[00:00:00] Speaker 01:
The last case this morning was VPR Brands versus Shenzhen Weiboing Technology, 2023-1544.

[00:00:09] Speaker 01:
Mr. Hire.

[00:00:10] Speaker 01:
Thank you, Your Honor.

[00:00:14] Speaker 00:
Eric Hire on behalf of the defendants, appellants,

[00:00:18] Speaker 00:
When it enacted the Lammon Act, Congress never contemplated enabling the party to leverage conduct that could be prosecuted as a federal crime to weaponize the Act's trademark protections against its competitors.

[00:00:33] Speaker 00:
Yet the plaintiff, VPR, has done exactly that.

[00:00:37] Speaker 00:
The Federal Food Drug and Cosmetic Act is clear that marketing and selling tobacco products as defined therein without an FDA marketing order is both illegal and indeed can be prosecuted formally.

[00:00:49] Speaker 03:
Was that question addressed by experts in this proceeding?

[00:00:55] Speaker 00:
We called an expert, Your Honor, but our arguments are in no way dependent on the testimony of the experts.

[00:01:00] Speaker 03:
Is it disputed that to sell tobacco products

[00:01:05] Speaker 03:
you need to have some form of registration at the FDA?

[00:01:09] Speaker 00:
I don't believe that's disputed, Your Honor.

[00:01:10] Speaker 00:
I believe it's undisputed, Your Honor.

[00:01:15] Speaker 04:
Your client sells e-cigarettes.

[00:01:18] Speaker 04:
Correct, Your Honor.

[00:01:18] Speaker 04:
Do they have this FDA marketing approval?

[00:01:21] Speaker 04:
So the important fact here, Your Honor, we... That's just a yes or no answer to that question.

[00:01:26] Speaker 00:
They don't, but they were not subject to that requirement when they first started using the market, Your Honor, because their products fell outside of the statutory definition of the benefit.

[00:01:34] Speaker 00:
I'm sorry?

[00:01:35] Speaker 00:
Are they exempt now?

[00:01:37] Speaker 00:
Now they are not, at this point in time.

[00:01:41] Speaker 03:
Your clients are marketing tobacco products without the FDA approval also?

[00:01:45] Speaker 00:
No, my clients have been enjoined from using the SMARC, the market issue.

[00:01:49] Speaker 00:
With what?

[00:01:50] Speaker 00:
My clients have been enjoined.

[00:01:51] Speaker 04:
We're here about a preliminary injunction from using the market issue, so they have not... Well, the day before the preliminary injunction, they were out there marketing, selling e-cigarettes without having the required FDA approval.

[00:02:04] Speaker 00:
Right, and this gets a bit into the intricacies of the Food and Cosmetic Act and the amendment.

[00:02:09] Speaker 03:
So there were... About food injunction, your poll would be marketing tobacco product center that it has not registered with the FDA.

[00:02:19] Speaker 03:
The very simple versions you're accusing them of not having registered on

[00:02:22] Speaker 03:
Your clients haven't registered either.

[00:02:24] Speaker 00:
You know, the salient – no, that's not correct.

[00:02:28] Speaker 00:
The salient points are Congress amended the Tobacco Control Act and the Food, Drug, and Cosmetic Act in 2022.

[00:02:34] Speaker 00:
My clients submitted PMTs, the pre-market applications, within the time frame that was required for those – for the types of products – The type of FDA regulation you were relying on for the definition of tobacco products came out in 2016.

[00:02:50] Speaker 00:
The deeming role did, Your Honor, but at that point in time the underlying statute only defined

[00:02:55] Speaker 00:
tobacco product as it had involved nicotine that was derived from the tobacco plant.

[00:03:01] Speaker 00:
So it did not account for synthetic nicotine.

[00:03:03] Speaker 00:
Congress subsequently in 2022 amended the statute to now bring those types of products that had synthetic nicotine within the ambit of the act as a result of that there was a new deadline to submit these pre-market applications.

[00:03:16] Speaker 04:
So in our... It's a very complicated regulatory regime.

