RAI Strategic Holdings, Inc.

Patent Trials and Appeals Board

Jan 19, 2021

IPR2020-01097 (P.T.A.B. Jan. 19, 2021)

Trials@uspto.gov Paper 9
571-272-7822 Date: January 19, 2021

UNITED STATES PATENT AND TRADEMARK OFFICE

BEFORE THE PATENT TRIAL AND APPEAL BOARD

PHILIP MORRIS PRODUCTS, S.A.,
Petitioner,
v.
RAI STRATEGIC HOLDINGS, INC.,
Patent Owner.

IPR2020-01097
Patent 9,839,238 B2

Before JEFFREY W. ABRAHAM, ELIZABETH M. ROESEL, and
MICHELLE N. ANKENBRAND, Administrative Patent Judges.
PER CURIAM
DECISION
Denying Institution of Inter Partes Review
35 U.S.C. § 314
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I. INTRODUCTION
A. Background and Summary
Philip Morris Products, S.A. (“Petitioner”) filed a Petition (Paper 2,
“Pet.”) seeking an inter partes review of claims 19–21 (“the challenged
claims”) of U.S. Patent No. 9,839,238 B2 (Ex. 1001, “the ’238 Patent”).
RAI Strategic Holdings, Inc. (“Patent Owner”) filed a Preliminary Response.
Paper 6 (“Prelim. Resp.”). With the Board’s prior authorization, the parties
filed additional briefs limited to the issue of discretion to institute pursuant
to NHK1/Fintiv2. Paper 7 (“Pet. Reply”); Paper 8 (“PO Sur-reply”).
We have authority to determine whether to institute an inter partes
review. 35 U.S.C. § 314 (2018); 37 C.F.R. § 42.4(a) (2020). After
considering the parties’ arguments and evidence, we exercise our discretion
under 35 U.S.C. § 314(a) and deny institution of an inter partes review.
B. Real Parties in Interest
Petitioner identifies Philip Morris Products, S.A.; Philip Morris
International, Inc.; Altria Client Services LLC; and Philip Morris USA as
real parties in interest. Pet. 2. Petitioner additionally states that Altria
Group, Inc. is not a real party in interest, but nevertheless agrees to be bound
by any final written decision in this proceeding. Pet. 2–3 (citing 35 U.S.C.
§ 315(e)).

1 NHK Spring Co. v. Intri-Plex Technologies, Inc., IPR2018-00752, Paper 8
(PTAB Sept. 12, 2018) (precedential) (“NHK”).
2 Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11 (PTAB Mar. 20, 2020)
(precedential) (“Fintiv”).
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Patent Owner identifies RAI Strategic Holdings, Inc.; R.J. Reynolds
Vapor Company; RAI Innovations Company; and R.J. Reynolds Tobacco
Company as real parties in interest. Paper 4, 1 (Mandatory Notice).
C. Related Matters
The parties identify the following as related matters involving the
’238 Patent and the same parties as this proceeding:
RAI Strategic Holdings, Inc. v. Altria Client Services LLC,
No. 1:20-cv-00393-LO-TCB (E.D. Va. filed April 9, 2020)
(“district court action”); and
Certain Tobacco Heating Articles and Components
Thereof, Investigation No. 337-TA-1199 (Int’l Trade Comm’n,
filed April 9, 2020 and instituted by the Commission on May 11,
2020) (“ITC investigation”).
Pet. 3; Paper 4, 1.
D. The ’238 Patent (Ex. 1001)
The ’238 Patent is titled “Control body for an electronic smoking
article” and describes “aerosol delivery devices that use electrical energy to
heat a material . . . to form an inhalable substance” and “may provide some
or all of the sensations . . . of smoking a cigarette, cigar, or pipe, without any
substantial degree of combustion or pyrolysis of any component.” Ex. 1001,
code (54), 4:32–45. The ’238 Patent discloses a control body including an
electronic circuit board, a pressure sensor, and a coupler, where the coupler
includes “an exterior opening that allows external air to enter the device and
a pressure channel that communicates a pressure drop caused by the drawn
air to an isolated segment of the device that includes a portion of the
pressure sensor.” Id. at 1:56–66. According to the ’238 Patent, “[s]uch
coupler can particularly be useful to reduce or prevent passage of liquid
from an attached cartridge through the coupler and into the control body and
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thus reduce or prevent contamination of the sensor or other electronic
elements present in the control body.” Id. at 1:66–2:3.
Figure 2 of the ’238 Patent is reproduced below.

