[Federal Register Volume 86, Number 190 (Tuesday, October 5, 2021)]
[Notices]
[Pages 54998-54999]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-21626]


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INTERNATIONAL TRADE COMMISSION

[Investigation No. 337-TA-1199]


Certain Tobacco Heating Articles and Components Thereof; 
Commission's Final Determination Finding a Violation of Section 337; 
Issuance of a Limited Exclusion Order and Cease and Desist Orders; 
Termination of the Investigation

AGENCY: U.S. International Trade Commission.

ACTION: Notice.

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SUMMARY: Notice is hereby given that the U.S. International Trade 
Commission (``Commission'') has found a violation of section 337 of the 
Tariff Act of 1930, as amended, in this investigation and has issued a 
limited exclusion order prohibiting the importation of infringing 
tobacco heating articles and components thereof and cease and desist 
orders directed against respondents Philip Morris USA, Inc. (``PM 
USA'') and Altria Client Services LLC (``ACS''). The investigation is 
terminated.

FOR FURTHER INFORMATION CONTACT: Lynde Herzbach, Office of the General 
Counsel, U.S. International Trade Commission, 500 E Street SW, 
Washington, DC 20436, telephone (202) 205-3228. Copies of non-
confidential documents filed in connection with this investigation may 
be viewed on the Commission's electronic docket (EDIS) at https://edis.usitc.gov. For help accessing EDIS, please email 
[email protected]. General information concerning the Commission may 
also be obtained by accessing its internet server at https://www.usitc.gov. Hearing-impaired persons are advised that information on 
this matter can be obtained by contacting the Commission's TDD terminal 
on (202) 205-1810.

SUPPLEMENTARY INFORMATION: On May 15, 2020, the Commission instituted 
this investigation under section 337 of the Tariff Act of 1930, as 
amended, 19 U.S.C. 1337 (``section 337''), based on a complaint filed 
by RAI Strategic Holdings, Inc., R.J. Reynolds Vapor Company, and R.J. 
Reynolds Tobacco Company, all of Winston-Salem, North Carolina 
(collectively, ``Complainants''). See 85 FR 29482-83. The complaint, as 
supplemented, alleges a violation of section 337 based upon the 
importation of certain tobacco heating articles and components thereof 
by reason of infringement of certain claims of U.S. Patent Nos. 
9,839,238 (``the '238 patent''); 9,930,915 (``the '915 patent'');

[[Page 54999]]