[00:03:20] Speaker 04:
But if you want the, I don't know, the district courts and trademark examiner attorneys to go delve into and figure out when the trademark examiner attorney is getting better is just looking at your F bar E cigarette and trying to figure out whether that would create confusion in the marketplace with the registrant's F E cigarette and then concluding, yeah, there's a pretty serious confusion there.

[00:03:48] Speaker 00:
You know, Article III courts do this all the time.

[00:03:50] Speaker 00:
Whenever FDA pursues someone, for example, selling tobacco products that FDA believes are being sold unlawfully, that's up to the Article III judge to decide, to a district court to decide.

[00:04:01] Speaker 04:
This is what... This so-called unlawful use doctrine that the agency has had for maybe on the order of 70 years, I don't think the Federal Circuit has ever passed on that issue, has it?

[00:04:15] Speaker 04:
Has it ever actually

[00:04:18] Speaker 04:
made a ruling on whether the Trademark Act requires that use in commerce for a trademark application has to be lawful commerce activity.

[00:04:34] Speaker 00:
Not not squarely a cast.

[00:04:36] Speaker 04:
It mentioned it in the gravy daffy dance, which is a current registration use case.

[00:04:41] Speaker 04:
Very different than what we have here.

[00:04:43] Speaker 00:
Correct.

[00:04:43] Speaker 00:
But there are multiple, there are multiple provisions of the land.

[00:04:46] Speaker 04:
What I'm trying to figure out is what, what is the vitality of this doctrine where allegedly it's been around for decades and decades.

[00:04:55] Speaker 04:
We haven't seen it yet.

[00:04:57] Speaker 04:
And in fact, it's been only, I don't know,

[00:05:03] Speaker 04:
It's a little-used doctrine, it seems to me, and it has a very uncertain status.

[00:05:08] Speaker 04:
I haven't seen the agency ever do a rigorous statutory interpretive exercise on where they get this.

[00:05:16] Speaker 04:
I mean, the only federal court I've ever seen that's done any kind of real, fundamental statutory interpretive exercise

[00:05:25] Speaker 04:
was a case from Eastern District of Pennsylvania last year called PacWest.

[00:05:29] Speaker 04:
You're familiar with it?

[00:05:30] Speaker 03:
No, thank you, sir.

[00:05:31] Speaker 04:
And that included, no, there is no authorization under the Trademark Act for such an unlawful use doctrine.

[00:05:42] Speaker 04:
And so that's the only treatment.

[00:05:44] Speaker 04:
And it makes me wonder whether the 11th Circuit, because we're standing in their shoes for the moment, would really think that this is a viable doctrine.

[00:05:55] Speaker 00:
Well, I would say, Your Honor, in the age of state marijuana legalization, if the court is inclined to dispense with that, then we should expect that the Patent and Trademark Office will be authorizing all sorts of trademarks for state legal, and I'm doing air quotes here for the record, marijuana products.

[00:06:11] Speaker 04:
Well, they can do trademark registrations for scandalous and moral marks now.

[00:06:16] Speaker 04:
We know that, right?

[00:06:18] Speaker 04:
It seems like it's a free-for-all now.

[00:06:21] Speaker 00:
Well, Your Honor, respectfully, the Ninth Circuit, I think, has spoken very clearly on this.

[00:06:24] Speaker 00:
And there's actually an old, dated, but it hasn't been cited for the record, Seventh Circuit case called Stray v. Devines, inked from 1954.

[00:06:32] Speaker 00:
It's 217, F-second, 187.

[00:06:35] Speaker 00:
Is that in your briefing?

[00:06:36] Speaker 00:
It's not, I just, because it's not labeled as unlawful.

[00:06:39] Speaker 00:
It came under unclean hands back then, but this is obviously derived from unclean hands.

[00:06:44] Speaker 04:
Yeah, so don't, you have to have clean hands in order to invoke this doctrine.

[00:06:49] Speaker 04:
And, and, and?

[00:06:50] Speaker 04:
I'm not convinced you have clean hands.

[00:06:52] Speaker 04:
You know, our, my clients... Not only are you, you know, pretty clearly ripping off the other side's mark, but you also don't have the required FDA marketing, pre-marketing approval.

[00:07:03] Speaker 00:
Yeah, if I can be heard on this.

