Case 1:20-cv-00393-LO-TCB Document 967 Filed 02/11/22 Page 1 of 38 PageID# 27202
`
`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
`
`REYNOLDS’S OPPOSITION TO
`PMI/ALTRIA’S OMNIBUS MOTION IN LIMINE
`
`

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`Case 1:20-cv-00393-LO-TCB Document 967 Filed 02/11/22 Page 2 of 38 PageID# 27203
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`
`
`TABLE OF CONTENTS
`
`Page
`
`I.
`
`II.
`
`MIL NO. 1: PRECLUDE RJR FROM RELYING ON NON-COMPARABLE
`AGREEMENTS TO SUGGEST THE AMOUNT OF A REASONABLE
`ROYALTY ........................................................................................................................ 1
`MIL NO. 2: PRECLUDE RJR FROM VIOLATING ITS STIPULATION
`REGARDING THE PRIOR ART ..................................................................................... 3
`III. MIL NO. 3: NO ARGUMENT, EVIDENCE, OR TESTIMONY ABOUT PRIOR
`ART INVALIDITY NOT DISCLOSED IN EXPERT REPORTS ................................... 5
`IV. MIL NO. 4: NO REFERENCE TO PRACTICING THE PRIOR ART AS AN
`ALLEGED NON-INFRINGEMENT DEFENSE.............................................................. 7
`MIL NO. 5: PRECLUDE RJR’S EXPERTS FROM RELYING ON HEARSAY
`CONVERSATIONS WITH UNDISCLOSED THIRD-PARTIES AND
`EVIDENCE PRODUCED IN VIOLATION OF THE COURT’S DISCOVERY
`ORDER .............................................................................................................................. 9
`VI. MIL NO. 6: PRECLUDE RJR FROM ARGUING THAT IT LACKS CONTROL
`OVER SUPPLIERS OF THE ACCUSED PRODUCTS ................................................ 13
`VII. MIL NO. 7: PRECLUDE LAY OPINION TESTIMONY FROM RJR’S FACT
`WITNESSES ABOUT ALLEGED NON-INFRINGEMENT OR INVALIDITY ......... 14
`VIII. MIL NO. 8: NO REFERENCE TO RJR’S PATENT INFRINGEMENT CLAIMS ...... 17
`IX. MIL NO. 9: NO ARGUMENT, EVIDENCE, OR TESTIMONY ABOUT THE
`PENDING ITC INVESTIGATION OR INVESTIGATIONS INVOLVING
`ALTRIA’S INVESTMENT IN THIRD-PARTY JUUL ................................................. 19
`MIL NO. 10: NO REFERENCE TO WITHDRAWN CLAIMS OR DEFENSES ......... 22
`X.
`XI. MIL NO. 11: NO REFERENCE TO PM/ATRIA’S DECISION NOT TO SUE
`THIRD PARTIES FOR INFRINGING THE ASSERTED PATENTS .......................... 23
`XII. MIL NO. 12: NO REFERENCE TO RJR OR
` MARKING WITH
`THIRD-PARTY FONTEM PATENT NUMBERS ......................................................... 26
`XIII. MIL NO. 13: PRECLUDE RJR FROM REFERENCING THE ABSENCE OF
`CHARLES HIGGINS AT TRIAL ................................................................................... 28
`XIV. MIL NO. 14: NO ARGUMENT, EVIDENCE, OR TESTIMONY
`CHALLENGING FDA’S PMT AND MRTP AUTHORIZATIONS FOR IQOS .......... 29
`
`V.
