63 F.4th 1328
Fed. Cir.2023Background
- Reynolds sued Philip Morris at the International Trade Commission under 19 U.S.C. § 1337, alleging IQOS holders and HeatSticks infringed U.S. Pat. Nos. 9,901,123 (’123) and 9,930,915 (’915), both covering heat‑not‑burn tobacco systems.
- The ALJ construed claims, held infringement and non‑invalidity, found a domestic industry (technical and economic prongs), and recommended a limited exclusion order (no cease‑and‑desist orders).
- The Commission reviewed in part, affirmed key ALJ findings (including nonobviousness of the ’123 patent and domestic industry), and issued a limited exclusion order plus cease‑and‑desist orders against certain Philip Morris affiliates.
- Philip Morris appealed, raising: (1) failure to "consult with" HHS/FDA under § 1337(b)(2); (2) abuse of discretion on public‑interest/remedy given FDA PMTA/MRTPA findings; (3) domestic industry allegedly invalid because Reynolds’ VUSE lacked FDA authorization at filing; (4) invalidity/obviousness of the ’123 claims; (5) claim construction and noninfringement of the ’915 claims; and (6) insufficient corroboration of asserted prior public use (Accord K).
- The Federal Circuit reviewed legal issues de novo and factual findings for substantial evidence under the APA, and affirmed the Commission in full.
- The record relied heavily on expert testimony, documentary evidence (including >30 FDA documents such as PMTA/MRTPA materials), and the ALJ’s credibility and corroboration findings regarding the alleged prior public use.
Issues
| Issue | Philip Morris' Argument | Reynolds/Commission's Argument | Held |
|---|---|---|---|
| Duty to consult under §337 | Commission failed to consult HHS/FDA and thus ignored FDA findings that IQOS benefits public health | Commission provided notice, solicited agency submissions, and considered voluminous FDA materials in the record; PM raised the complaint too late | Forfeited by Philip Morris for raising too late; alternatively Commission satisfied §1337(b)(2) (notice and opportunity plus consideration of FDA docs) |
| Public interest / remedy | FDA PMTA/MRTPA approvals demonstrate public‑health benefits; exclusion would harm public health | Commission weighed FDA materials and other evidence and concluded exclusion would not harm public health overall (population‑level analysis) | Commission’s remedy discretion affirmed; not arbitrary or an abuse of discretion |
| Domestic industry (economic prong) | Reynolds’ VUSE products lacked FDA authorization at filing and thus cannot establish an industry | Statute does not require prior regulatory approval; Reynolds invested and sold during FDA’s grace period; technical prong satisfied | FDA approval is not a prerequisite; domestic industry satisfied |
| Obviousness of the ’123 claims | Morgan + common knowledge of central heaters would have made central‑heater claims obvious | Morgan emphasizes circumferential heaters and suggests other solutions; no narrow set of predictable design choices; record lacks motivation to modify Morgan to a central heater | Substantial evidence supports Commission’s finding of nonobviousness; affirmed |
| Infringement of the ’915 claims | "Receiving end" must wholly contain the electrical energy source; IQOS isolates energy source so it does not meet the claim | "Receiving end" is an orientation term that must receive the disposable and have at least a portion of the energy source; IQOS meets limitation | Affirmed infringement; Philip Morris did not preserve a contestable claim construction before the Commission |
| Corroboration of alleged prior public use (Accord K) | Burton’s testimony plus documents prove public use and anticipation of the ’915 claims | Documents use inconsistent product names and do not independently link the Miami devices to the technical files; witness testimony not independently corroborated | ALJ reasonably found corroboration insufficient under rule‑of‑reason; substantial evidence supports rejection of anticipation |
Key Cases Cited
- Spansion, Inc. v. Int'l Trade Comm'n, 629 F.3d 1331 (Fed. Cir. 2010) (injunctive/exclusion relief is the normal remedy under § 337 and Commission has broad remedy discretion)
- Kyocera Wireless Corp. v. Int'l Trade Comm'n, 545 F.3d 1340 (Fed. Cir. 2008) (failure to raise an issue before the ALJ constitutes forfeiture)
- Finnigan Corp. v. Int'l Trade Comm'n, 180 F.3d 1354 (Fed. Cir. 1999) (corroboration required where witness testimony alone is used to invalidate a patent)
- In re NTP, Inc., 654 F.3d 1279 (Fed. Cir. 2011) (uncorroborated evidence cannot be circularly corroborated by the same testimony)
- Viscofan, S.A. v. Int'l Trade Comm'n, 787 F.2d 544 (Fed. Cir. 1986) (Commission is the expert body on remedies and its remedy selection gets deferential review)
- Consolo v. Fed. Mar. Comm'n, 383 U.S. 607 (1966) (substantial evidence standard: agency findings must be upheld if reasonable on the record as a whole)