01/21/22 Page 7 of 41 PageID# 23892
`
`CONFIDENTIAL BUSINESS INFORMATION – SUBJECT TO PROTECTIVE ORDER
`
`106.
`
`In a
`
` document,
`
`. However, this document
`
`1:20-cv-00393-LO-TCB, McAlexander Rebuttal Expert Report – Validity
`
`
`
`
`
`
`
`31
`
`

`

`Case 1:20-cv-00393-LO-TCB Document 889-3 Filed 01/21/22 Page 8 of 41 PageID# 23893
`
`CONFIDENTIAL BUSINESS INFORMATION – SUBJECT TO PROTECTIVE ORDER
`
`.”31 According to my conversation with Mr. Ripley,
`
`.32
`
`107. According to Mr. Ripley, “
`
`33 He suggested
`
`.34
`
`
`
`
`
`
`
`
`
`108.
`
`.36
`
`37
`
`.38 ACS then
`
`.39
`
`109. During his deposition, Mr. Ripley testified:40
`
`, Altria_IQOS_ITC_00225856, at
`
`
`31
`Altria_IQOS_ITC_00225857.
`32 Conversation with R. Ripley on Mar. 22, 2021.
`33 Deposition of R. Ripley, dated Mar. 15, 2021, at 116:20-117:6.
`34 Id., at 85:12-19, 86:3-17,117:4-6.
`35 Id., at 116:10-18.
`36 Id., at 96:18-97:13, 178:21-179:14; Conversation with R. Ripley on Mar. 22, 2021.
`37 Deposition of R. Ripley, dated Mar. 15, 2021, at 96:18-97:13, 178:21-179:14; Conversation
`with R. Ripley on Mar. 22, 2021.
`38 Deposition of R. Ripley, dated Mar. 15, 2021, at 96:18-97:13, 178:21-179:14; Conversation
`with R. Ripley on Mar. 22, 2021.
`39 Deposition of R. Ripley, dated Mar. 15, 2021, at 102:14-21, 202:10-203:15, 207:12-20;
`Conversation with R. Ripley on Mar. 22, 2021.
`40 Deposition of R. Ripley, dated Mar. 15, 2021, at 130:24-132:9.
`
`1:20-cv-00393-LO-TCB, McAlexander Rebuttal Expert Report – Validity
`
`32
`
`

`

`Case 1:20-cv-00393-LO-TCB Document 889-3 Filed 01/21/22 Page 9 of 41 PageID# 23894
`
`CONFIDENTIAL BUSINESS INFORMATION – SUBJECT TO PROTECTIVE ORDER
`
`110. Mr. Ripley further testified:41
`
`
`
`
`41 Id., at 96:18-97:13.
`
`1:20-cv-00393-LO-TCB, McAlexander Rebuttal Expert Report – Validity
`
`33
`
`

`

`Case 1:20-cv-00393-LO-TCB Document 889-3 Filed 01/21/22 Page 10 of 41 PageID# 23895
`
`CONFIDENTIAL BUSINESS INFORMATION – SUBJECT TO PROTECTIVE ORDER
`
`111. ACS filed the application that led to the '545 Patent on June 5, 2002.
`
`7.1.2 Lithium-ion batteries were known to be unsafe
`
`112. As explained in my Opening Expert Report, lithium-ion batteries “are lightweight,
`
`have a high energy storage capacity and higher voltage per cell than other batteries.”42 However,
`
`despite these benefits, lithium-ion batteries were not widely used at all prior to the mid-90s because
`
`they can be dangerous if over discharged or overcharged due to the unique chemical structure and
`
`chemical reactions of the batteries.43 In particular, “[o]ver discharging and overcharging of
`
`lithium-ion batteries can cause an abundance of heat to be generated by the chemical reaction
`
`occurring in the battery,” leading to a damaged battery.44
`
`113.
`
`In the 1990s and early 2000s, lithium-ion batteries continued to face safety
`
`problems. For example, numerous lithium-ion batteries were recalled “after in a battery in a
`
`cellular phone released hot gases and inflicted burns to a man’s face.”45
`
`
`42 ’545 Patent at 1:22-25.
`43 Id. at 1:13-15, 1:28-30.
`44 Id. at 1:30-45.
`45 Buchmann, I., “Will Lithium-Ion batteries power the new millennium,” Cadex Electronics Inc.
`(April 2001), at 1.
`
`1:20-cv-00393-LO-TCB, McAlexander Rebuttal Expert Report – Validity
`
`34
`
`