`
`
`
`
`
`-i-
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`Case 1:20-cv-00393-LO-TCB Document 967 Filed 02/11/22 Page 3 of 38 PageID# 27204
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`
`
`
`
`CASES
`
`TABLE OF AUTHORITIES
`
`Page
`
`Ariosa Diagnostics v. Verinata Health, Inc.,
`805 F.3d 1359 (Fed. Cir. 2015)..................................................................................................7
`
`AstraZeneca AB v. Apotex Corp.,
`782 F.3d 1324 (Fed. Cir. 2015)..............................................................................................4, 7
`
`AVM Techs. LLC v. Intel Corp.,
`No. 15-33-RGA, 2017 WL 2938191 (D. Del. Apr. 19, 2017) ...................................................1
`
`Bayer Healthcare LLC v. Baxalta Inc.,
`989 F.3d 964 (Fed. Cir. 2021)............................................................................................23, 24
`
`Biedermann Techs. GmbH & Co. KG v. K2M, Inc.,
`528 F. Supp. 3d 407 (E.D. Va. 2021) ......................................................................................23
`
`Buckman v. Bombardier Corp.,
`893 F. Supp. 547 (E.D.N.C. 1995)...........................................................................................15
`
`Burlington N.R. Co. v. Nebraska,
`802 F.2d 994 (8th Cir. 1986) ...................................................................................................16
`
`Cal. Beach Co., LLC. v. Exqline, Inc.,
`No. C 20-01994 WHA, 2020 WL 6544457 (N.D. Cal. Nov. 7, 2020) ....................................14
`
`Carlson v. Bos. Sci. Corp.,
`856 F.3d 320 (4th Cir. 2017) ...................................................................................................14
`
`Centripetal Networks, Inc. v. Cisco Sys., Inc.,
`492 F. Supp. 3d 495 (E.D. Va. 2020) ......................................................................................23
`
`CertusView Techs., LLC v. S&N Locating Servs., LLC,
`No. 2:13CV346, 2016 WL 6915303 (E.D. Va. Mar. 7, 2016) ................................................15
`
`Crawford v. Newport News Indus. Corp.,
`No. 14-cv-130, 2017 WL 3222547 (E.D.Va. July 28, 2017) ...................................................10
`
`Eko Brands, LLC v. Adrian Rivera Maynez Enters., Inc.,
`946 F.3d 1367 (Fed. Cir. 2020)................................................................................................24
`
`
`
`-ii-
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`
`TABLE OF AUTHORITIES
`(continued)
`
`
`
`Page
`
`
`Ericsson, Inc. v. D-Link Sys., Inc.,
`773 F.3d 1201 (Fed. Cir. 2014)..................................................................................................4
`
`Exmark Mfg. v. Briggs & Stratton Power Prods. Grp.,
`LLC, 879 F.3d 1332 (Fed. Cir. 2018) ........................................................................................5
`
`Hatfill v. N.Y. York Times Co.,
`242 F.R.D. 353 (E.D. Va. 2006) ..............................................................................................14
`
`Henderson v. Corelogic Nat’l Background Data, LLC,
`No. 3:12CV97, 2016 WL 354751 (E.D. Va. Jan. 27, 2016) ..............................................15, 16
`
`I/P Engine, Inc. v. AOL Inc.,
`No. 2:11CV512, 2012 WL 12068846 (E.D. Va. Oct. 12, 2012) ...............................................2
`
`KSR International Co. v. Teleflex Inc.,
`550 U.S. 398 (2007) ...............................................................................................................6, 7
`
`Lord & Taylor, LLC v. White Flint, L.P.,
`849 F.3d 567 (4th Cir. 2017), as amended (Mar. 7, 2017) ......................................................15
`
`Lucent Techs., Inc. v. Gateway, Inc.,
`580 F.3d 1301,1335 (Fed. Cir. 2009).....................................................................................4, 7
`
`MCI Telecomms. Corp. v. Wanzer,
`897 F.2d 703 (4th Cir. 1990) ...................................................................................................16
`
`Ocasio v. Ollson,
`596 F. Supp. 2d 890 (E.D. Pa. 2009) .......................................................................................30
`
`Phillip Morris Products S.A. v. I.T.C.,
`No. 2022-1227, Dkt. 28 (Fed. Cir. Jan. 25, 2022) ...................................................................21
`
`Randall Mfg. v. Rea,
`733 F.3d 1355 (Fed. Cir. 2013)..................................................................................................6
`
`Robocast, Inc. v. Microsoft Corp.,
`No. 10-1055-RGA, 2014 WL 202399 (D. Del. Jan. 16, 2014) ..................................................2
`
`
`
`-iii-
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`

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`
`TABLE OF AUTHORITIES
`(continued)
`
`
`
`Page
`
`
`S. States Rack & Fixture, Inc. v. Sherwin-Williams Co.,