[00:07:05] Speaker 00:
When my client first launched the Elf Bar products, and the record is clear, it was in October of 2021 from the Proline Junction.

[00:07:12] Speaker 04:
After it got its trademark application denied, it denied the registration by the other side for the F for e-cigarettes.

[00:07:21] Speaker 04:
And then it could have filed a cancellation proceeding at that time.

[00:07:25] Speaker 04:
It really should have.

[00:07:26] Speaker 04:
A rational business person would have.

[00:07:28] Speaker 04:
But it chose not to.

[00:07:29] Speaker 04:
It just said, oh, screw it.

[00:07:30] Speaker 04:
We're just going to keep going and launch our product.

[00:07:35] Speaker 04:
That's that.

[00:07:36] Speaker 00:
At the time, at that point in time, synthetic nicotine was not subject to the Food Drug and Cosmetic Act.

[00:07:42] Speaker 00:
In fact, had they submitted a pre-market application at the time, it would have been rejected.

[00:07:46] Speaker 00:
FDA would not have accepted it because it was not within the scope of a tobacco product, of the statutory definition.

[00:07:51] Speaker 00:
Congress subsequently amended, and that is when my clients first claimed rights attached.

[00:07:57] Speaker 00:
And then Congress subsequently amended.

[00:07:59] Speaker 00:
There was a new deadline to submit PMTAs because of the change in the statutory definition that didn't apply, you know, that bonded beyond what was applied because of the 2016 deeming rule, and they moved forward then with their own applications.

[00:08:13] Speaker 00:
Now, in fact, I would suggest that there is consistency across the circuits.

[00:08:18] Speaker 00:
No circuit court has explicitly rejected the Unlawful Use Doctrine.

[00:08:23] Speaker 03:
What exactly did the Unlawful Use Doctrine do?

[00:08:26] Speaker 03:
It seems to me that they surveyed existing law and said that we have never applied the Unlawful Use Doctrine.

[00:08:40] Speaker 03:
You're not appointed in this case.

[00:08:42] Speaker 03:
But it seemed like they didn't leave it open for applicability maybe in some other case.

[00:08:49] Speaker 03:
Did I read that right?

[00:08:50] Speaker 00:
That's correct, Your Honor, because in F.N.

[00:08:53] Speaker 00:
Hurstall, what the Eleventh Circuit pointed out to is that they're really giving the facts and the state of the factual record that it wouldn't have applicability there anyway.

[00:09:08] Speaker 03:
to agree that it is possible that the 11th Circuit, they haven't denied it.

[00:09:16] Speaker 03:
In fact, they seem to embrace the possibility sometime in the future.

[00:09:20] Speaker 03:
What would be the role of this court to tell the district court what 11th Circuit law would be or should be?

[00:09:29] Speaker 00:
That is, the role of this court is to make its best understanding of what the 11th Circuit would rule standing in the 11th Circuit's shoes.

[00:09:37] Speaker 00:
And the 11th Circuit did in fact note that in 1984, the Southern District of Florida did recognize the unlawful use docker in a case that was predated by decades, F.N.

[00:09:46] Speaker 00:
Herstal, as well as the Davidoff case as well, which happened to be an open case.

[00:09:51] Speaker 03:
Is it possible in this case to separate

[00:09:53] Speaker 03:
the unlawful consideration of the unlawful use doctrine to separate that from consideration of the injunction, but the four elements of the injunction.

[00:10:03] Speaker 00:
Your Honor, it goes to the likelihood of success on the merits, but Your Honor raises an excellent point, which is an injunction and a preliminary injunction is by its very nature an equitable remedy.

[00:10:12] Speaker 00:
And so, of course, the plaintiff must come with unclean hands.

[00:10:15] Speaker 03:
Exactly.

[00:10:16] Speaker 03:
That's your problem there, with unclean hands.

[00:10:20] Speaker 00:
Respectfully, I disagree and that's where that document applies My client my clients products when they first started using the mark They're coming after my clients for hundreds of millions of dollars in damages.

[00:10:36] Speaker 03:
I'm glad you have unclean hands come up at all during the proceedings below Well the entire all of our evidence is all this is all a Not their hands your hands

[00:10:51] Speaker 00:
I don't think they presented any evidence about the... I'm sorry?