`

`Case 1:20-cv-00393-LO-TCB Document 889-3 Filed 01/21/22 Page 11 of 41 PageID# 23896
`
`CONFIDENTIAL BUSINESS INFORMATION – SUBJECT TO PROTECTIVE ORDER
`
`and power arrangement which comprise a battery and a capacitor which is recharged by the
`
`battery.”64 However, Fleischhauer does not say all power sources discussed in the '962 Patent are
`
`useful or that lithium-ion power sources could be used.
`
`127. The only description of a power source within Fleischhauer is Ni-Cd batteries, as
`
`Fleischhauer states that “the preferred four cells of nickel cadmium batteries 35a typically have a
`
`voltage discharge cycle such as the one which is generally designated 40 in Fig. 8.”65
`
`128. Grier Fleischhauer, the first named inventor of Fleischhauer, testified that usage of
`
`a lithium-ion power source in the system described in Fleischhauer was a “pipe dream”66 and that
`
`Meanwhile, Mr. Ripley, also an inventor from Fleischhauer, testified that
`
`During my conversation with Mr. Ripley, he reiterated that
`
`.67
`
`
`
`68
`
`
`
`
`
`
`
` .69
`
`129. Fleischhauer itself focuses on the flow of energy to the heater, not the power from
`
`the battery.70 There is no discussion of having circuitry addressing the safety concerns a POSITA
`
`would know accompany usage of a lithium-ion battery. As such, a POSITA would not know how
`
`
`64 Fleischhauer, at 5:32-37.
`65 Id., at 6:42-45.
`66 Deposition of G. Fleischhauer, dated Mar. 11, 2021, at 125:23-127:12.
`67 Id., at 165:5-15.
`68 Deposition of R. Ripley, dated Mar. 15, 2021, at 204:21-205:15.
`69 Conversation with R. Ripley on Mar. 22, 2021.
`70 Fleischhauer, at Abstract.
`
`1:20-cv-00393-LO-TCB, McAlexander Rebuttal Expert Report – Validity
`
`39
`
`

`

`Case 1:20-cv-00393-LO-TCB Document 889-3 Filed 01/21/22 Page 12 of 41 PageID# 23897
`
`CONFIDENTIAL BUSINESS INFORMATION – SUBJECT TO PROTECTIVE ORDER
`
`to implement and use a lithium-ion battery in an electrically heated smoking system based on the
`
`disclosure in Fleischhauer.
`
`130. The '962 Patent likewise does not provide any discussion about the use of a lithium-
`
`ion battery beyond mere mention of it. The sentence in the '962 Patent that discusses lithium-ion
`
`batteries states “power source 16 may be any rechargeable or disposable battery, such as a
`
`rechargeable lithium manganese dioxide battery or a disposable alkaline battery.”71 However, the
`
`filing date of the '962 Patent (1989) is even earlier than the first commercially available lithium-
`
`ion battery according to Dr. Fuller.72
`
`131. The '962 Patent does not provide any exemplary embodiments showing the use of
`
`a lithium-ion battery in an electrically heated smoking system, and, in light of the prior art, likely
`
`was unable to do so. Indeed, ACS itself recognized in 1990, after the '962 Patent, that lithium-ion
`
`batteries, such as those described in the '962 Patent, are unsuitable “from a safety viewpoint.”73
`
`Indeed, Bob Ripley, the 30(b)(6) witness on batteries from ACS, testified that to his knowledge,
`
`.74
`
`132. The '962 Patent describes that “[i]nternal power sources 16 typically are
`
`rechargeable nickel cadmium (NiCd) batteries, because NiCd batteries discharge power relatively
`
`
`
`
`71 '962 Patent, at 9:62-65. I note that the '962 Patent refers to a lithium battery at 12:2-3, but
`there is no mention of whether this is a lithium ion battery or not.
`72 Fuller Report, at ¶ 35.
`73 August 16, 1990 Battery Cycling Report, DEF_PUB_EDVA000055481, at
`DEF_PUB_EDVA000055489.
`74 Deposition of R. Ripley, dated Mar. 15, 2021, at 130:24-131:19; see also Conversation with R.
`Ripley on Mar. 22, 2021.
`
`1:20-cv-00393-LO-TCB, McAlexander Rebuttal Expert Report – Validity
`
`40
`
`