`318 F.3d 592 (4th Cir. 2003) ...................................................................................................11
`
`Sprint Commc’ns Co. L.P. v. Charter Commc’ns, Inc.,
`No. 17-1734-RGA, 2021 WL 982730 (D. Del. Mar. 16, 2021) ..............................................25
`
`Steves & Sons, Inc. v. JELD-WEN, Inc.,
`No. 3:16CV545, 2018 WL 359479 (E.D. Va. Jan. 10, 2018) ..................................................16
`
`Summit Towers Condo. Ass’n, Inc. v. QBE Ins. Corp.,
`No. 11-60601-CIV-SEITZ-SIMONTON, 2012 WL 12838460 (S.D. Fla. May
`7, 2012) ....................................................................................................................................30
`
`TC Tech. LLC v. Sprint Corp.,
`No. 16-cv-153-RGA, 2019 WL 2515779 (D. Del. June 18, 2019)............................................2
`
`TecSec v. Adobe Inc.,
`No. 1:10-cv-115, 2018 WL 11388472 (E.D.Va. November 21, 2018) ...................................10
`
`Tyco Healthcare Grp. LP v. Applied Med. Res. Corp.,
`No. 9:09-CV-176, 2010 WL 11469880 (E.D. Tex. Feb. 26, 2010) .........................................25
`
`United States v. Chapman,
`209 F. App’x 253 (4th Cir. 2006) ......................................................................................15, 16
`
`United States v. Farrell,
`921 F.3d 116 (4th Cir. 2019) ...................................................................................................16
`
`United States v. Graham,
`796 F.3d 332 (4th Cir. 2015), on reh’g en banc, 824 F.3d 421 (2016) ...................................15
`
`United States v. Verges,
`No. 1:13CR222 (JCC), 2014 WL 559573 (E.D. Va. Feb. 12, 2014) .................................18, 20
`
`United States v. Williams,
`445 F.3d 724 (4th Cir. 2006) ...................................................................................................19
`
`WBIP, LLC v. Kohler Co.,
`829 F.3d 1317 (Fed. Cir. 2016)................................................................................................23
`
`
`
`-iv-
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`Case 1:20-cv-00393-LO-TCB Document 967 Filed 02/11/22 Page 6 of 38 PageID# 27207
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`TABLE OF AUTHORITIES
`(continued)
`
`
`
`Page
`
`
`Wonderland NurseryGoods Co. v. Thorley Indus.,
`No. 12-196, 2014 WL 241751 (W.D. Pa. Jan. 22, 2014) ........................................................18
`
`Younan v. Rolls-Royce Corp.,
`No. 09CV2136-WQH-BGS, 2013 WL 1899919 (S.D. Cal. May 7, 2013) .............................17
`
`STATUTES
`
`35 U.S.C. § 112 ............................................................................................................................3, 4
`
`35 U.S.C. § 287 ..............................................................................................................................28
`
`35 U.S.C. § 311 ................................................................................................................................4
`
`OTHER AUTHORITIES
`
`Fed. R. Civ. P. 26 .......................................................................................................................5, 10
`
`Fed. R. Civ. P. 34 ...........................................................................................................................13
`
`Fed. R. Civ. P. 37 .................................................................................................................5, 10, 11
`
`Fed. R. Evid. 403 .....................................................................................................................19, 25
`
`Fed. R. Evid. 611 .............................................................................................................................5
`
`Fed. R. Evid. 701 .....................................................................................................................16, 17
`
`
`
`-v-
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`I.
`
`MIL NO. 1: PRECLUDE RJR FROM RELYING ON NON-COMPARABLE
`AGREEMENTS TO SUGGEST THE AMOUNT OF A REASONABLE ROYALTY
`
`To be clear, despite PM/Altria’s citations to authorities addressing the admissibility of non-
`
`comparable “licenses” “to suggest a reasonable royalty” (Dkt. 901 at 1-2), PM/Altria’s Motion in
`
`Limine No. 1 does not discuss any specific purported non-comparable “license,” what portion
`
`PM/Altria wants excluded, or why. Without such identification, PM/Altria’s MIL 1 is premature,
`
`as Reynolds cannot discern what evidence from any given license agreement PM/Altria finds ob-
`
`jectionable and it is well-settled that “non-comparable” licenses may be relevant for purposes other
`
`than setting the reasonable royalty, such as “cross-examination purposes.” AVM Techs. LLC v.
