Federal Circuit Rules against Philip Morris on E-Cigarette Patent Challenge
November 6th, 2023
The Federal Circuit has affirmed a ruling by the Patent Trial and Appeal Board (PTAB or Board) against tobacco company Philip Morris, which had tried to overturn an R.J. Reynolds e-cigarette patent.
The patent generally relates to tobacco smoking devices, including electronic cigarettes, a market in which the parties compete.
Philip Morris filed an inter partes review (IPR) petition against several claims of Reynolds’s patent.
Philip Morris argued that certain claims of the Reynolds patent were obvious in light of prior art (Hon [a Chinese patent] and Whittemore [a US patent]) and thus not patentable.
Reynolds argued that a skilled artisan would have replaced Hon’s heating element with Whittemore’s wick and heating wire.
The PTAB found that Reynolds failed to show Hon’s heating efficiency needed improvement. The Board found unpersuasive Philip Morris’s argument that a skilled artisan would have been motivated to simplify Hon in the manner Phillip Morris proposed.
Philip Morris appealed the Board’s decision, arguing that it was arbitrary and capricious because (1) it contradicts the reasoning in an earlier related IPR decision, (2) there was a legal error in the Board’s motivation to combine analysis, and (3) the decision was otherwise not supported by substantial evidence.
In the earlier IPR, as the court noted.
the issue before the Board was whether a skilled artisan would have replaced Hon’s heating element with Whittemore’s wick and heating wire. The patent owner’s overarching argument was that a skilled artisan would not have combined Hon and Whittemore ….
But the Board there did not go so far as to find that replacing Hon’s entire atomizer with Whittemore’s wick and heating wire would have been an obvious, simple substitution … Moreover, that particular combination theory was not before the Board in the prior IPR, as no party made that argument.
In contrast, said the court, in the current IPR
the issue before the Board was whether a skilled artisan would have replaced Hon’s entire atomizer with Whittemore’s wick and heating wire. The Board thus analyzed a different combination theory, with expert testimony specifically directed to this combination. Because the Board did not conclude in the prior IPR that replacing Hon’s atomizer would have been obvious, it was not arbitrary and capricious for the Board to conclude that Philip Morris did not meet its burden here.
The court also concluded that substantial evidence supported the Board’s decision to reject Philip Morris’s proposed combination because the Board reasonably relied on expert testimony and its own analysis of the Reynolds teardown report on a product that implemented the Hon prior art.
Product teardown, also known as Bill of Materials (BOM), is a list of components, parts, modules, raw materials and their quantities required to build a product, often used to determine patent infringement.
Earlier this year, the International Trade Commission (ITC) banned Philip Morris from importing into the United States vapes that infringed on the Reynolds patent.
Philip Morris also appealed to the Federal Circuit in that case, and the court found that Philip Morris violated Section 337 of the Tariff Act of 1930, 19 U.S.C. § 1337, through the importation and sale of tobacco products that infringed certain claims of Reynolds’ patents.