Reynolds ENDS Section 337 Investigation: A GEO in Sight? Validity Review and the Direction of Relief

On August 29, 2025, the Administrative Law Judge issued a Final Initial Determination (FID) finding that respondents infringed claims 4 and 12 of Reynolds's patent. On September 12, 2025, the ALJ issued a Recommended Determination (RD) recommending a general exclusion order (GEO) and a 136% bond. On January 9, 2026, the Commission determined to review the FID in part, focusing on patent validity and the domestic industry requirement. The investigation concerns the disposable vape market and may significantly affect the industry.

I. Background and Procedural History

1.1 The Case

On June 11, 2024, R.J. Reynolds Tobacco Company and affiliates filed a Section 337 complaint with the U.S. International Trade Commission alleging that 35 companies infringed U.S. Patent No. 11,925,202, directed to disposable vape atomizer technology. The ITC formally instituted the investigation on July 22, 2024.

It is among the vape intellectual property matters with the largest number of respondents and the broadest market impact in recent years. The respondents are principally Chinese vape manufacturers and U.S. distributors, including many well-known brands.

1.2 Key Procedural Milestones

1.3 The Respondents

• 15 respondents defaulted and were found in violation automatically.
• 2 settled and exited the investigation.
• 18 appeared and participated fully.

II. The Core Legal Issues

2.1 The Patent

U.S. Patent No. 11,925,202 (the '202 patent), titled "Smoking article containing tobacco," is directed to an electrically driven device that produces an aerosol without combustion.

• Valid claims: 4 and 12.
• Invalid claims: 1, 9, 11, and 15.

The ALJ found the latter claims invalid as anticipated — that is, already disclosed in the prior art. Notably, neither Reynolds nor OUII petitioned for review of that conclusion, effectively accepting it.

2.2 The Effect of Lashify on the Domestic Industry Standard

On March 5, 2025, in Lashify, Inc. v. International Trade Commission, 130 F.4th 948 (Fed. Cir. 2025), the Federal Circuit materially revised the standard for "domestic industry" in Section 337 investigations.

Before Lashify: sales, marketing, warehousing, and distribution alone were generally treated as the conduct of a "mere importer" and did not constitute a protectable domestic industry; a complainant had to show core research and development or manufacturing in the United States.

After Lashify: substantial investment in sales, marketing, quality control, and distribution functions may count toward the domestic industry; a complainant of sufficient commercial scale may bring a Section 337 action without manufacturing in the United States.

In the 1410 investigation, Reynolds successfully invoked the new standard, satisfying the economic prong by establishing its extensive U.S. sales network, quality control team (including its investment in FDA PMTA applications), and distribution facilities.

III. The Recommended Relief

3.1 General Exclusion Order

The ALJ recommended a GEO rather than a limited exclusion order directed only at named respondents. That would bar importation of all disposable atomizer products infringing claims 4 and 12, regardless of whether the importer is a respondent here.

Statutory basis: under 19 U.S.C. § 1337(d)(2), the ITC may issue a GEO where there is a pattern of circumvention of a limited exclusion order, or where the source of infringing products is difficult to identify. In the RD, the ALJ observed that the disposable vape market has many participants; that the relevant entities frequently operate through multiple corporate vehicles, change corporate names, and use false or unverifiable addresses; and that they rely principally on internet channels for sales and distribution — making the true source and the importing and distributing entities difficult to trace. The ALJ also noted that infringing designs in this category can be replicated quickly at very low cost of circumvention, and that distribution channels are complex. On those facts, a limited exclusion order directed at named respondents would provide little practical relief and would readily be circumvented through substitute entities or third-party importation. The ALJ therefore recommended that the Commission issue a GEO.

3.2 How the 136% Bond Was Calculated

During the 60-day Presidential review period, a respondent continuing to import must post a bond of 136% of the entered value.

Method: the price differential approach. Reynolds's products carry significantly higher market prices than unauthorized imports, reflecting substantial compliance costs, R&D, and marketing expenditure. The purpose of the bond is to offset the improper price advantage respondents obtain through infringement.

Market effect. On that price-differential analysis, the 136% rate reflects the gap between Reynolds's compliant products and the accused products. A bond at that level may have a considerable effect on importers whose position depends on price competition.

3.3 Cease and Desist Orders

For respondents holding substantial U.S. inventory — distributors in particular — the ALJ recommended cease and desist orders barring sale of stock already in the United States, cutting off the flow of infringing product at the end of the supply chain.

IV. Public Interest

4.1 The NJOY and Altria "Carve-Out" Requests

Although neither NJOY nor Altria is a respondent, both submitted public interest statements requesting a carve-out from any GEO.

Their rationale: their products have been determined not to infringe, and if a GEO were to sweep them in at the customs enforcement level, it would disrupt the supply of FDA-authorized lawful products — contrary to the public health interest.

V. Current Status and Next Steps

5.1 The Commission's January 9, 2026 Determination to Review in Part

The ITC determined to review the ALJ's FID in part, focusing specifically on:

• whether claims 4 and 12 would have been obvious over the combination of the Kim patent (US 2006/0016453) and the Pienemann patent (WO 00/28843);
• the form in which relief should be implemented; and
• public interest considerations.

Important: the Commission is not reviewing claim construction (including the meaning of "smoking article") or the infringement findings, which means those determinations stand. And because neither Reynolds nor OUII petitioned for review of the invalidity findings as to claims 1, 9, 11, and 15, those claims have permanently exited the case.

5.2 Key Dates

• 2026-01-23 — parties' opening written submissions (responses to the review questions and positions on relief)
• 2026-01-30 — parties' reply submissions

This article addresses general legal questions only and does not constitute legal advice on any specific matter.