Court allows Axonics neurostim patent case to proceed against Medtronic

UPDATE: July 17, 2023: Medtronic provided additional information about the U.S. Patent and Trademark Office review. "Importantly, the Federal Circuit previously upheld the validity of one of Medtronic’s patents after a separate Axonics challenge, and only certain of Medtronic’s patents are subject to further Patent Office review as a result of the latest ruling," Medtronic spokesperson Becky Dvorak said in an emailed statement.

Dive Brief:

A federal appeals court ruled on Monday that Axonics can continue to press claims against Medtronic in an ongoing legal dispute over neurostimulation patents after determining that a U.S. Patent and Trademark Office board erred in its analysis of the case.
The U.S. Court of Appeals ruling supports Axonics as it prepares to defend itself against a related patent infringement lawsuit brought by Medtronic.
Medtronic, in an emailed statement, said it is committed to protecting its intellectual property and is ready to present its infringement case against Axonics in court.

Dive Insight:

Axonics and Medtronic compete in the market for sacral nerve modulation to treat urinary incontinence. A device is implanted above the tailbone in a minimally invasive procedure to deliver mild stimulation to the sacral nerve.

After Medtronic sued Axonics for patent infringement, its smaller rival challenged the claims at the Patent Office’s Patent Trial and Appeal Board, arguing that “obviousness” made the technology “unpatentable.”

The appeal board, however, sided with Medtronic, concluding that Axonics had failed to prove any of the challenged claims unpatentable.

Now, the U.S. Court of Appeals for the Federal Circuit has rejected the patent board’s decision and sent the case back for further consideration. The court found that the board “adopted a legally incorrect framing” of the challenge and “erred in its obviousness analysis.”

Medtronic, in its statement, said its patents have survived various challenges by Axonics at the Patent Office, which are at different stages of appellate review. “The Federal Circuit has yet to invalidate any Medtronic patent claims asserted against Axonics,” Medtronic said.

The medtech giant said the trial in a related lawsuit is set to begin Aug. 15 in a California federal court. Medtronic is suing Axonics for infringement of seven patents.

In a research note published Wednesday, analysts at KeyBanc Capital Markets said they think Axonics remains well-positioned to continue driving rapid penetration of its device portfolio in a large, underserved market.

“While the outcome of litigation is difficult to predict, we think AXNX has an ability to manage through a wide range of scenarios and there could be progress toward resolution this year,” the analysts wrote.