`
`Intel Corp., No. 15-33-RGA, 2017 WL 2938191, at *3 (D. Del. Apr. 19, 2017) (deferring motion
`
`in limine to exclude non-comparable licenses). Thus, any PM/Altria objection to an unspecified
`
`provision of an unspecified agreement is best addressed at trial.
`
`The true focus of MIL 1 is not about a license at all—it is about PM/Altria’s desire to
`
`exclude
`
`acknowledged that the
`
`. However, both parties and their experts
`
` should be considered
`
`in determining the appropriate damages, making it indisputably relevant to the jury’s evaluation
`
`of the damages experts’ testimony. PMP’s interrogatory response states:
`
`at 10, 16, 24. PM/Altria’s damages expert Mr. Meyer claims
`
`
`
`
`
`
`
`.” Ex. 1
`
`
`
` Dkt. 892, Ex. 1 ¶ 184. Reynolds too explained in an in-
`
`terrogatory response that
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`--
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`1 Dkt. 901, Ex. 5 at 6. And Reynolds’s expert similarly considered that
`
` in rendering his opinions. Ex. 2 ¶¶ 166 & n.382, 252-253.
`
`Courts agree that the
`
` is an important factor for the jury
`
`
`
`to consider in determining the reasonable royalty. See, e.g., TC Tech. LLC v. Sprint Corp., No.
`
`16-cv-153-RGA, 2019 WL 2515779, at *9-10 (D. Del. June 18, 2019) (denying motion to exclude
`
`patent purchase price stating, “[m]ost importantly . . . the jury will know the purchase price of the
`
`’488 patent and be able to take that into account in reaching a reasonable royalty determination”);
`
`see also Robocast, Inc. v. Microsoft Corp., No. 10-1055-RGA, 2014 WL 202399, at *2 (D. Del.
`
`Jan. 16, 2014) (explaining that valuation of patent in sale “serves as a relevant data point [for the
`
`jury] in determining the value which the parties to the hypothetical negotiation would place on
`
`technologically similar patents”); I/P Engine, Inc. v. AOL Inc., No. 2:11CV512, 2012 WL
`
`12068846, at *1 (E.D. Va. Oct. 12, 2012) (deferring motion in limine seeking to exclude patent
`
`purchase price). PM/Altria does not cite any contrary authority and its cited caselaw regarding
`
`non-comparable licenses is inapplicable.
`
`-
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`Ironically, PM/Altria recognizes the relevance of the
`
` when the amount is higher. PM/Altria’s damages expert intends to rely on the
`
`. Dkt. 892, Ex. 1 ¶ 142 (showing that
`
`-
`
`
`
`
`
`
`
`
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`).
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`But, where PM/Altria paid less, a total of
`
`-
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`for a portfolio of patents that included the
`
`
`1 The interrogatory response mistakenly references the ’545 patent, which is a typographical er-
`ror and should refer to the ’265 patent—the only asserted patent
`.
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`
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`clude that less favorable amount. It would be unfairly prejudicial to Reynolds if it is not permitted
`
` (see Dkt. 892, Ex. 1 ¶ 176), PM/Altria seeks to ex-
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`to cross-examine Mr. Meyer about his consideration of the
`
`cision to rely on the
`
`. Thus, MIL 1 should be denied.
`
`-
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`, including his de-
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` but not the
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`
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`II. MIL NO. 2: PRECLUDE RJR FROM VIOLATING ITS STIPULATION RE-
`GARDING THE PRIOR ART
`
`PM/Altria’s Motion in Limine No. 2 purportedly seeks to preclude Reynolds from “violat-
`
`ing” its stipulations that it will “not pursue as to the challenged claims any ground raised or that
`
`could have been reasonably raised in the IPR[s].” Dkt. 901 at 3. But Reynolds repeatedly informed
`
`PM/Altria that it has no intention of doing so. To be clear: Reynolds adheres to its stipulations.
