`WASHINGTON, DC
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`Before The Honorable Clark S. Cheney
`Administrative Law Judge
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`In the Matter of
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`Investigation No. 337-TA-1199
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`Public Version of
`Motion Number 1199-002
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`COMPLAINANTS’ MOTION FOR LEAVE TO AMEND
`THE COMPLAINT AND NOTICE OF INVESTIGATION
`TO ADD CLAIM 3 OF THE ’915 PATENT
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`Pursuant to 19 C.F.R. §§ 210.14(b)(1) and 210.15, Complainants move to amend the
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`CERTAIN TOBACCO HEATING
`ARTICLES AND COMPONENTS
`THEREOF
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`Complaint and Notice of Investigation to assert infringement of claim 3 of U.S. Patent No.
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`9,930,915 (“the ’915 patent”). As set forth in detail in the attached Memorandum of Points and
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`Authorities, good cause exists pursuant to 19 C.F.R. § 210.14(b)(1) to make this amendment.
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`GROUND RULE 5.1 CERTIFICATION
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` Pursuant to Ground Rule 5.1, counsel for Complainants certifies that it provided notice
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`of this motion to Respondents and Commission Investigative Staff (“Staff”) at least two business
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`days prior to filing this motion. The Parties and Staff met and conferred on June 7, 2020
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`regarding the substance of this motion, as well as in email correspondence thereafter, but were
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`unable to reach a resolution. Complainants understand that Respondents and Staff will state their
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`positions after reviewing the papers filed.
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`Accordingly, Complainants respectfully request that the Administrative Law Judge issue
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`an Initial Determination granting this Motion.
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`PUBLIC VERSION
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` Dated: July 13, 2020
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`Respectfully submitted,
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`/s/ David M. Maiorana
`David M. Maiorana
`Ryan B. McCrum
`Kenneth S. Luchesi
`JONES DAY
`901 Lakeside Avenue
`Cleveland, OH 44114
`Tel: (216) 586-3939
`Fax: (216) 579-0212
`Email: dmaiorana@jonesday.com
`Email: rbmccrum@jonesday.com
`Email: kluchesi@jonesday.com
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`Stephanie E. Parker
`JONES DAY
`1420 Peachtree Street, N.E.
`Suite 800
`Atlanta, GA 30309
`Tel: (404) 521-3939
`Fax: (404) 581-8330
`Email: separker@jonesday.com
`
`Anthony M. Insogna
`JONES DAY
`4655 Executive Drive
`Suite 1500
`San Diego, CA 92121
`Tel: (858) 314-1200
`Fax: (844) 345-3178
`Email: aminsogna@jonesday.com
`
`John J. Normile
`JONES DAY
`250 Vesey Street
`New York, NY 10281
`Tel: (212) 326-3939
`Fax: (212) 755-7306
`Email: jjnormile@jonesday.com
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`Counsel for Complainants
`RAI Strategic Holdings, Inc.,
`R.J. Reynolds Vapor Company, and
`R.J. Reynolds Tobacco Company
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`PUBLIC VERSION
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`UNITED STATES INTERNATIONAL TRADE COMMISSION
`WASHINGTON, DC
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`Before The Honorable Clark S. Cheney
`Administrative Law Judge
`
`
`In the Matter of
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`
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`Investigation No. 337-TA-1199
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`CERTAIN TOBACCO HEATING
`ARTICLES AND COMPONENTS
`THEREOF
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`MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
`MOTION FOR LEAVE TO AMEND THE COMPLAINT AND NOTICE OF
`INVESTIGATION TO ADD CLAIM 3 OF THE ’915 PATENT
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`Pursuant to 19 C.F.R. §§ 210.14(b)(1) and 210.15, Complainants hereby submit this
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`memorandum of points and authorities in support of their motion to amend the Complaint and
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`Notice Investigation to assert claim 3 of U.S. Patent No. 9,930,915 (“the ’915 patent”).
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`I.
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`INTRODUCTION
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`Good cause exists for allowing Complainants to assert infringement of dependent claim 3
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`of the ’915 patent in this Investigation. That claim is already at issue in this Investigation as
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`Complainants rely on it for purposes of establishing a domestic industry, and Respondents have
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`served invalidity contentions challenging the validity of claim 3. Furthermore, Complainants
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`already assert infringement of claims 1, 2, and 5 of the ’915 patent against Respondents, and
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`claim 3 would add only a single additional limitation. Moreover, each product Complainants
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`seek to accuse of infringing claim 3 is already accused of infringing claims 1, 2, and 5.
