Axonics, Inc. v. Medtronic, Inc., Appeal Nos. 2022-1532, -1533 (Fed. Cir. Aug. 7, 2023)

In this week’s case of the week, the Federal Circuit re-affirmed existing precedent that in inter partes review proceedings before the Patent Trial and Appeal Board, a petitioner must be permitted to respond to any new claim construction proposed by the patent owner or by the Board following institution of proceedings.  Consistent with that precedent, the Court further held that where a patent owner advances a new claim construction in its Patent Owner Response, a petitioner must be permitted to present arguments and evidence of unpatentability under that construction in its reply, at least where the petitioner relies on the same prior art embodiments relied on in its Petition.

The case involved two patents owned by patent owner/appellee Medtronic and directed to transcutaneous charging of implanted medical devices.  As relevant to the appeal, the challenged claims included limitations requiring an external power source to vary its output “based on a value associated with [] current passing through” the implanted device, and also limitations requiring the same output variance “based on a measured current” or other specific value associated with the current passing through the devices.  In its Petitions, Axonics had employed an implied construction under which the second limitation was simply a more specific restatement of the first limitation, i.e. that a single input from the device could satisfy both limitations concerning the basis for the external charger’s output variance.  In its Preliminary Response, Medtronics did not challenge this “one-input” construction, and argued that Axonics’ cited prior art did not render the claims invalid under that construction.

Following institution and in its Patent Owner Response, however, Medtronic argued that two separate inputs were required to satisfy the limitations at issue.  In its Reply, Axonics continued to defend the “one-input” construction, but also presented argument and a supplemental expert declaration arguing that its cited prior art was nonetheless also invalidating under Medtronics’ new “two-input” construction.  In its Final Written Decision finding that Axonics had failed to prove unpatentability, the Board adopted the “two-input” construction, but declined to consider Axonics’ arguments that its prior art disclosed the invention under that construction, considering them to be improper reply arguments that had not been raised in the petition.

The Federal Circuit found this to be an abuse of discretion and/or a violation of the Administrative Procedures Act, noting that there was no authority for the proposition that an IPR petition must argue for unpatentability under all potentially reasonable constructions.  The Court also observed that if it adopted the rule proposed by Medtronics, it would create an opportunity for “sandbagging” wherein a Patent Owner could reserve its best claim construction arguments for after institution, and thereby impose an estoppel under 35 U.S.C. § 315(e) that would not have been imposed had institution been denied based on the same arguments in a preliminary response.  Clarifying existing precedent that a petitioner must be permitted to respond to a new construction raised following institution, the Court held that a petitioner is also entitled to present argument and evidence under the new construction.  The Court advised that the petitioner must still rely on the prior art presented in the petition, and reserved for another day the question of whether, in such circumstances, the petitioner is still constrained to rely on the specific prior art embodiments asserted in the petition.  As Axonics had presented its arguments under the new “two-input” construction relying on the same prior art embodiments in this case, the Federal Circuit vacated and remanded for further proceedings.

The opinion can be found here.

By Jason Wrubleski


Rembrandt Diagnostics, LP v. Alere, Inc., Appeal No. 2021-1796 (Fed. Cir. Aug. 11, 2023)

Also this week, in affirming a Patent Trial and Appeal Board decision that Rembrandt’s Patent No. 6,548,019 was unpatentable for obviousness, the Federal Circuit further addressed what counts as impermissible “new theories” in a petitioner’s reply brief.

Rembrandt had sued Alere for infringement of the ‘019 patent, which was directed to test assay devices and methods for testing biological fluids.  Alere petitioned for inter partes review, which was instituted, decided, appealed, and remanded.  On remand, after Rembrandt’s patent owner’s response, Alere filed a reply brief raising three additional prior art combinations as grounds for obviousness.  On a second appeal to the Federal Circuit, Rembrandt specifically objected to one of those combinations as being a “new theory” impermissible on reply, and more broadly that Alere “resort[ed] to new theories in reply.”

In finding Alere’s three new prior art combinations permissible, the Federal Circuit first held that Rembrandt had forfeited its objections to the two prior art combinations to which it did not specifically object.  Especially where Rembrandt specifically objected to one combination, a generic statement that Alere “resort[ed] to new theories in reply” was not a proper objection to the other two combinations, failing to give Alere or the Board sufficient notice of which theories on reply were allegedly new.  And second, even if Rembrandt’s objections were proper, all three of Alere’s new combinations were permissible.

Specifically, the Court held that on reply, a petitioner may respond to arguments in the corresponding opposition, in a patent owner’s response, or in the institution decision, and its reply may be proper if it responds to the patent owner’s arguments and simply expands on the petitioner’s own previously raised arguments.  The Board found that Alere’s new combinations were permissible on reply, because they had “a nexus” to and were responsive to Rembrandt’s arguments, and that they “expanded” or “elaborated” on, and involved the same “legal ground” and made the same “legal argument” as, Alere’s prior arguments.  Going on to find there was substantial evidence supporting the Board’s factual findings, the Federal Circuit affirmed the Board’s obviousness finding.

The opinion can be found here.

By Tyler Hall

This article summarizes aspects of the law and does not constitute legal advice. For legal advice for your situation, you should contact an attorney.

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