Case 1:20-cv-00393-LO-TCB Document 967-2 Filed 02/11/22 Page 1 of 8 PageID# 27241
`Case 1:20-cv-00393-LO-TCB Document 967-2 Filed 02/11/22 Page 1 of 8 PagelD# 27241
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`EXHIBIT 2
`EXHIBIT 2
`(PUBLIC)
`(PUBLIC)
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`Case 1:20-cv-00393-LO-TCB Document 967-2 Filed 02/11/22 Page 2 of 8 PageID# 27242
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`
`INTENSITY, LLC
`12730 High Bluff Drive, Suite 300
`San Diego, California 92130
`telephone 858.876.9101
`
`www.intensity.com
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`I N T E N SI T Y
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`UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF VIRGINIA
`ALEXANDRIA DIVISION
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`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.
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`
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`
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`Case No. 1:20-cv-00393
`
`REPORT OF
`RYAN SULLIVAN, Ph.D.
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`____________________________________
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`Ryan Sullivan, Ph.D.
`March 24, 2021
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`CONFIDENTIAL BUSINESS INFORMATION, SUBJECT TO PROTECTIVE ORDER
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`

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`Case 1:20-cv-00393-LO-TCB Document 967-2 Filed 02/11/22 Page 3 of 8 PageID# 27243
`CONFIDENTIAL BUSINESS INFORMATION, SUBJECT TO PROTECTIVE ORDER
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`(164)
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`(165)
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`8.3.4. Relative value
`(166) The Meyer Report claims that the ’545, ’911, and ’265 patents are equally or more valuable
`than the Fontem patent families they are compared to,381 yet does not acknowledge that the
`Fontem patents are widely licensed whereas the asserted patents are not.382 Indeed, each of
`the VUSE products mark at least 38 of the Fontem patents (see Attachment D-1), and Altria’s
`Nu Mark products collectively marked at least 14 of the Fontem patents.383
`
`(167) Furthermore, the patents contained within the Fontem agreement are foundational patents
`relating to e-cigarette technology. The patents at issue were acquired by Fontem when they
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`381
`382
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`383
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`Meyer Report, 2/24/2021, ¶¶ 205–212.
`ACS and PM USA identify only four agreements that are comparable to the ’545 and ’374 patents. Notably, two of the
`agreements are the Fontem-RJRV (RJREDVA_001521385–1559) and
` which do not include the asserted patents. See Sections 12.2.1 and 12.2.2. The other two agreements
` and
`
`
`are the
`agreements. See Sections 12.3.4 and 12.4.1. See also:
`Altria Client Services LLC and Philip Morris USA Inc.’s Second Supplemental Objections and Responses to Plaintiffs’ Third
`Set of Interrogatories (No. 18), 2/23/2021, at Supplemental Response to Interrogatory No. 18 (Nov. 2, 2020), Second
`Supplemental Response to Interrogatory No. 18 (Feb. 23, 2021).
`Similarly, PMP identifies only three agreements that are comparable to the ’265, ’911, and ’556 agreements, two of which
`are also the Fontem-RJRV and
`
` The third agreement is the
`See Section 12.4.2. See also:
`Philip Morris Products S.A.’s Second Supplemental Objections and Responses to Plaintiffs’ Third Set of Interrogatories (No.
`18), 2/23/2021, at Supplemental Response to Interrogatory No. 18 (Nov. 2, 2020), Second Supplemental Response to
`Interrogatory No. 18 (Feb 23, 2021).
`The Nu Mark products marked U.S. Patent Nos. 8,365,742; 8,375,957; 8,393,331; 8,490,628; 8,689,805; 8,863,752; 8,893,726;
`8,899,239; 9,320,300; 9,326,548; 9,326,549; 9,326,551; 9,364,027; and 9,370,205, each of which is identified as a licensed
`patent in the Fontem-Nu Mark agreement. See:
`displayed
`(as
`Internet Archive
`via
`Altria Website, Nu Mark
`Patent
`Information,
`http://web.archive.org/web/20181002235800/http://www.altria.com/About-Altria/our-companies/nu-
`mark/Documents/NuMark-Patents.pdf (accessed 3/18/2021).
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`10/2/2018),
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`________________________________________________________________________________________________________________________________________
`Report of Ryan Sullivan, Ph.D.
