united states international trade commission …juul labs, inc. 560 20th street san francisco, ca...

UNITED STATES INTERNATIONAL TRADE COMMISSION WASHINGTON, D.C.

In the Matter of

CERTAIN ELECTRONIC NICOTINE DELIVERY SYSTEMS AND COMPONENTS THEREOF

Investigation No. 337-T A - __

VERIFIED COMPLAINT UNDER SECTION 337 OF THE TARIFF ACT OF 1930, AS AMENDED

Complainant

Juul Labs, Inc. 560 20th Street San Francisco, CA 94107 (415) 829-2336

Counsel for Complainant

Daniel E. Yonan Michael E. Joffre Nirav N. Desai Paul A. Ainsworth Uma N. Everett STERNE, KESSLER,

G•r.nsrE1N & Fox, r.L.L.C. 1100 New York Avenue, N.W. Washington, DC 20005 (202) 3 71-2600

Proposed Respondents

J Well France S.A.S. 50 rue de Miromesnil 75008 Paris, France 3 3 (0) I 44 65 38 70

Bo Vaping 5 91 Stewart A venue Garden City, NY 11530

MMS Distribution LLC 195 Lake Louise Marie Road Rock Hill, NY 12775 (516) 806-4900

The Electric Tobacconist, LLC 3235 Prairie Avenue Boulder, CO 80301 (646) 853-0368

Eonsmoke, LLC 1500 Main Ave, 2nd Floor Clifton, NJ 07011 (862) 225-9100

ZLab S.A. Ave. Golero, 9 11 Office 27 Punta del Este - Maldonado - Uruguay 20100

Ziip Lab Co., Limited E district 4F, 5 building, Wen Ge Industrial Zone, Heshuikou Gongming St., Guangming New District Shenzhen City, Guangdong Province China518106 (86) 755-21385136

Shenzhen Yibo Technology Co., Ltd. I F-4F, 3rd Building, Laowei, Tiantou Community Pingshan Sub-District, Pingshan New District Shenzhen City, Guangdong Province China 51 8118 (86) 755 86001023

XFire, Inc. 820 Summer Park Dr., Suite 700 Stafford, TX 77477

ALD Group Limited No. 2, 3rd Industrial Road Baoan District Shenzhen City, Guangdong Province China 518108 (86) 755-29271296

Flair Vapor LLC 2500 Hamilton Blvd., Suite B South Plainfield, NJ 07080

Shenzhen Joecig Technology Co., Ltd. I F-5F, Building 17, •uarter G ShaJing Rd., Gonghe 3rd Industry District Baoan District Shenzhen City, Guangdong Province China 518104 (86) 755 27460719 x606

Myle Vape Inc. 8085 Chevy Chase Street Jamaica, NY 11432

Vapor Hub International, Inc. 1871 Tapo Street Simi Valley, CA 93063 (805) 309-0530

Limitless Mod Co. 4590 lsh Drive, Suite I 00 Simi Valley, CA 93063 (805) 309-0530

lnfinite-N Technology Limited 4F, iTone Digital Park Xin Fa San Road Sha Jing Shenzhen City, Guangdong Province China 518200 (86) 755 27538750 x808

King Distribution LLC 2 81 Route 46 West Elmwood Park, NJ 07407

Keep Vapor Electronic Tech. Co., Ltd. Block D, XinLong Techno Park ShaJing Town, Bao An District Shenzhen, China (86) 137 51267275

TABLE OF CONTENTS

EXHIBIT LIST .............................................................................................................................. iv

I. INTRODUCTION .............................................................................................................. I

II. THE PARTIES .................................................................................................................... 9

A. The Complainant. .................................................................................................... 9

B. Respondents ........................................................................................................... I I

I. Bo Group ................................................................................................... I 2

2. Eonsmoke Group ...................................................................................... 14

3. Ziip Group ................................................................................................. 15

4. XFire Group .............................................................................................. 16

5. Flair Group ................................................................................................ I 7

6. Myle Group ............................................................................................... I 8

7. Pulse Group ............................................................................................... 18

8. 3 X Group .................................................................................................. I 9

III. THE ASSERTED PATENTS ............................................................................................ 20

A. The '669 Patent ..................................................................................................... 21

B. The '139 Patent ..................................................................................................... 22

C. The '568 Patent ..................................................................................................... 23

D. The' 130 Patent ..................................................................................................... 23

IV. NON-TECHNICAL DESCRIPTION OF THE ASSERTED PATENTS .......................... 24

A. The '669 Patent ..................................................................................................... 26

8. The '139 Patent ..................................................................................................... 27

C. The '568 Patent ..................................................................................................... 28

D. The' 130 Patent ..................................................................................................... 29

V. THE ACCUSED PRODUCTS ......................................................................................... 29

A. Bo Group ............................................................................................................... 30

B. Eonsmoke Group .................................................................................................. 31

C. Ziip Group ............................................................................................................. 32

D. XFire Group .......................................................................................................... 32

E. Flair Group ............................................................................................................ 33

F. Myle Group ........................................................................................................... 33

G. Pulse Group ........................................................................................................... 34

H. 3X Group .............................................................................................................. 35

VI. RESPONDENTS' UNLAWFUL AND UNFAIR ACTS .................................................. 35

A. Importation and Sale ............................................................................................. 35

I. Bo Group ................................................................................................... 3 5

2. Eonsmoke Group ...................................................................................... 37

3. Ziip Group ................................................................................................. 41

4. XFire Group .............................................................................................. 45

5. Flair Group ................................................................................................ 46

6. My le Group ............................................................................................... 48

7. Pulse Group ............................................................................................... 49

8. 3X Group .................................................................................................. 50

B. Infringement. ......................................................................................................... 5 I

I. Bo Group ................................................................................................... 53

2. Eonsmoke Group ...................................................................................... 55

3. Ziip Group ................................................................................................. 59

4. XFire Group .............................................................................................. 61

5. Flair Group ................................................................................................ 64

6. Myle Group ............................................................................................... 66

I!

7. Pulse Group ............................................................................................... 68

8. JXGroup .................................................................................................. 71

VII. PHYSICAL SAMPLE ...................................................................................................... 73

VIII. HARMONIZED TARIFF SCHEDULE ........................................................................... 74

IX. THE DOMESTIC INDUSTRY ........................................................................................ 74

X. RELATED LITIGATION ................................................................................................. 76

A. Domestic Litigation .............................................................................................. 76

B. Foreign Litigation ................................................................................................. 78

XI. RELIEF REQUESTED ..................................................................................................... 78

ill

Exhibit No.

Exhibit I

Exhibit 2

Exhibit 3

Exhibit 4

Exhibit 5

Exhibit 6

Exhibit 7

Exhibit 8

Exhibit 9

Exhibit I 0

Exhibit 11

Exhibit 12

Exhibit 13

Exhibit 14

Exhibit 15

Exhibit 16

Confidential Exhibit 17



EXHIBIT LIST

Description

SSA Article - Global Statistics on Addictive Behaviours

CDC - Quitting Smoking

FDA - 20 I 8 Strategic Policy Roadmap

CDC - Fast Facts Smoking & Tobacco

Am. Cancer Society Position Statement on E-Cigarettes

WHO Tobacco Fact Sheet

Levy- Potential Deaths Averted in USA by Replacing Cigarettes with ECigarettes

CMS - Historical Statistics

CDC - Economic Trends in Tobacco

Chaiton - Estimating the Number of Quit Attempts It Takes to Quit Smoking Successfully in a Longitudinal Cohort of Smokers

NASPH - Consequences of E-Cigarettes

Policy Study - Expected Savings to Medicaid from Substituting Electronic for Tobacco Cigarettes

Gottlieb - A Nicotine-Focused Framework for Public Health

CNBC Article - Juul's e-cigarette sales have surged over the past year

Bloomberg Article - E-Cigarette Maker Juul Labs Is Raising $1.2 Billion

Bloomberg Article - Imperial Takes on Juul as Big Tobacco Faces Upstart Rival

Declaration of Tim Danaher

Nielsen 4-Week Sell-Through Report

!RI 4-Week Sell-Through Report

Exhibit No.