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`Accordingly, adding claim 3 would not require any modification to the scope of discovery, and it
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`is in the public interest to include all of these claims in a single proceeding.
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`In addition, Complainants have not delayed in seeking leave to assert claim 3. The
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`information giving rise to the assertion of claim 3 could not reasonably have been obtained
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`PUBLIC VERSION
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`before filing suit. In particular, Complainants conducted a reasonable pre-suit investigation of
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`the IQOS® system with respect to claim 1, from which claim 3 depends. That investigation
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`included purchases, tear downs, and analyses of the IQOS® system based upon information and
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`materials in the public domain. The necessary information to confirm infringement of claim 3,
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`however, became available only through the course of discovery, in the form of confidential
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`documents produced by Respondents. Respondents did not provide those documents until June
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`12, 2020, as part of a production that contained nearly two million pages. Complainants began
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`their review of those documents immediately, and have filed this motion as quickly as
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`practicable.
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`Meanwhile, particularly in light of claim 3’s close relationship to the claims already
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`asserted, the requested amendment does not prejudice Respondents. In fact, Complainants have
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`included claim 3 in their initial infringement contentions, and Respondents have already
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`challenged the validity of claim 3 in their initial invalidity contentions, as well in a separate inter
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`partes review (IPR) petition, further making clear that permitting Complainants to assert this
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`claim does not prejudice Respondents in any respect and will not present issues requiring any
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`procedural schedule changes.
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`Accordingly, for all of these reasons, leave to amend the Complaint and Notice of
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`Institution of Investigation to permit assertion of claim 3 of the ’915 patent should be granted.
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`II.
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`BACKGROUND
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`The Complaint in this Investigation was filed on April 9, 2020. As to the ’915 patent, the
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`Complaint asserts infringement of claims 1, 2, and 5, and it included claim 3 in the domestic
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`industry analysis. See Complaint ¶¶ 2, 120 & Ex. 44. The Commission issued the Notice of
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`Investigation on May 11, 2020.
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`On June 12, 2020, as part of the discovery in this Investigation, Respondents produced
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`nearly two million pages of documents. Those documents included information—not publicly
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`available—demonstrating Respondents’
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`infringement of claim 3 of
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`the ’915 patent.
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`Accordingly, on July 2, 2020, in light of their review of those documents, Complainants
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`informed Respondents of their intent to assert infringement of claim 3 in this Investigation.
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`Consistent with that intent, Complainants included claim 3 with the initial infringement
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`contentions they served that same day. Respondents’ initial non-infringement contentions are
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`not due until July 23, 2020, and the parties do not exchange claim terms for construction until
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`July 27, 2020.
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`Meanwhile, on June 12, 2020—the same day they produced documents revealing their
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`infringement of claim 3—Respondents filed an IPR petition challenging the validity of the ’915
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`patent, including claim 3. See Philip Morris Products, S.A. v. RAI Strategic Holdings, Inc., No.
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`IPR2020-01094 (petition filed by Respondent Philip Morris Products, S.A. on June 12, 2020, and
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`identifying itself and additional Respondents Philip Morris International, Inc., Altria Client
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`Services LLC, and Philip Morris USA as real parties-in-interest, and further noting that the final
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`Respondent Altria Group, Inc. has agreed to estoppel arising from the IPR). In their petition,
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`Respondents raise various arguments and asserted alleged prior art references challenging the
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`validity of ’915 claim 3. And on July 2, 2020, Respondents served their initial invalidity
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`contentions in this Investigation, which included contentions directed at claim 3 of the ’915
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`patent.
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`On July 7, 2020, Complainants, Respondents, and Commission Investigative Staff
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`(“Staff”) conferred regarding Complainants’ intent to seek leave to assert claim 3 in this
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`Investigation. After further email correspondence, the Parties have been unable to reach a
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`resolution. Complainants understand that Respondents and Staff will state their positions after
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`reviewing the papers filed.
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`III. LEGAL STANDARD
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`Commission Rule 210.14(b)(1) provides that, “[a]fter an investigation has been instituted,
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`the complaint or notice of investigation may be amended only by leave of the Commission for
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`good cause shown and upon such conditions as are necessary to avoid prejudicing the public
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`interest and the rights of the parties to the investigation.” 19 C.F.R. § 210.14(b)(1). “Generally,
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`good cause exists for amending a complaint after institution when new information is obtained
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`during discovery that was not known to a complainant prior to institution.” Certain Laser Bar
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`Code Scanners and Scan Engines, Components Thereof and Products Containing Same, Inv. No.