Figure 2 is a sectional view of electronic smoking article 200, including
control body 202 and cartridge 204. Ex. 1001, 3:51–53, 11:35–44. Control
body 202 includes shell 201 and coupler 224 having cavity 225 for engaging
projection 241 of base 240 of the cartridge. Id. at 11:36–39, 11:63–12:2.
Figure 7 of the ’238 Patent is reproduced below.

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Figure 7 is a partial sectional view of an electronic smoking article including
control body 702 engaged with cartridge 704 via coupler 724 on the control
body and base 740 on the cartridge. Ex. 1001, 3:64–67, 16:58–62.
Coupler 724 includes cavity 725 that receives projection 741 on base 740.
Id. at 16:62–63. Coupler 724 includes one or more air inlet apertures 789
and air inlet channel 788 proximate to air flow entry 741a of projection 741.
Id. at 17:1–3, 17:14–20. Coupler 724 also includes pressure channel 785
having first end 785a opening within cavity 725 of the coupler and second
end 785b opening within control body 702. Id. at 17:3–7. The ’238 Patent
discloses that “first end 785a of the pressure channel 785 is spatially
arranged relative to the air inlet channel 788 to be separated along the
longitudinal axis of the coupler 724.” Id. at 17:7–11; see also id. at 17:22–
36 (discussing longitudinal separation). According to the ’238 Patent,
Because of the spatial arrangement of the air inlet channel 788
and the first end 785a of the pressure channel 785, . . . the air
flow entry 741[a] of the seated projection 740 is sufficiently
spaced apart from the first end of the pressure channel to prevent
or reduce incidence of passage of liquid from the cartridge 704
through the base 740 and into the control body 702.
Id. at 17:45–51.
E. Illustrative Claim
Claims 19–21 of the ’238 Patent are challenged in the Petition. Claim
19 is the only independent challenged claim and is reproduced below with
emphasis added to key limitations.
19. A control body for an electronic smoking article, the
control body comprising:
an elongated shell with an interior, a proximal end, and an
opposing distal end;
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a coupler formed of an elongated body having a first end
that forms a wall and that engages the proximal end of the shell
and a second end that comprises a cavity configured to releasably
engage a cartridge, wherein the coupler includes a pressure
channel extending between a first end that is in fluid
communication with the cavity and a second end that opens
through the wall at the first end of the coupler, wherein the
coupler includes an air inlet channel in fluid communication
with the cavity and an air inlet aperture in an exterior surface of
the coupler, and wherein the coupler has a longitudinal axis
extending from the first end to the second end, and the first end
of the pressure channel is spatially separated from the air inlet
channel relative to the longitudinal axis of the coupler; and
a microprocessor.
Ex. 1001, 22:5–24 (emphasis added).
F. Asserted Grounds and Evidence
Petitioner asserts the following grounds of unpatentability:
Claims Challenged 35 U.S.C. § Basis
1 19–21 103 Levitz3
2 19, 21 103 Cohen,4 Newton5
Petitioner relies on a Declaration of Samir Nayfeh, Ph.D. Ex. 1003.
II. ANALYSIS
A. Patent Owner’s Request for Discretionary Denial
The Petition was filed two months after Patent Owner filed complaints
in the district court and the ITC asserting the ’238 Patent against Petitioner.
See Pet. 70–71. Petitioner argues that “[t]he Board should therefore reach