Exhibit 20

Exhibit 2 l

Exhibit 22

Exhibit 23

Exhibit 24

Exhibit 25

Exhibit 26

Exhibit 27

Exhibit 28

Exhibit 29

Exhibit 30

Exhibit 31

Exhibit 32

Exhibit 33

Exhibit 34

Exhibit 35

Exhibit 36

Exhibit 37

Exhibit 38

Exhibit 39

Exhibit 40

Exhibit 41

Exhibit 42

Description

Letter to the FDA - Claim of Other lllegal Products

Copy of J Well's Original Corporate By-Laws Update

Copy of English Translation of J Well's Cmporate By-Laws Update

J Well's Company Profile

Tobacco Business Magazine - Bringing Up Bo

Web Printout of J Welt's Website (Bo One)

Web Printout of J Wel!'s Website (Bo+)

Web Printout of J Well's Website (Bo One from China)

Web Printout of J Weirs Website (Bo+ from China)

Web Printout of Bo Vaping Address

Web Printout of Bo Vaping Shop Selling Bo One and Bo+

Web Printout of Bo Vaping Shop Selling Bo One, Bo+, and Bo Caps

MMS Distribution LLC Company Report

Article - MMS Is Exclusive Distributor of Bo Products

Web Printout of MMS Distribution, Bo's Exclusive Distributor

The Electric Tobacconist, LLC Corporate Entity Information

Electric Tobacconist's Company Profile

Web Printout of Electric Tobacconist, Bo One and Bo+ Devices and Pods Distributor

Eonsmoke, LLC Company Report

Web Printout of Eonsmoke Shop Selling Eonsmoke Devices and Pods

Web Printout of Eonsmoke Shop Selling Eonsmoke v2.0 Devices and Pods

Web Printout of Electric Tobacconist, Eon smoke Pods Distributor

Web Printout of Electric Tobacconist, 4X Pods Distributor

v

Exhibit No. Description

Exhibit 43 Web Printout of ZLab Website

Exhibit 44 Web Printout of Ziip Lab Contact

Exhibit 45 Web Printout of ZLab Contact

Exhibit 46 Web Printout of Shenzhen Yibo Website

Exhibit 47 Web Printout ofYibo Contact Noting Ziip's Factory

Exhibit 48 Web Printout of Electric Tobacconist, Ziip Pods Distributor

Exhibit 49 XFire Inc Company Report

Exhibit 50 Web Printout of ALD Contact

Exhibit 5 I ALD Company Report

Exhibit 52 Flair Vapor LLC Company Report

Exhibit 53 Web Printout of Joecig Contact

Exhibit 54 Wingle (Public) Report on Nicotine Salts E-Liquid Overview

Exhibit 55 Web Printout of Joecig Eavalon

Exhibit 56 Myle Vape Inc. Company Report

Exhibit 57 Web Printout of Electric Tobacconist, My le Devices and Pods Distributor

Exhibit 58 Vapor Hub International Inc. Company Report

Exhibit 59 Web Printout of Vapor Hub's Shop Selling Pulse Devices and Pods

Exhibit 60 Limitless Mod Co. Company Report

Exhibit 61 Limitless Mod Co., LLC. Notation in Terms & Conditions

Exhibit 62 Web Printout of Limitless Products for Sale and Instructions for Use

Exhibit 63 Web Printout of Limitless Products for Sale

Exhibit 64 Web Printout of INTL Contact

Exhibit 65 Web Printout of Electric Tobacconist, Pulse Devices and Pods Distributor

Vl

Exhibit No.

Exhibit 66

Exhibit 67

Exhibit 68

Exhibit 69

Exhibit 70

Exhibit 71

Exhibit 72

Exhibit 73

Exhibit 74

Exhibit 75

Exhibit 76

Exhibit 77

Exhibit 78

Exhibit 79

Exhibit 80

Exhibit 81

Exhibit 82

Exhibit 83

Exhibit 84

Exhibit 85

Exhibit 86

Exhibit 87

Description

King Distribution Certificate of Formation

Certified Copy of U.S. Pat. No. I0,070,669 ("the 1669 Patent")

Certified Copy of the Assignment Record for the '669 Patent

Listing of all foreign patents and patent applications corresponding to the '669 Patent

Certified Copy of U.S. Pat. No. I0,076, 139 ("the '139 Patent")



Certified Copy of U.S. Pat. No. I0,045,568 ("the '568 Patent")


Certified Copy of U.S. Pat. No. 10,058, 130 ("the' !30 Patent")

Certified Copy of the Assignment Record for the ' 130 Patent


Photo of Bo One Device and Pod

Photo of Bo+ Device and Pod

Photo of Bo One Device and Pod Coupled

Photo of Bo One Device and Pod Separated

Photo of Eonsmoke Device and Pod

Photo of Eonsmoke v2.0 Device and Pod

Photo of 4X Pod

Photo of Eonsmoke Device and Pod Coupled

Photo of Eonsmoke Device and Pod Separated

Photo of Ziip Device and Pod

Vil


Exhibit 88 Photo of Ziip Device and Pod Coupled

Exhibit 89 Photo of Ziip Device and Pod Separated

Exhibit 90 Photo of Plus Pod

Exhibit 91 Photo of Plus Pod Without Cap

Exhibit 92 Photo of XFire Device and Pod

Exhibit 93

Exhibit 94

Exhibit 95

Exhibit 96

Exhibit 97

Exhibit 98

Exhibit 99

Exhibit I 00

Exhibit 101

Exhibit 102

Exhibit I 03

Exhibit I 04

Exhibit 105

Exhibit 106

Exhibit 107

Exhibit 108

Exhibit 109


Photo of XFire Device and Pod Coupled

Photo of XFire Device and Pod Separated

Photo of Flair Xtreme Device and Pod

Photo of Flair Xtreme Device and Pod Coupled

Photo of Flair Xtreme Device and Pod Separated

Photo of Myle Device and Pod

Photo of Myle Device and Pod Coupled

Photo of Myle Device and Pod Separated

Photo of Pulse Device and Pod

Photo of Pulse Device and Pod Coupled

Photo of Pulse Device and Pod Separated

Photo of 3X Pod

Photo of 3X Pod with Cap

Photo of 3X Pod without Cap

Photo of 3X Pod without Cap, Angled View

Declaration of Alexandra Lazea

Web Printout ofVaping Daily - Eonsmoke Review

Investigator Report Regarding 4X Pods

viii

Exhibit No.

Exhibit 111

Exhibit 112

Exhibit 113


Exhibit 115

Exhibit 116

Exhibit 117

Exhibit l l 8

Exhibit 119

Exhibit 120

Exhibit 121

Exhibit 122

Exhibit 123

Exhibit 124

Exhibit 125

Exhibit 126

Exhibit 12 7

Exhibit 128

Exhibit 129

Exhibit 130

Exhibit 131

Exhibit 132

De.fiicription

Web Printout of Ziip's Products for Sale

Web Printout of Plus Pods' Products for Sale

Web Printout of Plus Pods' Juul Compatible Pods and Charger for Sale

Investigator Report Regarding Plus Pods

Photo of Plus Pods Packaging

Photo of Ziip Pods Blister Pack Front

Photo of Ziip Pods Blister Pack Back

Photo of Plus Pods Blister Pack Back

Web Printout of Vapor Hub Introducing Limitless Products

Web Printout of Vapor Hub's SEC Form I O~Q

Representative Claim Chart Showing Infringement of the '669 Patent by Bo One


Representative Claim Chart Showing lnf.-ingement of the '568 Patent by Bo One


Representative Claim Chart Showing lnf.-ingement of the '568 Patent by Bo+

Representative Claim Chart Showing Infringement of the '130 Patent by Bo+

Web Printout of Instructions on how to use Bo One and Bo+ Devices and Pods

Photo of Contents of Bo One Packaging

Web Printout of Bo Vaping's Bo One Products for Sale

Web Printout of Bo Vaping's Bo+ Products for Sale

Representative Claim Chart Showing Infringement of the '669 Patent by Eonsmoke

Representative Claim Chart Showing Infringement of the' 139 Patent by Eonsmoke

ix

Exhibit No.

Exhibit 133

Exhibit 134

Exhibit 135

Exhibit 136

Exhibit 137

Exhibit 138

Exhibit 139

Exhibit 140

Exhibit 141

Exhibit 142

Exhibit 143

Exhibit 144

Exhibit 145

Exhibit 146

Exhibit 147

Exhibit 148

Exhibit 149

Exhibit 150

Descri pti011

Representative Claim Chart Showing Infringement of the '568 Patent by Eonsmoke

Representative Claim Chart Showing Infringement of the '13 0 Patent by Eonsmoke

Representative Claim Chart Showing Infringement of the '669 Patent by Eonsmoke v2.0




Representative Claim Chart Showing Infringement of the '669 Patent by 4X


Representative Claim Chart Showing Infringement of the' 130 Patent by 4X

Web Printout of Instructions on How to Use Eonsmoke Brand Devices and Pods

Photo of Contents of Eonsmoke Packaging

Web Printout of Eonsmoke's 4X Products for Sale

Representative Claim Chart Showing Infringement of the '669 Patent by Ziip

Representative Claim Chart Showing Infringement of the' 139 Patent by Ziip



Representative Claim Chart Showing Infringement of the '669 Patent by Plus Pods

Representative Claim Chart Showing Infringement of the '568 Patent by Plus Pods

Exhibit No.

