PTAB Technique: Balancing the Sandbagging

by Dennis Crouch

The Federal Circuit’s latest Axonics choice displays an ongoing stress 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 afterward.

In Axonics, the patentee provided a brand new declare development 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 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 court docket, Decide Dyk quotes from the oral argument transcript after getting an admission from Medtronic’s lawyer (Naveen Modi from Paul Hastings) that the PTAB strategy dangers sandbagging by the patentee:

The Court docket: “However isn’t there a threat right here of sandbagging, that you simply understand there’s an excellent declare development argument, [and] you allow it out of your preliminary response. In the event you argued it in your preliminary response, then perhaps establishment could be denied and there would
be no estoppel. However in the event you maintain again on the argument and wait to make it till the response, then you definately 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 clarify 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 court docket explicitly concluded that petitioners aren’t sure to preemptively deal with all potential affordable declare interpretations.

Necessary Caveats and Ongoing Questions

The case has some vital caveats relating to what argument/proof could be supplied in reply.  The court docket made clear {that a} petitioner can not elevate solely new prior artwork references in a reply to a patent proprietor’s response: “a petitioner might not in reply depend on new prior artwork to show a declare limitation.”  And, the court docket refused to determine an middleman query of whether or not the petitioner can depend upon “new embodiments” from the already offered prior artwork in an effort to counter a brand new declare development proposal. “We depart 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 specific state of affairs was not at subject 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 not introduce solely new prior artwork references in a reply, it stays an open query whether or not new parts or embodiments from the identical preexisting references could be cited to deal with a brand new declare development proposed post-institution.

Putting a Center Course

On this body, the choice exhibits the Federal Circuit steering a center course – permitting petitioners to answer modified declare constructions with arguments tied to the identical prior artwork, whereas prohibiting solely new prior artwork in replies. Ongoing circumstances will possible proceed to form the exact boundaries between truthful response and improper new arguments on this contentious area.

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 consequence: 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.