RAI Strategic Holdings, Inc.

Patent Trials and Appeals Board

Aug 5, 2021

IPR2020-00921 (P.T.A.B. Aug. 5, 2021)

Trials@uspto.gov Paper 13
571-272-7822 Date: August 5, 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.

IPR2020-00921
Patent 9,814,268 B2

Before JO-ANNE M. KOKOSKI, ELIZABETH M. ROESEL, and
MICHELLE N. ANKENBRAND, Administrative Patent Judges.
ROESEL, Administrative Patent Judge.
DECISION
Granting Request For Rehearing and
Granting Institution of Inter Partes Review
35 U.S.C. § 314; 37 C.F.R. § 42.71(d)
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I. INTRODUCTION
A. Status of the Proceeding
Philip Morris Products, S.A. (“Petitioner”) filed a Petition seeking
inter partes review of claims 16 and 17 of U.S. Patent No. 9,814,268 B2
(Ex. 1001, “the ’268 Patent”). Paper 2 (“Pet.”). 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
and 35 U.S.C. § 325(d). Paper 7 (“Pet. Reply”); Paper 8 (“PO Sur-reply”).
We denied institution under § 314(a) in view of the district court’s
anticipated trial date eight to nine months before the projected statutory
deadline for issuing a final decision and the other Fintiv factors. Paper 9
(“Denial Decision” or “Denial Dec.”). Petitioner timely filed a request for
rehearing, along with copies of the district court’s stay orders. Paper 10
(“Reh’g Req.” or “Request”); Exs. 1041, 1043. Concurrently therewith,
Petitioner requested that the Board’s Precedential Opinion Panel (“POP”)
reconsider the Denial Decision. Paper 11; Ex. 3002 (“POP Request”). The
POP declined to review the issue raised in Petitioner’s POP Request.
Paper 12. Thus, we proceed to the rehearing.
Shortly after the Denial Decision, the district court stayed the parallel
action. As discussed further below, we conclude that, in light of the district
court’s stay order, a weighing of the Fintiv factors does not warrant exercise
of our discretion to deny institution under 35 U.S.C. § 314(a).

1 NHK Spring Co. v. Intri-Plex Technologies, Inc., IPR2018-00752, Paper 8
(PTAB Sept. 12, 2018) (precedential).
2 Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11 (PTAB Mar. 20, 2020)
(precedential).
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Under 37 C.F.R. § 42.4(a), we have authority to determine whether to
institute an inter partes review. The standard is set forth in 35 U.S.C.
§ 314(a), which provides that an inter partes review may not be instituted
“unless . . . there is a reasonable likelihood that the petitioner would prevail
with respect to at least 1 of the claims challenged in the petition.” After
considering the information presented in the Petition and the Preliminary
Response, we determine that Petitioner has shown a reasonable likelihood
that it will prevail with respect to at least one claim challenged in the
Petition. After considering Patent Owner’s arguments, we do not deny the
Petition under 35 U.S.C. § 312(a)(3) for lack of particularity or under
35 U.S.C. § 325(d) due to the same or substantially the same art or
arguments having previously been considered by the Office. Therefore, we
grant 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. 5. 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. Id. (citing 35 U.S.C.
§ 315(e)).
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 5, 1 (Mandatory Notice).
C. Related Matters
The parties identify the following district court action in which Patent
Owner is asserting the ’268 Patent against Petitioner: RAI Strategic
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Holdings, Inc. v. Altria Client Services LLC, No. 1:20-cv-393 (E.D. Va. filed
Apr. 9, 2020). Pet. 5; Paper 5, 2.
The parties also identify IPR2020-00919 involving U.S. Patent
No. 9,901,123 (“the ’123 Patent”), which is related to the ’268 Patent.3
Pet. 5–6; Paper 5, 2.
II. REQUEST FOR REHEARING AND BOARD’S DISCRETION TO
DENY INSTITUTION UNDER 35 U.S.C. § 314(a)
A. Standard of Review and Fintiv Factors
A party requesting rehearing of a Board decision has the burden to
show that the decision should be modified. Pursuant to 37 C.F.R.
§ 42.71(d), the rehearing request must identify, specifically, all matters the
party believes the Board misapprehended or overlooked and the place where
each matter was previously addressed in a motion, an opposition, or a reply.
When rehearing a decision on a petition, we review the decision for an abuse
of discretion. 37 C.F.R. § 42.71(c) (2019). An abuse of discretion may arise
if a decision is based on an erroneous interpretation of law, if a factual
finding is not supported by substantial evidence, or if an unreasonable
judgment is made in weighing relevant factors. In re Gartside, 203 F.3d
1305, 1315–16 (Fed. Cir. 2000)
The Board’s precedential Fintiv order identifies the following factors
that should be considered and balanced when the patent owner raises an
argument for discretionary denial under NHK:

3 The ’268 Patent and the ’123 Patent both claim the benefit of Application
No. 11/550,634, filed October 18, 2006, through a series of continuation
and/or division applications. The Board denied institution of an inter partes
review in IPR2020-00919.
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1. whether the court granted a stay or evidence exists that one
may be granted if a proceeding is instituted;
2. proximity of the court’s trial date to the Board’s projected
statutory deadline for a final written decision;
3. investment in the parallel proceeding by the court and the
parties;
4. overlap between issues raised in the petition and in the parallel
proceeding;
5. whether the petitioner and the defendant in the parallel
proceeding are the same party; and
6. other circumstances that impact the Board’s exercise of
discretion, including the merits.
Fintiv, Paper 11 at 5–6. According to Fintiv, these factors relate to
“efficiency, fairness, and the merits” and require the Board to take “a
holistic view of whether efficiency and integrity of the system are best
served by denying or instituting review.” Id. at 6.
B. Discussion on Rehearing
1. Whether the court granted a stay and the proximity of court’s trial
date
After our Denial Decision, the district court ordered a stay of the
related civil action “pending a decision by the PTAB on whether to institute
post-grant petitions on [U.S. Patent Nos. 9,814,268 and 10,492,542].”4
Ex. 1043. Subsequently, the district court partially lifted the stay only as to
Petitioner’s counterclaims against Patent Owner. Ex. 3003 (district court’s
Feb. 16, 2021 order). The stay of the district court action order remains in
place as to the ’268 and ’542 patents. Citing the relief it requested from the

