Fed Circ sides with Axonics in patent validity battle
US Court of Appeals highlights procedural rules in patent dispute concerning medical device charging patents | Medtronic now faces further patent validity reviews after Fed Circ rules in favour of rival.
Medtronic is facing more patent validity reviews after the US Court of Appeals for the Federal Circuit ruled in favour of Axonics, in a clash over spinal stimulation technology.
In the precedential decision handed down yesterday, August 7, the court found that the Patent Trial and Appeal Board ( PTAB) had erred in dismissing Axonics’ challenge to patents owned by Medtronic.
The patents, US numbers 8,457,758 and,738,148, cover the charging of implanted medical devices.
Case background
Axonics challenged the validity of these patents at the PTAB, asserting that the claims were either anticipated or obvious based on prior art references.
The root of the dispute lay in the interpretation of key claim terms in the patents.
Specifically, the focus was on two “wherein” clauses that required the external power source to automatically vary its power output based on a “value associated with [the] current passing through [the] internal power source” and a “measured current associated with [the] current passing through [the] internal power source”.
Axonics advocated for a “one-input” construction, where both clauses could be satisfied by a single input; while Medtronics proposed a “two-input” construction that required separate inputs for each clause.
The PTAB initially sided with Axonics, granting institution based on the one-input construction. However, in its final written decisions, the PTAB shifted its stance and adopted Medtronic's two-input construction.
It further refused to consider Axonics' arguments and evidence presented in response to this new claim construction.
PTAB error
Upon appeal, Axonics did not contest the adoption of a two-input claim construction by the PTAB, but asserted that the Board erred in refusing to consider its reply arguments and evidence under this new construction.
The court stressed the importance of following procedural rules set by the Administrative Procedure Act (APA) to ensure fairness for all parties involved.
It referred to past cases, such as Qualcomm v Intel, Hamilton Beach Brands v f’real Foods, and SAS Institute v Iancu, which established that if the PTAB introduces a new way of interpreting a claim after the initial phase, the party challenging the patent should have a chance to respond under this new interpretation.
This means that parties can provide arguments and evidence to support their case, as long as they don't bring in entirely new sources of evidence.
The court also tackled concerns about possible unfair tactics, warning against patent owners holding back their claim interpretation arguments until after the initial phase, and then using them strategically to secure a favourable outcome without addressing the main issues related to patent validity.
A balanced exchange
The Federal Circuit found fault with the PTAB's refusal to consider Axonics' arguments and evidence under the new claim construction.
The court held that when a patent owner introduces a new claim construction in its response, the petitioner should have the opportunity to respond.
The Federal Circuit emphasised that fairness requires a balanced exchange of arguments and evidence, especially when a party introduces a new construction after institution.
Considering the factors, the Federal Circuit vacated the PTAB's decisions and the case has gone back for further proceedings.
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