`

`Case 1:20-cv-00393-LO-TCB Document 889-3 Filed 01/21/22 Page 13 of 41 PageID# 23898
`
`CONFIDENTIAL BUSINESS INFORMATION – SUBJECT TO PROTECTIVE ORDER
`
`consistently throughout the discharge cycle.”75 As I discuss above, the high discharge rates needed
`
`for electrically heated smoking systems made lithium-ion batteries unusable in such applications,
`
`especially given that the first commercial lithium-ion battery had not even been made available at
`
`the time the '962 Patent was filed.
`
`133. The only invention the '962 Patent describes in a way that would enable someone
`
`to make and use an electrically heated smoking system would have been with the use of nickel-
`
`cadmium batteries. As noted in the '962 Patent, “Circuit 112 permits power source 16 (e.g., a
`
`nickel cadmium battery) to be charged at a fast rate.”76 While usage of a lithium-ion battery would
`
`not have been known to a POSITA based on the disclosure in the '962 Patent, the use of Ni-Cd
`
`batteries would have been.
`
`134. Dr. Blalock contends that Counts disclosed an electrically heated smoking system
`
`using a lithium-ion power source.77 Yet, the disclosure in Counts is just as sparse as in the '962
`
`Patent and thus it also does not enable usage of a lithium-ion battery in an electrically heated
`
`smoking system without undue experimentation. Counts does not provide any discussion about
`
`the use of a lithium-ion battery beyond mere mention of it. The only sentence in the Counts that
`
`discusses lithium-ion batteries states “[o]f course, other power sources, such as rechargeable
`
`lithium-manganese dioxide batteries, can be used.”78 However, the filing date of Counts (1989) is
`
`even earlier than the first commercially available lithium-ion battery according to Dr. Fuller.79
`
`135. Counts does not provide any exemplary embodiments showing the use of a lithium-
`
`ion battery in an electrically heated smoking system, and, in light of the prior art, likely was unable
`
`
`75 '962 Patent, at 9:59-62.
`76 Id., at 12:20-22.
`77 See e.g., Blalock Report, at ¶ 202.
`78 Counts, at 9:4-6.
`79 Fuller Report, at ¶ 35.
`
`1:20-cv-00393-LO-TCB, McAlexander Rebuttal Expert Report – Validity
`
`41
`
`

`

`Case 1:20-cv-00393-LO-TCB Document 889-3 Filed 01/21/22 Page 14 of 41 PageID# 23899
`
`CONFIDENTIAL BUSINESS INFORMATION – SUBJECT TO PROTECTIVE ORDER
`
`to do so. Indeed, ACS itself recognized in 1990, after Counts was filed, that lithium-ion batteries,
`
`such as those described in Counts, are unsuitable “from a safety viewpoint.”80 Indeed, Bob Ripley,
`
`the 30(b)(6) witness on batteries from ACS testified that to his knowledge,
`
`
`
`
`
`
`
`.82
`
`136. Counts recognized that “the rate at which [] energy delivered —i.e., the power— is
`
`also important.”83 It then goes on to describe that “nickel-cadmium (Ni-C[]d) rechargeable
`
`batteries are capable of providing much greater power on discharge” and discusses a preferred
`
`embodiment using Ni-Cd batteries.84 As I discuss above, the high discharge rates needed for
`
`electrically heated smoking systems made lithium-ion batteries unusable in such applications,
`
`especially given that the first commercial lithium-ion battery had not even been made available at
`
`the time the Counts was filed.
`
`137. Dr. Fuller and Dr. Blalock’s only evidence of a smoking device prior to the '545
`
`Patent that uses lithium-ion batteries is a single line, in two references (Counts and the '962 Patent)
`
`that pre-date any commercially available lithium-ion battery, and do not provide any enabling
`
`description of that use in a smoking device without undue experimentation. Such scant evidence
`
`is itself a further reflection that lithium-ion batteries were not used for high discharge devices like
`
`electrically heated smoking systems.
`
`
`80 August 16, 1990 Battery Cycling Report, DEF_PUB_EDVA000055481, at
`DEF_PUB_EDVA000055489.
`81 Deposition of R. Ripley, dated Mar. 15, 2021, at 130:24-131:19.
`82 Conversation with R. Ripley on Mar. 22, 2021.
`83 Counts, at 8:56-59.
`84 Id., at 8:63-67.
`
`1:20-cv-00393-LO-TCB, McAlexander Rebuttal Expert Report – Validity
`
`42
`
`