[00:10:56] Speaker 00:
I don't believe so, Your Honor.

[00:10:58] Speaker 00:
Not that I can recall.

[00:11:02] Speaker 00:
well he said yes you're saying no well your honor in fact your honor the the the the chinese company that was selling these products is not even a named defendant in this case that's fair enough so not not adopting here would put as the Cree Agri Ninth Circuit said in Cree Agri would create the anomalous position of the government extending the benefits of trademark protection to sellers based

[00:11:27] Speaker 00:
specifically on the seller's violations of that government's own laws.

[00:11:31] Speaker 00:
It would also reward the hasty at the expense of the diligent.

[00:11:35] Speaker 00:
And practically speaking, we're talking about how the TTAB operates.

[00:11:39] Speaker 04:
Have you read the Law Review article in the Vanderbilt Law Review called Unauthorized and Unwise, the lawful use doctrine in trademark law?

[00:11:50] Speaker 00:
I'm familiar with it.

[00:11:51] Speaker 04:
Okay.

[00:11:52] Speaker 04:
So that goes on for 80 pages and does a highly rigorous analysis for why

[00:11:58] Speaker 04:
This lawful abuse doctrine is an unauthorized doctrine.

[00:12:04] Speaker 00:
I understand.

[00:12:05] Speaker 00:
Here's a practical problem with this.

[00:12:08] Speaker 00:
looking at the district court's opinion, the district court says, well, this should be up to the TTAB once you go and file a cancellation proceeding.

[00:12:15] Speaker 00:
The problem is, practically speaking, under 37 CFR 2.1178, the TTAB always stays a cancellation proceeding in deference to a district court infringement proceeding.

[00:12:28] Speaker 00:
Always.

[00:12:29] Speaker 00:
Well, as long as the district court proceeding is pending first.

[00:12:32] Speaker 00:
So practically speaking... Do you know when there's no validity question before the district court?

[00:12:39] Speaker 04:
I mean, here we have a district court that says, I'm not going to consider the unethical use doctrine.

[00:12:45] Speaker 04:
What would stop you from that point in filing a cancellation proceeding?

[00:12:49] Speaker 00:
We did, and it was stated, Your Honor.

[00:12:51] Speaker 00:
And it was stated in deference to the district court.

[00:12:52] Speaker 00:
And here's the practical problem.

[00:12:54] Speaker 00:
There is no possibility until you get to post-judgment, which in many instances, including for some of the appellants here, would destroy their businesses to ever have this issue passed on by the TTAB or any other forum.

[00:13:05] Speaker 00:
It completely strips them of a forum.

[00:13:07] Speaker 00:
to litigate the validity of the underlying registration.

[00:13:11] Speaker 04:
Why do they file the unlawful use doctrine cancellation proceeding after they get their trademark application refused?

[00:13:19] Speaker 00:
I don't know, Your Honor.

[00:13:20] Speaker 00:
That was before we were involved with representing them, so I don't know.

[00:13:23] Speaker 01:
That's all right.

[00:13:24] Speaker 01:
Your rebuttal time, you wish to save it?

[00:13:27] Speaker 00:
Yeah, I'll stand on my rebuttal time, Your Honor.

[00:13:29] Speaker 00:
Thank you.

[00:13:38] Speaker 01:
Let me first say I think it was inappropriate for you to be nodding and answering a court's question during someone else's time.

[00:13:47] Speaker 02:
Your Honor, I apologize.

[00:13:50] Speaker 01:
Proceed.

[00:13:51] Speaker 02:
Thank you.

[00:13:53] Speaker 02:
Joe Rothman for BPL Brands.

[00:13:59] Speaker 02:
May it please the court.

[00:14:01] Speaker 02:
Indeed, these issues were presented to the district court.

[00:14:07] Speaker 02:
The issue was argued that it was paradoxical that a product that was focused solely on synthetic nicotine was arguing that our client's product, which is not focused on synthetic nicotine entirely, can be used for many other things

[00:14:38] Speaker 02:
can be used with hemp oil, or with clove oil, or with lots of other oils that are vaporized for aromatherapy purposes, or for other purposes.