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`Page 83
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`Case 1:20-cv-00393-LO-TCB Document 967-2 Filed 02/11/22 Page 4 of 8 PageID# 27244
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`bought Dragonite, an e-cigarette company founded by Hon Lik, in 2013.384 Mr. Lik’s patents
`cover broad e-cigarette concepts; examples of the titles of patents include: “aerosol electronic
`cigarette”, “electronic atomization cigarette”, and “electronic cigarette”.385
`
`(168) The Meyer Report cites to Mr. McAlexander, Mr. Walbrink, and Dr. Abrahams to support its
`assertion that the ’545, ’265, and ’911 patents are of equal or greater value than the Fontem
`Spray Atomizer, Air Channel, and Shell Design families respectively.386 However, I understand
`the technology claimed in the Spray Atomizer family of patents is at least as valuable as the
`technology claimed by the ’545 patent.387 I also understand that the technology claimed in
`the Air Channel family is at least as valuable, if not more valuable, than the technology
`claimed by the ’265 patent.388 I further understand that Dr. Abraham’s conclusion that the
`’911 patent is more valuable than the Shell Design family does not account for the value of
`the absence of a detailed dimensional requirement for the interior structure of an e-cigarette
`device from the claims of the Shell Design family patents.389
`
`(169)
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`In addition, the Meyer Report “assign[s] no economic value to the technology claimed in the
`[.]”390 The Meyer
`patents in
`Report claims that Fontem neither asserted nor litigated any patent from these families.391
`The Meyer Report also claims that Fontem abandoned several patent applications in these
`families leaving several families with no issued patents, and that because these families never
`included any issued patents, Fontem never had any enforceable intellectual property rights
`with respect to these patent families.392 The Meyer Reports conclusion is flawed for several
`reasons. First, just because the patents were not litigated does not mean that they have no
`value. Second, even if certain families did not include issued patents, this does not mean that
`there was no value at the time the Fontem-RJRV agreement was entered into. Third, it is
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`Financial Times, “Imperial fires up e-cigarette legal battle,” 3/10/2014 https://www.ft.com/content/0d5e20ec-a877-11e3-
`a946-00144feab7de.
`The Economist, “A Case of the Vapers; E-cigarette Patent Wars,” 3/17/2014,
`https://www.economist.com/schumpeter/2014/03/17/a-case-of-the-vapers.
`Meyer Report, 2/24/2021, ¶¶ 205, 208, 212.
`Interview with Travis Blalock. See Attachment A-5.
`Interview with Jeffrey C. Suhling. See Attachment A-6.
`Interview with Kelly R. Kodama. See Attachment A-7.
`Meyer Report, 2/24/2021, ¶ 228.
`Meyer Report, 2/24/2021, ¶ 228.
`Meyer Report, 2/24/2021, ¶ 228.
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`384
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`386
`387
`388
`389
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`391
`392
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`________________________________________________________________________________________________________________________________________
`Report of Ryan Sullivan, Ph.D.
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`Page 84
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`Case 1:20-cv-00393-LO-TCB Document 967-2 Filed 02/11/22 Page 5 of 8 PageID# 27245
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`12.4.2.
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`(252)
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`________________________________________________________________________________________________________________________________________
`Report of Ryan Sullivan, Ph.D.
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`Page 118
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`Case 1:20-cv-00393-LO-TCB Document 967-2 Filed 02/11/22 Page 6 of 8 PageID# 27246
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`(253)
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`12.4.3.
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`(254)
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`(255)
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`________________________________________________________________________________________________________________________________________
`Report of Ryan Sullivan, Ph.D.
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`Page 119
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`Case 1:20-cv-00393-LO-TCB Document 967-2 Filed 02/11/22 Page 7 of 8 PageID# 27247
`
`Attachment D-1
`VUSE Patent List Detail for Marked Fontem Patents
`
`VUSE Patent List
`
`U.S. 7,832,410
`U.S. 8,156,944
`U.S. 8,365,742
`U.S. 8,375,957
`U.S. 8,393,331
`U.S. 8,490,628