Exhibit 151

Exhibit 152

Exhibit 153

Exhibit 154

Exhibit 155

Exhibit 156

Exhibit 157

Exhibit 158

Exhibit 159

Exhibit 160

Exhibit 161

Exhibit 162

Exhibit 163

Exhibit 164

Exhibit 165

Exhibit 166

Exhibit 167

Exhibit 168

Exhibit 169

Exhibit 170

Exhibit I 71

Exhibit 172

Description

Representative Claim Chart Showing Infringement of the' 130 Patent by Plus Pods

Photo of Contents of Ziip Packaging

Representative Claim Chart Showing In fi·ingement of the '669 Patent by XFire

Representative Claim Chart Showing Infringement of the '139 Patent by XFire

Photo of Contents of XFire Packaging

Web Printout of XFire's Products for Sale

Representative Claim Chart Showing Infringement of the '669 Patent by Flair Xtreme

Representative Claim Chart Showing Infringement of the' 139 Patent by Flair Xtreme

Web Printout of Instructions on How to Use Flair Brand Devices and Pods

Web Printout of Instructions on How to Use Flair Brand Devices and Pods

Photo of Contents of Flair Xtreme Packaging

Web Printout of Flair's Flair Xtreme Products for Sale

Web Printout of Flair's Flair Xtreme Products for Sale

Representative Claim Chart Showing Infringement of the '669 Patent by Myle

Representative Claim Chart Showing Infringement of the' 139 Patent by Myle

Photo of Contents of Myle Packaging

Web Printout of Myle's Products for Sale

Representative Claim Chart Showing Infringement of the '669 Patent by Pulse

Representative Claim Chart Showing lnfringement of the '139 Patent by Pulse

Representative Claim Chart Showing Infringement of the '568 Patent by Pulse

Representative Claim Chart Showing Infringement of the 'I 30 Patent by Pulse

Photo of Contents of Pulse Packaging

xi

Exhibit No.

Exhibit 173

Exhibit 174

Exhibit 175

Exhibit 176





Exhibit 181

Exhibit 182

Exhibit 183

Exhibit 184

Exhibit 185

Descri ptio11

Representative Claim Chart Showing lnfringement of the '669 Patent by 3 X


Representative Claim Chart Showing lnfi·ingement of the' 130 Patent by 3X

CNBC Article - E-Cigarette Maker Juul Is Raising $150 Million After Spinning Out ofVaping Company

Confidential Representative Claim Chart Showing that JLJ's Domestic Articles Practice the Claims of the '669 Patent

Confidential Representative Claim Chart Showing that JLl's Domestic Articles Practice the Claims of the '13 9 Patent

Confidential Representative Claim Chart Showing that JLI's Domestic Articles Practice the Claims of the '568 Patent

Confidential Representative Claim Chart Showing that JLl's Domestic Articles Practice the Claims of the' 130 Patent

Web Printout of the JUUL System FAQ

Copy of J Well's Original Meeting Minutes

Copy of J Welt's Meeting Minutes Translated into English

"About Us" Page Designating ZLab S.A. with Mix of Ziip Lab References

ZLab S.A./Ziip Labs S.A. "Contact Us" Page

xii

PHYSICAL EXHIBIT LIST


Physical Exhibit I JUUL Starter Kit

Physical Exhibit 2 Bo One Starter Kit

Physical Exhibit 3 Bo+ Starter Kit

Physical Exhibit 4 Eonsrnoke Device

Physical Exhibit 5 Eonsrnoke v2.0 Device

Physical Exhibit 6 Eonsrnoke Pods Pack

Physical Exhibit 7 4X Pods Pack

Physical Exhibit 8 Ziip Starter Kit

Physical Exhibit 9 Plus Pods Pack

Physical Exhibit 1 o Plus Pods Pack

Physical Exhibit t I XFire Device Kit

Physical Exhibit 12 XFire Pods Kit

Physical Exhibit 13 Flair Xtrerne Starter Kit

Physical Exhibit 14 Myle Starter Kit

Exhibit No.

Physical Exhibit 15

Physical Exhibit 16

Description

Pulse Starter Kit

3X Pods Pack

XIV

Append fr

Appendix A

Appendix B

Appendix C

Appendix D

Appendix E

Appendix F

Appendix G

Appendix H

Appendix I

LIST OF APPENDICES

Description

Listing of Competitor Flavors

Certified Copy of the File History of the '669 Patent (for U.S. Pat. No. I 0,070,669)

References Cited in the Certified File History of the '669 Patent

Certified Copy of the File History of the' 139 Patent (for U.S. Pat. No. I 0,076, 139)

References Cited in the Certified File History of the' 139 Patent

Certified Copy of the File History of the '568 Patent (for U.S. Pat. No. I 0,045,568)


Certified Copy of the File History of the' 130 Patent (for U.S. Pat. No. I 0,058, 130)


xv

I. INTRODUCTION

I. Complainant Juul Labs, Inc. (hereinafter, "JLI") requests that the United States

International Trade Commission institute an investigation into violations of Section 337 of the

Tariff Act of 1930, as amended, 19 U.S.C. § 1337.

2. JLl's allegations are based on the unlawful importation into the United States, sale

for importation into the United States, and sale within the United States after importation of

certain electronic nicotine delivery systems (''ENDS") and components thereof-such as nicotine

delivery pods (also called cartridges) used in ENDS-that infringe one or more of four U.S.

patents owned by JLI. Specifically, JLI alleges that these products infringe one or more of the

following patent claims (independent claims shown in bold underline):

I 0.076, 139 ··-] • 13~ Patent J !. 2, 3, 4, 9, 10, !!. 13, 14, !2.1!!. 21, 24, 28, 29 ~·

_10~.0_4:_5_6s __ -+-'-5_6s_P_a_te_n_t~·----<~!_._2._3_._5._6_._1._s_._9._!:.._2 __ 11_._1_s,_1_9_,2_0~~ _____ J 10,058,130 'IJOPatent !.2,4,5,6,~,9, 10, 16, 19,21,27 ---1

3. The '669 Patent, '139 Patent, '568 Patent, and '130 Patent are collectively

ref erred to herein as the "Asserted Patents," and the above-listed claims of the Asserted Patents

are collectively ref erred to herein as the "Asserted Claims."

4. The proposed Respondents fall into eight groups. named according to their

primary infringing product:

Bo Group

Eonsmoke Group

Ziip Group

J Well France S.A.S. (''J Well") Bo Vaping (''Bo Vaping") MMS Distribution LLC ("MMS") The Electric Tobacconist, LLC ("Electric

Eonsmoke, LLC ("Eonsmoke") Electric Tobacconist

ZLab S.A. ("Ziip Labs") Ziip Lab Co., Ltd. ("Ziip China") Shenzhen Yibo Technology Co., Ltd. ("Yibo")

Bo One device and pods Bo+ device and pods

Eonsmoke device and pods Eonsmoke v2.0 device and pods 4X ads

Ziip device and pods Plus Pods

Electric Tobacconist !-------+,.;;;:;,_~c.:..:_....::..c:..~....::..c:..;.;.:.;:~,-------------·-····

XFire. Inc. ("'XFire'') XFire Group

Flair Group

Myle Group

Pulse Group

ALD Grou Limited ("ALD") _ __,_ __ Flair Vapor LLC ( .. Flair") Shenzhen Joecig Technology Co., Ltd. ("'Joecig")

I Myle V~pe Inc. ("Myle") Electric Tobacconist Vapor Hub International, Inc. ("Vapor Hub") Limitless Mod Co. ("Limitless") lntinite-N Technology Limited ("!NTL'') Electric Tobacconist

~-----i-------------------~,···--~

3X Group King Distribution LLC ("King") Keep Vapor Elec. Tech. Co., Ltd. ("Keep Va or")

JLl's Beginnings: Filling a Gap in the ENDS Market

XFire device and pods

Flair Xtreme device and pods

Myle device and pods

Pulse device and pods

3X pods

5. Since its founding in 2007, JLI has sought to provide a satisfying alternative to

combustible cigarettes by developing its ENDS products. JLl's mission-to switch adult smokers

from cigarettes-was the driving force behind its product development.

6. As graduate students at Stanford University's Product Design program in the mid-

2000s, the founders of JLI, James Monsees and Adam Bowen, applied their background in

design and engineering to the challenge of finding a better alternative to cigarettes. As cigarette

smokers at the time, Monsees and Bowen saw a gap in the alternative smoking environment,

which then included, for example, nicotine vaping and heat-not-bum systems, for adults who

wanted to make the switch from combustible cigarettes. These early ENDS were often overly

complex to use and failed to provide the experience traditional cigarette smokers expected.