[00:14:50] Speaker 02:
And so, factually... Aromatherapy?

[00:14:52] Speaker 04:
You're using e-cigarettes for aromatherapy?

[00:14:55] Speaker 02:
It's actually being used for aromatherapy.

[00:14:58] Speaker 02:
There are many of these products on the marketplace.

[00:15:00] Speaker 04:
Well, let's just get to the point.

[00:15:02] Speaker 04:
You didn't get the pre-marketing approval, did you?

[00:15:05] Speaker 02:
because the pre-marketing approval was unnecessary for a product which is sold empty.

[00:15:16] Speaker 02:
It is not sold in a disposable containing nicotine the way that the defendant's products are sold.

[00:15:28] Speaker 04:
indeed, the pre-market approval requirements are... You're saying under the 2016 FDA regulation, your product doesn't qualify?

[00:15:40] Speaker 02:
In fact, the testimony below was that their expert had never seen a product like ours that had ever been the subject.

[00:15:52] Speaker 04:
But you said there have been warning letters that have been issued to other companies.

[00:15:55] Speaker 02:
But never a warning letter

[00:15:58] Speaker 02:
exactly like our client's product, and certainly never any FDA action concerning a product like our client's product.

[00:16:14] Speaker 02:
The situation was and is that these regulations are exactly the sort of regulations that were at issue in FN Herstal.

[00:16:27] Speaker 02:
And if this court stays consistent with its decision in Padua, then this court would lead to affirm, because the 11th Circuit

[00:16:45] Speaker 02:
on facts that are indistinguishable except for the products and the particular regulation.

[00:16:51] Speaker 02:
But in all of the ways similar to here, as indicated, it wouldn't apply in a fact situation like this, the unlawful use doctrine.

[00:17:01] Speaker 04:
Wait a second.

[00:17:02] Speaker 02:
You're saying we're guided by the facts of F.M.

[00:17:05] Speaker 02:
Hirstel?

[00:17:06] Speaker 02:
No, I'm not saying that, Your Honor.

[00:17:08] Speaker 02:
What I'm saying is that this is extremely fact specific.

[00:17:11] Speaker 02:
Right, the standard, I'm sorry, the standard.

[00:17:14] Speaker 04:
That's not the analysis that the district court judge used.

[00:17:17] Speaker 04:
District court judge used, it was much more law-based question.

[00:17:22] Speaker 04:
Yes, whether the 11th Circuit endorse and apply the unlawful use doctrine.

[00:17:28] Speaker 04:
Would it recognize it or not?

[00:17:30] Speaker 04:
And she concluded, no, it would not.

[00:17:32] Speaker 04:
That's right.

[00:17:33] Speaker 04:
So it had nothing to do with, well, what are the facts?

[00:17:36] Speaker 04:
What are the circumstances?

[00:17:37] Speaker 04:
No, it had nothing to do with that.

[00:17:39] Speaker 04:
It was a pure legal question.

[00:17:41] Speaker 02:
Well, I think that the facts were significant to the court, because in FN Hostel, as in here, we were dealing with not a statute, but we were dealing with a regulation.

[00:18:01] Speaker 02:
And that regulation is subject to change.

[00:18:07] Speaker 02:
It's subject to review.

[00:18:09] Speaker 02:
In fact, the FDA regulations concerning e-cigarettes have been found not to have been adopted in a manner that is consistent with the requirements of the Administrative Procedures Act by other circuit courts.

[00:18:32] Speaker 02:
and to apply this sort of regulation and for a district court to make a determination not the ultimate authority on it, which would be the FDA or the DOD in the case of F.N.

[00:18:51] Speaker 02:
Hurstall, but for a district court to make a determination of unlawful use

[00:18:58] Speaker 02:
would not be appropriate under the facts as presented and also the application of the unlawful use doctrine to a case like this presents all sorts of problems because you have

[00:19:19] Speaker 02:
a situation where the facts have indicated that it is unclear whether the use in question is in fact unlawful or not.

[00:19:34] Speaker 02:
Now, in addition, Your Honor, we have a situation where effectively allowing

[00:19:48] Speaker 02:
The finding of unlawful use would have created a private right of action where money exists.