`
`Id., Exs. 6-7. PM/Altria’s real aim with MIL 2 is broader than what Reynolds’s stipulations re-
`
`quire: It wants a ruling that, because Reynolds will not argue the patents are invalid under Sections
`
`102 and 103 over the prior art, Reynolds cannot mention prior art for any purpose whatsoever.
`
`This would include prohibiting Reynolds from introducing evidence regarding prior art that is
`
`relevant to, for example, (1) its invalidity defenses under 35 U.S.C. § 112 and (2) its damages
`
`case—neither of which were raised or could have been raised before the PTAB. PM/Altria cannot
`
`invoke Reynolds’s stipulation to bar any mention of prior art for any purpose, and PM/Altria cites
`
`no case where a court excluded all mention of prior art based on a similar stipulation.
`
`PM/Altria entirely disregards Reynolds’s Section 112 defenses, incorrectly stating that,
`
`“[f]or the ’545 and ’556 Patents, the only invalidity grounds that RJR’s technical experts rely on
`
`in their reports are typical anticipation and obviousness grounds based on publicly available pa-
`
`tents and publications.” Dkt. 901 at 3 (emphasis in original). Not so. Reynolds’s expert Dr. Fuller
`
`opined that “claim 1 of the ’545 patent and the other claims that depend from it are invalid for
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`failing to comply with the written description requirement.” Ex. 3 ¶ 70. Dr. Fuller relies on prior
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`art to support his opinion that the ’545 patent lacks written description. Id. ¶¶ 57, 62, 67, 69.
`
`Challenging the ’545 patent’s validity under Section 112 is not a ground that Reynolds could have
`
`raised before the PTAB. See 35 U.S.C. § 311 (restricting IPR challenges to lack of novelty and
`
`obviousness). Accordingly, Reynolds’s stipulations do not cover Dr. Fuller’s testimony that the
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`’545 patent is invalid under Section 112.
`
`With respect to damages, PM/Altria contends that Reynolds’s stipulation bars it from pre-
`
`senting prior-art references in Reynolds’s “‘valuation’ of the asserted patents.” Dkt. 901 at 4.
`
`PM/Altria is wrong again. First, Reynolds stipulated only that it would “not pursue as to the
`
`challenged claims any ground raised or that could have been reasonably raised in the IPR” (Dkt.
`
`901, Exs. 6-7), not that Reynolds would decline to present or otherwise limit the evidence it would
`
`introduce in support of its damages case. Second, evidence regarding the prior art is relevant to
`
`the issue of damages under the Georgia-Pacific factors. See, e.g., Lucent Techs., Inc. v. Gateway,
`
`Inc., 580 F.3d 1301,1335 (Fed. Cir. 2009) (finding that the jury’s damage award was not supported
`
`by substantial evidence because “the infringing use of the [product] seems to have, at best, only a
`
`slight advantage over what is arguably the closest prior art”). Likewise, when “the claims recite
`
`both conventional elements and unconventional elements, the court must determine how to account
`
`for the relative value of the patentee’s invention in comparison to the value of the conventional
`
`elements recited in the claim.” AstraZeneca AB v. Apotex Corp., 782 F.3d 1324, 1338 (Fed. Cir.
`
`2015) (citing Ericsson, Inc. v. D-Link Sys., Inc., 773 F.3d 1201, 1233 (Fed. Cir. 2014)).
`
`PM/Altria’s expert Mr. McAlexander identifies a number of benefits that he alleges are
`
`attributable to the ’545 patent, rendering prior art in rebuttal to those opinions directly relevant.
