Philip Morris defended the claim by arguing that its accused product aerosolized the nicotine at a low temperature and, therefore, never combusted the tobacco. Philip Morris filed a motion under Fed.
Since the issues raised were not unique to patent law, the Federal Circuit addressed HCM's appeal under the law of the relevant regional circuit, the Eleventh Circuit. The Court noted that in the Eleventh Circuit, exhibits attached to a complaint can be considered and the exhibit controls in the event of any conflict with allegations pertaining to the exhibit. However, when an exhibit is alleged to be factually false in some way and the allegations in a complaint are specific and well pleaded, then the allegations in the complaint control. The exhibit regarding the accused product in this case was alleged to be incorrect, as far as it stated that there was no combustion initiated by the "heat-not-burn" method described in the exhibit. HCM contended that combustion occurred despite the assertions in that document. Relying on several cases disavowing the truth of the exhibit, the Federal Circuit found Eleventh Circuit law to be both clear and in alignment with HCM. The Court concluded that in light of the detailed allegations as to the basis underlying HCM's disagreement with the facts asserted in the exhibit, the complaint should not have been dismissed based on the exhibit.
The Federal Circuit next turned to HCM's amended complaint. Noting that the amended complaint "superseded" the earlier complaint, the Court found that the amended complaint removed the offending exhibit and any references to the offending exhibit and included a declaration of a technical expert to further support HCM's allegations. Philip Morris contested that the exhibit was central to HCM's complaint and, therefore, not only had to be explicitly disavowed but also had to be considered in connection with the amended complaint regardless of the removal of citations. The Court disagreed, explaining that there was no need to "recite particular magic words to disavow statements made in [the exhibit]." The Court further noted that there was no reason to treat the exhibit as dispositive, as the definition of "combustion" in terms of the exhibit and the patent could differ and, therefore, a Markman hearing was the appropriate time to resolve those issues.
Finally, the Federal Circuit vacated the award of attorneys' fees but denied HCM's request for reassignment to a different district court judge. The Court succinctly explained that under Eleventh Circuit law, "the fact that the district judge ruled against the appellants previously is of little impact" on weighing reassignment. The case was vacated and remanded to the district court for further proceedings.
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