Abbott gets green light to challenge diabetes patents

Dispute hinges on clauses set out in decade-old settlement and licensing agreement | Federal Circuit unpersuaded by arguments suggesting that a federal court erred in denying a preliminary injunction.

The US Court of Appeals for the Federal Circuit has given the go-ahead for Abbott to challenge a rival’s patents covering a glucose monitoring device at the Patent Trial and Appeal Board (PTAB).

The court delivered its precedential decision yesterday, January 3, holding that an earlier settlement and licensing agreement between the parties should not bar the review of patents owned by DexCom.

DexCom and Abbott are competing manufacturers of continuous glucose monitoring systems, which help patients suffering from diabetes to constantly track their glucose levels. DexCom makes the  G6 CGM product line while Abbott produces the FreeStyle Libre CGM.

The complex case emerged when DexCom sued Abbott for infringing its patents at the US District Court for the District of Delaware, prompting Abbott to petition for an inter partes review (IPR).

DexCom moved for a preliminary injunction to enjoin Abbott from proceeding with the IPR proceedings based on a forum selection clause in a decade-old settlement and licensing agreement between the parties.

Licensing agreement

Following years of patent litigation, DexCom and Abbott signed a deal in 2014 that included terms for a cross-license for certain patents, as well as an agreement not to sue each other during a certain covenant period.

It also contained a mutual covenant not to challenge DexCom’s or Abbott’s patents during this period, and a forum selection clause identifying the Delaware federal court as the exclusive jurisdiction “over any dispute arising from or under or relating to this agreement”.

The covenant period expired in March 2021, while the agreement is set to end “when the last of the licensed patents expires or December 31, 2025”.

After the expiration of the covenant period in 2021, DexCom sued Abbott in the Western District of Texas, alleging infringement of 60 claims of five of its patents.

Abbott moved to transfer the case to Delaware. While the motion to transfer was pending, Abbott filed a breach-of-contract suit against DexCom in Delaware, alleging that DexCom breached the agreement by suing Abbott on licensed patents and by filing its suit in Texas in violation of the forum selection clause.

Transferred to Delaware

The Western District of Texas court transferred DexCom’s infringement suit to Delaware, where it was consolidated with Abbott’s breach-of-contract suit.

In April 2022—ten months after DexCom filed its infringement suit in Texas—Abbott filed eight petitions for IPRs of DexCom’s asserted patents.

Five months later, DexCom followed with a breach-of-contract counter-counterclaim at the district court, alleging inter alia that Abbott breached the agreement’s forum selection clause by filing IPR petitions.

In October 2022, Abbott moved to dismiss DexCom’s counter-counterclaim, prompting DexCom to file for a for a preliminary injunction, requesting the district court prohibit Abbott from proceeding with the IPRs.

The district court then determined that Abbott’s IPR petitions did not violate the agreement’s forum selection clause, reasoning that IPR petitions could only be filed at the PTAB and thus could not be brought in the District of Delaware.

No ‘abuse of discretion’

DexCom appealed the district court’s denial, but the Federal Circuit found yesterday that the district court “did not abuse its discretion” in denying the preliminary injunction.

The appeals court was unpersuaded by DexCom’s suggestion that the forum selection clause has a different interpretation during the covenant period versus after the covenant period, noting that “nothing in the agreement supports such an interpretation”.

William Adams, partner at Quinn Emanuel Urquhart & Sullivan argued for DexCom, and his team comprised David Bilsker, Nathan Hamstra, Alexander Loomis, Valerie Lozano and John Shaw.

Jason Wilcox, partner at Kirkland & Ellis represented Abbott, with a team that included William Burgess, John O’Quinn; Amanda Hollis,  Benjamin Lasky, Ashley Ross, and Ellisen Turner.

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