`
`See Ex. 4 ¶¶ 65-82. For example, Mr. McAlexander states that “by using the technology claimed
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`in the ’545 Patent, an e-cigarette system is also able to produce a consistent quality of smoke,” and
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`“deliver modulated pulses of electrical energy to the heater in a way that delivers precise and
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`consistent amount of energy to the heater.” Id. ¶ 69. In rebutting Mr. McAlexander’s opinion,
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`Reynolds’s expert Dr. Blalock properly discusses the prior art. Ex. 5 ¶¶ 175-184. For example,
`
`Dr. Blalock states that the Fleischhauer reference already taught the “numerous benefits of using
`
`pulse width modulation in electronic cigarettes,” such as “provid[ing] puffs with consistent taste
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`and delivery to the user.” Id. ¶¶ 175-177. Discussion of the prior art thus is relevant to damages
`
`and to rebut Mr. McAlexander’s opinion regarding benefits allegedly attributable to the ’545 pa-
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`tent. See, e.g., Exmark Mfg. v. Briggs & Stratton Power Prods. Grp., LLC, 879 F.3d 1332, 1351
`
`(Fed. Cir. 2018) (explaining that prior art is relevant to rebut the argument that the claimed inven-
`
`tion “was a big advancement over the prior art”). Likewise, asking Mr. McAlexander about the
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`state of the prior art in response to opinions he may offer touting the ’545 patent invention, includ-
`
`ing his view of purported improvements over the prior art (see Ex. 4 ¶¶ 65-82), is fair use of cross-
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`examination. See Fed. R. Evid. 611(b) (permitting cross-examination on “the subject matter of the
`
`direct examination”).
`
`III. MIL NO. 3: NO ARGUMENT, EVIDENCE, OR TESTIMONY ABOUT PRIOR
`ART INVALIDITY NOT DISCLOSED IN EXPERT REPORTS
`
`PM/Altria’s vague three-sentence Motion in Limine No. 3 raises a non-issue and should be
`
`denied. Consistent with Federal Rules of Civil Procedure 26 and 37, Reynolds does not intend to
`
`introduce at trial opinions “not disclosed in its expert reports,” nor, presumably, will PM/Altria.
`
`Indeed, acknowledging the requirements of the Federal Rules, Reynolds earlier proposed that both
`
`sides stipulate to: “no offering of any opinions by an expert that were not previously disclosed in
`
`expert reports.” Ex. 6 at 2. Without explanation, PM/Altria would not agree. In any event, even
`
`absent agreement, if either side attempts to offer expert testimony or opinions at trial outside the
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`scope of their pre-trial expert disclosures, the opposing side will have the opportunity to object
`
`and seek the Court’s resolution of any disputed issue in the context of the trial.
`
`MIL 3 seeks to preclude “any prior art invalidity arguments not disclosed in [Reynolds’s]
`
`expert reports,” but PM/Altria fails to explain what it means by the term “prior art invalidity argu-
`
`ments.” Dkt. 901 at 5. PM/Altria refers to an earlier proposed stipulation that was overbroad and
`
`unnecessary (Dkt. 895-1 at 2-3), and thus Reynolds rightly rejected it. See Ex. 7. For the ’545
`
`and ’556 patents presently undergoing IPR proceedings, PM/Altria’s proposed stipulation sought
`
`to exclude “[a]ny reference” that Reynolds raised or reasonably could have raised in the IPR, and
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`for the ’911 and ’374 patents, PM/Altria’s proposed stipulation sought to preclude Reynolds from
`
`discussing “[a]ny” prior art reference “other than” certain specifically-listed patents and patent
`
`publications. See Dkt. 895-1 at 2-3. As such, PM/Altria’s proposed stipulation would have im-
`
`properly excluded prior art references identified and discussed in the reports of Reynolds’s experts
`
`that, for example, demonstrate the state of the art at the time of the alleged inventions. Those other
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`prior art references must necessarily be considered in assessing the obviousness of the claimed
`
`inventions under the U.S. Supreme Court’s decision in KSR International Co. v. Teleflex Inc., 550
`
`U.S. 398, 399 (2007) (in analyzing obviousness, “the scope and content of the prior art are [to be]
`
`determined” and “differences between the prior art and the claims at issue are [to be] ascertained”).
