Recor Medical, Inc. v. Medtronic Ireland Manufacturing Unlimited Co.

NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
RECOR MEDICAL, INC.,
Plaintiff-Appellee
v.
MEDTRONIC IRELAND MANUFACTURING
UNLIMITED CO.,
Defendant-Appellant
MEDTRONIC VASCULAR, INC., MEDTRONIC,
INC.,
Defendants
______________________
2025-1998
______________________
Appeal from the United States District Court for the
Northern District of California in Nos. 3:22-cv-03072-TLT,
3:25-cv-05881-TLT, Judge Trina L. Thompson.
______________________
Decided: May 19, 2026
______________________
ASHLEY M. F RY , Latham & Watkins LLP, Washington,
DC, argued for plaintiff-appellee. Also represented by
G ABRIEL K. BELL , MATTHEW J. MOORE, J ACOB VANNETTE;
ROGER J. CHIN, San Francisco, CA.
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RECOR MEDICAL, INC. v.
MEDTRONIC IRELAND MANUFACTURING UNLIMITED CO.
2
G REGORY A. CASTANIAS , Jones Day, Washington, DC,
argued for defendant-appellant. Also represented by
ROBERT BREETZ, Cleveland, OH; J ENNIFER SERAPHINE ,
K EELEY I RENE VEGA , Thompson Hine LLP, San Mateo, CA.
______________________
Before CHEN, HUGHES , and STARK, Circuit Judges.
CHEN, Circuit Judge.
Medtronic Ireland Manufacturing Unlimited Co. (Med-
tronic Ireland) appeals from a decision of the United States
District Court for the Northern District of California dis-
missing its counterclaims of patent infringement against
Recor Medical, Inc. (Recor) for lack of constitutional stand-
ing. Recor Med., Inc. v. Medtronic Ireland Mfg. Unlimited
Co., No. 22-CV-03072-TLT, 2025 WL 2272414, at *1
(N.D. Cal. July 7, 2025) (Decision). Prior to filing suit,
Medtronic Ireland licensed several rights under the as-
serted patents to an exclusive licensee, but retained others,
including the right to sue third parties for patent infringe-
ment. In a precedential opinion we issued today in a dif-
ferent appeal addressing constitutional standing, A.L.M.
Holding Co. v. Zydex Industries Private Ltd., No. 25-1317
(Fed. Cir. May 18, 2026), we held that the patent owner in
that case had constitutional standing because it retained a
right to sue for patent infringement that was not rendered
illusory by the rights it granted to its licensee. Because
Medtronic Ireland’s retained rights are materially the
same as the patent owner’s in A.L.M., we hold that Med-
tronic Ireland retained an exclusionary right sufficient to
satisfy the “irreducible constitutional minimum of stand-
ing,” and we reverse and remand.
BACKGROUND
A. The Patent License Agreement
Medtronic Ireland is the owner of U.S. Patent
Nos. 8,845,629 (’629 patent) and 11,801,085 (’085 patent)
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RECOR MEDICAL, INC. v.
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(collectively, Asserted Patents). The Asserted Patents de-
scribe systems and methods for renal neuromodulation, in
which thermal energy is used to heat or cool neural fibers
that contribute to kidney function. Medtronic Vascular
Galway Unlimited Company (Medtronic Galway) is the
manufacturer of Medtronic’s1 Symplicity Spyral TM renal
denervation (RDN) system, which uses renal neuromodu-
lation to treat hypertension.
Through an April 2023 license agreement (Exclusive
License Agreement or ELA), Medtronic Ireland licensed
certain rights in the Asserted Patents to Medtronic Gal-
way. J.A. 3641–52. These include the “exclusive license”
“to use, make, [] have made,” “import, offer for sale, and
sell” “Product.” Id. at 3643 §§ 2.1, 2.2. “Product” is defined
as “any finished medical device, as specifically designated
by [Medtronic Ireland] and agreed to by [Medtronic Gal-
way] for sale into the medical field including the products
for catheter-based therapies to treat hypertension and re-
lated conditions.” Id. at 3642 § 1.9.