Physical Exhibit 1 - Representative JUUL Starter Kit

7. Monsees and Bowen set out to change that. They knew that, to succeed where

other ENDS had failed, they needed to develop a product that was different fi·om a cigarette in

design, but similar in convenience, simplicity, and satisfaction. Monsees and Bowen leveraged

their design and scientific know-how to develop a real alternative for adult smokers. The

resulting innovations ultimately led to the introduction in June 2015 of the branded JUUL

system, which includes the JUUL device body and JUULpods (hereinafter, "JUUL system," or

"Domestic Articles").

8. Smoking is the most prevalent addiction in the United States and the number one

cause of preventable death worldwide. Exhibit I (SSA Article - Global Statistics on Addictive

Behaviours); Exhibit 2 at 1-4 (CDC - Quitting Smoking); Exhibit 3 at 1-2 (FDA - 2018 Strategic

Policy Roadmap); Exhibit 4 at 1-3 (CDC - Fast Facts Smoking & Tobacco). Tobacco kills half of

its users, totaling more than seven million people worldwide each year. Exhibit 5 at I (Am.

Cancer Society Position Statement on E-Cigarettes); Exhibit 6 at I (WHO Tobacco Fact Sheet).

The toxic chemical compounds in tobacco products-and particularly in the smoke created by

setting tobacco on fire-are directly and primarily responsible for the illness and death caused by

cigarettes. Exhibit 3 at 3. Smoking not only steals valuable years of life but significantly

increases national healthcare costs. Exhibit 7 at 5 (Levy - Potential Deaths Averted in USA by

Replacing Cigarettes with E-Cigarettes); Exhibit 8 (CMS - Historical Statistics). The Centers for

Disease Control estimates that smoking costs the country $14 billion in monthly health care costs

and $11 billion monthly in lost productivity. Exhibit 9 at 1-4 (CDC - Economic Trends in

Tobacco).

9. Not surprisingly, roughly 70% of adult smokers report that they want to give up

smoking. Exhibit 2 at 2-3. But the average smoker will attempt to give up the habit more than 30

times before successfully doing so for at least one year. Exhibit I 0 at 5-7 (Chaiton - Estimating

the Number of Quit Attempts It Takes to Quit Smoking Successfully in a Longitudinal Cohort of

Smokers). Significantly, smoking cessation fails over 90% of the time without some form of

support. Id. at 3- 7.

I 0. ENDS technology represents a potential solution. Recent studies show that

switching from cigarettes to an ENDS can reduce exposure to toxic byproducts by up to 99%.

Exhibit 11 at 1-3 (NASPH - Consequences of E-Cigarettes); Exhibit 3 at 4-7. One 2017 study

lead by researchers from the Oncology Department at Georgetown University Medical Center

estimated that 6.6 million premature deaths could be averted over the next decade if all smokers

switched to an ENDS. Exhibit 7 at 3. Relatedly, healthcare analysts estimate that for every I% of

cigarette smokers who switch to ENDS, lifetime cost-savings to Medicaid programs would be

$2.8 billion. Exhibit 12 at I (Policy Study - Expected Savings to Medicaid from Substituting

Electronic for Tobacco Cigarettes). Notably, the FDA and other health organizations have

concluded that nicotine, while highly addictive, does not itself directly cause the cancer, lung or

heart diseases associated with combusted cigarette smoking. Exhibit 13 at 2 (Gottlieb - A

Nicotine·Focused Framework for Public Health) ("Nicotine ... is not directly responsible for the

tobacco-caused cancer, lung disease, and heart disease that kill hundreds of thousands of

Americans each year.").

The JUUL System: A Runaway Success

I I. Within a fow years of the launch of the JUUL system, JU became the recognized

market leader in the ENDS device and pod refill market. Exhibit 14 at 1-3 (CNBC Article - Juul

e-cigarette sales have surged over the past year); Exhibit 15 (Bloomberg Article - E-Cigarette

Maker Juul Labs Is Raising$ l .2 Billion); Exhibit 16 (Bloomberg Article - Imperial Takes on

Juul as Big Tobacco Faces Upstart Rival). After a slow start for a then-unknown company, JLl's

products began to gain significant word-of-mouth momentum. By the summer of 2016, the

market share for the JUUL system began to grow steadily-and then exponentially. As shown in

the table below, JLI is now responsible for over 95% of the gro\\'th in the ENDS pod refill

market in the United States. Confidential Exhibit 17 at 'U IO, App. 5 (Danaher Deel.);

Confidential Exhibit 18 at 3 (Nielsen 4-Week Sell-Through US); Confidential Exhibit 19 at 3

(!RI 4-Week Sell-Through US).

:5

A11pendix 5: U.S. ENDS Pod 1Harket Retail Unit Sales Growth 2018

4-Week Unit Sales by End Date

-~~~~·--"·

35,166,120 95.1%

7,409,312 1.0% ~.~.=o--"- -- ----

3,230,237 1.5% ~ =~""!=..=."-==-- -

1,876,006 ·0.2% -·---

1,937,225 3.0% --··

1,175,055 ·0.3%

12. Today, the JUUL system is the leading alternative for adult smokers, and analysts

are calling it a "runaway success." Exhibit 15 at 1-2. As one commentator stated; "It's no secret

that JLI has dominated the [ENDS) device market over the past year, but just how much it has

dominated is eye-popping." Exhibit 14 at I. Similarly, a Wells Fargo analysis of Nielsen data

recently reported that JU ·s effiective annual dollar sales skyrocketed 783% in the 52-week period

ending June 16, 2018, reaching $942.6 million. Id. Even more recently, JLl's sales have surged

by 882%-boosting JLl's United States market share to 68%. Id.

13. As shown in the graphic below, JLI has captured the majority share of the United

States' ENDS market. Exhibit 14 at 3. Its share continues to grow in size. For example, as of

early September 2018, JLl's market share by volume of the U.S. ENDS pod refill market is about

72%. Confidential Exhibit 17 at App. 3 (Danaher Deel.).

Juul dominates the U.S. e-cigarette market Juul Labs represented 68 percent of dollar m~rllet share in the fOOM'le<!k pe11od ended June 16, 2018. accOfding to Nielsen data.

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Altria Group

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https://www.cnbc.com/20 I 8/0 7 /02/j uul-e-cigarett e-sa I es-have-surged-over-the-past-year. htm I.

14. JLl's market share and innovative products have led to competition from

copyists-like Respondents-who hope to profit by stealing JLJ's intellectual property. In a

letter to the U.S. Food and Drug Administration, industry commentators noted how "new

products appear to mimic the sleek design of Juul, including ... Bo Vaping's Bo One [and] ...

XFire Vapor's Xfire .... "Exhibit 20 at 4 (Letter to the FDA - Claim of Other Illegal Products).

Respondents' products are inferior copies of the Domestic Articles. Respondents market these

JU look-alike devices- --0ften at a fraction of the price of the JUUL system-without the same

attention to quality control that JLI employs. While JU manufactures, through the use of contract

manufacturers, its liquid nicotine and fills its pods under tight quality controls here in the United

States, on information and belief, each Respondent maintains its liquid nicotine manufacturing

and pod filling operations in China, operating without necessarily complying with FDA

regulations and operating under unspecified quality control procedures.

JLl's Leadership: Setting Corporate Responsibility Standards

15. JU markets only to adult smokers and takes great pains to combat youth use.

Indeed. J LI maintains that no non-nicotine user, especially youth, should ever use its product or

any other product designed to deliver nicotine. In this regard, J LI is dedicated to raising the

standard for responsibility in the ENOS industry, committing an initial investment of at least $30

million for independent research, youth and parent education, and community engagement

effiorts. Further, JLI proactively adopted a 21 +"age-gate" nationwide that limits on line purchases

of JUUL products via Juul's e-commerce site to adults 21 and older, despite a majority of states

permitting sales to 18-year olds. JLI has partnered with an industry leading age verification

service to complete a public-records search to determine whether a purchaser is 21 years of age

or older. If the system cannot immediately verify age, the user would be required to upload a

photo l.D. And JU continually strengthens its online age verification, most recently

implementing a request to input the last four digits of a consumer's social security number to

enhance verification. In addition, JU adopted a comprehensive marketing code-particularly on

social media-under which JU adheres to strict guidelines to ensure that its marketing and sales

are directed only toward existing adult smokers.

16. In contrast, each Respondent appears to make only half-hearted attempts, if any,

to prevent youth adoption-the single most important challenge facing the industry.