4 U.S. Patent No. 10,492,542 (“the ’542 patent”) is being challenged by
Petitioner in PGR2020-00071, where institution was granted on
January 13, 2021.
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district court, Petitioner represents that “the stay will remain in place if the
Board institutes review.” Reh’g Req. 4 (citing Ex. 1038, 23; Ex. 1040, 2–4,
6–8; Ex. 1041; Ex. 1042, 6–9; Ex. 1043).
Petitioner argues that Fintiv factors 1 and 2 strongly favor institution.
Reh’g Req. 9–10. We agree. The district court action is stayed pending
resolution of the PTAB proceedings. Ex. 1043. The district court’s stay
allays concerns about inefficiency and duplication of effort. Snap, Inc., v.
SRK Tech. LLC, IPR2020-00820, Paper 15 at 8–9 (PTAB Oct. 21, 2020)
(precedential) (“Snap”); Fintiv, Paper 11 at 6.
Accordingly, Fintiv factors 1 and 2 weigh strongly against exercising
discretion to deny institution.
2. Investment in the parallel proceeding by the court and the parties
In our Denial Decision, we determined that Fintiv factor 3 weighs
against exercising discretion to deny institution. Denial Dec. 18. In
reaching that determination, we relied on the fact that, at the time of the
Denial Decision, the district court had not issued any substantive order
related to the ’268 Patent and the parties had completed some work in the
district court action, e.g., claim construction briefing, but much remained to
be completed in advance of trial. Id. We also relied on Petitioner’s
diligence in filing the Petition less than one month after Patent Owner filed
its complaint in the related district court action. Id. (citing Fintiv, Paper 11
at 11).
Petitioner argues that Fintiv factor 3 still favors institution. Reh’g
Req. 10. According to Petitioner, “[n]ot enough changed” during the two-
week period between the Board’s Denial Decision and the district court’s
stay order “to shift this factor to a negative.” Id. Petitioner acknowledges
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that, in the meantime, the district court issued a claim construction order. Id.
at 11. Petitioner argues, however, that the claim construction order does not
demonstrate a high level of investment because the district court merely
agreed with Patent Owner that the sole disputed claim term should be
interpreted according to its plain and ordinary meaning. Reh’g Req. 11
(citing Ex. 1044).
We agree with Petitioner that not enough changed during the two-
week period between our Denial Decision and district court’s stay order to
warrant a change in our determination that Fintiv factor 3 weighs against
exercising discretion to deny institution. Although the parties and the
district court completed some work in the district court action prior to the
stay, the investment by the parties and the district court related to the
’268 Patent does not appear to be significant, and the case as it relates to that
patent is still at an early stage. Nor is there any indication that the parties
will make a significant investment in the district court action as it relates to
the ’268 Patent before the due date of a final written decision in this
proceeding. We continue to rely on Petitioner’s diligence in filing the
Petition less than one month after Patent Owner filed its complaint in the
related district court action.
Accordingly, Fintiv factor 3 weighs against exercising discretion to
deny institution.
3. Overlap between the issues raised in the petition and in the
parallel proceeding
In our Denial Decision, we determined that Fintiv factor 4 weighs
marginally against exercising discretion to deny institution. Denial Dec. 20.
In reaching that determination, we relied on the fact that, at the time of the
Denial Decision, Petitioner had not yet disclosed its invalidity contentions in
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the district court action, making it impossible to determine the extent of any
overlap. Id. at 19 (citing Prelim. Resp. 62; Pet. Reply 4). We also relied on
Petitioner’s stipulation not to pursue any IPR grounds in the district court, if
the Board institutes an inter partes review, finding that, although the
stipulation is narrowly crafted, it “will lessen to some degree the concerns
about duplicative efforts and the possibility of conflicting decisions.” Id.
(citing PO Sur-reply 7; Ex. 1037).
On rehearing, Petitioner argues that Factor 4 strongly favors
institution. Reh’g Req. 11. Petitioner is correct that, upon entry of a final
written decision in this proceeding, statutory estoppel will preclude
Petitioner from raising any invalidity grounds that it “raised or reasonably
could have raised during [this IPR]” in district court. Id.; 35 U.S.C.
§ 315(e)(2). As in Snap,
due to the stay of the parallel District Court proceeding, the
Board will likely address patentability issues prior to the District
Court reaching invalidity issues at trial, thereby obviating
concerns of inefficiency and conflicting decisions while
providing the possibility of simplifying issues for trial in the
parallel District Court proceeding.
Snap, Paper 15 at 15–16.
Accordingly, Fintiv factor 4 weighs against exercising discretion to
deny institution.
4. Whether the petitioner and defendant in the parallel proceeding
are the same party
It is undisputed that the district court action involves the same parties
as this proceeding. See Pet. Reply 7; Prelim. Resp. 62 (Patent Owner asserts
that “Petitioner is a named defendant in the district court action.”).
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Because the related district court action is stayed and the amount of
overlap between the invalidity contentions and the Petition challenges is
presently unknown, we regard Fintiv factor 5 as neutral or, at most,
weighing slightly in favor of exercising discretion to deny institution. Snap,
Paper 15 at 16.
5. Other circumstances, including the merits
In our Denial Decision, we determined that Fintiv factor 6 weighs
against a discretionary denial of institution. Denial Dec. 27. At that time,
we viewed the merits of Petitioner’s grounds as “particularly strong on the
preliminary record” and “Patent Owner’s substantive response as weak.” Id.
at 26.
Our preliminary view of the merits has not changed since the Denial
Decision. A preliminary analysis of the merits is provided in Section IV
below.
Accordingly, Fintiv factor 6 weighs against a discretionary denial of
institution.
6. Conclusion on Rehearing and § 314(a) Discretion
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. No single factor is determinative
of whether we exercise our discretion to deny institution under § 314(a).
Balancing all of the Fintiv factors, we determine that the circumstances
weigh against exercising discretion under § 314(a) to deny institution of
inter partes review and that Petitioner has met its burden to show that our
Denial Decision should be modified.
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III. BACKGROUND OF THE PROCEEDING
A. The ’268 Patent (Ex. 1001)
The ’268 Patent describes and claims a tobacco-containing,
electrically-powered smoking article. Ex. 1001, codes (54), (57), 1:19–20,
32:41–42, 34:13–14 (preamble of independent claims 1 and 16). One
objective is “to provide a smoking article that provides a smoker with an
ability to enjoy using tobacco without the necessity of burning any
significant amount of tobacco.” Id. at 4:27–29.
A first embodiment is depicted in Figure 1, reproduced below:

Figure 1 of the ’268 Patent is a longitudinal cross-sectional view of an
electrically powered, tobacco-containing smoking article. Ex. 1001,
8:28–30, 19:31–35.
As shown in Figure 1, smoking article 10 includes outer container or
housing 20 that is generally tubular in shape and has distal end 13 and
mouth-end 15. Ex. 1001, 19:40–44, 19:53–55. “[T]he mouth-end comprises
an opening adapted for egress of an aerosol generated within the smoking
article and the distal end comprises an opening adapted for intake of air into
the smoking article 10.” Id. at 19:55–58. Within outer container 20 is
electric power source 36, such as a battery. Id. at 20:6–7.
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As shown in Figure 1, smoking article 10 includes controller 50
having microchips that provide control of time of operation, current, and
electrical resistance heat generation. Ex. 1001, 20:27–28, 20:31–36, Figs. 4,
5. Smoking article 10 also includes sensor 60 for sensing draw, i.e., intake
of air by the user of the smoking article. Id. at 20:43–46, 20:61–63.
Controller 50 and sensor 60 are powered by battery 36 and function in
concert as a puff-actuated controller for regulating the flow of current
through the resistance heating elements. Id. at 20:36–37, 20:53–54, 20:57–
61.
Smoking article 10 of Figure 1 includes electrical resistance heating
elements 70, 72, which are configured to allow airflow through the heating
elements. Ex. 1001, 21:10–11, 21:21–22. First electrical resistance heating
element 70 heats drawn air passing through the smoking article from distal
end 13 of outer housing 20. Id. at 21:11–15. Second electrical resistance
heating element 72 heats an aerosol-forming material supported by or in
close proximity to the heating element. Id. at 21:26–40. Aerosol-forming
material can be transferred to the heating element by the wicking action of a
high surface area absorbent material that either forms the heating element or
is in close proximity to the heating element. Id.
Smoking article 10 of Figure 1 includes cartridge 85, which has
upstream segment 95 composed of tobacco filler or processed tobacco filler
material 89 incorporating aerosol-forming material and downstream
segment 98 composed of substrate 101 carrying flavors and/or aerosol-
forming material. Ex. 1001, 21:58–59, 21:63–21:1, 22:8–14. The ’268
Patent discloses that “smoking article 10 is assembled such that a certain
amount of aerosol-forming material and tobacco components can be wicked
or otherwise transferred to heating element 72 or the region in close
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proximity to the heating element.” Id. at 22:14–18. As shown in Figure 1,
“extreme mouth end region of cartridge 85 is sealed, and as such, tobacco
components and aerosol-forming material have a tendency to travel
upstream towards the resistance heater 72.” Id. at 22:19–22.
Smoking article 10 of Figure 1 has mouth-end piece 120, which is
“typically removable” and can be maintained in place by friction fit or
complementary threaded screw mechanisms on the mouth-end piece and
outer housing. Ex. 1001, 23:63–24:1.
Another embodiment is depicted in Figure 2, reproduced below:

Figure 2 of the ’268 Patent is a longitudinal cross-sectional view of an
electrically powered, tobacco-containing smoking article. Ex. 1001,
8:28–30, 24:42–43. According to the ’268 Patent, the smoking article of
Figure 2 has “certain components comparable to” the Figure 1 embodiment;
“[h]owever, the smoking article is adapted to incorporate a cigarette 150.”
Id. at 24:45–49.
The ’268 Patent discloses that cigarette 150 has a charge or roll of
tobacco 89 wrapped in wrapping material 160 so as to form a generally
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cylindrical cigarette rod or tobacco rod. Ex. 1001, 24:50–53, 25:1–3.
According to the ’268 Patent, “wrapping material 160 is formed into a
generally tubular shape, and the tobacco is positioned within the hollow
region within that tube,” and “wrapping material 160 is formed such that
each end of the tobacco rod is open to expose the tobacco contained therein,
and to allow the passage of drawn air therethrough.” Id. at 25:3–9.
As shown in Figure 2, cigarette 150 has a type of cartridge 85 at its
distal end within the wrapping material 160 and in fluid communication with
the tobacco rod. Ex. 1001, 25:21–24. Cartridge 85 contains aerosol-
generating material composition 101 and has a tubular shape with open ends
such that air can flow through the cartridge. Id. at 25:24–25, 25:31–32. The
’268 Patent describes an alternative embodiment in which cartridge 85 is not
incorporated within cigarette 150 and the region of cigarette 150 that is
wrapped in paper wrapper 160 is composed entirely of tobacco material and
aerosol-forming materials, which are not necessarily arranged in a
segmented fashion. Id. at 26:43–52.
As shown in Figure 2, cigarette 150 has filter element 200 composed
of filter material 215 wrapped in circumscribing plug wrap 218 and attached
to the tobacco rod using tipping material 222 that circumscribes the length of
the filter element 200 and an adjacent region of the tobacco rod at its
downstream end. Ex. 1001, 26:53–61. The ’268 Patent discloses that
tubular mouth-end piece 120 can act as a support for filter element 200 of
cigarette 150, and can be removably attached to outer housing 20. Id. at
26:62–27:7.
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Another embodiment is depicted in Figure 3, reproduced below:

Figure 3 of the ’268 Patent is a longitudinal cross-sectional view of an
electrically powered, tobacco-containing smoking article. Ex. 1001,
8:28–30, 27:28–29. According to the ’268 Patent, the smoking article of
Figure 3 has “certain components comparable to” the Figure 1 embodiment
and is “adapted to incorporate a type of cigarette 150.” Id. at 27:30–35.
In the Figure 3 embodiment, smoking article 10 has tube-shaped third
resistance heating element 300 that fits snuggly around a portion of tobacco
rod 89 and provides heat to at least a portion of tobacco 89 of cigarette 150.
Ex. 1001, 27:49–51, 27:63–28:2. First, second, and third resistance heating
elements 70, 72, 300 can each be separately controlled in response to timing
mechanisms, switching mechanisms, and/or sensing mechanism 60 so that
each resistance heating element can provide differing amounts of heat and
during differing periods. Id. at 28:6–26. As shown in Figure 3, second
resistance heating element 72 can have an elongated portion that extends
into tobacco segment 89 and is “in close contact with a significant amount of
substrate and aerosol-forming material within the tobacco.” Id. at 28:28–35.
As shown in Figure 3, thermally insulated region 400 circumscribes
resistance heating element 300 of smoking article 10. Id. at 28:36–40.
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B. Illustrative Claim
The ’268 Patent includes 17 claims. Claims 16 and 17 are challenged
in the Petition. Claim 16 is representative of the challenged subject matter,
and is reproduced below:
16. A tobacco-containing, electrically-powered smoking
article comprising:
(a) a tubular outer housing having a mouth-end and an end
distal to the mouth-end, the housing comprising an opening
adapted for intake of air into the smoking article;
(b) an electrical power source within the outer housing;
(c) a controller adapted for regulating current flow through
the heater;
(d) a rod-shaped carrier device removably engaged with
the mouth-end of the outer housing and comprising a tubular
mouth-end piece and a tubular cartridge with two open ends
allowing air to flow therethrough, wherein the cartridge includes
a tobacco material and an aerosol-generating material; and
(e) an electrical resistance heater in contact with the
tobacco material and the aerosol-generating material and adapted
for heating at least a portion of the tobacco material and the
aerosol-generating material.
Ex. 1001, 34:13–31.
C. Asserted Grounds and Evidence
Petitioner asserts the following grounds of unpatentability:
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Claim(s)
Challenged 35 U.S.C. Reference(s)
16 § 103(a)5 Morgan,6 Collins,7 Adams,8 Brooks9
17 § 103(a) Morgan, Collins, Adams, Brooks, Counts-96210
16 and 17 § 103(a) Counts-962, Brooks
Petitioner relies on a Declaration of Seetharama C. Deevi, Ph.D. Ex. 1003
(“Deevi Declaration”).
IV. ANALYSIS
A. Legal Standards
“In an [inter partes review], the petitioner has the burden from the
onset to show with particularity why the patent it challenges is
unpatentable.” Harmonic Inc. v. Avid Tech., Inc., 815 F.3d 1356, 1363 (Fed.
Cir. 2016) (citing 35 U.S.C. § 312(a)(3) (requiring inter partes review
petitions to identify “with particularity . . . the evidence that supports the
grounds for the challenge to each claim”)); see also 37 C.F.R. § 42.104(b)
(requiring a petition for inter partes review to identify how the challenged
claim is to be construed and where each element of the claim is found in the
prior art patents or printed publications relied upon).

5 The Leahy-Smith America Invents Act (“AIA”), Pub. L. No. 112-29, 125
Stat. 284, 287–88 (2011), amended 35 U.S.C. § 103, effective March 16,
2013. Because the ’268 Patent issued on an application that is a division of
an application filed before this date, the pre-AIA version of § 103 applies.
Ex. 1001, code (60).
6 Ex. 1005, US 5,249,586, issued Oct. 5, 1993.
7 Ex. 1006, US 5,865,185, issued Feb. 2, 1999.
8 Ex. 1007, US 2007/0102013 A1, published May 10, 1997.
9 Ex. 1009, US 4,947,874, issued Aug. 14, 1990.
10 Ex. 1008, US 5,144,962, issued Sept. 8, 1992.
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A patent claim is unpatentable under 35 U.S.C. § 103 if the
differences between the claimed subject matter and the prior art are such that
the subject matter, as a whole, would have been obvious at the time the
invention was made to a person having ordinary skill in the art to which said
subject matter pertains. KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 406
(2007). The question of obviousness is resolved based on underlying factual
determinations including: (1) the scope and content of the prior art; (2) any
differences between the claimed subject matter and the prior art; (3) the level
of ordinary skill in the art; and, when presented, (4) objective evidence of
nonobviousness, i.e., secondary considerations. Graham v. John Deere Co.,
383 U.S. 1, 17–18 (1966).
Additionally, the obviousness inquiry typically requires an analysis of
“whether there was an apparent reason to combine the known elements in
the fashion claimed by the patent at issue.” KSR, 550 U.S. at 418 (citing In
re Kahn, 441 F.3d 977, 988 (Fed. Cir. 2006) (requiring “articulated
reasoning with some rational underpinning to support the legal conclusion of
obviousness”)). Petitioner cannot satisfy its burden of proving
obviousness by employing “mere conclusory statements,” but “must
instead articulate specific reasoning, based on evidence of record, to support
the legal conclusion of obviousness.” In re Magnum Oil Tools Int’l, Ltd.,
829 F.3d 1364, 1380 (Fed. Cir. 2016).
B. Level of Ordinary Skill in the Art
Petitioner provides the following contention regarding a person of
ordinary skill in the art (“POSA”):
A POSA at the time of the purported invention (the
October 2006 timeframe) would have had a Bachelor’s degree in
mechanical engineering, electrical engineering, chemistry, or
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physics, or a related field, and three to four years of industry
experience, or a Master’s degree in mechanical engineering,
electrical engineering, chemistry, or physics, or a related field,
and one to two years of industry experience. Such a POSA
would have been familiar with electrically powered smoking
articles and/or the components and underlying technology used
therein.
Pet. 14 (citing Ex. 1003 ¶¶ 26–30). Patent Owner accepts Petitioner’s
description of a POSA for purposes of the Preliminary Response. Prelim.
Resp. 20. For purposes of this Decision, we accept Petitioner’s contention,
which is supported by Dr. Deevi’s testimony (Ex. 1003 ¶ 28) and is
consistent with the scope and content of the ’268 Patent and the asserted
prior art.
C. Claim Construction
In an inter partes review, we apply the same claim construction
standard as would be used by a district court to construe a claim in a civil
action involving the validity or infringement of a patent. 37 C.F.R.
§ 42.100(b). Under that standard, claim terms are given their ordinary and
customary meaning, as would have been understood by a person of ordinary
skill in the art at the time of the invention, in light of the language of the
claims, the specification, and the prosecution history of record. Id.; Phillips
v. AWH Corp., 415 F.3d 1303, 1312–19 (Fed. Cir. 2005) (en banc); Thorner
v. Sony Comput. Entm’t Am. LLC, 669 F.3d 1362, 1365–66 (Fed. Cir. 2012).
The Petition is based on alternative constructions for the terms
“controller,” “removably engaged,” and “a rod-shaped carrier device . . .
comprising a tubular mouth-end piece and a tubular cartridge with two open
ends.” Pet. 14–22. According to Patent Owner, its arguments for denial of
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institution “do not require addressing the construction of claim terms.”
Prelim Resp. 20.
We determine that no claim term requires express construction for
purposes of this Decision. Vivid Techs., Inc. v. Am. Sci. & Eng’g, Inc., 200
F.3d 795, 803 (Fed. Cir. 1999) (“[O]nly those terms need be construed that
are in controversy, and only to the extent necessary to resolve the
controversy.”); see also Nidec Motor Corp. v. Zhongshan Broad Ocean
Motor Co., 868 F.3d 1013, 1017 (Fed. Cir. 2017) (applying Vivid Techs. in
the context of inter partes review).
D. Petitioner’s First Ground: Morgan, Collins, Adams, Brooks
Petitioner challenges claim 16 based on Morgan, Collins, Adams, and
Brooks. Pet. 7, 23–56. Patent Owner opposes. Prelim. Resp. 63–66. We
provide an overview of the asserted references before turning to the parties’
contentions.
1. Morgan (Ex. 1005)
Morgan relates to electrical smoking articles “in which tobacco flavor
media are heated but not burned to release tobacco flavors.” Ex. 1005,
1:11–15. Morgan discloses “a smoking article for delivering to a smoker an
inhalable tobacco flavor substance” where the article “can be used, for
example, to simulate a cigarette.” Id. at 2:17–19, 3:9–11. According to
Morgan, the electrical article includes:
a removable disposable portion which includes the tobacco
flavor medium and, if desired, a filter, and a reusable
“permanent” portion including a source of electrical energy, a set
of reusable heating elements, and control circuitry for energizing
the heaters in an appropriate sequence, in response to manual
actuation or puff-induced actuation.
Id. at 3:13–22.
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Figures 1 and 2 of Morgan are reproduced below.