`

`Case 1:20-cv-00393-LO-TCB Document 889-3 Filed 01/21/22 Page 15 of 41 PageID# 23900
`
`CONFIDENTIAL BUSINESS INFORMATION – SUBJECT TO PROTECTIVE ORDER
`
`472. For example, a small portable product intended for widespread use by normal
`
`consumers, like an electrically heated smoking system, would want the maximum safety available.
`
`Ni-Cd batteries, while suffering some deficiencies, including memory effect and lower voltage per
`
`battery cell, were known to be safe and effective batteries. Meanwhile, lithium-ion batteries were
`
`notorious for the safety concerns, and I incorporate by reference my discussion above regarding
`
`that topic herein. Unsurprisingly, as I discuss above, the prior art showed a POSITA that
`
`electrically heated smoking systems should use nickel-based batteries and not lithium-ion.
`
`473. As I discuss above, there is not an enabling disclosure of using a smoking device
`
`with a lithium-ion power source prior to the '545 Patent and a POSITA would not have known
`
`how to use a lithium-ion power source safely in an electrically heated smoking system.
`
`7.12.2 There was a long-felt but unmet need to design an electrically heated
`smoking system that could use a lithium-ion battery safely and the
`'545 Patent met that need
`
`474. As discussed above and in my opening report, lithium-ion batteries were known to
`
`convey a number of advantages over other batteries. Lithium-ion batteries “are lightweight” and
`
`“have a high energy storage capacity and higher voltage per cell than other batteries.”395 Further,
`
`they are rechargeable and do not exhibit memory effects.396 Indeed, Grier Fleischhauer, an
`
`inventor of Fleischhauer, testified that
`
`
`
`”397
`
`475. However, lithium-ion batteries are dangerous and were especially so as of 2002.
`
`“Due to the unique chemical structure and chemical reaction of lithium-ion batteries, the batteries
`
`can be dangerous if over discharged or overcharged. Over discharging and overcharging of
`
`
`395 ’545 Patent, at 1:22-24; Fuller Report, at ¶ 48.
`396 ’545 Patent, at 1:14-16.
`397 Deposition of G. Fleischhauer, dated Mar. 11, 2021, at 135:17-23.
`
`1:20-cv-00393-LO-TCB, McAlexander Rebuttal Expert Report – Validity
`
`152
`
`

`

`Case 1:20-cv-00393-LO-TCB Document 889-3 Filed 01/21/22 Page 16 of 41 PageID# 23901
`
`CONFIDENTIAL BUSINESS INFORMATION – SUBJECT TO PROTECTIVE ORDER
`
`currents.402 In fact, Takeuchi itself recognized that “[a] cell according to the prior art would not
`
`be an adequate power supply for an implantable defibrillator.”403
`
`479. Further, Dr. Blalock’s analysis disregards the prior art as a whole, which did
`
`recognize that there was need for these types of systems, as I described previously.
`
`480. One of the inventors of Fleischhauer, Grier Fleischhauer, recognized that (before
`
`the claimed inventions) using a lithium-ion battery, while it would have been “nice,” was really a
`
`“pipe dream” because it “just didn’t have the kind of discharge rates than you could ever think of,”
`
`the “lithium-ion technology wasn’t mature enough for the – for the consumer,” and “it was kind
`
`of an unsafe technology too….”404
`
`481. Grier Fleischhauer, an inventor of Fleischhauer, testified when asked why he
`
`testified that using a lithium-ion battery was a pipe dream:405
`
`
`
`
`402 Takeuchi, at Examples I-II.
`403 Takeuchi, at 7:63-65.
`404 Deposition of G. Fleischhauer, dated Mar. 11, 2021, at 125:23-127:12.
`405 Deposition of G. Fleischhauer, dated Mar. 11, 2021, at 165:5-166:17.
`
`1:20-cv-00393-LO-TCB, McAlexander Rebuttal Expert Report – Validity
`
`154
`
`