Respondents' ENOS products are easily purchased online after simply checking an unverified

box or filling out a basic unverified form. And in contrast to JLl's simple, adult-oriented flavors

such as Mango and Virginia Tobacco, many of the Respondents sell pods in a variety of flavors

having obvious, if not deliberate, youth appeal, such as ''Bubble Bubble.'' "Apple Juice,"

"Pineapple Crush," "Citrus Burst," "Sour Gummy;· and "Strawberry Milk," to name a few. 1 On

information and belief., Respondents lack any meaningfiJI or formalized program for preventing

minors from purchasing their low-cost products. Without safeguards, including age-verification

and policing, Respondents' products are ending up in the hands of underage users.

17. Given the encroachment on JLl's intellectual property, the importance of

continued availability of high-quality ENDS, and the immediate need for corporate responsibility

in this burgeoning industry-particularly as to youth prevention-JU seeks as relief: (i) a

permanent limited exclusion order under 19 U.S.C. § I 337(d) barring from entry into the United

States the Accused Products that infringe the Asserted Patents, (ii) a permanent cease-and-desist

order under 19 U.S.C. § l337(t) prohibiting Respondents and their affiliates, subsidiaries,

successors, and assigns from importing, marketing, distributing, repairing, providing warranty

services, selling, offering for sale, or selling after importation into the United States ENDS

products including devices, pods, and all components thereof, that infringe the Asserted Patents,

and (iii) any other relief deemed appropriate by the Commission.

18. Further, JU requests that the Commission impose a bond on Respondents'

importation of infringing products during the 60-day Presidential review period pursuant to 19

U.S.C. § 1337U) to prevent fi.irther injury to J LI and its domestic industry relating to the Asserted

Patents.

II. THE PARTIES

A. The Complainant

I 9. JU is a privately-held corporation organized and existing under the laws of the

state of Delaware, with its principal place of business at 560 20th Street, San Francisco,

1 For a more complete listing of Respondents' flavors. see Appendix A (Listing of Competitor Flavors).

9

California 94107. JU was incorporated in 2007, beginning as a small start-up consumer-products

company. Since its founding in 2007, however, JLI matured into an FDA-regulated enterprise,

dedicating significant resources to its capacities in the United States both in terms of assets and

personnel. The Domestic Articles were first brought to market in June 2015 by JLl's predecessor

corporate entity, Pax Labs, Inc. ("Pax"). On June 30, 2017, Pax was renamed Juul Labs, Inc.,

making Juul Labs, Inc. the direct successor-in-interest of the original Pax Labs. Juul Labs, Inc.

then spun off certain products (other than the JUUL system), personnel, and resources into a new,

distinct corporate entity, which reacquired the corporate name Pax Labs, Inc. (New Pax). New

Pax focuses on other vaporization fields that do not involve the vaporization of nicotine liquid.

The JUUL System

20. Three core concepts drove the development of the JUUL system: (i) an elegant

design to replace the cigarette iconography of the "round white burning stick"; (ii) a simple user

interface requiring no buttons, switches, or complex instructions; and (iii) reliable performance.

And the liquid nicotine of the JUUL system was specially formulated to mimic nicotine

satisfaction similar to that of cigarettes.

21. Years of research and development, leading to multiple innovations in ENDS

technology, resulted in JLl's market-leading product, the JUUL system: an elegant, intuitive

closed pod-based device that delivers a satisfying experience to help adult smokers switch from

combustible cigarettes. By way of illustration, certain elements of the JUUL system are shown

below, including the JUUL device (fiar left), its packaging, and various other system components.

JUUl

The JUUL system, packaging, and components.

B. Respondents

22. In contrast to JU, Respondents are mostly bit players and recent entrants in the

ENDS market. Seeing an opportunity to capture some of JLl's success with minimal investment,

Respondents blatantly emulated the distinctive design of the JUUL system.

J !

50% UJ

40%

30%

20% ~

10%

2015 2016 017 2018

Cascade of Copy-Cats Entering Market Starting in 2017

23. On information and belief, Respondents copied JL!'s innovative design and other

patented features to steal JLl's domestic market share by importing into the United States- --0ften

at lower prices-infringing products such as pods and related devices that include JLl's patented

technology.

1. Bo Group

a) J Well France S.A.S.. 2 ("J Well'')

24. Respondent J Well is a French company with its principal place of business at 50

rue de Miromesnil, 75008 Paris, France. Exhibit 21 at 2; Exhibit 22; Exhibit 23 (corporate profile

of J Well France); Exhibit 24 at 2 (Tobacco Business Magazine - Bringing Up Bo) (noting that J

2 J Well France S.A.S., formerly J Well France S.A.R.L., changed its corporate structure from societe a responsabilite limitee to societe par actions simplifiee on February l, 2018. Exhibit 21 (copy of J Wei l's original corporate by-laws update); Exhibit 22 (copy of English translation of J Welt's corporate by-laws update); Exhibit 182 (copy of J Well's original meeting minutes); Exhibit 183 (copy of J Well's meeting minutes translated into English).

Well developed the Bo line of devices and pods); Exhibit 25 (Web Printout of J Well's Website

(Bo One)) (showing that Bo One is a J Well product); Exhibit 26 (Web Printout of J Well's

Website (Bo+)) (showing that Bo+ is a J Well product).

25. On infonnation and belief., Respondent J Well designed the Bo One and Bo+

devices and pods that are marketed to consumers in the United States. Respondent J Well's

products are manufactured, assembled, and filled in China. See il1ljra ii1! I 06-110; Exhibit I 08 ,I 6

(photographs of the Bo One packaging and Bo+ packaging) ("Lazea Deel."); Exhibit 27 (Web

Printout of J Well's Website (Bo One from China)) (showing that the Bo One is assembled in

China); Exhibit 28 (Web Printout of J Well's Website (Bo+ from China)) (showing that the Bo+

is assembled in China).

b) Bo Vaping

26. Respondent Bo Vaping is an American company with its principal place of

business in New York, at 591 Stewart Avenue, Garden City, NY 11530. Exhibit 29 (Bo Vaping

website showing address); Exhibit 30 (Bo Vaping website showing sales of Bo One products);

Exhibit 31 (Bo Vaping website showing line of products, including Bo One, Bo+, and Bo Caps).

27. On infonnation and belief, Respondent Bo Vaping is a subsidiary brand company

of Respondent J Well and markets the Bo One and Bo+ devices and pods to consumers in the

United States. Exhibit 25 (showing Bo Vaping as a subsidiary brand of Respondent J Well);

Exhibit 26 (showing Bo Vaping as a subsidiary brand of Respondent J Well).

c) MMS Distribution LLC ("MMS'')

28. Respondent MMS is an American limited liability company with its principal

place of business in New York, at 195 Lake Louise Marie Road, Rock Hill, NY 12775. Exhibit

32 at 1-2 (MMS Distribution LLC Company Report).

29. On information and beliet: Respondent MMS distributes the Bo One and Bo+

devices and pods. Exhibit 33 (Article - MMS Is Exclusive Distributor of Bo Products) (MMS is

the exclusive distributor of Bo products); Exhibit 34 (Web Printout of MMS Distribution, Bo's

Exclusive Distributor) (noting that MMS is the "EXCLUSIVE distributor of AUTHENTIC Bo

products in the US").

d) The Electric Tobacconist, LLC ("Electric Tobacconist'')

30. Respondent Electric Tobacconist is an American limited liability company with its

principal place of business in Colorado, at 3235 Prairie Avenue, Boulder, CO 8030 I. Exhibit 35

at 1-2 (The Electric Tobacconist, LLC Corporate Entity Information); Exhibit 36 (Electric

Tobacconist Company Profile).

31. On information and belief, Respondent Electric Tobacconist distributes the Bo

One and Bo+ devices and pods through its website. Exhibit 37 (Web Printout of Electric

Tobacconist, Bo One and Bo+ devices and pods distributor).

2. Eonsmoke Group

a) Eonsmoke, LLC ("Eonsmoke'')

32. Respondent Eonsmoke is an American limited liability company with its principal

place of business in New Jersey, at 1500 Main Ave., 2nd Floor, Clifton, NJ 070 I I. Exhibit 38 at

2 (Eonsmoke, LLC Company Report).

33. On information and belief, Respondent Eonsmoke's Eonsmoke and Eonsmoke

v2.0 devices and pods. as well as 4X pods. are marketed to consumers in the United States.