Morgan Figures 1 and 2 depict an electrical smoking article with a
perspective view in Figure 1 and a partially fragmentary, exploded
perspective view in Figure 2. Ex. 1005, 2:42–45. Electrical smoking
article 10 includes reusable or permanent portion 20 and disposable
filter/flavor portion or cartridge 21 received in cavity 30 at the mouth end of
portion 20. Id. at 4:44–47. Reusable portion 20 includes power source 22,
heating elements 23, and control circuit 24. Id. at 4:48–50, 4:56–59.
Disposable portion 21 includes flavor segment 27 and filter segment 28. Id.
at 5:26–28.
Morgan discloses that flavor segment 27 includes tobacco and an
aerosol precursor such as glycerine. Ex. 1005, 5:35–42. According to
Morgan, “[i]t is desirable to add an aerosol precursor to deliver the tobacco
flavor substance as an aerosol, so that when the consumer exhales the
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tobacco flavor substance, the visible condensed aerosol may mimic the
appearance of cigarette smoke.” Id. at 5:42–46.
In the Figures 1 and 2 embodiment, heating elements 23 linearly
extend from the mouth end to the rod end of cavity 30 and are bowed out
from the wall of the cavity so that they “press into flavor segment 27 for
intimate thermal contact.” Ex. 1005, 5:6–11, 5:47–53.
Figures 7 and 8 of Morgan are reproduced below.

Morgan Figures 7 and 8 depict an alternative heater embodiment with a
radial cross-sectional view in Figure 7 and a longitudinal cross-sectional
view in Figure 8. Ex. 1005, 2:62–68. As shown in Figures 7 and 8, heating
elements 71 are spaced from the wall of cavity 30, and each has sharp tip 72
and fold 73 to increase their rigidity. Id. at 5:46–50. Morgan discloses that,
“[i]n this way, heating elements 71 actually pierce and extend into
disposable portion 21 to provide the desired intimate thermal contact.” Id. at
6:50–52.
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2. Collins (Ex. 1006)
Collins is a continuation-in-part (“CIP”) of Morgan. Ex. 1006,
1:6–15. Collins discloses a “smoking article . . . in which a replaceable
tobacco flavor unit containing tobacco flavor material is electrically heated
by a set of permanent reusable heaters to evolve flavors or other components
in vapor or aerosol form for delivery to a smoker.” Id. at code (57)
Figures 1 and 2 of Collins are reproduced below.

Collins Figures 1 and 2 depict electrical smoking article 10 including
reusable or permanent portion 20 and disposable tobacco flavor unit 21
received in cavity 30 at the mouth end of portion 20. Ex. 1006, 3:30–33,
7:32–37. As shown in Figure 2, heating elements 23 are linear, extending
from one end of cavity 30 to the other. Id. at 8:4–11.
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Figures 3, 3A, 4, and 5 of Collins are reproduced below.

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Collins Figures 3 and 3A are radial cross-sectional views of the smoking
article of Figures 1 and 2. Ex. 1006, 3:34–40. Figure 4 is a longitudinal
cross-sectional view of the smoking article, and Figure 5 is a partially
fragmentary, perspective view of the disposable tobacco flavor unit of the
smoking article. Id. at 3:41–46.
As shown in Figures 4 and 5, disposable tobacco flavor unit 21
includes tobacco flavor material 27 positioned on carrier 36, free-flow filter
28, back-flow filter 29, mouthpiece filter 46, and aerosol barrier tube 35.
Ex. 1006, 8:20–23. Collins discloses that carrier 36 “physically separates
heater elements 23 from tobacco flavor material 27.” Id. at 8:23–26.
According to Collins:
When tobacco flavor unit 21 is inserted in cavity 30 of
reusable portion 20, aerosol barrier tube 35 fits over the outside
surface 51 of heater elements 23 whereas back-flow filter 29,
tobacco flavor material 27 and free-flow filter 28 fit into cavity
30, as shown in FIG. 3A. Thus, the inside surfaces 41 of heater
elements 23 are adjacent tobacco flavor material 27 to facilitate
aerosol generation, but are separated from it by carrier 36.
Id. at 8:27–34.
Collins further discloses:
Tobacco flavor unit 21 also includes an aerosol barrier
tube 35 which is used to prevent aerosol from condensing onto
inside surface 47 of permanent portion wall 31. Since wall 31
forms a part of permanent portion 20, reducing this type of
condensation further reduces the potential for the generation of
undesirable flavors due to the reheating of condensed aerosol.
Aerosol which does condense onto the surface of aerosol barrier
tube 35 is disposed of when tobacco flavor unit 21 is discarded
after use. Additionally, aerosol barrier tube 35 also prevents the
build-up of condensed aerosol onto permanent portion 20 from
creating undesirable staining.
Ex. 1006, 9:12–23.
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3. Adams (Ex. 1007)
Adams relates to “tobacco smoking systems using electrical energy
rather than combustion.” Ex. 1007 ¶ 1. Petitioner relies on Adams for its
disclosure of mouthpiece 60, which Adams depicts in Figure 5, reproduced
below.

Adams Figure 5 is a cross-sectional view of an electrically heated smoking
system including a mouthpiece. Ex. 1007 ¶ 11. Figure 5 shows electric
tobacco smoking system 20, including heating assembly 22, tobacco plug
24, and mouthpiece 60, which together resemble a conventional cigarette.
Id. ¶¶ 42, 43; see also id. ¶ 23, Fig. 1 (both describing the electric tobacco
smoking system). Mouthpiece 60 includes cylindrical shell 62 and
attachment sheath 64. Id. ¶ 42.
Adams describes shell 62 as having an open interior that provides a
channel or passage to deliver an aerosol. Ex. 1007 ¶ 42. Adams discloses
that sheath 64 extends beyond the end of shell 62 and into an opening within
heating assembly 22. Id. ¶ 43. According to Adams, sheath 64 may be
fabricated from a sufficiently rigid material that mouthpiece 60 can be
removably attached to smoking system 20 by inserting the extending portion
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of the sheath 64 between heating assembly 22 and tobacco plug 24. Id. ¶ 44.
Adams discloses that, for some applications, it may be desirable to provide a
suitable filter (not shown in Figure 5) such as a plug of cellulose acetate in
the discharge end of the mouthpiece 60. Id. According to Adams, “a
mouthpiece, with or without a filter, may be used with the heating system
both to define a cooling region for the tobacco volatiles, and to direct the
resulting aerosol to the consumer.” Id. ¶ 5.
4. Brooks (Ex. 1009)
Brooks “relates to cigarettes and other smoking articles such as cigars,
pipes, and the like, which employ an electrical resistance heating element
and an electrical power source to produce a tobacco flavored smoke or
aerosol.” Ex. 1009, 1:6–10. The ’268 Patent discusses Brooks, stating that
it discloses “electronic control components” and “sensing mechanism
components” that can be used to “regulat[e] current flow through one or
more of the resistance heating elements.” Ex. 1001, 20:27–21:10.
Brooks states that its controller provides “accurate and sophisticated”
current actuation and regulation. Ex. 1009, code (57), 4:50–5:12.
Brooks discloses a smoking article that includes a cigarette and a
reusable, hand-held controller. Ex. 1009, 7:15–16, Fig. 1. The controller
includes a case, a puff actuated current actuation mechanism, a time-based
current control circuit, and a chamber into which a battery is inserted. Id. at
7:20–25, 9:37–39, 9:51–55, Fig. 1. Brooks describes the control circuit in
detail with reference to Figures 9 and 10. Id. at 9:55–65, 12:12–15, 12:39–
16:31. Brooks discloses examples in which controllers, including the
control circuits shown in Figures 9 and 10, were built and tested. Id. at
17:41–18:33 (Example 1), 20:54–21:41 (Example 4).
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5. Petitioner’s Obviousness Challenge
a) Claim Element 16(e)
At this stage, the parties’ dispute11 focuses on claim element 16(e),
which recites “an electrical resistance heater in contact with the tobacco
material and the aerosol-generating material and adapted for heating at least
a portion of the tobacco material and the aerosol-generating material.”
Ex. 1001, 34:28–31.
Petitioner contends that Morgan discloses an electrical resistance
heater in contact with the tobacco material and the aerosol-generating
material, as recited in claim element 16(e). Pet. 52–55 (citing Ex. 1005,
2:26–32, 3:66–68, 4:3–5, 4:9–15, 4:18–39, 5:35–46, 7:38–43 (claim 1),
9:1–11 (claims 25–27)). Petitioner directs us, in particular, to Morgan’s
Figures 7 and 8, which “illustrate sharp heating elements 71 that ‘pierce and
extend into disposable portion 21 to provide [a] desired intimate thermal
contact’ with tobacco and aerosol-generating material.” Pet. 54 (quoting
Ex. 1005, 6:46–52 and reproducing Morgan Figures 7, 8).
Patent Owner argues that, in “Morgan’s Figure 2, heating elements 23
are separated from flavor segment 27 by paper” and, therefore, do not meet
the “in contact with” limitation of claim element 16(e). Prelim. Resp. 64.
Patent Owner argues that “the embodiment of Figure 2 already includes
heating elements, and Petitioner fails to show why the POSA would have
been motivated to modify the embodiment of Figure 2 to include the heating