[00:19:56] Speaker 02:
There is no situation under which a lady can come in and sue to stop the marketing of a particular product because it is their view that it violates the Food, Drug and Cosmetic Act.

[00:20:13] Speaker 02:
That is something that is specifically carved out of the FDA Act.

[00:20:21] Speaker 02:
There is no private right.

[00:20:23] Speaker 01:
A preliminary injunction is an equitable remedy.

[00:20:26] Speaker 02:
Yes.

[00:20:27] Speaker 01:
And Supreme Court has given us pretty high standards for upholding it.

[00:20:33] Speaker 01:
And generally speaking, in the field of patents, when there's a real question about infringement and validity, and here, if there was a non-frugalist allegation of illegality, shouldn't that be enough to defeat the preliminary injunction?

[00:20:50] Speaker 02:
A non-fibrous allegation of illegality?

[00:20:53] Speaker 02:
No, Your Honor.

[00:20:54] Speaker 02:
I think that there needs to be a demonstration by the party that is challenging the mark and its validity.

[00:21:07] Speaker 02:
I think there needs to be a demonstration.

[00:21:10] Speaker 02:
And in fact, the challenger, as the district court noted, must prove it by clean and convincing evidence.

[00:21:17] Speaker 01:
If we're in a patent triangle, one has to prove the invalidity of the patent by clear and convincing evidence to defeat a preliminary injunction?

[00:21:30] Speaker 02:
Well, look, the district court said below, Your Honor, and I don't have the case law she was relying on in front of me, but at page seven of her decision she indicated,

[00:21:42] Speaker 02:
that a challenger to the mob has to prove by clear and convincing evidence that there's been a finding of noncompliance

[00:21:51] Speaker 01:
If this isn't just a challenge to the mark, this is asking for a plenary injunction.

[00:21:58] Speaker 02:
Okay.

[00:21:59] Speaker 02:
Well, what I'm saying, Your Honor, is that the plaintiff comes forward with the mark.

[00:22:04] Speaker 02:
The plaintiff has a registration.

[00:22:06] Speaker 02:
The registration provides a presumption of validity.

[00:22:09] Speaker 02:
There is nothing to indicate that the plaintiff's use of the mark or the plaintiff's application of the mark to their language is unlawful.

[00:22:18] Speaker 02:
Now, Your Honor says there's this accusation of illegality.

[00:22:23] Speaker 02:
And is the accusation of illegality, as long as it's non-fervelous, to use Your Honor's words, is that enough?

[00:22:29] Speaker 02:
My response to that, Your Honor, is no, that isn't enough.

[00:22:33] Speaker 02:
Because it would require that there be a real showing, a showing of evidence that the plaintiff's use of the mark was, in fact, illegal.

[00:22:46] Speaker 02:
And the district court said below,

[00:22:48] Speaker 02:
And again, it's on page seven of her decision that that showing must be by clearly convincing evidence that there has been a finding of noncompliance with the law by a court or a government agency or a per se violation of the statute.

[00:23:06] Speaker 02:
And what my friend is arguing is that there has been a per se violation of the statute by my client.

[00:23:16] Speaker 02:
And what we are here arguing to your owners is that, no, there has been no such showing of a per se violation.

[00:23:24] Speaker 02:
In fact, even if it was true that all clients' product was not approved, and that was necessary, and the law applied under a force, in fact, the trademark wasn't issued

[00:23:42] Speaker 02:
for precisely the thing that this law is intended to regulate.

[00:23:46] Speaker 02:
It applies to more uses than simply e-cigarette uses.

[00:23:51] Speaker 02:
We have also demonstrated that our clients use e-cigarettes

[00:23:58] Speaker 02:
of this product has at all times been consistent with the law.

[00:24:04] Speaker 02:
And there hasn't been any demonstration by the defendants here that we have not applied with any court's determination, that we have not applied with a government agency's determination

[00:24:21] Speaker 02:
that we have committed a per se violation of the statute that has not been demonstrated.

[00:24:28] Speaker 02:
So the argument is that this product that my client markets, it should be subject to this law, that it should be pursued by the FDA, that it should be the subject of a warning letter.