In the event of any third-party patent infringement,
Medtronic Galway has the first right to sue to enforce the
patents. Id. at 3644–45 § 3.6(a). Medtronic Ireland retains
the right to participate in such an action. Id. Moreover,
Medtronic Ireland may bring an enforcement action itself
if Medtronic Galway declines or fails to act within a rea-
sonable time. Id. The ELA further provides that any set-
tlement amounts will first be used to pay each party’s share
of litigation costs, with the remaining amounts “allocated
ratably between the Parties based upon the economic dam-
ages suffered by each Party.” Id. § 3.6(b).
1 Medtronic Ireland and Medtronic Galway are part
of a broader global group of related entities called Med-
tronic.
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The ELA also addresses Medtronic Galway’s ability to
transfer its rights. While Medtronic Galway may subli-
cense patent rights, this right is subject to Medtronic Ire-
land’s “prior written consent” which is “not to be
unreasonably withheld.” Id. at 3643 § 2.4. Likewise, the
ELA prohibits any assignment of Medtronic Galway’s
rights under the agreement without the express written
consent of Medtronic Ireland. Id. at 3648 (Article XI).
Medtronic Galway must also pay Medtronic Ireland royal-
ties, including on sales by sublicensees, “at a rate agreed
between the Parties.” Id. at 3645 § 6.1.
The ELA provides that Medtronic Galway “shall not at
any time do . . . or otherwise fail to do any act or thing that
would have the effect of[] contesting or impairing [Med-
tronic Ireland’s] ownership or exclusive rights in the Intel-
lectual Property.” Id. at 3647–48 § 9.1. The parties retain
the right to terminate the ELA in the event of a material
breach. Id. at 3648 §§ 10.2, 10.3. The ELA is set to expire
on “the last Friday of April, 2028,” at which time all patent
rights will revert to Medtronic Ireland. Id. § 10.1.
B. District Court Litigation
In May 2022, Recor sued Medtronic Ireland and Med-
tronic Vascular, Inc. in the Northern District of California,
seeking a declaration that the claims of the ’629 patent are
invalid and not infringed by Recor’s Paradise System,
which competes with Medtronic’s RDN system. Medtronic
Ireland answered Recor’s complaint and asserted counter-
claims of patent infringement, alleging that Recor in-
fringed the ’629 and ’085 patents. In response, Recor
asserted counterclaims, seeking a declaratory judgment
that the claims of the ’085 patent are invalid and not in-
fringed.
During discovery, Medtronic Ireland produced the ELA
to Recor and subsequently moved to join Medtronic Galway
as a party to the litigation under Federal Rule of Civil Pro-
cedure 19. Recor opposed Medtronic Ireland’s motion and
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RECOR MEDICAL, INC. v.
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instead moved to dismiss Medtronic Ireland’s counter-
claims, asserting that Medtronic Ireland’s transfer of
rights to Medtronic Galway under the ELA deprived it of
the exclusionary rights necessary for Article III standing.
The district court granted Recor’s motion to dismiss.
Decision, 2025 WL 2272414, at *8. The district court first
determined that Medtronic Ireland’s right to sue was not
an exclusionary right sufficient to establish Article III
standing. Id. at *4–6. In doing so, the district court relied
on this court’s decision in Morrow v. Microsoft Corp.,
499 F.3d 1332 (Fed. Cir. 2007), where we held that when
patent rights are split among multiple entities, a non-pa-
tentee plaintiff’s contractual right to sue for infringe-
ment—separated from all other patent rights—did not
confer an exclusionary right sufficient for constitutional
standing. Id. at 1342–43. The district court then deter-
mined that Medtronic Ireland’s right to veto any subli-
censes, its right to limit sublicenses and assignments, and
its revisionary rights were likewise insufficient to establish
constitutional standing. Decision, 2025 WL 2272414, at
*6–8.
After it concluded that Medtronic Ireland lacked con-
stitutional standing, the district court dismissed Medtronic
Ireland’s counterclaims without prejudice, dismissed for
lack of subject matter jurisdiction Recor’s declaratory judg-
ment claims of noninfringement and invalidity as to both
Asserted Patents, and denied as moot Medtronic Ireland’s
motion for joinder. Id. at *8–9.
Medtronic Ireland timely appealed. We have jurisdic-
tion under 28 U.S.C. § 1295(a)(1).
STANDARD OF REVIEW
We review Article III standing determinations de novo.
Intell. Tech LLC v. Zebra Techs. Corp., 101 F.4th 807, 813
(Fed. Cir. 2024) (citing Abraxis Bioscience, Inc. v. Navinta
LLC, 625 F.3d 1359, 1363 (Fed. Cir. 2010)). In interpreting
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RECOR MEDICAL, INC. v.