11 Here and in the remainder of Sections IV.D to IV.F, we address whether
Petitioner has established “a reasonable likelihood that the petitioner would
prevail with respect to at least 1 of the claims challenged in the petition.”
35 U.S.C. § 314(a). Patent Owner presents other arguments for denial,
which we address in Sections IV.G and IV.H below.
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elements of the different Figures 7 and 8 embodiment.” Id. at 65. Patent
Owner additionally argues that “Collins[] disparages the teachings of
Morgan and states that heaters should not be placed in contact with
tobacco—as they are in Morgan’s Figures 7 and 8—because this
arrangement can result in contaminants building up on the heaters.” Id. at
66.
After considering the parties’ arguments and evidence, we are
persuaded that Petitioner shows sufficiently for purposes of institution that
Morgan discloses an “an electrical resistance heater in contact with the
tobacco material and the aerosol-generating material and adapted for heating
at least a portion of the tobacco material and the aerosol-generating
material,” as recited in claim element 16(e). Pet. 52–55. Petitioner’s
contention is supported by the portions of Morgan cited in the Petition,
particularly Morgan’s Figures 7 and 8, which depict sharp-tipped heating
elements 71 that “pierce and extend into disposable portion 21 to provide the
desired intimate thermal contact.” Ex. 1005, 6:50–52. At this stage, there is
no dispute that Morgan’s disposable portion 21 contains tobacco material
and aerosol-generating material and that Morgan’s heating elements 71 are
“adapted for heating at least a portion of the tobacco material and the
aerosol-generating material,” as claim element 16(e) recites in part.
We have considered Patent Owner’s argument that Morgan Figure 2
shows heating elements 23 separated from flavor segment 27 by paper.
Prelim. Resp. 64. The Petition, however, relies on Morgan Figures 7 and 8,
not Figure 2, to show the “in contact with” feature of claim 16. Pet. 54.
We have also considered Patent Owner’s argument regarding lack of
motivation. Prelim. Resp. 65. For purposes of institution, Petitioner has met
its burden by directing us to Morgan’s Figures 7 and 8, which show an
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“alternative heater embodiment,” i.e., one that can be used instead of
Morgan’s heating elements 23 in Figure 2. Ex. 1005, 2:62–68, 3:28–37,
6:46–52.
We have also considered Patent Owner’s arguments about Collins and
disparagement. Prelim. Resp. 15, 66. Collins teaches that “[a] disadvantage
of reusable heating elements is that residual aerosol can settle and condense
on the heating elements . . . resulting in the generation of undesirable aerosol
components if the residual aerosol is reheated after new disposable tobacco
flavor medium is inserted into the article.” Ex. 1006, 2:7–13; see also id.
at 4:52–56 (discussing importance of minimizing condensation of aerosol on
the heating elements). In the portions Patent Owner cites, Collins teaches a
carrier that separates the heating elements from the tobacco flavor material.
Id. at 5:11–15, 8:23–26, 8:31–34; see Prelim. Resp. 15, 66. Patent Owner
does not direct us to any disparagement, and on this record, there is no
evidence that Collins’ discussion of a “disadvantage of reusable heating
elements” (Ex. 1006, 2:7–13) would have been understood by a POSA as
disparagement of Morgan’s Figure 7 and 8 embodiment in which the heating
elements pierce and extend into the tobacco material. Accordingly, we
determine that Petitioner meets the threshold for institution without making
any final determination on the disparagement issue.
b) Remaining Elements of Claim 16
Petitioner contends that Morgan discloses the claim 16 preamble (“[a]
tobacco-containing, electrically powered smoking article”), claim
element 16(a) (“a tubular outer housing . . . comprising an opening adapted
for intake of air into the smoking article”), and claim element 16(b) (“an
electrical power source within the outer housing”). Pet. 30–32. Regarding
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claim element 16(c) (“a controller adapted for regulating current flow
through the heater”), Petitioner contends that, if § 112(6) does not apply,
then Morgan discloses the claim element, and if § 112(6) does apply, then
Brooks discloses the claim element. Pet. 15–18, 32–35.
Claim element 16(d) recites “a rod-shaped carrier device removably
engaged with the mouth-end of the outer housing and comprising a tubular
mouth-end piece and a tubular cartridge with two open ends allowing air to
flow therethrough, wherein the cartridge includes a tobacco material and an
aerosol-generating material.” Ex. 1001, 34:22–27. Petitioner contends that,
if “a rod-shaped carrier device removably engaged with the mouth-end of
the outer housing and comprising a tubular mouth-end piece and a tubular
cartridge with two open ends” is construed consistent with Patent Owner’s
district court infringement contention,12 then Morgan alone teaches claim
element 16(d), even if “removably engaged” requires an interlocking or snug
fit. Pet. 18–20, 35–40, 45–48.
More specifically, Petitioner contends that a “tubular mouth-end
piece” is taught by Morgan’s filter segment 28. Pet. 39–40. In the
alternative, Petitioner contends that Adams teaches a “tubular mouth-end
piece” and that it would have been obvious to combine Adams’ mouthpiece
with Morgan’s smoking article. Pet. 40–44. Under a broader construction,
Petitioner contends that Morgan’s flavor segment 27 of disposable portion
21 teaches a “tubular cartridge with two open ends.” Pet. 45–48.

12 Petitioner relies on Patent Owner’s district court complaint alleging that
Petitioner’s IQOS® tobacco stick infringes at least claims 16 and 17.
Pet. 19 (citing Ex. 1032, 9, 14–15). Petitioner also relies on Patent Owner’s
claim chart for the related ’123 Patent in the International Trade
Commission. Id. (citing Ex. 1025, 4–5).
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Alternatively, under a narrower construction, Petitioner contends that
Collins’ aerosol barrier tube 35 teaches a “tubular cartridge with two open
ends” and that it would have been obvious either to combine Collins’ aerosol
barrier tube 35 with Morgan’s disposable portion 21 or to substitute Collins’
tobacco flavor unit 21 for Morgan’s disposable portion 21. Pet. 48–52.
At this stage, Patent Owner does not present arguments regarding the
claim 16 preamble and claim elements 16(a)–(d), separate from its
arguments addressing claim element 16(e) and its arguments for lack of
particularity and discretionary denial. Except as discussed above in
connection with claim element 16(e), Patent Owner does not challenge
Petitioner’s rationale for combining Morgan with each of Collins, Adams,
and Brooks.
We have reviewed the information provided by Petitioner, including
the relevant portions of the Deevi Declaration, and are persuaded, based on
the current record, that Petitioner has established a reasonable likelihood of
prevailing with respect to at least one claim challenged in the Petition.
E. Petitioner’s Second Ground: Morgan, Collins, Adams, Brooks,
Counts-962
Petitioner challenges claim 17 based on Morgan, Collins, Adams,
Brooks, and Counts-962. Pet. 7, 56–59. Patent Owner opposes. Prelim.
Resp. 63–66. We provide an overview of Counts-962 before turning to the
parties’ contentions.13

13 We provide an overview of Morgan, Collins, Adams, and Brooks in
Sections IV.D.1 to IV.D.4 above.
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1. Counts-962 (Ex. 1008)
Counts-962 relates to smoking articles that use “electrical power for
heating and thereby releasing flavor from tobacco.” Ex. 1008, 1:5–12.
Petitioner relies on Figure 1 of Counts-962, which is reproduced below.

Counts-962 Figure 1 is a partially fragmentary perspective view of smoking
article 10 including flavor-generating medium 12, heating element 14, and
power source 16, which are surrounded by outer tube or overwrapper 18.
Ex. 1008, 2:34–37, 3:16–20. According to Counts-962, “[f]lavor-generating
medium 12 is captured within tube 20 by perforated front and rear clips 22
and 24, respectively.” Id. at 3:24–26. Counts-962 discloses that “[e]lectrical
energy from power source 16 is applied to the terminals of heating
element 14, which heats the flavor generating medium to produce flavor
components.” Id. at 3:26–29. As shown in Figure 1, “[a]ir holes 26 are
provided in outer wrapper 18 to permit outside air to be drawn through
flavor-generating medium 12.” Id. at 3:29–31. According to Counts-962,
“[t]he outside air mixes with the flavor components, and the mixture is
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drawn through front clip 22 and filter 28 when the consumer draws on the
article.” Id. at 3:31–34. Counts-962 discloses that article 10 is separable
along line A-A in Figure 1 to permit the consumer to replace expended
flavor-generating medium and filter materials. Id. at 3:34–37.
Counts-962 discloses that flavor-generating medium 12 may be placed
around heating element 14 or that the heating element may surround the
flavor-generating medium. Ex. 1008, 3:53–55. Counts-962 discloses that
flavor-generating medium 12 may include tobacco or tobacco-derived
materials. Id. at 4:1–2.
Petitioner relies on Figure 3 of Counts-962, which is reproduced
below.