[00:24:46] Speaker 02:
There can be arguments on both sides as to whether that's true or not.

[00:24:51] Speaker 02:
But certainly, as of today, there has been no such warning letter.

[00:24:58] Speaker 02:
There has been no such determination by a court.

[00:25:01] Speaker 02:
There has been no such determination by a government agency.

[00:25:04] Speaker 02:
There has been no such finding of noncompliance.

[00:25:08] Speaker 02:
As Judge Chen pointed out, this means that the unlawful use doctrine is in, I think, difficult waters to navigate.

[00:25:19] Speaker 02:
Because what exactly does it mean for a use to be unlawful?

[00:25:24] Speaker 02:
This is foundational section of the Monoclinam Act.

[00:25:27] Speaker 03:
I'm saying that it doesn't apply in this case.

[00:25:30] Speaker 03:
The doctrine doesn't apply.

[00:25:31] Speaker 02:
I'm saying that's my number one argument, is that it doesn't apply in this case.

[00:25:37] Speaker 02:
However, number two, even if it does apply, it doesn't apply to my client's product.

[00:25:43] Speaker 02:
And number three, even if it applies to my client's product, that this court, though sitting as it does under Panduit,

[00:25:51] Speaker 02:
must look at FN Herstal and say, well, the 11th Circuit, in factually similar circumstances, refused to apply it.

[00:26:01] Speaker 02:
And so we are consistent with Panduit and the concepts that underpin it, which go back to Erie.

[00:26:10] Speaker 02:
And we will not interpret

[00:26:14] Speaker 02:
what the 11th circuit would do differently than FN first of all, the interpreter did.

[00:26:22] Speaker 03:
the bill open on the possibility of the backroom applied in another case.

[00:26:28] Speaker 02:
I think that the 11th Circuit did what any very well-reasoned panel of any other circuit would have done under those circumstances, which is look at the facts and say, well, the facts really don't support the application here.

[00:26:47] Speaker 02:
And so we don't have to decide this issue now.

[00:26:52] Speaker 02:
And we're not going to apply it here, certainly.

[00:26:56] Speaker 02:
And so we will defer that issue.

[00:27:02] Speaker 02:
They actually could have said, this doesn't apply in the 11th circuit.

[00:27:08] Speaker 02:
And they absolutely could have said that we apply this to everything in the 11th Circuit.

[00:27:14] Speaker 02:
But what they did was they looked at the facts.

[00:27:17] Speaker 02:
The facts did not present a compelling case, even if it was a doctrine they wished to adopt.

[00:27:25] Speaker 02:
And so they determined, we shall not adopt this doctrine in this case, because it appears to us not to be applicable

[00:27:37] Speaker 02:
and left it at that.

[00:27:42] Speaker 02:
But that's a very strong indication for purposes of this court's work that adopting it here would potentially run afoul of

[00:27:54] Speaker 02:
the underpinnings of this court's jurisdiction, which is to be consistent with concepts of federalism and not to be deciding cases in a way that runs afoul of the right of the serf.

[00:28:14] Speaker 03:
What do we do if the balance of harms element in the preliminary injunction has issued those laws?

[00:28:21] Speaker 03:
We get the argument we had here this morning.

[00:28:25] Speaker 03:
the main registration of two companies of tobacco products.

[00:28:29] Speaker 03:
Now, explain to me the balance of harms on them.

[00:28:35] Speaker 02:
ways in favor of the injunction that was issued being affirmed.

[00:28:40] Speaker 02:
Because for the reasons that the district court reasoned below, once we got past the district court's decision where she dispensed with the unlawful use doctrine, the rest of the district court's reasoning, and my time is up, may I finish my question?

[00:29:03] Speaker 01:
Certainly.

[00:29:04] Speaker 02:
The answer?

[00:29:04] Speaker 02:
Thank you.

[00:29:06] Speaker 02:
The rest of the district court's decision was a very well reasoned analysis of the balance of the harms as weighing in favor of the issuance of the injunction.

[00:29:22] Speaker 02:
My clients had used this trademark for many years.

[00:29:26] Speaker 02:
The products were identical, if not highly, highly similar.

