650 F.Supp.3d 375
M.D.N.C.2023Background
- Altria sued R.J. Reynolds Vapor Company (RJR) for patent infringement of three Altria patents covering pod-style e-vapor assemblies; a jury found RJR infringed and awarded $95,233,292 in past damages, and final judgment entered for Altria.
- RJR moved under Fed. R. Civ. P. 50(b) for JMOL and Rule 59 for a new trial/remittitur, arguing noninfringement, invalidity (anticipation/obviousness) based on JUUL articles and the Inova device, and insufficient damages proof; Altria opposed.
- Core technical disputes at trial concerned (1) whether the Vuse Alto has claimed "front/rear faces" bounded by edges and a separate "vaporizer/device compartment" in fluidic communication with a liquid compartment, (2) whether prior art (three JUUL news articles and the Inova 2.0 device) anticipated or rendered the claims obvious, and (3) the proper reasonable-royalty rate and built-in apportionment.
- The court applied Fourth Circuit standards for sealing and jury-verdict review (JMOL and new-trial standards), weighing public access against asserted business confidentiality and requiring specific findings for sealing.
- The court denied RJR’s Rule 50(b) and Rule 59 motions, finding (after reviewing the evidence in the light most favorable to Altria) that reasonable juries could accept Altria’s infringement, reject RJR’s clear-and-convincing invalidity proof, and adopt Altria’s damages model including a 5.25% benchmark and built-in apportionment.
Issues
| Issue | Plaintiff's Argument (Altria) | Defendant's Argument (RJR) | Held |
|---|---|---|---|
| Infringement — front/rear faces and edges | Alto has discernible faces and rounded edges; expert demonstrated tactile/visual edges on the physical product | Alto lacks distinct edges per CAD/engineering; rounded transitions do not meet claim construction | Jury reasonably could find edges and faces; JMOL denied |
| Infringement — vaporizer/device compartment & fluidic communication | Alto has separate vaporizer compartment with heater/wick adjacent to upstream end and in fluidic communication with liquid compartment | Liquid flows freely; no separate vaporizer compartment as claimed; expert testimony inconsistent | Sufficient evidence supported jury finding of a separate compartment and fluidic communication; JMOL denied |
| Invalidity — JUUL articles and Inova (anticipation/obviousness) | JUUL articles and Inova do not disclose several claim limitations (e.g., vaporizer upstream, vapor channel to outlet, planar contacts at upstream surface) | JUUL articles and Inova show the claimed features and would render claims obvious or anticipated | Conflicting evidence; RJR failed to prove invalidity by clear and convincing evidence; JMOL denied |
| Damages — pre-suit practice, royalty rate, and apportionment | 5.25% benchmark supported by Fontem (Nu Mark) and Fontem–Reynolds agreements; built-in apportionment justified by comparable licenses | Comparable agreements do not support 5.25%; proper rate is much lower (0.21% or at most 2.1%); built-in apportionment unsupported | Jury could reasonably adopt Altria’s 5.25% benchmark and built-in apportionment; JMOL and remittitur denied |
Key Cases Cited
- In re U.S. for an Order Pursuant to 18 U.S.C. § 2703(d), 707 F.3d 283 (4th Cir. 2013) (scope of public/common-law and First Amendment access to judicial records)
- Rushford v. The New Yorker Magazine, 846 F.2d 249 (4th Cir. 1988) (First Amendment right of access extends to records filed with dispositive motions and used at trial)
- Va. Dep't of State Police v. Washington Post, 386 F.3d 567 (4th Cir. 2004) (compelling-interest and narrow-tailoring standard to overcome access presumption)
- Stone v. Univ. of Md. Med. Sys. Corp., 855 F.2d 178 (4th Cir. 1988) (procedural safeguards and findings required for sealing)
- Nixon v. Warner Commc'ns, Inc., 435 U.S. 589 (U.S. 1978) (business confidentiality can support restriction of access)
- Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133 (U.S. 2000) (JMOL review cannot resolve credibility or weigh evidence)
- Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (role of POSA testimony in claim construction and infringement analysis)
- Graham v. John Deere Co., 383 U.S. 1 (U.S. 1966) (framework for obviousness analysis)
- TF3 Ltd. v. Tre Milano, LLC, 894 F.3d 1366 (Fed. Cir. 2018) (anticipation requires every claim element disclosed in a single prior reference)
- Procter & Gamble Co. v. Teva Pharm. USA, Inc., 566 F.3d 989 (Fed. Cir. 2009) (clear-and-convincing standard for invalidity challenges)
- Virnetx, Inc. v. Cisco Sys., Inc., 767 F.3d 1308 (Fed. Cir. 2014) (reasonable-royalty and hypothetical-negotiation methodology)
- Omega Patents, LLC v. CalAmp Corp., 13 F.4th 1361 (Fed. Cir. 2021) (built-in apportionment and when comparable licenses may embody apportionment)
- Vectura Ltd. v. GlaxoSmithKline LLC, 981 F.3d 1030 (Fed. Cir. 2020) (discussion of built-in apportionment and comparability of licenses)
- Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579 (U.S. 1993) (admissibility and reliability of expert testimony)
- Greer v. Miller, 483 U.S. 756 (U.S. 1987) (presumption that juries follow curative instructions)