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`337-TA-551, Order No. 9 at 3 (Mar. 22, 2006); see also, e.g., Certain NOR and NAND Flash
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`Memory Devices and Products Containing Same, Inv. No. 337-TA-560, Order No. 4, 2006 WL
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`3775915, at *2 & n.4 (Apr. 25, 2006) (same). Although not the circumstances present here,
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`ALJs have granted leave to amend even where “some question remains as to whether [a
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`Complainant] could have identified [infringement of additional claims] in its original
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`Complaint.” Certain Semiconductor Chips With DRAM Circuitry, and Modules and Products
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`Containing Same, Inv. No. 337-TA-819, Order No. 7 at 2 (May 10, 2012); see also Certain
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`Reduced Ignition Proclivity Cigarette Paper Wrappers and Products Containing Same, Inv. No.
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`337-TA-756, Order No. 5 at 3 (Mar. 22, 2011) (granting leave to amend even though there was
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`some question as to whether that Complainant could have named at least some of the proposed
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`Respondents in its original Complaint).
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`Moreover, requests to amend are routinely granted where the proposed additional claim
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`or claims “only implicate a few additional limitations and are directed to the same accused
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`products that were identified in the complaint. . . In these circumstances, the prejudice to
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`[Respondent] is minimal, and the public interest is served by the inclusion of all relevant claims
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`in the investigation.” Certain LED Lighting Devices, LED Power Supplies, & Components
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`Thereof (“LED Lighting Devices”), Inv. No. 337-TA-1081, Order No. 29 at 3 (Feb. 26, 2018);
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`Certain Semiconductor Chips with DRAM Circuitry, and Modules and Products Containing
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`Same, Inv. No. 337-TA-819, Order No. 7 at 2 (May 10, 2012) (“While some question remains as
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`to whether [Complainant] could have identified these dependent claims in its original Complaint,
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`the Administrative Law Judge nevertheless finds that the public interest will be served by the
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`inclusion of all relevant claims in a single investigation and for that reason good cause exists for
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`the proposed amendments.”).
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`IV. ARGUMENT
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`Good cause and the lack of prejudice to Respondents warrant allowing Complainants to
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`assert infringement of claim 3 of the ’915 patent.
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`A.
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`Good Cause Exists to Add Claim 3 of the ’915 Patent.
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`Good cause supports this motion, for at least five reasons.
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`First, the motion seeks to allow Complainants to assert only a single dependent claim
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`from a currently asserted patent, and that claim is closely tied to the current scope of this
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`Investigation. Specifically, claim 3 of the ’915 patent depends from claim 1—one of three
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`claims of the ’915 patent already asserted in this Investigation. Claim 1 is directed to a reusable
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`control unit for a smoking article comprising: (a) a receiving end for receiving an engaging end
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`of the disposable smoking article and having an electrical energy source; and (b) a control unit
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`section that houses a power source, a switching component, and a flow regulating component.
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`Claim 3 adds only a single limitation. Claim 3 recites in full: “The reusable control unit of
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`claim 1, wherein the electrical energy source includes a capacitor.” Because claim 1 is already
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`asserted against Respondents, allowing assertion of claim 3 would not add undue technical
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`complexity to the case. Moreover, claim 3 is already at issue in the case for purposes of
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`domestic industry. See Complaint ¶ 120 & Ex. 44. Accordingly, it is efficient and in the public
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`interest to allow assertion of this single patent claim, with its single additional limitation, for
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`purposes of Complainants’ infringement claims.
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`Second, the product that infringes claim 3 is the IQOS® system that is already accused in
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`this Investigation of infringing ’915 claim 1 as well as other dependent claims (claims 2 and 5).
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`Thus, the amendment does not expand the scope of discovery, the infringing products, or the
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`accused products in the Notice of Institution of Investigation. See Not. Of Inv. ¶ 2 (identifying
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`“electric tobacco heating device systems and the associated tobacco sticks sold for use with the
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`device systems” as a category of accused product).
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`Third, Complainants did not have sufficient pre-suit information to assert claim 3 in the
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`original Complaint, despite their reasonable pre-suit investigations. Prior to filing suit,
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`Complainants performed investigations that did not confirm infringement of claim 3 of the ’915
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`patent. Therefore, in an abundance of caution, Complainants did not assert infringement of that
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`in the Complaint. It was not until during discovery that Complainants received the information,
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`produced and marked by Respondents as Confidential Business Information, that confirmed
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`infringement of claim 3. In particular, Respondents produced the necessary information—
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`regarding the inclusion of
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` in the electrical energy source—in a non-public circuit
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`schematic.