3 Ex. 1005, PCT Publication No. WO 2012/142293 A2, published October
18, 2012 (“Levitz”).
4 Ex. 1006, US 2011/0036346 A1, published February 17, 2011 (“Cohen”).
5 Ex. 1007, US 8,499,766 B1, issued August 6, 2013 (“Newton”).
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the merits of this petition based on its overwhelmingly strong merits and
Petitioner’s diligence in expeditiously availing itself of the Board’s
jurisdiction.” Id. at 71; see also Pet. Reply 4–7 (arguing that a “‘holistic’
evaluation” of the Fintiv factors favors institution).
The evidentiary hearing in the ITC investigation is set for this month.
Prelim. Resp. 49. Patent Owner argues that the Board should deny
institution in view of the parallel ITC investigation. Id. at 49–57. Patent
Owner asserts that the ITC investigation involves the same prior art and
arguments as raised in the Petition, that an evidentiary hearing in the ITC is
scheduled for the same time as the statutory date for this Decision, and that
the ITC’s final determination will pre-date any Final Written Decision in this
proceeding by four months. Id. at 49.
The Petition in this case was filed one month later than the Petition in
IPR2020-00919, which involves the same parties and another patent asserted
by Patent Owner against Petitioner in the related ITC investigation and
district court action. The Board discretionarily denied institution of this
related petition under § 314(a), with the following explanation:
Evaluating the Fintiv factors with a holistic view of whether the
efficiency and integrity of the system are best served by denying
or instituting review, we determine that the proximity of the
anticipated ITC hearing date, combined with an anticipated final
determination from the ITC prior to the Board’s final decision on
validity of claims in dispute between the same parties, outweigh
the relatively moderate investment to date in the ITC proceeding,
the Petitioner’s diligence in filing the Petition less than one
month after Patent Owner filed its complaints in the ITC
proceeding and the related district court action, and the lack of
complete overlap in the prior art asserted. Thus, we determine
that the facts presented weigh in favor of exercising discretion to
deny institution in this instance.
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Patent 9,839,238 B2
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Philip Morris Prods., S.A. v. RAI Strategic Holdings, Inc., IPR2020-00919,
Paper 9 at 12–13 (PTAB Nov. 16, 2020) (“919 Decision” or “919 IPR”).
Petitioner argues that ITC investigations warrant lenient treatment under
Fintiv. Pet. Reply 1–3. According to Petitioner, the 919 Decision is an
impermissible departure “from Fintiv and the long line of cases leading to
it.” Id. at 3. Petitioner did not, however, request rehearing nor Precedential
Opinion Panel review of the 919 Decision. Because Petitioner has not
directed us to facts that would support a different result under the Fintiv
factors, we reach the same result in this case as in the 919 IPR.
We incorporate by reference the Analysis section of the 919 Decision
and limit our discussion below to those Fintiv factors where the facts and our
analysis differs from the 919 Decision.
1. Fintiv Factor 4: Overlap of Issues
Patent Owner asserts that the Petition relies on the same prior art and
invalidity arguments as Petitioner raises in the ITC investigation. Prelim.
Resp. 54. According to Patent Owner, “Petitioner’s first two invalidity
grounds for the ’238 patent in its final ITC invalidity contentions assert
Levitz and Cohen and allege that claims 19–21 would have been obvious in
view of each of those references (just as Petitioner alleges here).” Id. (citing
Ex. 2001). Patent Owner additionally asserts that “in the ITC, Petitioner is
challenging every claim challenged here.” Id.
Petitioner does not dispute Patent Owner’s assertions, agreeing
“[t]here is overlap.” Pet. Reply 7. Petitioner’s only counterargument is that
“the ITC investigation includes several different grounds and different
expert witnesses.” Id.
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It appears there is a substantially greater degree of overlap between
Petitioner’s unpatentability challenges and Petitioner’s invalidity contentions
in the ITC for this proceeding than was the case in the 919 IPR. It is
undisputed that Petitioner relies on the same two primary references—Levitz
and Cohen—both here and in its final invalidity contentions in the ITC.
Ex. 2001, Appendices A1, A2. This overlap increases the concerns about
duplicative efforts and the possibility of conflicting decisions. See Fintiv,
Paper 11 at 12. Accordingly, in contrast to the 919 IPR, Fintiv factor 4
weighs in favor of exercising discretion to deny institution in this case.
2. Factor 6: Other Circumstances, Including the Merits
Not surprisingly, the parties disagree as to the merits of Petitioner’s
challenges, with Patent Owner characterizing them as “not ‘particularly
