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 pressure the petitioner to lock in particular arguments, solely to supply a game-changing response afterward.

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 courtroom instructed 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 signify improper new arguments.  The Federal Circuit vacated that call and despatched the case again down for reconsideration.

Sandbagging Danger and the Want for Stability

In his opinion for the courtroom, 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 Courtroom: “However isn’t there a danger right here of sandbagging, that you just notice there’s an excellent declare building 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 in the event you maintain again on the argument and wait to make it till the response, then you definitely get the estoppel. Isn’t there a danger of that?”

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

Oral Arg. at 14:24–51.  Modi went on to elucidate that the danger may additionally have an effect on the petitioner. The brand new rule permits the petitioner to supply an unreasonable preliminary declare building, 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 cheap declare interpretations.

Vital Caveats and Ongoing Questions

The case has some vital caveats concerning what argument/proof might be offered in reply.  The courtroom made clear {that a} petitioner can’t increase 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 courtroom refused to determine an middleman query of whether or not the petitioner can rely on “new embodiments” from the already introduced prior artwork with the intention 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 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 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 might be cited to deal with a brand new declare building proposed post-institution.

Placing 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 instances will seemingly proceed to form the exact boundaries between truthful 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 in addition siding with the petitioner Axonics in holding that Board erred in its obviousness evaluation by improperly framing the motivation-to-combine inquiry. [LINK]

The end result: 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 attention-grabbing. One set pertains to implanting a neurostimulation lead and the second set pertains to transcutaneous charging of implanted medical gadgets.