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a contract, we generally apply state law, including to de-
termine “who owns the patent rights and on what terms.”
Bd. of Trs. of Leland Stanford Junior Univ. v. Roche Mo-
lecular Sys., Inc., 583 F.3d 832, 841 (Fed. Cir. 2009) (inter-
nal quotation marks and citation omitted). “Contract
interpretation is a question of law that [appellate courts]
review de novo.” Carroll Shelby Licensing, Inc. v. Halicki,
138 F.4th 1178, 1186 (9th Cir. 2025) (citation omitted); see
also Tex. Instruments Inc. v. Tessera, Inc., 231 F.3d 1325,
1329 (Fed. Cir. 2000).
D ISCUSSION
A. Mootness
We begin by addressing whether this appeal has been
rendered moot by intervening developments in related dis-
trict court litigation.
Article III of the Constitution limits the jurisdiction of
federal courts to actual cases and controversies. U.S.
CONST . art. III, § 2, cl. 1. “A case becomes moot—and there-
fore no longer a ‘Case’ or ‘Controversy’ for purposes of Arti-
cle III—when the issues presented are no longer ‘live’ or
the parties lack a legally cognizable interest in the out-
come.” Already, LLC v. Nike, Inc., 568 U.S. 85, 91 (2013)
(internal quotation marks and citation omitted).
Recor argues that no live controversy remains because
the Medtronic parties amended the ELA to address the dis-
trict court’s dismissal of Medtronic Ireland’s claims for lack
of constitutional standing and filed a new lawsuit in Med-
tronic Ireland Manufacturing Unlimited Co. v. Recor Med-
ical, Inc., No. 25-cv-05881-TLT (Recor II) that purportedly
provides a means to obtain the same relief sought in the
original lawsuit in Recor Medical, Inc. v. Medtronic Ireland
Manufacturing Unlimited Co., et al., No. 22-cv-03072-TLT
(Recor I). ECF No. 44 at 1. We disagree.
This case is not moot because legal consequences con-
tinue to flow from the district court’s dismissal in Recor I.
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RECOR MEDICAL, INC. v.
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These consequences include, at a minimum, the viability of
Recor’s affirmative defense of unclean hands, which is
based on Medtronic Ireland’s assertion of counterclaims in
Recor I. Although Recor attempts to recast its defense as
“not based on the merits of the district court’s decision,”
ECF No. 50 at 6, it alleges in Recor II that it was “materi-
ally prejudiced” by “Medtronic’s misrepresentations re-
garding rights and interests in the Asserted Patents.” Am.
Answer, Recor II, Dkt. No. 34 (N.D. Cal. Aug. 19, 2025) at
11. That theory depends, in part, on the premise that Med-
tronic Ireland lacked sufficient rights to sue in its own
name in Recor I. A reversal would undercut that premise
and, in turn, weaken the basis for Recor’s unclean hands
defense. Accordingly, because a reversal by this court
would have legal consequences (for at least this reason), we
find the case is not moot.
B. Constitutional Standing
We now turn to the merits of the appeal. Medtronic
Ireland argues that, as the patent owner, its rights to sue
and receive royalties together are sufficient to show that it
retained an exclusionary right necessary for Article III
standing. Appellant Br. 26–29.2 See Zebra Techs., 101
F.4th at 814 (“In general, the question for the injury-in-fact
threshold is whether a party has an exclusionary right.”).
We agree.
In a separate order issued today, we held that a patent
owner retained an exclusionary right under a materially
similar license agreement. A.L.M. Holding Co. v. Zydex In-
dus. Priv. Ltd., No. 25-1317, slip op. at 1 (Fed. Cir. May 19,
2 In the alternative, Medtronic Ireland asserts other
bases for having constitutional standing, including that its
allegations of monetary harm independently satisfy the
constitutional injury in fact requirement. Appellant Br.
40–46. We need not reach these issues.
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2026). There, we explained that when a patent owner re-
tains a right to sue third parties for patent infringement
that is not rendered illusory by the rights granted to a li-
censee, that patent owner retains an exclusionary right
sufficient for constitutional standing. Id. at 10–15.