`
`As the Federal Circuit has explained, KSR requires consideration of prior art documents that are
`
`“perhaps the most reliable” form of evidence demonstrating what was already known to those
`
`having ordinary skill in the art. Randall Mfg. v. Rea, 733 F.3d 1355, 1362-63 (Fed. Cir. 2013) (“In
`
`recognizing the role of common knowledge and common sense, we have emphasized the im-
`
`portance of a factual foundation to support a party’s claim about what one of ordinary skill in the
`
`relevant art would have known. One form of evidence to provide such a foundation, perhaps the
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`most reliable because not litigation-generated, is documentary evidence consisting of prior art in
`
`the area.”) (citations omitted); see also Ariosa Diagnostics v. Verinata Health, Inc., 805 F.3d 1359,
`
`1365 (Fed. Cir. 2015) (prior art reference not identified “as one of the pieces of prior art defining
`
`a combination for obviousness” can nevertheless “legitimately serve to document the knowledge
`
`that skilled artisans would bring to bear in reading the prior art identified as producing obvious-
`
`ness”). To the extent MIL 3’s vague reference to “prior art invalidity arguments” seeks to preclude
`
`Reynolds from presenting prior art documents for purposes of showing, e.g., “common
`
`knowledge” and “what one of ordinary skill in the relevant art would have known,” MIL 3 should
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`be denied as contrary to a required aspect of the obviousness analysis under KSR and Federal
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`Circuit precedent. See Ariosa, 805 F.3d at 1365 (holding it is error to decline to consider prior art
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`documents presented as “evidence of the background understanding of skilled artisans”).
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`IV. MIL NO. 4: NO REFERENCE TO PRACTICING THE PRIOR ART AS AN AL-
`LEGED NON-INFRINGEMENT DEFENSE
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`Reynolds agrees it will not offer a practicing the prior art non-infringement defense.
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`PM/Altria’s Motion in Limine No. 4 is another attempt to prevent Reynolds from presenting its
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`damages case to the jury. Contrary to PM/Altria’s position, weighing the purported value of pa-
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`tented features over what was known in the prior art is relevant to the issue of damages under the
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`Georgia-Pacific factors. See, e.g., Lucent, 580 F.3d at 1335; AstraZeneca, 782 F.3d at 1338. MIL
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`4 should be denied.
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`Despite the broad scope of the arguments in MIL 4, PM/Altria identifies only a single
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`paragraph of Mr. Kodama’s expert report as allegedly requiring exclusion. Dkt. 901 at 6 (citing
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`Ex. 35 ¶ 55). In that paragraph, Mr. Kodama states that the “
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`Ex. 8 ¶ 55. Mr. Kodama states that
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` Id. These statements support Mr. Kodama’s rebuttal to the opinion of PM/Altria’s
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`expert Dr. Abraham, who states that an “additional benefit of the ’556 Patent technology” is an
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`improvement over “prior art systems where the liquid aerosol-generating substrate is ‘held in the
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`capillary material and delivered to the wick.’” Ex. 9 ¶ 376. Dr. Abraham alleges that the technol-
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`ogy of the ’556 patent provided cost savings due to (1) a reduction of material used; and (2) a
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`reduction of wasted e-liquid. Id. ¶¶ 371-380. As discussed below, Mr. Kodama’s discussion of
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`prior art in response to each of these assertions is relevant and there is no basis for exclusion.
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`Reduction of Materials Used: Dr. Abraham states the technology of the ’556 patent allows
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`for a reduction of cost “because e-liquid is transported from the tank to the heater through two
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`capillary materials, which eliminates the need to use (and the cost associated with using) a piece
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`of gauze (or similar material) sufficiently large to hold all of the liquid.” Ex. 9 ¶ 372. In response,
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`Mr. Kodama opines that “Dr. Abraham fails to address other known prior art approaches.” Ex. 8
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`¶ 107. And, there is “a different kind of prior art configuration,” where “a reservoir of aerosol-
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`forming liquid is provided in a tank,” that “is not filled with a capillary medium.” Id. ¶¶ 110-111.
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` Id. ¶ 55.
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`Reduction of Wasted E-Liquid: Dr. Abraham opines that in the prior art “some residual
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`liquid” “remains in the capillary material after usage, leading to wastage.” Ex. 9 ¶ 376. Mr. Ko-
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`dama disagreed, stating Dr. Abraham ignores prior art utilizing a liquid tank rather than a liquid-
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`soaked capillary material. Ex. 8 ¶¶ 121-124.
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`Additionally, the prior art Mr. Kodama discussed in ¶ 55 is relevant for cross-examination
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`because Dr. Abraham is expected to discuss the alleged benefits of the ’556 patent over the prior
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`art. Permitting Dr. Abraham to offer his opinions while prohibiting Reynolds from using the prior
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`art to cross examine him would unfairly prejudice Reynolds.