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`Fourth, for the same reasons, this motion could not have reasonably been brought earlier
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`in this Investigation. Respondents did not produce the key documents confirming infringement
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`of claim 3 until June 12, 2020. Thus, Complainants were unable to bring these allegations
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`forward at an earlier point in time. See Certain Light Emitting Diodes & Prod. Containing
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`Same, Inv. No. 337-TA-512, Order No. 13, 2004 WL 2606111 at *1 (Oct. 19, 2004); Certain
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`Nor & Nand Flash Memory Devices & Prod. Containing Same, Inv. No. 337-TA-560, Order No.
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`4, 2006 WL 3775915 at *2 (Apr. 25, 2006) (granting leave to amend where Complainant had
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`obtained new information that it did not have at the time the original Complaint was filed
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`regarding the additional asserted claims and products). Complainants did not lie in wait or
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`otherwise delay the timing of this motion by any means, and instead are promptly seeking
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`amendment.
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`Fifth, “the public interest will be served by the inclusion of all relevant claims in a single
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`investigation and for that reason good cause exists for the proposed amendments.” Certain
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`Semiconductor Chips With DRAM Circuitry, and Modules and Products Containing Same, Inv.
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`No. 337-TA-819, Order No. 7 at 2 (May 10, 2012); see also LED Lighting Devices, Inv. No.
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`337-TA-1081, Order No. 29 at 4 (Feb. 26, 2018) (allowing amendment to add a claim because
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`“the public interest is served by the inclusion of all relevant claims in the investigation”).
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`Certain Reduced Ignition Proclivity Cigarette Paper Wrappers and Products Containing Same,
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`Inv. No. 337-TA-756, Order No. 5 at 2 (Mar. 22, 2011) (granting leave to amend where
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`discovery “confirmed [Complainant’s] suspicions” about new respondents, over respondents’
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`objections that Complainant already knew the relevant information pre-filing).
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`B.
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`Respondents Will Not Be Prejudiced.
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`Respondents will not be prejudiced if claim 3 is asserted.
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`To start, claim 3’s significant overlap with other claims already asserted in this
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`Investigation minimizes or eliminates any risk of prejudice. In LED Lighting Devices, where the
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`three newly asserted claims only “implicate[d] a few additional limitations and [were] directed to
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`the same accused products,” the Administrative Law Judge found that any prejudice was
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`“minimal, and the public interest [was] served by the inclusion of all relevant claims in the
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`investigation.” LED Lighting Devices, Inv. No. 337-TA-1081, Order No. 29 at 4 (Feb. 26,
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`2018). Here, there is even less risk of prejudice, because Complainants seek to assert only one
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`claim, and that claim adds only a single limitation to the Investigation.
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`In addition, Complainants are filing this motion early in the Investigation, and thus no
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`changes to the procedural schedule are required. Indeed, Respondents’ non-infringement
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`contentions are not due until July 23, 2020, and the parties do not exchange claim terms for
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`construction until July 27, 2020. Meanwhile, Complainants have already included claim 3 in
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`their infringement contentions, which they provided July 2, 2020. And Respondents have
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`already challenged the invalidity of claim 3 in their initial invalidity contentions provided on that
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`same date, as well as in a separately filed IPR petition challenging the validity of the ’915 patent.
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`See Philip Morris Products, S.A. v. RAI Strategic Holdings, Inc., No. IPR2020-01094 (petition
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`filed by Respondent Philip Morris Products, S.A. on June 12, 2020, and identifying itself and
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`additional Respondents Philip Morris International, Inc., Altria Client Services LLC, and Philip
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`Morris USA as real parties-in-interest, and further noting that the final Respondent Altria Group,
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`Inc. has agreed to estoppel arising from the IPR). Thus, the granting of this motion does not
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`prejudice Respondents in the present Investigation.
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`V.
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`CONCLUSION
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`Because good cause, including the public interest and the lack of prejudice to
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`Respondents, warrants the requested amendment, Complainants’ Motion for Leave to File
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`Amended Complaint should be granted, and Complainants request that the Administrative Law
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`Judge issue an Initial Determination permitting the request amendment to the complaint and
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`Notice of Investigation.
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`Dated: July 13, 2020
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`Respectfully submitted,
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`/s/ David M. Maiorana
`David M. Maiorana
`Ryan B. McCrum
`Kenneth S. Luchesi
`JONES DAY
`901 Lakeside Avenue
`Cleveland, OH 44114
`Tel: (216) 586-3939
`Fax: (216) 579-0212
`Email: dmaiorana@jonesday.com
`Email: kluchesi@jonesday.com
`Email: rbmccrum@jonesday.com
`
`Stephanie E. Parker
`JONES DAY
`1420 Peachtree Street, N.E.