Counts-962 Figure 3 is a longitudinal sectional view of smoking article 34
including “a first heating element 14 in contact with flavor-generating
medium 12, and a second heating element 14' for preheating air drawn into
tube 20 before it enters bed 12.” Ex. 1008, 2:40–42, 4:18–21.
Counts-962 discloses a control system for maintaining flavor-
generating medium 12 at a controlled temperature, where the control system
may be either “passive” or “active.” Ex. 1008, 4:31–38. According to
Counts-962, “[a] passive control system is one that uses heating element 14
or power source 16 themselves to regulate the temperature of flavor-
generating medium 12 or the amount of power applied to the heating
element,” and “[a]n active control system uses . . . additional components
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such as an electronic control circuit, or requires participation from the
consumer, to consistently heat the flavor-generating medium.” Id.
at 4:38–46. Counts-962 discloses several types of active control systems.
Id. at 6:15–9:51, Figs. 6, 7, 8, 8a.
Petitioner relies on Figure 6 of Counts-962, which is reproduced
below.

Counts-962 Figure 6 is a longitudinal sectional view of a smoking article
with an active control system having a double heater/pulse design having
first heating element 14, which maintains flavor-generating medium 12 at a
constant temperature, and second heating element 14', which is pulsed to
produce the desired aerosol. Ex. 1008, 2:50–52, 16:15–25. Counts-962
discloses that heating element 14 surrounds tube 20, which is thermally
conductive and contains flavor-generating medium 12, and heats both the
contents of the tube and air drawn through passageway 36 before it enters
tube 20. Id. at 6:26–32. According to Counts-962, heating element 14' may
be disposed within flavor-generating medium 12 and is pulsed to
generate/release flavor components for each puff. Id. at 6:32–36.
2. Petitioner’s Obviousness Challenge
Claim 17 depends from claim 16 and recites: “wherein the electrical
resistance heater is positioned between the electrical power source and the
cartridge.” Ex. 1001, 34:32–34.
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Applying a claim construction based on Patent Owner’s district court
infringement position, Petitioner contends that Morgan’s “Figure 7 and 8
heaters are ‘between’ Morgan’s power source and the cartridge into which
they have been inserted” and include “heater portions that are not inserted
into portion 21, i.e., the spacers 80.” Pet. 58. Alternatively, Petitioner
contends that “POSAs often placed heaters completely between electrical
power sources and flavor cartridges, for example, to preheat the air before it
enters the tobacco,” citing Counts-962 Figure 3 as an example of such a
configuration. Pet. 59.
Addressing claim 17, Patent Owner argues that “the Petition fails to
provide any explanation as to why the POSA would allegedly have been
motivated to combine Counts-962 with any, much less all, of the other
references.” Prelim. Resp. 34 (citing Pet. 59).
After considering the parties’ arguments and evidence, we are
persuaded that Petitioner shows sufficiently for purposes of institution that
Morgan discloses the limitation of claim 17 or that the limitation would have
been obvious in view of Morgan and Counts-962. Pet. 58–59. Although the
Petition does not use any form of the word “motivate,” the Petition does
provide a rationale for the combination of Morgan and Counts-962, namely
that “POSAs often placed heaters completely between electrical power
sources and flavor cartridges, for example, to preheat the air before it enters
the tobacco.” Pet. 59.
F. Petitioner’s Third Ground: Counts-962, Brooks
Petitioner challenges claims 16 and 17 based on Counts-962 and
Brooks. Pet. 7, 60–70. Patent Owner opposes. Prelim. Resp. 66. We
address the parties’ contentions below.
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1. Claim Element 16(e)
At this stage, the parties’ dispute focuses on element 16(e), which
recites “an electrical resistance heater in contact with the tobacco material
and the aerosol-generating material and adapted for heating at least a portion
of the tobacco material and the aerosol-generating material.” Ex. 1001,
34:28–31.
Petitioner contends that Counts-962 discloses an electrical resistance
heater in contact with the tobacco material and the aerosol-generating
material, as recited in claim element 16(e). Pet. 68–69 (citing Ex. 1008,
1:21–25, 3:53–55, 4:1–2, 4:6–12, 4:17–19, 5:41–59, 10:40–42, 10:53–55,
Figs. 1, 3). For example, Petitioner directs us to the disclosure in
Counts-962 that “[f]lavor-generating medium 12 typically is placed around
heating element 14” (Ex. 1008, 3:53–55) and that “heating element 14 [is] in
contact with flavor-generating medium 12” (id. at 4:17–19). Pet. 68.
Patent Owner argues that, in “Counts-962, heater element 14 . . . is
separated from flavor-generating medium 12 . . . by an insulating tube or
protective sheath” and, therefore, does not meet the “in contact with”
limitation of claim element 16(e). Prelim. Resp. 66 (citing Ex. 1008,
4:5–14).
After considering the parties’ arguments and evidence, we are
persuaded that Petitioner shows sufficiently for purposes of institution that
Counts-962 discloses an “an electrical resistance heater in contact with the
tobacco material and the aerosol-generating material and adapted for heating
at least a portion of the tobacco material and the aerosol-generating
material,” as recited in claim element 16(e). Pet. 68–69. Petitioner’s
contention is supported by the portions of Counts-962 cited in the Petition,
particularly Counts-962 Figure 3 and the description of that figure as
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showing “a first heating element 14 in contact with flavor-generating
medium 12.” Ex. 1008, 6:50–52. At this stage, there is no dispute that
flavor-generating medium 12, as disclosed in Counts-962, may contain
tobacco material and aerosol-generating material and that heating element 14
is “adapted for heating at least a portion of the tobacco material and the
aerosol-generating material,” as recited in claim element 16(e).
We have considered Patent Owner’s argument that, in Counts-962,
heater element 14 is separated from flavor-generating medium 12 by an
insulating tube or protective sheath. Prelim. Resp. 66. Patent Owner relies
on the following passage in Counts-962:
Heating element 14 may be formed using a variety of
materials. In a preferred embodiment, heating element 14 is a
resistive wire coil (such as tungsten, tantalum, or an alloy of
nickel, chromium, and iron (such as that sold by Driver-Harris
Company, Harison, N.J., under the trademark NICHROME®)
disposed within an insulating tube which typically may be paper,
foil, carbon, plastic, or glass. Alternatively, the heater may be
formed with graphite or ceramics, and can be formed with a
protective sheath of these materials.
Ex. 1008, 4:5–14 (emphasis added). We begin by observing that
Counts-962’s description of an insulating tube or protective sheath pertains
to a preferred embodiment. Id. More broadly, Counts-962 discloses that
“[h]eating element 14 may be formed using a variety of materials.” Id.
at 4:5–6. On this record, we find that Counts-962 is reasonably interpreted
as disclosing embodiments that do not include an insulating tube or a
protective sheath.
Furthermore, even Counts-962’s description of a preferred
embodiment does not support Patent Owner’s argument. On this record, we
find that the above-quoted passage from Counts-962 is reasonably
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interpreted as teaching that heating element 14 may include an electrically
insulating tube or protective sheath as part of the heating element, not as a
separate element that separates and thermally insulates heating element 14
from flavor-generating medium 12. Our interpretation is consistent with
Counts-962’s teachings that “[t]he heating element is designed to heat
flavor-generating medium 12 directly” and “heating element 14 [is] in
contact with flavor-generating medium 12.” Id. at 4:15–19. Our
interpretation is further supported by Counts-962 claim 24, which discloses
“a first heating element in thermal contact with said flavor-generating
medium for heating said flavor-generating medium.” Id. at 15:61–63. We
do not, however, make any immutable findings at this stage of the
proceeding.
2. Remaining Elements of Claim 16 and Claim 17
Petitioner contends that Counts-962 discloses the claim 16 preamble
(“[a] tobacco-containing, electrically powered smoking article”), claim
element 16(a) (“a tubular outer housing . . . comprising an opening adapted
for intake of air into the smoking article”), claim element 16(b) (“an
electrical power source within the outer housing”), claim element 16(d) (“a
rod-shaped carrier device . . . a tobacco material and an aerosol-generating
material”), and the limitation of claim 17 (“electrical resistance heater . . .
positioned between the electrical power source and the cartridge”).
Pet. 62–63, 65–69. Regarding claim element 16(c) (“a controller adapted for
regulating current flow through the heater”), Petitioner contends that, if
§ 112(6) does not apply, then Counts-962 discloses the claim element, and if
§ 112(6) does apply, then Brooks discloses the claim element. Pet. 15–18,
34–35, 64.
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Addressing Petitioner’s combination of Counts-962 and Brooks in
Ground 3, Patent Owner argues that “the Petition does not explain why the
POSA would allegedly have been motivated to combine these two
references.” Prelim. Resp. 34. We disagree. Petitioner asserts that a POSA
would have adapted Brooks’ controller for use in Counts-962’s smoking
article for the same reasons as Petitioner presented in Ground 1. Pet. 64.
For Ground 1, Petitioner asserts that a POSA would have been motivated to
use Brooks’ controller to achieve the “accurate and sophisticated current
actuation and current regulati[on]” that Brooks describes. Pet. 34–35 (citing
Ex. 1003 ¶¶ 140–143; Ex. 1009, 4:50–57, 20:55–58, 21:6–7, 21:38–41).
At this stage, Patent Owner does not present other arguments
regarding the claim 16 preamble, claim elements 16(a)–(d), and claim 17
separate from its arguments addressing claim element 16(e) and a reason to
combine Counts-962 and Brooks, and its arguments for discretionary denial.
We have reviewed the information provided by Petitioner, including
the relevant portions of the Deevi Declaration, and are persuaded, based on
the current record, that Petitioner has established a reasonable likelihood of
prevailing with respect to at least one claim challenged in the Petition.
G. Patent Owner’s Arguments regarding Lack of Particularity
Patent Owner argues that the Petition should be denied for lack of
particularity under 35 U.S.C. § 312(a)(3). Prelim. Resp. 21–35. We address
Patent Owner’s arguments below.
1. Number of Combinations and Use of “And/Or”
Patent Owner argues that “Petitioner presents an excessive number of
combinations through the disfavored use of ‘and/or.’” Prelim. Resp. 23–27
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(citing Adaptics Ltd. v. Perfect Co., IPR2018-01596, Paper 20 (PTAB
Mar. 6, 2019) (informative)).
After considering Patent Owner’s arguments, we are persuaded that
the Petition meets the particularity requirement of § 312(a)(3),
notwithstanding the number of possible combinations and the use of
“and/or” in the heading and conclusion for Ground 1. Pet. 23, 56.
The Petition relies on two primary references—Morgan and
Counts-962—either alone or in combination with one of Collins, Adams,
Brooks, and Counts-962. Pet. 7. The Petition asserts with reasonable
particularity that claims 16 and 17 are unpatentable based on Morgan alone
or Counts-962 alone, if certain claim terms are construed broadly and in a
manner consistent with Patent Owner’s district court infringement
contention. Pet. 15–16, 18–20, 22–24, 30–40, 45–48, 52–58, 60–70. The
Petition relies on the secondary references to show particular claim
limitations under a narrower claim construction. Pet. 16–18, 20–22, 34–35,
40–45, 48–52, 59, 64.
For example, the Petition presents both a plain meaning construction
and a means-plus-function (“MPF”) construction for the term “controller.”
Pet. 15–18. The Petition relies on Morgan to show a “controller” under a
plain meaning construction and Brooks to show a “controller” under a MPF
construction. Pet. 16–18, 34–35, 64. The Petition presents both broad and
narrower constructions for “a rod-shaped carrier device . . . comprising a
tubular mouth-end piece and a tubular cartridge with two open ends.”
Pet. 18–22. The Petition relies on Morgan to show a “tubular mouth-end
piece” under a broad construction and Adams to show a “tubular mouth-end
piece” under a narrower construction. Pet. 39–44. The Petition relies on
Morgan to show a “tubular cartridge with two open ends” under a broad
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construction and Collins to show a “tubular cartridge with two open ends”
under a narrower construction. Pet. 45–52.
Petitioner’s reliance on the secondary references to show particular
claim limitations under a narrower claim construction distinguishes this case
from Adaptics, where claim construction did not play an overt role in the
multiplicity of references and combinations of references relied upon by the
petitioner. Unlike Adaptics, Petitioner relies on each of the secondary
references to show particular claim limitations, thereby limiting the breadth
of the asserted grounds to a reasonable scope. Cf. Adaptics, Paper 20
at 20–21 (“Petitioner’s ‘catch-all’ ground attempts to require Patent Owner
to address whether each and every claim limitation is taught not only by
each of Bendel and Sartorius, but by each of these references in combination
with one or more of the other references asserted in the proceeding.”).14
2. Alleged Inconsistencies, Discrepancies, and Errors
Patent Owner argues that inconsistencies between the Petition’s
headings and text, discrepancies between the Petition and the Deevi
Declaration, and erroneous references to limitations “27[c],” “27[d],” and
“27[f]” exacerbate the lack of particularity. Prelim. Resp. 28–30 & n.4
(citing Pet. 7, 23, 56; Ex. 1003, 57, 94; Adaptics, Paper No. 20 at 9 n.7).
After considering Patent Owner’s arguments, we are persuaded that
the Petition meets the particularity requirement of § 312(a)(3),

