Last week, the U.S. Court of Appeals for the Federal Circuit issued an opinion in Axonics, Inc. v. Medtronic, Inc., No. 2022-1532, -1533 (Aug. 7, 2023), vacating and remanding a determination from the Patent Trial and Appeal Board that Axonics had failed to show claims of two Medtronic patents were unpatentable.
Medtronic’s patents, U.S. Patent Nos. 8,457,758 and 8,738,148, are directed to enhancing charging for implanted medical devices by adjusting external charger output based on device-related measurements. Axonics petitioned for Inter Partes Review of these patents, contesting their validity. In its petition, Axonics adopted a “one-input” claim construction, contending claim elements were disclosed by three prior art references. Medtronic countered in its preliminary response that none of the references met the “one-input” construction. Both parties agreed no explicit claim interpretation was needed. The Board instituted, adopting Axonics’ “one-input” construction and agreeing no explicit claim interpretation was needed.
In its patent owner response, Medtronic introduced a new “two-input” claim construction and argued Axonics’ petition had not identified two separate inputs in any of the prior art references. In reply, Axonics maintained the “one-input” stance but also argued that, even under the new “two-input” construction, the references anticipated the patents. Axonics’ reply, along with a supplemental expert declaration, cited additional disclosures in the prior art references pertaining to the same embodiments relied on in its petition. In the final written decision, the Board adopted the “two-input” construction and refused to consider Axonics’ new anticipation arguments and evidence because they were not identified in the petition. Axonics appealed, arguing the Board erred in not considering its reply arguments and evidence relating to the new construction.
The Federal Circuit vacated and remanded. Specifically, the Court concluded that the Administrative Procedure Act rules and the Supreme Court’s SAS Inst., Inc. v. Iancu decision permit petitioners to respond to new arguments made in a patent owner response, particularly after a patent owner introduces a new claim construction post-institution. The Court explained that in formal adjudications, like IPRs, parties should be allowed to present rebuttal evidence and arguments and should have the ability to cross-examine. The Court confirmed that the Board can adopt a new construction after institution but stated that it must allow the petitioner to respond under the new construction, though new prior art cannot be introduced.