These products are expressly marketed as" Juul Compatible." Exhibit 39 (Web Printout of

Eonsmoke Shop Selling Eonsmoke Devices and Pods); Exhibit 40 (Web Printout of Eonsmoke

Shop Selling Eonsmoke v2.0 Devices and Pods). Respondent Eonsmoke manufactures its

devices and pods in China. See irafra ,1,1111- I I 8; Exhibit I 08 ~113 (photographs of the Eonsmoke

device packaging, Eonsmoke v2.0 packaging, Eonsmoke pods packaging, and 4X packaging).

b) Electric Tobacconist

34. On information and belief: Respondent Electric Tobacconist distributes the

Eonsmoke and Eonsmoke v2.0 pods, as well as the 4X pods. through its website. Exhibit 41

(Web Printout of Electric Tobacconist, Eonsmoke and Eonsmoke v2.0 pods distributor): Exhibit

42 (Web Printout of Electric Tobacconist, 4X pods Distributor).

3. Ziip Group

a) Zlab S.A. ("Ziirp labs''/

35. Respondent Ziip Labs is a Uruguayan corporation with its principal place of

business at Ave. Golero, 911 Office 27, Punta del Este - Maldonado - Uruguay, 20100. Exhibit

45 at I. On information and belief; the Ziip Group Respondents' Ziip devices and pods, as well

as Plus Pods, are marketed to consumers in the United States. These products are expressly

marketed as" Juul Compatible," and on information and belief., are of substantially the same

design as the Eonsmoke products.

36. On information and belief, Ziip Labs designs the Ziip devices and pods, including

the P'lus Pods, in Uruguay, and it manufactures its devices and pods in China. See irafra ,,,, 119-

130; Exhibit I 08 ~I 18 (photographs of the Ziip starter kit packaging and Plus Pods packaging);

Exhibit 43 at 2 (Web Printout of ZLab Website) (advertising on Ziip 's website that "ZLab S.A.

develops high quality e-juices ... ").On information and belief, Ziip Labs has two sales offices

in the United States: one in San Francisco, Exhibit 44, and another in New York, Exhibit 45.

3 On information and belief, ZLab S.A. rebranded and changed its business name from Ziip Labs S.A. to ZLab S.A. See Exhibit 184 ('·About Us" Page Designating ZLab S.A. with Mix of Ziip Lab References); Exhibit l 85 (ZLab S.A./Ziip Labs S.A. "Contact Us" Page).

15

b) Ziip Lab Co., limited ("Ziip China")

37. Respondent Ziip China is a Chinese company with its principal place of business

at E District 4F, 5 Building, Wen Ge Industrial Zone, Heshuikou, Gongming St., Guangming

New District, Shenzhen City, Guangdong Province, China 518106. Exhibit 44 at 2.

38. On information and belief Respondent Ziip China manufactures Ziip devices and

pods, as well as the Plus Pods. See Exhibit 44 at 2; Exhibit 45 at I (Web Printout of ZLab

Contact).

c) Shenzhen l'ibo Technology Co., ltd. ("l'ibo''.)

39. Respondent Yibo is a Chinese company with its principal place of business at IF-

4F, 3rd Building, Laowei, Tiantou Community, Pingshan Sub-District, Pingshan New District,

Shenzhen City, Guangdong Province, China 518118. Exhibit 46 at I (Web Printout of Shenzhen

Yibo Website).

40. On information and belief, Respondent Yibo manufactures Ziip devices and pods,

as well as the Plus Pods, in China. Exhibit 47 (noting Ziip's factory as Yibo).

d) Electric Tobacconist

41. On information and belief, Respondent Electric Tobacconist distributes Ziip pods

through its website. Exhibit 48 (Web Printout of Electric Tobacconist, Ziip pods distributor).

4. XFire Group

a) XFire, Inc. ("XFire''.>

42. Respondent XFire is an American corporation with its principal place of business

in Texas, at 820 Summer Park Drive, Suite 700, Stafford, TX 77477. Exhibit 49 at I (XFire Inc

Company Report).

43. On information and belie I: Respondent XFire's XFire devices and pods are

marketed to consumers in the United States. The XFire devices and pods are manufactured in

China. See ifll{r« il~I 131-133; Exhibit I 08 i! 21 (photographs of the XFire device packaging and

XFire pods packaging).

b) ALD Group Limited ("ALD'')

44. Respondent ALD is a Chinese company with its principal place of business at No.

2, 3rd Industrial Road, Baoan District, Shenzhen City, Guangdong Province, China 518108.

Exhibit 50 at I (Web Printout of ALD Contact); Exhibit 51 at 1-2 (ALD Company Report).

45. On information and belief, ALD manufactures Respondent XFire's XFire devices

and pods in China.

5. Flair Group

a) Flair Vapor LLC ("Flair'')

46. Respondent Flair is an American limited liability company with its principal place

of business in New Jersey, at 2500 Hamilton, Blvd., Suite B, South Plainfield, NJ 07080. Exhibit

52 at I (Flair Vapor LLC Company Report).

47. On information and belief, Respondent Flair's Flair Xtreme devices and pods are

marketed to consumers in the United States. The Flair Xtreme devices and pods are

manufactured in China. See infr« 11~ 134-136; Exhibit I 08 ~ 24 (photograph of the Flair Xtreme

starter kit packaging).

h) Shenzhen Joecig Technology Co., Ltd. ("Joeci'g'')

48. Respondent Joecig is a Chinese company with its principal place of business at

I F-5F, Building 17, Quarter G, ShaJing Road, Gonghe 3rd Industry District, Baoan District,

Shenzhen City, Guangdong Province, China 518104. Exhibit 53 at 1-2 (Web Printout of Joecig

Contact).

49. On information and belief, Joecig manufactures Respondent Flair's Flair Xtreme

devices and pods in China. Exhibit 54 at 15 (Wingle (Public) Report on Nicotine Salts E-Liquid

! ., 'I

Overview) (noting the Joecig Eavalon is the OEM of the Flair Xtreme ); Exhibit 55 (Joecig

Eavalon Website) (showing that the Joecig Eavalon is identical to the Flair Xtreme).

6. Myle Group

a) Myle Vape Inc. ('"My/e'')

50. Respondent Myle is an American corporation with its principal place of business

in New York, at 8085 Chevy Chase Street, Jamaica, NY 11432. Exhibit 56 at l (Myle Vape Inc.

Company Report).

51. On information and beliet: Respondent Myle's Myle devices and pods are

marketed to consumers in the United States. The Myle devices and pods are manufactured in

China. See inifra ,,,I 137-139; Exhibit l 08 ,12 7 (photograph of the Myle starter kit packaging).

b) Electric Tobacconi.vt

52. On information and belief, Respondent Electric Tobacconist distributes

Respondent Myle's Myle devices and pods through its website. Exhibit 5 7 (Web Printout of

Electric Tobacconist, Myle devices and pods distributor).

7. Pulse Group

a) Vapor Hub I ntemational, Inc. ("Vapor Hub")

53. Respondent Vapor Hub is an American corporation with its principal place of

business in California, at 1871 Tapo Street, Simi Valley, CA 93063. Exhibit 58 at 5 (Vapor Hub

International lnc. Company Report).

54. On information and belief, Respondent Vapor Hub's Pulse devices and pods are

marketed to consumers in the United States. Vapor Hub distributes its devices and pods. Exhibit

59 (Web Printout of Vapor Hub's Shop Selling Pulse Devices and Pods); see also if!fra~l,1140-

141.

18

b) Limitless Mod Co. ("limitless':>

55. Respondent Limitless is an American limited liability company with its principal

place of business in California, at 4590 !sh Drive, Suite I 00, Simi Valley, CA 93063. Exhibit 60

at 1-2 (Limitless Mod Co. Company Report); Exhibit 61 (Limitless Mod Co., LLC. Notation in

Tenns & Conditions).

56. On infonnation and belief, Limitless distributes Respondent Vapor Hub's Pulse

devices and pods. Exhibit 62 (Web Printout of Limitless Products for Sale and Instructions for

Use); Exhibit 63 (Web Printout of Limitless Products for Sale).

c) lnjinite-N Technology Umited ("INTL''.>

57. Respondent INTL is a Chinese company with its principal place of business at 4F,

iTone Digital Park, Xin Fa San Road, Sha Jing, Shenzhen City, Guangdong Province, China

518200. Exhibit 64 at I (Web Printout of INTL Contact).

58. On information and belief, INTL manufactures Respondent Vapor Hub's Pulse

devices and pods in China.

d) Electric Tobacconist

59. On infonnation and belief; Respondent Electric Tobacconist distributes

Respondent Vapor Hub's Pulse devices and pods through its website. Exhibit 65 (Web Printout of

Electric Tobacconist, Pulse devices and pods distributor).

8. 3X Group

a) King Distribution LLC ("King':>

60. Respondent King is an American limited liability company with its principal place

of business in New Jersey, at 2 8 I Route 46 West, Elmwood Park, NJ 07 407. Exhibit 66 (King

Distribution Certificate of Fonnation).