14 There were many factors that contributed to a lack of particularity in
Adaptics that are not present in this case, including non-conforming exhibits,
inaccurate pinpoint citations, the use of “and/or” yielding “hundreds of
possible combinations,” the declarant’s reliance on additional references and
documents not included in petitioner’s asserted grounds, and a lack of
analysis regarding public availability of multiple references. Adaptics,
Paper 20 at 7 n.4, 8 n.5, 9 n.7, 18 n.12, 19, 21–24.
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notwithstanding the alleged inconsistencies, discrepancies, and errors.
Patent Owner presents charts outlining the asserted grounds, demonstrating
that it fully comprehends the scope and content of Petitioner’s challenges.
Prelim. Resp. 24–26. Patent Owner relies, as it should, on the detailed
presentation of the grounds as set forth in the body of the Petition, not
merely on the summary of the grounds or the headings.
3. Alternative Claim Constructions
Patent Owner argues that alternative, unsupported claim constructions
exacerbate the lack of particularity, arguing that Petitioner fails to state
which construction it believes is correct. Prelim. Resp. 30–32.
After considering Patent Owner’s arguments, we are persuaded that
the Petition meets the particularity requirement of § 312(a)(3),
notwithstanding the Petition’s reliance on alternative constructions for
certain claim terms.
We disagree with Patent Owner’s assertion that Petitioner’s claim
constructions are unsupported. Petitioner cites both intrinsic and extrinsic
evidence as support for its plain meaning and MPF constructions for
“controller.” Pet. 15–18 (citing Exs. 1001, 1003, 1009, 1012, 1027, 1028,
1029, 1031). Petitioner relies on Patent Owner’s district court infringement
contention as support for its broad constructions for “removably engaged”
and “a rod-shaped carrier device . . . comprising a tubular mouth-end piece
and a tubular cartridge with two open ends.” Pet. 18–20 (citing Exs. 1025,
1032). Petitioner cites intrinsic evidence as support for its narrower
construction for the latter term. Pet. 20–22 (citing Exs. 1001, 1010, 1033).
We also disagree with Patent Owner’s argument that “[i]n any IPR,
the petitioner must show how a challenged claim is unpatentable under ‘a
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claim construction that [the petitioner] consider[s] to be correct.’” Prelim.
Resp. 31 (quoting Hologic, Inc., v. Enzo Life Sci., Inc., IPR2018-00019,
Paper 17 at 8–9 (PTAB Apr. 18, 2018) (emphasis added)).15 The decisions
cited by Patent Owner have not been designated precedential or informative.
Under our rules, a petition must set forth “[h]ow the challenged claim
is to be construed.” 37 C.F.R. § 42.104(b)(3). Numerous decisions have
held that this rule does not require a petitioner to express a subjective belief
in the correctness of its proffered claim constructions, nor prohibit a
petitioner from relying on claim constructions that it believes are incorrect.
Lewis Machine & Tool Co. v. WHG Properties, LLC, IPR2020-00373, Paper
6 at 33–34 (PTAB July 27, 2020); 10X Genomics, Inc. v. Bio-Rad Labs.,
Inc., IPR2020-00086, Paper 8 at 17–22 (PTAB Apr. 27, 2020); Google LLC
v. AGIS Software Development, LLC, IPR2018-01085, Paper 10 at 10
(PTAB Nov. 19, 2018); General Electric Co. v. Vestas Wind Sys. A/S),
IPR2018-00928, Paper 9 at 12–17 (PTAB Nov. 5, 2018); Apple, Inc. v. AGIS
Software Development, LLC, IPR2018-00821, Paper 9 at 10 (PTAB Oct. 23,
2018); Western Digital Corp. v. SPEX Techs., Inc., IPR2018-00082, Paper
14 at 9–13 (PTAB Apr. 25, 2018). Although these decisions are not
precedential or informative, we find them persuasive.
Moreover, the regulatory history accompanying 37 C.F.R.
§ 42.104(b)(3) expressly contemplates that a petitioner may rely on
alternative claim constructions. Changes to Implement Inter Partes Review
Proceedings, Post-Grant Review Proceedings, and Transitional Program
for Covered Business Method Patents, 77 Fed. Reg. 48,680, 48,700 (“The