strong’” (Prelim. Resp. 55, quoting Fintiv, Paper 11 at 14) and Petitioner
arguing that “[t]he petition’s strong merits . . . favor institution”
(Pet. Reply 6).
According to Patent Owner, “the Petition lacks merit for at least one
reason for each ground.” Prelim. Resp. 55. We have considered each of
Patent Owner’s reasons, but are nevertheless persuaded that the merits of
Petitioner’s challenges are relatively strong.
Responding to Petitioner’s first ground, Patent Owner argues that
Levitz fails to describe the “spatially separated” limitation of claim 19.
Prelim. Resp. 30–39. We disagree, including for the reasons Petitioner
provides. Pet. Reply 6–7. Patent Owner presents no response to Petitioner’s
reply argument about Levitz. See PO Sur-reply 7 (addressing Fintiv
factor 6, but not responding to Petitioner’s reply argument about Levitz).
Petitioner contends that the “cavity,” as recited in claim 19, corresponds to
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the interior of Levitz’s shaft 32 and is bounded by battery post 34, and the
“air inlet channel,” as recited in claim 19, corresponds to Levitz’s side vent,
including surface channel 30 and orifice 33. Pet. 24, 35–37. Patent Owner
argues that Levitz’s “air inlet channel” includes groove 36 in post 34, which
Patent Owner asserts is not “spatially separated” from the pressure channel.
Prelim. Resp. 34, 36, 38. After considering both parties’ arguments, and the
record at this stage of the proceeding, we are persuaded that Levitz’s
groove 36 is reasonably considered part of the claimed “cavity,” as
Petitioner argues (Pet. 34), rather than part of the “air inlet channel,” as
Patent Owner argues (Prelim. Resp. 36).
Responding to Petitioner’s second ground, Patent Owner argues that
Cohen does not describe an “air inlet channel in fluid communication with
the cavity,” as recited in claim 19. Prelim. Resp. 43–47. We disagree,
including for the reasons Petitioner provides. Pet. Reply 7. Patent Owner
presents no response to Petitioner’s reply argument about Cohen. See PO
Sur-reply 7 (addressing Fintiv factor 6, but not responding to Petitioner’s
reply argument about Cohen). Petitioner presents colored versions of
Cohen’s Figures 3 and 8 to illustrate its contention that Cohen describes an
“air inlet channel” (slots 30) that is in fluid communication with a “cavity”
(space within first coupling 26, colored green) via holes 94. Pet. 57, 64, 66.
Patent Owner argues that Cohen’s slots 30 and holes 94 are in fluid
communication with a cavity of second coupling 90, not a cavity of first
coupling 26. Prelim. Resp. 45–47. After considering both parties’
arguments, and the record at this stage of the proceeding, we are persuaded
that the “cavity,” as recited in claim 19, corresponds to the entire interior
space defined by Cohen’s first coupling 26, including the space defined by
flange 28 in which slots 30 are formed, and that slots 30 are in fluid
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communication with this cavity. See Ex. 1006 ¶ 20 (“A number of slots 30
are formed in the flange 28 to create air passages into the interior of the first
coupling 26”).
Accordingly, in contrast to the 919 IPR, Fintiv factor 6 weighs against
exercising discretion to deny institution in this case.
3. Balancing the Fintiv Factors
Under Fintiv, we are required to take “a holistic view of whether
efficiency and integrity of the system are best served by denying or
instituting review.” Fintiv, Paper 11 at 6. On balance and taking into
account the consistent treatment of this petition and the 919 IPR, we
determine that the ITC evidentiary hearing occurring simultaneous with the
due date of this Decision whether to institute an inter partes review,
combined with the ITC’s target date for a final determination occurring four
months prior to the projected due date for a final decision, where the ITC
investigation involves the same parties, the same challenged claims, and the
same asserted prior art, outweighs slightly the factors that favor institution,
including Petitioner’s diligence in filing the Petition, the strength of the
Petition on the merits, and the relatively moderate investment in the ITC
investigation to date.
III. CONCLUSION
For these reasons, institution is denied under § 314(a) and Fintiv.
IV. ORDER
It is
ORDERED that, the Petition is denied, and no trial is instituted.
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Patent 9,839,238 B2
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FOR PETITIONER:
Jonathan M. Strang
Matthew J. Moore
Dale Chang
Lesley M. Hamming
LATHAM & WATKINS LLP
jonathan.strang@lw.com
matthew.moore@lw.com
dale.chang@lw.com
lesley.hamming@lw.com

FOR PATENT OWNER:

David M. Maiorana
Anthony M. Insogna
Kenneth S. Luchesi
Geoffrey K. Gavin
Joshua R. Nightingale
George N. Phillips
Gasper J. LaRosa
JONES DAY
dmaiorana@jonesday.com
aminsogna@jonesday.com
kluchesi@jonesday.com
ggavin@jonesday.com
jrnightingale@jonesday.com
gphillips@jonesday.com
gjlarosa@jonesday.com