`U.S. 8,511,318
`U.S. 8,689,805
`U.S. 8,863,752
`U.S. 8,893,726
`U.S. 8,899,239
`U.S. 9,320,300
`U.S. 9,326,548
`U.S. 9,326,549
`U.S. 9,326,550
`U.S. 9,326,551
`U.S. 9,339,062
`U.S. 9,364,027
`U.S. 9,370,205
`U.S. 9,456,632
`U.S. 9,713,346
`U.S. 9,717,278
`U.S. 9,717,279
`U.S. 9,808,033
`
`Issue Date
`[A]
`11/16/2010
`4/17/2012
`2/5/2013
`2/19/2013
`3/12/2013
`7/23/2013
`8/20/2013
`4/8/2014
`10/21/2014
`11/25/2014
`12/2/2014
`4/26/2016
`5/3/2016
`5/3/2016
`5/3/2016
`5/3/2016
`5/17/2016
`6/14/2016
`6/21/2016
`10/4/2016
`7/25/2017
`8/1/2017
`8/1/2017
`11/7/2017
`
`Expiration
`Date
`[B]
`11/8/2026
`6/13/2028
`5/15/2027
`5/15/2027
`3/18/2025
`3/18/2025
`3/8/2024
`1/28/2030
`5/15/2027
`3/18/2025
`3/8/2024
`1/28/2030
`5/15/2027
`3/18/2025
`5/15/2027
`5/15/2027
`5/15/2027
`3/8/2024
`6/11/2027
`1/24/2028
`3/8/2024
`3/18/2025
`3/8/2024
`5/15/2027
`
`Meyer Patent Family
`[C]
`Reed Switch
`Shell Design
`Shell Design
`Spray Atomizer
`Reed Switch
`Reed Switch
`Body Sensitive Sensor & Atomizer
`Air Channel
`Spray Atomizer
`Reed Switch
`Body Sensitive Sensor & Atomizer
`Air Channel
`Shell Design
`Reed Switch
`Spray Atomizer
`Spray Atomizer
`Spray Atomizer
`Body Sensitive Sensor & Atomizer
`Spray Atomizer
`Shell Design
`Body Sensitive Sensor & Atomizer
`Reed Switch
`Body Sensitive Sensor & Atomizer
`Spray Atomizer
`
`Title
`[D]
`Electronic Atomization Cigarette
`Aerosol Electronic Cigarette
`Aerosol Electronic Cigarette
`Electronic Cigarette
`Electronic Atomization Cigarette
`Electronic Atomization Cigarette
`Electronic Cigarette
`Electronic Cigarette
`Electronic Cigarette
`Electronic Cigarette
`Electronic Cigarette
`Electronic Cigarette
`Electronic Cigarette
`Electronic Cigarette
`Electronic Cigarette
`Electronic Cigarette
`Electronic Cigarette
`Electronic Cigarette
`Electronic Cigarette
`Electronic Cigarette
`Electronic Cigarette
`Electronic Cigarette
`Electronic Cigarette
`Electronic Cigarette
`
`VUSE Solo
`[E]
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`
`VUSE Vibe
`[F]
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`
`VUSE Ciro
`[G]
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`
`CONFIDENTIAL BUSINESS INFORMATION, SUBJECT TO PROTECTIVE ORDER
`
`VUSE Alto
`[H]
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`
`No. of Products
`Using Patent
`[I]
`4
`
`
`4
`
`4
`
`4
`
`4
`
`4
`
`4
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`4
`
`4
`
`4
`
`4
`
`4
`
`4
`
`4
`
`4
`
`4
`
`4
`
`4
`
`4
`
`4
`
`4
`
`4
`
`4
`
`4
`
`Attachment D-1
`Page 1 of 2
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`

`

`Case 1:20-cv-00393-LO-TCB Document 967-2 Filed 02/11/22 Page 8 of 8 PageID# 27248
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`VUSE Patent List
`
`U.S. 9,808,034
`U.S. 10,045,564
`U.S. 10,085,489
`U.S. 10,123,569
`U.S. 10,143,238
`U.S. 10,178,881
`U.S. 10,238,144
`U.S. 10,327,478
`U.S. 10,342,264
`U.S. 10,349,682
`U.S. 10,383,366
`U.S. 10,477,898
`U.S. 10,588,353
`U.S. RE47,573
`
`Issue Date
`[A]
`11/7/2017
`8/14/2018
`10/2/2018
`11/13/2018
`12/4/2018
`1/15/2019
`3/26/2019
`6/25/2019
`7/9/2019
`7/16/2019
`8/20/2019
`11/19/2019
`3/17/2020
`8/20/2019
`
`Expiration
`Date
`[B]
`5/15/2027
`3/18/2025
`3/18/2025
`3/8/2024
`5/15/2027
`5/15/2027
`9/19/2027
`3/8/2024
`3/8/2024
`3/18/2025
`1/28/2030
`1/28/2030
`1/28/2030
`2/27/2026
`
`Meyer Patent Family
`[C]
`Shell Design
`Reed Switch
`Reed Switch
`Body Sensitive Sensor & Atomizer
`Spray Atomizer
`Spray Atomizer
`Reed Switch
`Body Sensitive Sensor & Atomizer
`Body Sensitive Sensor & Atomizer
`Reed Switch
`Air Channel
`Air Channel
`Air Channel
`Body Sensitive Sensor & Atomizer
`
`Title
`[D]
`Electronic Cigarette
`Electronic Cigarette
`Electronic Cigarette
`Electronic Cigarette
`Electronic Cigarette
`Electronic Cigarette
`Electronic Cigarette
`Electronic Cigarette
`Electronic Cigarette
`Electronic Cigarette
`Electronic Cigarette
`Electronic Cigarette
`Electronic Cigarette
`Electronic Cigarette
`
`VUSE Solo
`[E]
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`
`VUSE Vibe
`[F]
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`
`VUSE Ciro
`[G]
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`
`VUSE Alto
`[H]
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`X
`
`No. of Products
`Using Patent
`[I]
`4
`
`
`4
`
`4
`
`4
`
`4
`
`4
`
`4
`
`4
`
`4
`
`4
`
`4
`
`4
`
`4
`
`4
`
`Notes and sources:
`[A],[B],[D] provided by counsel.
`[C] see Meyer Report, 2/24/2021, at Attachment 9.
`[E] VUSE, Patent List, accessed 10/3/2020, https://vusevapor.com/patents.
`[F] VUSE, Patent List, accessed 10/3/2020, https://vusevapor.com/patents.
`[G] VUSE, Patent List, accessed 10/3/2020, https://vusevapor.com/patents.
`[H] VUSE, Patent List, accessed 10/3/2020, https://vusevapor.com/patents.
`[I] The count of 'X' in [E] through [H].
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`CONFIDENTIAL BUSINESS INFORMATION, SUBJECT TO PROTECTIVE ORDER
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`Attachment D-1
`Page 2 of 2
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