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`V. MIL NO. 5: PRECLUDE RJR’S EXPERTS FROM RELYING ON HEARSAY
`CONVERSATIONS WITH UNDISCLOSED THIRD-PARTIES AND EVIDENCE
`PRODUCED IN VIOLATION OF THE COURT’S DISCOVERY ORDER
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`PM/Altria seeks to preclude Reynold’s technical expert Dr. Suhling from relying on:
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`(i) “conversations” with Dr. Xiao and Dr. Liu, two engineers from Smoore (the manufacturer of
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`the Alto) “about technical aspects” of the Alto S-shaped resistive heater; and (ii) a photo of the
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`Alto resistive heater.2 Dkt. 901 at 7. PM/Altria did not move to preclude Dr. Suhling’s reliance
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`on a publicly available video made by Smoore that shows thermal images of the S-shaped resistor
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`in the Alto as it is heated. PM/Altria also does not seek to preclude Reynolds from authenticating
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`the video or the photo as depicting the resistor used in the Alto based on statements from the
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`Smoore engineers.3 Rather, PM/Altria specifically complains about technical “conversations” re-
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`garding the video and photo that “go well beyond merely authenticating documents.” Dkt. 901 at
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`7, n.3. But Dr. Suhling’s conversation with the engineers was directed to confirming his observa-
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`tions of the video and photo, and authenticating them. Thus, as an initial matter, Reynolds should
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`be permitted to rely on statements from Drs. Xiao and Liu authenticating the video and photo no
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`2 Dr. Xiao is the Director of Research and Development for Smoore. Dr. Liu is the Senior Engi-
`neer at Smoore responsible for testing the Alto heater. See Dkt. 901, Ex. 14 ¶ 13. Dr. Suhling
`had one conversation with these engineers on March 24, 2021. Ex. 10 at 284:12-285:3; 287:15-
`288:6.
`3 Dkt. 901, Ex. 14 ¶ 95, n.1 (“Dr. Xiao and Mr. Liu confirmed that the testing shown in the video
`is of the resistor in the Alto product”) and ¶ 93 (“Mr. Liu also provided the following photograph
`that was taken during a March 28, 2018 testing session of the heater in the Alto product.”)
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`matter the Court’s ruling on MIL 5.4 MIL 5 should, nevertheless, be denied. There is no basis
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`under Rules 26 or 37 to exclude the photo or the discussion of the photo and video with Dr.
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`Suhling. Reynolds’s disclosure was timely, which should end the inquiry. But neither is there any
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`unfairness or harm to PM/Altria from allowing the evidence at trial.5
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`Reynolds’s March 24, 2021 disclosure was timely under Rule 26: Reynolds disclosed the
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`Smoore photo and conversation on March 24, 2021—three weeks before the April 19, 2021 close
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`of fact discovery.6 See Dkts. 534, 535. In his March 24, 2021 report, Dr. Suhling responded to a
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`new photo and new assertion in the February 24, 2021 Opening Infringement Report of PM/Al-
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`tria’s expert Dr. Walbrink. The video aided Dr. Suhling’s response. In order to respond, Dr.
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`Suhling sought to confirm his observations about the video with Smoore, who then volunteered
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`the photo.7 Ex. 10 at 284:6-285:3; see Dkt. 901, Ex. 14 ¶¶ 87, 89-94. Reynolds and Dr. Suhling
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`produced the photo to PM/Altria within one day of receiving it from Smoore. Ex. 10 at 284:6-
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`285:3.
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`Contrary to PM/Altria’s argument (Dkt. 901 at 8), Reynolds did not violate the deadline in
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`the Court’s November 30, 2020 Order granting PM/Altria’s motion to compel technical documents
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`from suppliers. The photo did not become relevant until months later, when Dr. Suhling sought to
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`4 The video bears Smoore’s name and is titled “The Secrets of “FEELM” technology.” Eric Hunt,
`a Reynolds corporate witness on Alto technical topics, testified that the heater used in the Alto
`product is branded as “FEELM” technology. Dkt. 901, Ex. 14 ¶ 92.
`5 PM/Altria’s cited cases are inapposite, as the discovery at issue in Crawford v. Newport News
`Indus. Corp. and TecSec v. Adobe Inc. was not produced during the discovery period, as i