9,901,123 (``the '123 patent) (collectively, ``the Asserted Patents''). 
The complaint also alleges the existence of a domestic industry. The 
notice of investigation names five respondents: ACS Altria Group, Inc. 
(``AGI''), and PM USA, all of Richmond, Virginia; Philip Morris 
International Inc. (``PMI'') of New York, New York; and Philip Morris 
Products S.A. of Neuchatel, Switzerland (collectively, 
``Respondents''). See id. The Office of Unfair Import Investigations 
(``OUII'') is also a party to the investigation. See id.
    The Commission previously terminated respondents AGI and PMI from 
the investigation based on Complainants' partial withdrawal of the 
complaint. See Order No. 24 (Dec. 14, 2020), unreviewed by Comm'n 
Notice (Jan. 5, 2021).
    The Commission previously affirmed that the economic prong of the 
domestic industry requirement is satisfied under 19 U.S.C. 
1337(a)(3)(A) with respect to the '238 and '915 patents and provided 
supplemental analysis. Order No. 35 (Jan. 19, 2021), affirmed in part 
by Notice (Feb. 18, 2021).
    On May 14, 2021, the presiding ALJ issued the final initial 
determination on violation (``FID''), which finds a violation of 
section 337 based on infringement of the '123 patent and the '915 
patent and finds no violation as to the '238 patent.
    On June 15, 2021, both Complainants and Respondents filed 
submissions on the public interest pursuant to Commission Rule 
210.50(a)(4). OUII did not file a statement on the public interest. The 
Commission also received seven filings in response to its Federal 
Register notice calling for public interest comments. See 86 FR 28382 
(May 16, 2021).
    On July 27, 2021, the Commission determined to review the FID in 
part. 86 FR 41509-11 (Aug. 2, 2021). Specifically, the Commission 
determined to review: (1) As to the '915 patent, the ALJ's construction 
of the limitation ``electrical energy source'' recited in asserted 
claims 1 and 3 and the FID's infringement, technical prong, and 
invalidity findings to the extent they may be affected by a modified 
claim construction; (2) as to the '123 patent, the FID's obviousness 
and domestic industry findings; and (3) as to the '238 patent, the 
FID's infringement finding. Id. The Commission also asked the parties 
to address a question related to the issues under review regarding the 
'915 patent. Id. The Commission further requested briefing on remedy, 
bonding, and the public interest. Id.
    On August 10, 2021, Complainants, Respondents, and OUII each filed 
an initial written response to the Commission's request for briefing. 
On August 17, 2021, Complainants and Respondents each filed a reply 
submission. On August 20, 2021, OUII filed its reply submission.
    On August 5, 6, 9, and 10, 2021, twenty-nine members of the public 
submitted public interest submissions. On August 9, 2021, the Hispanic 
Leadership Fund and the National Minority Quality Form filed public 
interest submissions. On August 10, 2021, Nextera Healthcare filed a 
public interest submission. On August 11, 2021, Tom Miller, the 
Attorney General of Iowa, filed a public interest submission.
    On September 13, 2021, Respondents filed Respondents' Motion to 
Take Judicial Notice of Recent Regulatory Determinations and District 
Court Opinion. On September 15, 2021, Complainants filed Complainants' 
Opposition to Respondents' Motion to Take Judicial Notice of Recent 
Regulatory Determinations and District Court Opinion. The Commission 
has determined to deny the motion, but has considered the parties' 
submissions in its consideration of the public interest factors.
    Having reviewed the record of the investigation, including the FID 
and the parties' submissions, the Commission has found a violation of 
section 337 as to claims 1-3, and 5 of the '915 patent and claims 27-30 
of the '123 patent. Specifically, with respect to the '915 patent, the 
Commission has determined to: (1) Modify the construction of the 
limitation ``electrical energy source'' recited in asserted claims 1 
and 3 to mean ``receptacle that provides for transmission of electrical 
current from the power source to the heating member, where the 
receptacle is not limited to a structure that requires wiring or 
insertion''; and (2) affirm the FID's findings as to infringement, 
technical prong, and invalidity findings under the modified claim 
construction. With respect to the '123 patent, the Commission has 
determined to: (1) Affirm, with supplemental analysis, the FID's 
finding that Respondents failed to prove claims 27-30 of the '123 
patent are invalid for obviousness under 35 U.S.C. 103; and (2) take no 
position as to the FID's findings with respect to the economic prong of 
the domestic industry requirement under subsection 337(a)(3)(A). The 
Commission has further determined to affirm the FID's non-infringement 
finding for the '238 patent.
    The Commission has determined that the appropriate remedy is: (1) A 
limited exclusion order prohibiting the importation of tobacco heating 
articles and components thereof that infringe claims 1-3, and 5 of the 
'915 patent and claims 27-30 of the '123 patent; and (2) cease and 
desist orders directed to respondents PM USA and ACS. The Commission 
has determined that the public interest factors do not preclude 
issuance of the limited exclusion order or the cease and desist orders. 
The Commission has further determined that no bond is required during 
the period of Presidential review. See 19 U.S.C. 1337(j)(3).
    The investigation is terminated. The Commission's reasoning in 
support of its determinations is set forth more fully in its opinion. 
The Commission's orders and opinion were delivered to the President and 
the United States Trade Representative on the day of their issuance.
    The Commission vote for this determination took place on September 
29, 2021.
    The authority for the Commission's determination is contained in 
section 337 of the Tariff Act of 1930, as amended (19 U.S.C. 1337), and 
in Part 210 of the Commission's Rules of Practice and Procedure (19 CFR 
part 210).

    By order of the Commission.

    Issued: September 29, 2021.
Lisa Barton,
Secretary to the Commission.
[FR Doc. 2021-21626 Filed 10-4-21; 8:45 am]
BILLING CODE 7020-02-P