6 l. On information and belief, the 3 X pods are marketed to consumers in the United

States. 4 These products are expressly marketed as" Juul Compatible." King coordinates with

Keep Vapor to distribute the 3X Pods. See irafra ilil 142-143; Exhibit I 08 ii 32 (photograph of the

3X packaging) (3X packaging noting King as the distributor and Keep Vapor as the

manufacturer).

b) Keep Vapor Electronic Technology Co., ltd. ("Keep Vapor'')

62. On information and belief, Respondent Keep Vapor is a Chinese Company with

its principal place of business at Block D, XinLong Techno Park, ShaJing Town, Bao An District,

Shenzhen, China.

63. On information and belief: Keep Vapor manufactures the 3X Pods in China.

Exhibit I 08 ii 32 (3X packaging noting production by Keep Vapor in China).

Ill. THE ASSERTED PATENTS

64. The Asserted Patents are specifically directed to features that have been

incorporated into the Domestic Articles. These patented features have contributed to the success

of the Domestic Articles in the United States, and are the same features that Respondents have

copied in their attempts to undercut and appropriate JLJ's market share.

65. JLI has licensed certain rights in the Asserted Patents to New Pax. the entity spun

out from JU as discussed above in Section II.A. JU, however, retains the sole right and

discretion to assert and defend its intellectual property rights, including against any use of the

patented technology for the delivery of nicotine vapor in the United States. Moreover. the license

4 JU filed a trademark infringement claim against King. See Juul Labs, Inc. v. King Distribution LLC. 18-CV-09233 (D.N.J.) (filed May 15, 2018). As a result, King agreed to make ornamental changes to its 3X pod design. However, the redesigned 3X pods continue to infringe the Asserted Patents. In working to resolve the trademark infringement claims against King, JLI specifically reserved its right to allege infringement of additional JU intellectual property found to be infringed.

20

prohibits Pax from using the Asserted Patents outside Pax's own field of use, meaning Pax lacks

any rights to use the Asserted Patents in the nicotine field of use.

66. In addition, JU has previously given a security interest in the Asserted Patents,

but retains all rights, title, and interest to the Asserted Patents absent default.

A. The '669 Patent

67. On September 11, 2018, the United States Patent and Trademark Office

("USPTO") duly and fawfolly issued the '669 Patent, entitled "Cartridge for Use with a

Vaporizer Device," to inventors James Monsees, Adam Bowen, Steven Christensen, Joshua

Morenstein, and Christopher Nicholas HibmaCronan. The '669 Patent issued from U.S.

Application No. 15/820,370, filed November 21, 2017, and is a continuation of U.S. Application

No. 15/257. 7 48. The '669 Patent descends from the same parent application as the • 13 0 Pa tent.

There are no foes currently due with respect to the '669 Patent. The '669 Patent will expire

December 23, 2034.

68. A certified copy oft he '669 Patent is attached hereto as Exhibit 67. By way of

assignment, JLI holds all rights, title, and interest to the '669 Patent. A certified copy of the

assignment record for the '669 Patent is attached hereto as Exhibit 68. Pursuant to Commission

Rule 210. f 2(c), a certified copy oft he File History of the '669 Patent is included as Appendix B.

Copies of the references cited in the certified file history of the '669 Patent are included as

Appendix C.

69. The '669 Patent has 21 claims, including 2 independent claims and I 9 dependent

claims. JLI has asserted independent claims I and 12 and dependent claims 2, 4, 5, 7, 8, 10, 13,

f 6, 17, 20, 21 of the '669 Patent.

70. In accordance with Commission Rule 210.12(a)(9)(v), a list of all foreign patents

and patent applications corresponding to the '669 Patent, including an indication of status, is

2!

attached as Exhibit 69. JU is aware of no other foreign counterparts issued, filed, abandoned,

withdrawn, or rejected with respect to the '669 Patent.

B. The '139 Patent

71. On September 18, 2018, the USPTO duly and lawfully issued the' 139 Patent,

entitled "Vaporizer Apparatus," to inventors James Monsees, Adam Bowen. Steven Christensen,

Joshua Morenstein, and Christopher Nicholas HibmaCronan. The '139 Patent issued from U.S.

Application No. 15/257,760, filed September 6, 2016, and is a continuation of U.S. Application

No. 14/581,666. There are no fees currently due with respect to the' 139 Patent. The' 139 Patent

will expire December 23, 2034.

72. A certified copy of the' 139 Patent is attached here to as Exhibit 70. By way of

assignment, JLI holds all rights, title, and interest to the' 139 Patent. A certified copy of the

assignment record for the 'I 39 Patent is attached hereto as Exhibit 71. Pursuant to Commission

Rule 210.12( c), a certified copy of the File History of the 'I 39 Patent is included as Appendix

D. Copies of the references cited in the certified file history of the' 139 Patent are included as

Appendix E.

73. The' 139 Patent has 37 claims, including 4 independent claims and 33 dependent

claims. JLI has asserted independent claims I, 11, 19, and 20 and dependent claims 2, 3, 4, 9, I 0,

13, 14, 21, 24, 28, 29 of the' 139 Patent.

7 4. In accordance with Commission Rule 2 I 0. I 2(a)(9)(v), a list of all foreign patents

and patent applications corresponding to the '139 Patent, including an indication of status, is

attached as Exhibit 72. JLI is aware of no other foreign counterparts issued, filed, abandoned,

withdrawn, or rejected with respect to the '139 Patent

C. The '568 Patent

75. On August 14, 2018, the USPTO duly and lawfi11!y issued the '568 Patent,

entitled "Vaporization Device Systems and Methods," to inventors James Monsees, Adam

Bowen, Steven Christensen, Joshua Morenstein, and Christopher Nicholas HibmaCronan. The

'568 Patent issued from U.S. Application No. 15/832,749, filed December 5, 20 l 7, and is a

continuation of U.S. Application No. 15/379,898. There are no fees currently due with respect to

the '568 Patent. The '568 Patent will expire December 23, 2034.

76. A certified copy of the '568 Patent is attached hereto as Exhibit 73. By way of

assignment, JLI holds all rights, title, and interest to the '568 Patent. A certified copy of the


Rule 2 l0.12(c), a certified copy of the File History of the '568 Patent is included as Appendix F.

Copies of the references cited in the certified file history of the '568 Patent are included as

Appendix G.

77. The '568 Patent has 20 claims, including 3 independent claims and 17 dependent

claims. JLI has asserted independent claims I, 12, and 20 and dependent claims 2, 3, 5, 6, 7, 8, 9,

17, l 8, 19 ofthe '568 Patent.

78. In accordance with Commission Rule 210. I 2(a)(9)(v). JLI is aware of no foreign

patents and patent applications corresponding to the '568 Patent.

D. The '130 Patent

79. On August 28, 2018, the USPTO duly and lawfUlly issued the' 130 Patent,

entitled "Cartridge for Use with a Vaporizer Device," to inventors James Monsees, Adam

Bowen, Steven Christensen, Joshua Morenstein, and Christopher Nicholas HibmaCronan. The

'130 Patent issued from U.S. Application No. 15/8 I 3.089, filed November 14, 2017, and is a

continuation of U.S. Application No. 15/257, 748. The' 130 Patent descends from the same parent

application as the '669 Patent. There are no fees currently due with respect to the' 130 Patent.

The '130 Patent will expire December 23, 2034.

80. A certified copy of the' 130 Patent is attached hereto as Exhibit 75. By way of

assignment, JLI holds all rights, title, and interest to the ' 130 Patent. A certified copy of the


Rule 2 JO. I 2(c), a certified copy of the File History of the' 130 Patent is included as Appendix

H. Copies of the references cited in the certified file history of the '130 Patent are included as

Appendix I.

8 I. The '130 Patent has 27 claims, including 3 independent claims and 24 dependent

claims. JLI has asserted independent claims I, 8, and 21 and dependent claims 2, 4, 5, 6, 9, IO,

16, 19, 27 ofthe '130 Patent.

82. In accordance with Commission Rule 210. I 2(a)(9)(v), a list of all foreign patents

and patent applications corresponding to the '130 Patent, including an indication of status. is

attached as Exhibit 77. JU is aware of no other foreign counterparts issued, filed, abandoned,

withdrawTI, or rejected with respect to the '13 0 Patent.