`

`Case 1:20-cv-00393-LO-TCB Document 889-3 Filed 01/21/22 Page 17 of 41 PageID# 23902
`
`CONFIDENTIAL BUSINESS INFORMATION – SUBJECT TO PROTECTIVE ORDER
`
`482. Mr. Fleischhauer further testified that, in his experience, his team never had
`
`406 Instead, he testified that in the 1990s
`
`“nickel-metal hydrides was the answer to NiCd batteries, it wasn’t lithium yet. That’s because
`
`lithium wasn’t really ready yet. And it was kind of an unsafe technology, too, is what I recall
`
`people saying.”407
`
`483. Mr. Fleischhauer further testified that he was unaware of people
`
`
`
`.408 As such,
`
`Fleischhauer itself (as well as the references cited within it) were not resolving this need.
`
`484. Mr. Ripley’s testimony provides further evidence that there was a long-felt but
`
`unsolved need before the inventions claimed in the '545 Patent. For example, when asked about
`
`, Mr. Ripley testified:
`
`
`406 Deposition of G. Fleischhauer, dated Mar. 11, 2021, at 153:23-154:19.
`407 Deposition of G. Fleischhauer, dated Mar. 11, 2021, at 125:23-127:12.
`408 Deposition of G. Fleischhauer, dated Mar. 11, 2021, at 165:5-15.
`
`1:20-cv-00393-LO-TCB, McAlexander Rebuttal Expert Report – Validity
`
`155
`
`

`

`Case 1:20-cv-00393-LO-TCB Document 889-3 Filed 01/21/22 Page 18 of 41 PageID# 23903
`
`CONFIDENTIAL BUSINESS INFORMATION – SUBJECT TO PROTECTIVE ORDER
`
`485. Mr. Ripley further testified that
`
`
`
`also testified that
`
`.410
`
`
`
`.”409 He
`
`
`
`
`
`
`
`486. As an additional example, Mr. Ripley further testified during his deposition that
`
`
`
`”411
`
`487. The testimony above is consistent with other evidence showing that using a lithium-
`
`ion battery in an electrically heated smoking system with a controller to modulated the pulses of
`
`
`409 Deposition of R. Ripley, dated Mar. 15, 2021, at 204:21-206:12; see also Conversation with
`R. Ripley on Mar. 22, 2021.
`410 Deposition of R. Ripley, dated Mar. 15, 2021, at 204:21-205:15; see also Conversation with
`R. Ripley on Mar. 22, 2021.
`411 Deposition of R. Ripley, dated Mar. 15, 2021, at 116:10-25; see also Conversation with R.
`Ripley on Mar. 22, 2021.
`
`1:20-cv-00393-LO-TCB, McAlexander Rebuttal Expert Report – Validity
`
`156
`
`

`

`Case 1:20-cv-00393-LO-TCB Document 889-3 Filed 01/21/22 Page 19 of 41 PageID# 23904
`
`CONFIDENTIAL BUSINESS INFORMATION – SUBJECT TO PROTECTIVE ORDER
`
`power from the battery to prevent damage to the battery was a long-felt need that the industry did
`
`not meet before the claimed inventions, which further shows that the claimed inventions are non-
`
`obvious and represent a radical improvement over the prior art that enabled further acquisition of
`
`the many benefits associated with using a lithium-ion battery.
`
`488. As discussed in the '545 Patent, “[a]lthough lithium-ion batteries are not intended
`
`to deliver the discharge rates required for electrical smoking systems, the electrically heated
`
`smoking device of the present invention provides an arrangement wherein lithium-ion batteries
`
`can be used safely and effectively.”412 As such, the '545 Patent resolved the long felt but unmet
`
`need for an electrically heated smoking system that could use a lithium-ion battery safely.
`
`7.12.3 Industry participants were skeptical that using a lithium-ion battery
`could be controlled and used in an electrically heated smoking system
`
`489.
`
`I have reviewed evidence showing that industry participants were skeptical that the
`
`invention claimed in the '545 Patent would be successful.
`
`490. ACS’ internal studies and documents showed that many employees at ACS were
`
`skeptical that a lithium-ion battery could be used safely in an electrically heated smoking system.
`
`For example, in one document, ACS recognized that “the realization of the required power
`
`densities will require significant advances over the current state-of-art and is by no means
`
`certain.”413 Meanwhile, in another internal memo, ACS recognized that, due to the energy
`
`requirements of these smoking systems, “there [was] no system currently, and nor will there be
`
`one in ten years time that will provide an all day smoke from a cigarette size device.”414
`
`
`412 '545 Patent, at 9:32-36.
`413 1990 Document on Longer Term Development, DEF_PUB_EDVA000055476, at
`DEF_PUB_EDVA000055476.
`414 April 23, 1992 Document, DEF_PUB_EDVA000055569, at DEF_PUB_EDVA000055570.
`
`1:20-cv-00393-LO-TCB, McAlexander Rebuttal Expert Report – Validity
`
`157
`
`

