PTAB Technique: Balancing the Sandbagging

by Dennis Crouch

The Federal Circuit’s latest Axonics determination displays an ongoing stress between IPR petitioners and patent homeowners regarding litigation methods and procedural equity. A prevalent patentee technique goals to pressure 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 building proposal in its post-institution response. On attraction, 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 court docket recommended 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 building 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 Stability

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

The Court docket: “However isn’t there a threat right here of sandbagging, that you just notice there’s a superb declare building argument, [and] you permit it out of your preliminary response. If you happen to argued it in your preliminary response, then possibly establishment can be denied and there would
be no estoppel. However should you maintain again on the argument and wait to make it till the response, you then get the estoppel. Isn’t there a threat of that?”

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

Oral Arg. at 14:24–51.  Modi went on to clarify that the chance might additionally have an effect on the petitioner. The brand new rule permits the petitioner to offer an unreasonable preliminary declare building, then current new proof later if challenged. Right here, the court docket explicitly concluded that petitioners should not sure to preemptively handle all potential cheap declare interpretations.

Necessary Caveats and Ongoing Questions

The case has some vital caveats relating to what argument/proof might be offered in reply.  The court docket made clear {that a} petitioner can’t elevate 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 court docket refused to resolve an middleman query of whether or not the petitioner can rely on “new embodiments” from the already introduced prior artwork so as to counter a brand new declare building proposal. “We depart for one more day the query of whether or not, when introduced with a brand new declare building, a petitioner can rely in its reply on new embodiments from the prior artwork references that have been relied on within the petition.”  That specific state of affairs was not at challenge 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 might be cited to handle a brand new declare building 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 circumstances will possible 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 determination 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 likelihood 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 gadgets.