IV. NON-TECHNICAL DESCRIPTION OF THE ASSERTED PATENTS5

83. The Asserted Patents each relate to ENDS and components of ENDS such as the

liquid nicotine pods. The patented ENDS generally have a pod containing liquid nicotine that is

inserted into the ENDS device body. The ENDS device body has a battery and a pod receptacle

into which the pod is inserted. as well as a charging port for charging the battery. The ENDS

device body also contains a printed circuit board that controls the electronic operations of the

5 The following non-technical description of the patented technology is provided solely for compliance with the Commission Rules. It is not intended to, and does not, limit, define, or otherwise affect the construction or application of the claim language and should not be understood to do so. '

device. The JUUL system's form-factor allows sufficient space for its advanced components, but

is compact enough to easily and snugly fit in a user's closed lips during pufl!s.

84. The pod includes a mouthpiece and storage compartment for the liquid nicotine.

The pod is filled with the liquid pursuant to JLl's patented method in JLl's domestic filling

plants. The disposable pod-based system provides the simplicity and convenience that smokers

seek. With only minimal attention to orientation and mild pressure, the single, reversible pod is

easily inserted and removed from the device body, even in the dark.

85. The JUUL system is simple, yet distinct. It is purposefully designed to make it

easy for adult smokers to transition to the product. Its design distinguishes the JUUL system

from combustible cigarettes and from the first generation of ENDS. Critically, it is not a white,

round, cigarette-like stick, instead employing a unique form factor that represented a stark

departure from conventional thinking about ENDS design. At one basic level. the flattened,

oblong design creates space for JU to leverage and incorporate its innovations into an effective

and well-controlled ENDS, with a unique iconography.

86. The Asserted Patents are directed to the innovative features of the JUUL system,

which includes the JUUL device body as well as the JUUL pod.

A. The '669 Patent

87. The '669 Patent discloses a pod with a mouthpiece, where the mouthpiece covers

only an upper portion of the pod body, and the mouthpiece does not cover a lower portion of the

pod body. The uncovered portion of the pod body is configured for insertion into an ENDS

device body. Nevertheless, when the pod body is inserted into the ENDS device body, there is

still a portion of the pod body that is neither covered by the mouthpiece nor the ENDS device

body, so as to allow an ENDS user to see the liquid nicotine level of the pod. See Exhibit 67,

'669 Patent. Figure 248.

7"il$

88. The '669 Patent discloses the transparent pod with a mouthpiece configuration

allowing users to see the nicotine formulation liquid level inside the pod. Prior to the '669 Patent,

users using many other ENDS could not see the nicotine formulation liquid levels inside the pod

while using the device. JU's ·669 Patent addresses this difficulty by disclosing transparent pods

where a portion of the pod is not covered by the mouthpiece. The pod is flattened with a notch up

into the mouthpiece such that the liquid nicotine level is visible.

B. The '139 Patent

89. The' l 39 Patent discloses an apparatus comprising a cartridge having a storage

compartment, through which a vaporizable material is visible. Furthermore, the '139 Patent

discloses an ENDS device body having a receptacle with a notch, and the cartridge is inserted

into this receptacle. When the cartridge sits in the ENDS device body, the notch allows an ENDS

user to view the storage level within the storage compartment of the cartridge. See Exhibit 70.

'139 Patent, Figures 12, 278.

FIG. 11

90. The '139 Patent discloses the transparent cartridge with a device configuration

allowing users to see the nicotine formulation liquid level inside the cartridge. Prior to the '139

Patent, users using many other ENDS could not see the nicotine fonnulation liquid levels inside

the cartridge while using the device. JLl's '139 Patent addresses this difficulty by disclosing

transparent cartridges where a portion of the cartridge is not covered by the device. The ENDS

device body has a notch such that a portion of the cartridge is visible through the notch when it is

housed within the device.

C. The '568 Patent

91. The '568 Patent discloses a pod with a mouthpiece enclosing and simultaneously

concealing a portion of the storage compartment, as well as an ENDS device body with a

notched pod receptacle to allow an ENDS user to view the liquid level inside the pod when the

pod sits inside the ENDS device body. Moreover, the '568 Patent discloses paired plates sitting

inside the pod, and flat contact tabs extend from these paired plates to outside of the pod. The flat

contact tabs also fold over so as to lie against the side of the pod that meets an electrical contact

in the ENDS device body when the pod is housed inside the ENDS device body. See Exhibit 73,

'568 Patent, Figure 248 (part 2411 ).

92. The '568 Patent discloses a pair of exposed, flat, folded-over contact tabs

integrally formed from the paired plates. These exposed, flat, folded-over contact tabs complete a

circuit with the battery in the ENDS device body when the pod is inserted into the device. Prior

to the '568 Patent, other ENDS used pins to connect the heating element and the pod. As

opposed to the claimed contact tabs which lay flat against the bottom of the pod, these pins were

larger and often required a separate compartment adjacent to the bottom of the pod for housing

the pins in order to dissipate excess heat from the heating element. However, the pins were

inadequate for dissipating excess heat and so were prone to overheat and produce a burnt flavor.

JLl's '568 Patent addresses this problem by disclosing the flat folded-over contact tabs integrally

formed from the paired plates, making the device more space-efficient and relatively easy to

manufacture and install, and allowing for heat to dissipate through the heat sink, which prevents

the formation and transmission of burnt flavors to users.

28

D. The '130 Patent

93. The' 130 Patent discloses a method of manufacturing a pod with a humectant, a

heating element, and a pair of heater contact plates, where the heating element sits between the

pair of heater contact plates, and the heater contact plates sit on opposite sides of the pod.

94. The '130 Patent discloses a method of fabricating a pod with a pair of plates

proximate to two opposing sides of the pod, where both plates are coupled to a heating element

positioned between the two paired plates. Prior to the '130 Patent, other ENDS were fabricated

with a larger number of components for the pod, leading to leakage problems, difficulty of

manufacture, and quality control issues. JLI's '130 Patent addresses this problem by disclosing a

method of fabrication where a much smaller number of components, including a heating element

connected to two tlat, paired plates and contact tabs to absorb, regulate, and dissipate the heat

produced by the heating element, where the plates and tabs are made from a single piece of

material. This method reduces the number of components and the chances of leakage, and it

makes the device more space-efficient and relatively easy to manufacture and install along

portions of the heating chamber walls, all while providing effective heat sink features.

V. THE ACCUSED PRODUCTS

95. Pursuant to section 210.1 O(b)(I) of the Commission's Rules of Practice and

Procedure, 19 C.F.R. § 210.1 O(b)(l), the proposed plain language description of the category of

accused products, which defines the scope of the investigation, is "electronic nicotine delivery

systems ('ENDS'). and components thereof, including ENDS devices and ENDS pods." As

detailed below, some of the accused products include an ENDS device and the associated ENDS

pods sold for use with the device. Others are ENDS pods alone. Some accused ENDS pods

sold alone or with an associated ENDS device--are expressly marketed as "Juul Compatible."

96. The Accused Products include at least the Bo Group's Bo One and Bo+ devices

and pods (also called "Bo Caps"); Eonsrnoke Group's Eonsmoke and Eonsrnoke v2.0 devices

and pods, as well as 4X pods; the Ziip Group's Ziip devices (also called "ZDevice") and pods

(also called "ZPods"), as well as Plus Pods; the Xfire Group's Xfire devices and pods; the Flair

Group's Flair Xtreme devices and pods; the Myle Group's Myle devices and pods; the Pulse

Group's Pulse (also called "Ply Rock") devices and pods; and the 3X Group's 3X pods

("Accused Products"). 6

A. Bo Group

97. On information and belief. each of J Well's, Bo Vaping's, MMS's, and Electric

Tobacconist's Bo One and Bo+ devices and pods are ENDS or components thereof. See, e.g.,

Exhibit 78 (Photo of Bo One Device and Pod); Exhibit 79 (Photo of Bo+ Device and Pod);

Exhibit 80 (Photo of Bo One Device and Pod Coupled); Exhibit 81 (Photo of Bo One Device and

Pod Separated).

6 JLI has identified these products based on information that is publicly available at this time. This list is non-limiting. and JLI reserves the right to identify additional infringing products during discovery.

Exhibits 80-81 (Bo One device and pod, coupled and separated}

B. Eonsmoke Group

98. On information and belief, each of Eonsmoke's and Electric Tobacconist's

Eonsmoke and Eonsmoke v2.0 devices and pods, as well as 4X pods, are ENDS or components

thereof: See, e.g., Exhibit 82 (Photo of Eonsmoke Device and Pod): Exhibit 83 (Photo of

Eonsmoke v2.0 Device and Pod); Exhibit 84 (Photo of 4X Pod); Exhibit 85 (Photo of Eonsmoke

Device and Pod Coupled); Exhibit 86 (Photo of Eonsmoke Device and Pod Separated).

Exhibits 85-86 (Eonsmoke device and pod, coupled and separated)

united states international trade commission …juul labs, inc. 560 20th street san francisco, ca...

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