PTAB Technique: Balancing the Sandbagging

by Dennis Crouch

The Federal Circuit’s current Axonics choice displays an ongoing pressure between IPR petitioners and patent homeowners regarding litigation methods and procedural equity. A prevalent patentee technique goals to power the petitioner to lock in particular arguments, solely to offer a game-changing response in a while.

In Axonics, the patentee supplied a brand new declare development proposal in its post-institution response. On enchantment, the Federal Circuit decided that it was solely simply, and mandated by the APA, for the petitioner to current new responsive arguments and proof in its reply briefing. Moreover, the courtroom urged that the patentee ought to then have the chance to submit additional proof in a sur-reply. The PTAB had adopted the patentee’s declare development proposal and refused to contemplate Axonics reply arguments and proof — discovering them to symbolize improper new arguments.  The Federal Circuit vacated that call and despatched the case again down for reconsideration.

Sandbagging Threat and the Want for Steadiness

In his opinion for the courtroom, Decide Dyk quotes from the oral argument transcript after getting an admission from Medtronic’s lawyer (Naveen Modi from Paul Hastings) that the PTAB method dangers sandbagging by the patentee:

The Courtroom: “However isn’t there a threat right here of sandbagging, that you simply notice there’s a great declare development argument, [and] you allow it out of your preliminary response. For those who argued it in your preliminary response, then perhaps establishment can be denied and there would
be no estoppel. However if you happen to maintain again on the argument and wait to make it till the response, then you definitely get the estoppel. Isn’t there a threat of that?”

Medtronic’s counsel: “Definitely, your honor, there’s a threat of that . . . .”

Oral Arg. at 14:24–51.  Modi went on to elucidate that the danger might additionally have an effect on the petitioner. The brand new rule permits the petitioner to offer an unreasonable preliminary declare development, then current new proof later if challenged. Right here, the courtroom explicitly concluded that petitioners usually are not certain to preemptively deal with all potential affordable declare interpretations.

Vital Caveats and Ongoing Questions

The case has some vital caveats concerning what argument/proof may be supplied in reply.  The courtroom made clear {that a} petitioner can’t increase totally new prior artwork references in a reply to a patent proprietor’s response: “a petitioner could not in reply depend on new prior artwork to show a declare limitation.”  And, the courtroom refused to determine an middleman query of whether or not the petitioner can depend on “new embodiments” from the already offered prior artwork so as to counter a brand new declare development proposal. “We go away for one more day the query of whether or not, when offered with a brand new declare development, a petitioner can rely in its reply on new embodiments from the prior artwork references that have been relied on within the petition.”  That individual state of affairs was not at concern as a result of “Axonics, within the reply, relied on the identical embodiments because it relied on within the petition.”

In essence, whereas a petitioner can’t introduce totally new prior artwork references in a reply, it stays an open query whether or not new parts or embodiments from the identical preexisting references may be cited to handle a brand new declare development proposed post-institution.

Hanging a Center Course

On this body, the choice reveals the Federal Circuit steering a center course – permitting petitioners to answer modified declare constructions with arguments tied to the identical prior artwork, whereas prohibiting totally new prior artwork in replies. Ongoing instances will doubtless proceed to form the exact boundaries between honest response and improper new arguments on this contentious subject.

Quotation: Axonics, Inc. v. Medtronic, Inc., 2022-1532 (Fed. Cir. Aug. 7, 2023) (opinion by Decide Dyk, joined by Judges Lourie and Taranto).

In July 2023, the identical panel launched a separate choice involving the identical events and likewise siding with the petitioner Axonics in holding that Board erred in its obviousness evaluation by improperly framing the motivation-to-combine inquiry. [LINK]

The outcome: Though the Board sided with the patentee on the 4 challenged patents, the Federal Circuit vacated these holdings and given the petitioner one other probability to show its case. and See U.S. Patent Nos. 8,036,756, 8,457,758, 8,626,314, and eight,738,148.  As with most Medtronic patents, the innovations are tremendous fascinating. One set pertains to implanting a neurostimulation lead and the second set pertains to transcutaneous charging of implanted medical units.