[00:29:31] Speaker 02:
They were in the same market.

[00:29:32] Speaker 02:
They were in the same, you know, consumers, sold by the same stores for similar things.

[00:29:40] Speaker 02:
So I don't think that there's a separate independent basis.

[00:29:45] Speaker 02:
that the defendants argue a separate basis for purposes of reversal.

[00:29:51] Speaker 02:
I think they argue the only basis, which is the unlawful use doctrine.

[00:29:56] Speaker 02:
Thank you, Your Honor.

[00:29:57] Speaker 02:
And I do apologize again to the extent that my head nodding appeared in some way to be inconsistent with the requirements of this court, something that I take very seriously.

[00:30:12] Speaker 02:
And I will confirm my behavior to that in the future.

[00:30:16] Speaker 01:
I appreciate the comment.

[00:30:23] Speaker 01:
Mr. Herr has two minutes.

[00:30:25] Speaker 00:
Thank you, Your Honor.

[00:30:26] Speaker 00:
On the balance of harms point, the court should vacate the injunction.

[00:30:31] Speaker 00:
The plaintiff came up on clean hands.

[00:30:35] Speaker 00:
Secondly, counsel stood here and said that because his product was sold empty without any nicotine containing e-liquid, marketing authorization was not required.

[00:30:42] Speaker 00:
I would point the court to appendix pages 235 to 248, which include warning letters from FDA to other open system products, electronic cigarettes without any e-liquid in them, that FDA sent warning letters on and said these products appear to violate the Food, Drug, and Cosmetic Act.

[00:31:00] Speaker 00:
That is simply not the case in terms of how FDA enforces.

[00:31:03] Speaker 00:
And the products, because they went out on the market by August 8, 2016, they don't qualify for any sort of deferred enforcement of BPR's products.

[00:31:17] Speaker 00:
Council argued that the FDA regulations governing tobacco products were violated.

[00:31:22] Speaker 00:
They were found by other circuits to violate the Administrative Procedure Act.

[00:31:26] Speaker 00:
There's one case that comes out of the U.S.

[00:31:29] Speaker 00:
District Court for the District of Columbia that I believe is currently up on appeal, if it's even been appealed, that relates to the deeming rule as it applies to premium cigars.

[00:31:37] Speaker 00:
That's it.

[00:31:38] Speaker 00:
In fact, the FDA, the deeming rule was challenging as to its applicability

[00:31:42] Speaker 00:
to electronic cigarettes, and it was specifically upheld by the D.C.

[00:31:46] Speaker 00:
Circuit back in, I believe, 2018.

[00:31:48] Speaker 00:
Do you have that opinion on Chevron preference?

[00:31:54] Speaker 00:
Off the top of my head, I don't.

[00:31:56] Speaker 00:
I don't, Your Honor.

[00:31:57] Speaker 00:
I'm not sure.

[00:31:59] Speaker 00:
This was an issue that was briefed.

[00:32:03] Speaker 00:
This is an affirmative defense.

[00:32:04] Speaker 00:
That's all we're asking the court to rule on.

[00:32:06] Speaker 00:
This is not a private cause of action.

[00:32:08] Speaker 00:
This isn't even an action to cancel, a request to cancel.

[00:32:11] Speaker 00:
We're not asking for ruling on a counterclaim or a cancellation proceeding before the TTAB.

[00:32:16] Speaker 00:
This is simply an affirmative defense in use of this doctrine as a defensive shield, not as an offensive sword.

[00:32:22] Speaker 00:
And again, finally, my final point, if I could just make it briefly, is there was clear and convincing evidence here.

[00:32:28] Speaker 00:
Our case relies in large part on VPR CEO's own testimony that he expected their products would be used with nicotine-containing e-liquids.

[00:32:36] Speaker 00:
The word expects is exactly what's in the FDA regulation to define what is a component or part of a tobacco product unless a tobacco product is subject to the act.

[00:32:44] Speaker 00:
Thank you.

[00:32:45] Speaker 01:
Thank you, counsel.

[00:32:46] Speaker 01:
The case is submitted.

[00:32:47] Speaker 01:
And that concludes today's argument.