A US federal appeals court has upheld a district court decision to refuse medtech company Dexcom a preliminary injunction against Abbott in a patent infringement dispute.

The judgment handed down by Circuit Judge Kara F Stoll at the US Court of Appeals for the Federal Circuit (CAFC) on 3 January sided with the Delaware district court’s earlier decision, finding it ”did not abuse its discretion in denying the preliminary injunction”.

Dexcom, represented by Quinn Emanuel Urquhart & Sullivan, and Abbott, represented by Kirkland & Ellis, are competing manufacturers of continuous glucose monitoring systems used in the management of diabetes. 

In response to alleged patent infringement, Abbott had petitioned for inter parties review (IPR) of the asserted patents before the Patent Trial and Appeal Board. In October 2022 Dexcom asked the district court in Delaware for a preliminary injunction to prevent Abbott from proceeding with an IPR based on a “forum selection clause” in a settlement the two parties had agreed in 2014 after years of patent litigation.

The agreement contained a number of clauses, including a forum selection clause that stated that the Delaware district court would be the exclusive jurisdiction over any dispute relating to the agreement.

Other elements to the agreement included a cross licence for certain patents and covenants not to sue or challenge patents during certain periods.

Stoll said that the agreement indisputably allowed IPR filings during the “covenant period” (which ended on 31 March 2021) under certain conditions.

She continued that it necessarily follows that because the forum selection clause “governs both during and after the covenant period, the clause cannot operate to prohibit the filing of IPRs after the covenant period if it allowed them during the covenant period”.

Stoll was joined by fellow circuit judges Timothy B Dyk and Todd M Hughes. They were not persuaded by Dexcom’s suggestion that the forum selection clause has a different interpretation during and after the covenant period.

Stoll notes: “Nothing in the agreement supports such an interpretation. We are similarly unpersuaded by Dexcom’s argument that the forum selection clause does not apply during the covenant period because, as noted above, nothing in the agreement indicates as much.”

Responding to the ruling, a  Dexcom spokesperson said: “While we disagree with the Federal Circuit’s decision, it has no impact on our case going forward other than to strengthen the validity of the remaining Dexcom patent claims. We look forward to holding Abbott accountable for infringing our patents at trial next year.”

Based on 2023 third quarter results, Dexcom raised its annual revenue forecast to between $3.58bn and $3.6bn, compared with its previous range of $3.5bn to $3.55bn due to strong demand for its glucose monitoring devices.

Abbott also had strong third quarter results; sales of its glucose monitoring system, FreeStyle Libre, were $1.4bn, which represents growth of 30.5% on a reported basis.

Quinn Emanuel’s team included William Adams, co-chair of its national appellate practice, and partners David Leon Bilsker, Nathan Hamstra and Valerie Anne Lozano as well as associate Alexander Hale Loomis. Shaw Keller’s John W Shaw also represented Dexcom.

Kirkland’s team included partners Jason M Wilcox, William H Burgess, John C O'Quinn, Amanda J Hollis,  Benjamin Adam Lasky, Ashley Ross and Ellisen Shelton Turner.