IP Law Daily, PATENT—Fed. Cir.: Medtronic’s infringement counterclaims reinstated in dispute with medical device rival, (May 21, 2026)

By Saurabh Kashyap, B.A., M.A., LL.B., LL.M.

Medtronic retained sufficient exclusionary rights in the patents at issue despite a licensing arrangement with an affiliate.

In a non-precedential disposition, the U.S. Court of Appeals for the Federal Circuit has reversed a federal district court’s dismissal of Medtronic’s patent infringement counterclaims in a competitor’s lawsuit requesting declaratory judgment of non-infringement. It found that Medtronic, the appellant, retained sufficient exclusionary rights in the patents at issue despite granting an exclusive license and remanded for further proceedings, including consideration of joinder. The appellate court determined that the appellant’s retained secondary right to sue, royalty interests, and control over sublicensing ensured that its enforcement rights were not illusory, thereby satisfying the constitutional requirement of an injury in fact (Recor Medical, Inc. v. Medtronic Ireland Manufacturing Unlimited Co., No. 25-1998 (Fed. Cir. May 19, 2026)).

Background. The plaintiff/appellee, Recor Medical, Inc., is a medical device company engaged in developing catheter-based technologies for the treatment of hypertension. The defendant/appellant, Medtronic Ireland Manufacturing Unlimited Co., is part of a global medical technology group engaged in the development, manufacture, and commercialization of medical devices, operating in coordination with affiliated entities involved in production and distribution.

The dispute concerned U.S. Patent Nos. 8,845,629 (the ’629 patent) and 11,801,085 (the ’085 patent). These patents relate to systems and methods for renal neuromodulation, involving the use of thermal energy to treat neural fibers associated with kidney function, particularly in catheter-based therapies for hypertension.

Recor filed a declaratory judgment action seeking findings of non-infringement and invalidity of the ’629 patent. Medtronic Ireland responded by asserting counterclaims alleging infringement of both the ’629 and ’085 patents. During discovery, Medtronic Ireland disclosed an exclusive license agreement under which it granted certain commercial rights to a related entity, Medtronic Galway, including a primary right to enforce the patents, while retaining a secondary right to sue, royalty interests, and approval rights over sublicensing. Recor moved to dismiss the counterclaims, contending that the license stripped Medtronic Ireland of the exclusionary rights necessary for standing. The district court agreed and dismissed the counterclaims without prejudice, also dismissing Recor’s declaratory judgment claims for lack of subject matter jurisdiction. Medtronic Ireland appealed.

Mootness. The Federal Circuit rejected Recor’s argument that the appeal was moot due to amendments to the license agreement and parallel litigation. Citing Already, LLC v. Nike, Inc., 568 U.S. 85 (2013), the court held that a live controversy persisted because the district court’s ruling continued to have legal consequences, including its impact on Recor’s unclean hands defense in related proceedings. The court found that reversal would affect the viability of that defense, thereby preserving Article III jurisdiction.

Constitutional standing. Further, the Federal Circuit held that Medtronic Ireland satisfied the requirements of constitutional standing. It emphasized that the central inquiry is whether the claimant retains an exclusionary right, citing Intell. Tech LLC v. Zebra Techs. Corp., 101 F.4th 807 (Fed. Cir. 2024). The court relied on its contemporaneous decision in A.L.M. Holding Co. v. Zydex Industries Private Ltd. (Fed. Cir. May 19, 2026), which clarified that a retained right to enforce patent rights is sufficient where it is not rendered illusory by the license arrangement.

Applying that framework, the court found that Medtronic Ireland retained meaningful enforcement rights. It held a secondary right to initiate infringement actions if the licensee declined to do so, maintained a continuing royalty interest in exploitation of the patents, and possessed veto authority over sublicensing arrangements. These rights ensured that the appellant retained both a financial stake and the ability to control unauthorized use of the patented technology.

The court distinguished Morrow v. Microsoft Corp., 499 F.3d 1332 (Fed. Cir. 2007), on which the district court relied, in which the right to sue was deemed illusory because the patent holder could extinguish the claim through royalty-free licensing. In contrast, the present license structure prevented unilateral actions that could nullify enforcement rights. The court further relied on Alfred E. Mann Foundation for Scientific Research v. Cochlear Corp., 604 F.3d 1354 (Fed. Cir. 2010), to reaffirm that even a secondary right to sue may suffice where it remains meaningful and enforceable.

Scope of rights under license. The appellate court also examined the scope of rights retained under the license agreement. It noted that the exclusive rights granted to the licensee were limited to specifically designated “Products,” and that Medtronic Ireland retained control over such designation. This limitation ensured that the appellant retained exclusionary rights over non-designated products and broader aspects of the patented technology. The court further rejected the argument that Medtronic Ireland lacked authority to settle litigation, pointing to contractual provisions governing allocation of settlement proceeds as evidence of retained enforcement authority.

Joinder. Having found that constitutional standing existed, the Federal Circuit addressed the issue of joinder. It observed that the district court had not reached the merits of whether the licensee was a necessary party under Federal Rule of Civil Procedure 19. Citing Lone Star Silicon Innovations LLC v. Nanya Technology Corp., 925 F.3d 1225 (Fed. Cir. 2019), the court remanded the matter for the determination of whether joinder was required to cure any issues relating to statutory standing.

The Case is No. 25-1998.

Judge: Chen, R.

Attorneys: Ashley M. Fry (Latham & Watkins LLP) for Recor Medical, Inc. Gregory A. Castanias (Jones Day) for Medtronic Ireland Manufacturing Unlimited Co.

Companies: ReCor Medical, Inc.; Medtronic Ireland Manufacturing Unlimited Co.

Cases: Patent FedCirNews