15 Patent Owner also cites Carefusion Corp. v. Baxter Int’l, Inc., IPR2016-
01456, Paper 9 at 7 (PTAB Feb. 6, 2017), and Toyota Motor Corp. v.
Blitzsafe Texas, LLC, IPR2016-00422, Paper 12 at 26 (PTAB July 6, 2016).
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rules do not preclude providing alternative claim constructions in a petition
or in later-authorized filings.”). As one Board decision aptly recognized,
“[b]ecause the petition is the last word by the petitioner at the institution
stage, petitioners are often required to anticipate arguments that may be
advanced by the patent owner in a preliminary response, and, as a result,
may argue in the alternative.” Lewis, Paper 6 at 33–34.
4. Obviousness Requirements
Patent Owner argues that, to the extent the Petition relies on a single
reference—Morgan for Grounds 1 and 2, and Counts-962 for Ground 3—it
fails to explain the differences between the prior art and the challenged
claims, as required under § 103(a) and Graham v. Deere, 383 U.S. at 17–18.
Prelim. Resp. 32–33. We disagree. We understand the Petition to assert
that, if the challenged claims are interpreted as not invoking § 112(6) and are
construed consistently with Patent Owner’s district court infringement
contention, there is no difference between the asserted prior art and the
challenged claims. Pet. 23, 60. As Petitioner notes, it is not error for the
Board to rely on a single reference to reach a conclusion of obviousness
under § 103. Realtime Data v. Iancu, 912 F.3d 1368, 1373 (Fed. Cir. 2019);
see Pet. Reply 6.
Patent Owner also argues that the Petition fails to explain why a
POSA would have been motivated to combine the asserted references,
identifying two instances of such failure. Prelim. Resp. 34. The specific
instances identified by Patent Owner are addressed above in the context of
addressing Petitioner’s second and third grounds above.
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H. Patent Owner’s Argument for Discretionary Denial under § 325(d)
Patent Owner argues that the Board should deny institution under
35 U.S.C. § 325(d). Prelim. Resp. 35–58. Patent Owner argues that all of
Petitioner’s prior art references were presented to the Examiner during
prosecution and identifies various ways that the asserted references or
equivalent teachings would have been brought to the Examiner’s attention,
including listing the references on an Information Disclosure Statement
(“IDS”). Id. at 37–47. Patent Owner argues that the Examiner already
considered Petitioner’s arguments regarding the “electrical resistance heater”
element and Petitioner’s arguments based on Adams. Id. at 47–53.
According to Patent Owner, Petitioner does not even attempt to demonstrate
that the Office materially erred in issuing the claims. Id. at 53–58.
The statute provides that, in determining whether to institute an inter
partes review, “the Director may take into account whether, and reject the
petition or request because, the same or substantially the same prior art or
arguments previously were presented to the Office.” 35 U.S.C. § 325(d).
The Board’s most recent precedential decision addressing § 325(d)
provides the following two-part framework:
(1) whether the same or substantially the same art previously was
presented to the Office or whether the same or substantially the
same arguments previously were presented to the Office; and
(2) if either condition of first part of the framework is satisfied,
whether the petitioner has demonstrated that the Office erred in
a manner material to the patentability of challenged claims.
Advanced Bionics, LLC v. MED-EL Elektromedizinische Geräte GmbH,
IPR2019-01469, Paper 6 at 8 (PTAB Feb. 13, 2020) (precedential).
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Advanced Bionics explains that the Becton, Dickinson factors16 provide
“useful insight” into how to apply the statutory framework and address
“challenging factual questions, such as when a ground of unpatentability
presents ‘substantially the same prior art or arguments’ previously presented
to the Office.” Id. at 9.
Applying the Advanced Bionics two-part framework to Patent
Owner’s arguments, we determine that the art presented in the Petition is the
same as the art previously presented to the Office during examination
because all of Petitioner’s asserted references were submitted to the Office
by the applicant in an IDS and are listed as cited art on the face of the
’268 Patent. Ex. 1001, code (56); Ex. 1002, 100–03, 107, 401–404, 408.
Under the second part of the Advanced Bionics framework, we find
that Petitioner has demonstrated that the Office erred in a manner material to
the patentability of challenged claims.
Other than initials on a lengthy IDS, nothing in the record indicates
that the Examiner substantively considered Morgan, Adams, Brooks, or
Counts-962. In that regard, Petitioner shows that the asserted references

16 Becton, Dickinson identifies the following non-exclusive factors: (a) the
similarities and material differences between the asserted art and the prior art
involved during examination; (b) the cumulative nature of the asserted art
and the prior art evaluated during examination; (c) the extent to which the
asserted art was evaluated during examination, including whether the prior
art was the basis for rejection; (d) the extent of the overlap between the
arguments made during examination and the manner in which petitioner
relies on the prior art; (e) whether petitioner has pointed out sufficiently how
the examiner erred in its evaluation of the asserted prior art; and (f) the
extent to which additional evidence and facts presented in the petition
warrant reconsideration of the prior art or arguments. Becton, Dickinson and
Co. v. B. Braun Melsungen AG, IPR2017-01586, Paper 8 at 17–18 (PTAB
Dec. 15, 2017) (precedential as to Section III.C.5, first paragraph).
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were among “an extremely large number of references” listed on an IDS and
that applicant did not respond to the Examiner’s request that applicant point
out “any particular reference or portion of a reference in the list which the
examiner should take [sic] pay particular attention to.” Ex. 1002, 99–111,
389; Pet. 13; Pet. Reply 1. Petitioner shows that the Examiner rejected the
pending claims over Counts-52517 and that applicant overcame the rejection
after amending the claims and arguing that Counts-525 did not disclose two
features—a “tubular outer housing” and a heater “in contact with” the
tobacco and aerosol-forming materials. Ex. 1002, 390, 392–93, 427,
431–432, 452; Pet. 13–14; Pet. Reply 2. Petitioner shows persuasively that
Morgan and Counts-962 teach the two features applicant argued were absent
from Counts-525. Pet. 31, 53–55, 62–63, 68–69; see also Pet. 60 (arguing
that “Counts-962 discloses the two features the applicants argued were
absent from Counts-525—a battery within a tubular outer housing and a
heater in contact with the medium it heats”); Pet. Reply 1–2 (identifying
teachings of Morgan and Counts-962 that the Examiner overlooked).
Patent Owner contends that the relevant teachings of Morgan and
Counts-962 would have been brought to the Examiner’s attention by virtue
of Counts-525’s incorporation by reference of Counts-962 and Counts-525’s
incorporation by reference of Fleischhauer’s18 heating elements that Patent
Owner contends are equivalent to Morgan’s heating elements. Prelim.
Resp. 41–47; PO Sur-reply 3. Although Patent Owner argues that the
Examiner “would have naturally turned to” the portions of Counts-525 that
incorporate by reference Counts-962 and Fleishhauer (Prelim. Resp. 43, 47),

17 Ex. 1010, US 5,692,525, issued Dec. 2, 1997.
18 Ex. 2002, US 5,591,268, issued Jan. 7, 1997.
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the Examiner requested that applicant point out the relevant teachings of the
references listed on the IDS. Ex. 1002, 389 (“If the applicant and/or
applicant’s representative are aware of any particular reference or portion of
a reference in the list which the examiner should take pay particular
attention to it is requested that it be specifically pointed out in response to
this Office action.”).
Patent Owner argues that applicant’s amendment and argument during
prosecution would have brought Counts-962 and Fleischhauer to the
Examiner’s attention. Prelim. Resp. 42, 46. If that is true, then applicant’s
amendment and argument during prosecution also would have brought
Counts-962 and Fleischhauer to the attention of the author of the
amendment and argument. If applicant were aware of the relevant teachings
of Counts-962 and Morgan (or Fleischhauer) during prosecution, then it
should have pointed those out in response to the Examiner’s request.
Ex. 1002, 389. If applicant were not aware of the relevant teachings of
Counts-962 and Morgan (or Fleischhauer) during prosecution (see
PO Reply 2), then Patent Owner cannot now impute such awareness to the
Examiner in support of its § 325(d) argument.
Patent Owner argues that the Examiner already considered
Petitioner’s arguments, presenting essentially the same arguments as it relies
upon to counter Petitioner’s showing of reasonable likelihood. Compare
Prelim. Resp. 49–52 & n.9 (distinguishing claimed heater elements from
Morgan and Counts-962), with id. at 64–66 (same). We are not persuaded
by Patent Owner’s arguments for the reasons as discussed in Sections
IV.D.5.a and IV.F.1 above.
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Accordingly, Petitioner has shown that the Office erred by allowing
the claims over Morgan and Counts-962.19 For these reasons, we decline to
exercise our discretion to deny institution under § 325(d).
V. CONCLUSION
For the foregoing reasons, we determine that the information
presented establishes a reasonable likelihood that Petitioner would prevail in
showing that at least one of the challenged claims of the ’268 Patent is
unpatentable. Additionally, we decline to exercise our discretion under
35 U.S.C. §§ 314(a), 325(d) to deny any of the proposed challenges to
patentability.
Our factual findings, conclusions of law, and determinations at this
stage of the proceeding are preliminary and based on the evidentiary record
developed thus far. At this stage of the proceeding, the Board has not made
a final determination as to the patentability of any challenged claim. Our
final decision will be based on the record as fully developed during trial.

19 As discussed above, the Office error may be attributed, at least in part, to
applicant’s failure to respond to the Examiner’s request to identify the
relevant references and portions of the references.
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VI. ORDER
It is
ORDERED that Petitioner’s Request for Rehearing is granted;
FURTHER ORDERED that, pursuant to 35 U.S.C. § 314(a), an inter
partes review of claims 16 and 17 of the ’268 Patent is instituted with
respect to all grounds of unpatentability asserted in the Petition; and
FURTHER ORDERED that, pursuant to 35 U.S.C. § 314(c) and
37 C.F.R. § 42.4, an inter partes review of claims 16 and 17 of the ’268
Patent shall commence on the entry date of this Order, and notice is hereby
given of the institution of trial.
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For PETITIONER:
Jonathan M. Strang
Matthew J. Moore
Inge A. Osman
Christopher W. Henry
LATHAM & WATKINS LLP
jonathan.strang@lw.com
matthew.moore@lw.com
inge.osman@lw.com
christopher.henry@lw.com

For PATENT OWNER:

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