`Suite 800
`Atlanta, GA 30309
`Tel: (404) 521-3939
`Fax: (404) 581-8330
`Email: separker@jonesday.com
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`Anthony M. Insogna
`JONES DAY
`4655 Executive Drive
`Suite 1500
`San Diego, CA 92121
`Tel: (858) 314-1200
`Fax: (844) 345-3178
`Email: aminsogna@jonesday.com
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`John J. Normile
`JONES DAY
`250 Vesey Street
`New York, NY 10281
`Tel: (212) 326-3939
`Fax: (212) 755-7306
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`PUBLIC VERSION
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`Email: jjnormile@jonesday.com
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`Counsel for Complainants
`RAI Strategic Holdings, Inc.,
`R.J. Reynolds Vapor Company, and
`R.J. Reynolds Tobacco Company
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`PUBLIC VERSION
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`The Honorable Clark S. Cheney
`Administrative Law Judge
`U.S. International Trade Commission
`500 E Street S.W.
`Washington, DC 20436
`Cheney337@usitc.gov
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`Sarah Sladic, Esq.
`Office of Unfair Import Investigations
`U.S. International Trade Commission
`500 E Street S.W., Room 401
`Washington, DC 20436
`sarah.sladic@usitc.gov
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`
` Via U.S. Mail
` Via Hand Delivery
` Via Overnight Courier
` Via Facsimile
` Via Electronic Mail
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` Via U.S. Mail
` Via Hand Delivery
` Via Overnight Courier
` Via Facsimile
` Via Electronic Mail
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`CERTIFICATE OF SERVICE
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`I hereby certify that on July 13, 2020 unless otherwise indicated, one copy of the
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`foregoing was filed/served on the following:
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`The Honorable Lisa R. Barton
`Secretary to the Commission
`U.S. International Trade Commission
`500 E Street S.W., Room 112
`Washington, DC 20436
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` Via U.S. Mail
` Via Hand Delivery
` Via Overnight Courier
` Via Facsimile
` Via Electronic Mail - EDIS
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`Counsel for Respondents Altria Client Services LLC; Altria Group, Inc.; Philip Morris USA,
`Inc.; Philip Morris Products SA; Philip Morris International Inc.
`Maximilian A. Grant
` Via U.S. Mail
`LATHAM & WATKINS LLP
` Via Hand Delivery
`555 Eleventh Street, NW, Suite 1000
` Via Overnight Courier
` Via Facsimile
`Washington, DC 20004
`pmiitc.lwteam@lw.com
` Via Electronic Mail
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`/s/ Diane L. Hughes
`Diane L. Hughes
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`PUBLIC VERSION
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`The Honorable Clark S. Cheney
`Administrative Law Judge
`U.S. International Trade Commission
`500 E Street S.W.
`Washington, DC 20436
`Cheney337@usitc.gov
`
`Sarah Sladic, Esq.
`Office of Unfair Import Investigations
`U.S. International Trade Commission
`500 E Street S.W., Room 401
`Washington, DC 20436
`sarah.sladic@usitc.gov
`
`
` Via U.S. Mail
` Via Hand Delivery
` Via Overnight Courier
` Via Facsimile
` Via Electronic Mail
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` Via U.S. Mail
` Via Hand Delivery
` Via Overnight Courier
` Via Facsimile
` Via Electronic Mail
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`CERTIFICATE OF SERVICE
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`I hereby certify that on July 20, 2020 unless otherwise indicated, one copy of the
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`foregoing was filed/served on the following:
`
`
`The Honorable Lisa R. Barton
`Secretary to the Commission
`U.S. International Trade Commission
`500 E Street S.W., Room 112
`Washington, DC 20436
`
` Via U.S. Mail
` Via Hand Delivery
` Via Overnight Courier
` Via Facsimile
` Via Electronic Mail - EDIS
`
`
`Counsel for Respondents Altria Client Services LLC; Altria Group, Inc.; Philip Morris USA,
`Inc.; Philip Morris Products SA; Philip Morris International Inc.
`Maximilian A. Grant
` Via U.S. Mail
`LATHAM & WATKINS LLP
` Via Hand Delivery
`555 Eleventh Street, NW, Suite 1000
` Via Overnight Courier
` Via Facsimile
`Washington, DC 20004
`pmiitc.lwteam@lw.com
` Via Electronic Mail
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`/s/ Diane L. Hughes
`Diane L. Hughes
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`PUBLIC VERSION
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