`

`Case 1:20-cv-00393-LO-TCB Document 889-3 Filed 01/21/22 Page 20 of 41 PageID# 23905
`
`CONFIDENTIAL BUSINESS INFORMATION – SUBJECT TO PROTECTIVE ORDER
`
`491. As I understand from Bob Ripley,
`
`
`
`
`
`
`
`
`
`
`
`”416 However,
`
`.417
`
`492. Further, Grier Fleischhauer, an inventor of the prior art Fleischhauer who was not
`
`involved with conceiving of the inventions claimed in the '545 Patent, testified that using a lithium-
`
`ion battery in his system was a “pipe dream,” and was thus skeptical of using lithium-ion batteries
`
`in such a system.418 This testimony from Mr. Fleischhauer is particularly probative of
`
`nonobviousness, as he has a degree in Mechanical Engineering,419 years of experience designing
`
`devices involving batteries and power electronics, including electrically heated smoking
`
`systems,420 and thus qualifies as a POSITA according to both my own definition of a POSITA as
`
`well as the definition of Dr. Blalock.421
`
`7.12.4 The industry has recognized and praised the inventions and benefits of
`the '545 Patent
`
`493. The inventions claimed in the '545 Patent, and benefits derived from those
`
`inventions, have been praised and recognized by others throughout the industry, including RJR.
`
`494. RJR’s own documents
`
`
`
`
`
`
`415 Conversation with R. Ripley on Mar. 22, 2021.
`416 Deposition of R. Ripley, dated Mar. 15, 2021, at 178:21-179:10; see also 116:10-18.
`417 Deposition of R. Ripley, dated Mar. 15, 2021, at 178:21-179:10; see also 116:10-18.
`418 Deposition of G. Fleischhauer, dated Mar. 15, 2021, at 178:21-179:10; see also 116:10-18.
`419 See Deposition of G. Fleischhauer, dated Mar. 15, 2021, Ex. 1.
`420 Id.; see also Deposition of G. Fleischhauer, dated Mar. 11, 2021, at 18:24-22:2.
`421 Blalock Report, at ¶ 25.
`
`1:20-cv-00393-LO-TCB, McAlexander Rebuttal Expert Report – Validity
`
`158
`
`

`

`Case 1:20-cv-00393-LO-TCB Document 889-3 Filed 01/21/22 Page 21 of 41 PageID# 23906
`Case 1:20-cv-00393-LO-TCB Document 889-3 Filed 01/21/22 Page 21 of 41 PagelD# 23906
`
`CONFIDENTIAL BUSINESS INFORMATION — SUBJECT TO PROTECTIVE ORDER
`
`that the product delivers,” and that consumers view a consistent puff as a benefit because “they
`
`wanttheir nicotine delivery to be consistent.”*°?
`
`518.
`
`In that same document, RJR emphasizedPe
`
`the practice of claim 7 of the '545 Patent, as I discussed in my openingreport.
`
`S19. Fut,«a
`eS« :.-:
`
`Pl RJR’s use of the '545 Patent in its products is attributable
`
`in-part to its ability to not overheat and explode.*”
`
`520.
`
`These numerous benefits that
`
`inform consumers purchasing decisions, as I
`
`described above, are derived from the JUUL device and associated JUUL pods’ and VUSE
`
`Products’ practice of the technology claimed in the '545 Patent and showthat a sufficient nexus
`
`exists between the commercial success of these products and the claimed technology.
`
`521.
`
`Indeed, there is evidence directly from consumers of the VUSE Products showing
`
`that they purchase these products at least in part because of the benefits provided by RJR’s use of
`
`the 545 patent technology. For example, one consumer review of the VUSE Alto focuses on the
`
`4°9 Deposition of K. Calderon, dated Nov. 12, 2020, at 184:5-187:4.
`460
`, RJREDVA_000786522, at RIREDVA_000786562.
`
`461
`, RIREDVA_000786522, at RIREDVA_000786557;
`
`De osition ofK. Calderon. dated Nov. 22. 2020. at 115:8-117:19.
`
`”
`
`RJREDVA_000864466, at RIREDVA_000864480.
`463 McAlexander Opening Report, at § 66.
`
`1:20-cv-00393-LO-TCB, McAlexanderRebuttal Expert Report — Validity
`
`167
`
`

`

`Case 1:20-cv-00393-LO-TCB Document 889-3 Filed