That same principle controls here. In A.L.M., we em-
phasized that a plaintiff’s right to sue, right to veto subli-
censes, and royalty interests ensured that that the plaintiff
retained both a concrete stake in excluding unauthorized
practice of the patents and a mechanism to enforce that in-
terest. Id. at 10–11. The A.L.M. plaintiff’s sublicensing
veto helped preserve its exclusionary interest because it
prevented the licensee from unilaterally authorizing an ac-
cused infringer’s practice of the patents without plaintiff’s
approval and free of plaintiff’s royalty interests. Id.
We distinguished Morrow, where the plaintiff’s right to
sue was “illusory.” Id. at 13–14 (citing Morrow, 499 F.3d
at 1342–43, 1336, 1338). We explained that in Morrow, the
patent owner could moot any suit brought by the plaintiff
by granting a royalty-free sublicense to the accused in-
fringer. Id. By contrast, a patent owner’s right to sue is
not rendered illusory in light of its retained royalty inter-
ests that attach to sublicenses, as well as its right to with-
hold consent to sublicenses that may moot any suit brought
by the patent owner. Id. (citing Alfred E. Mann Found. for
Sci. Rsch. v. Cochlear Corp., 604 F.3d 1354, 1362 (Fed. Cir.
2010)).
Here, Medtronic Ireland retains patent rights materi-
ally similar to the rights retained by the patent owner in
A.L.M. It holds a secondary right to sue (J.A. 3644–45
§ 3.6), royalty interests (Id. at 3645 § 6.1), and veto author-
ity over sublicenses (Id. at 3643 §§ 2.4, 2.5). Taken to-
gether, these rights ensure that Medtronic Ireland’s right
to enforce the patents it owns is not illusory and that its
exclusionary interests remain intact. The same rights that
conferred standing in A.L.M. thus confer standing here.
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The fact that Medtronic Ireland’s right to sue is second-
ary to Medtronic Galway’s does not change our analysis.
See Appellee Br. 30. In Mann, we rejected the argument
that a secondary right to sue was insubstantial for stand-
ing. 604 F.3d at 1361–63; see also Abbott Lab’ys v. Di-
amedix Corp., 47 F.3d 1128, 1132 (Fed. Cir. 1995) (finding
no transfer of all substantial rights where the patent owner
retained, among other rights, a secondary right to sue). We
explained that while the patent owner’s right to choose to
sue did not vest until the licensee chose not to sue, it was
“otherwise unfettered” because once that right activated,
the owner had complete control and discretion over the lit-
igation. Mann, 604 F.3d at 1362. We reaffirmed in A.L.M.
that this analysis regarding a patent owner’s right to sue—
though developed in the context of statutory standing—is
instructive in assessing whether that same right is real or
nullified by a licensee’s granted rights for purposes of Arti-
cle III standing. A.L.M., slip op. at 8–9.
Recor contends that Medtronic Ireland’s right to sue is
not an exclusionary right because it cannot grant a license
itself to settle a lawsuit. Appellee Br. 31, 37. Article 3.6(b),
however, provides for the allocation of settlement proceeds
between the parties, indicating that Medtronic Ireland re-
tains the authority to settle lawsuits (at least for damages)
that it initiates. J.A. 3644–45 § 3.6. Thus, even in light of
Medtronic Galway’s right to sublicense, Medtronic Ireland
retains a meaningful ability to settle the lawsuits it initi-
ates.3
3 To the extent that Recor contends that the ELA
permits Medtronic Galway to grant a royalty-free subli-
cense to any accused infringer, see Oral Arg. at 26:43–
26:50, available at https://www.cafc.uscourts.gov/oral-ar-
guments/25-1998_03032026.mp3, any such grant would be
expressly subject to Medtronic Ireland’s consent. See
J.A. 3643 § 2.4. It would be reasonable for Medtronic
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Medtronic Ireland also retains control over the scope of
its license grant. Medtronic Ireland’s grant of exclusive
rights to Medtronic Galway under Articles 2.1 and 2.2 are
limited to rights related to “Product,” which is defined as
“any finished medical device, as specifically designated by
Licensor and agreed to by Licensee.” Id. at 3642–43 §§ 1.9,
2.1, 2.2. Thus, for Medtronic Galway to have any exclu-
sionary right, Medtronic Ireland must first “specifically
designate[]” a finished medical device as a “Product.” Id.
at 3642 § 1.9. Beyond that, Medtronic Ireland retains all
rights, including exclusionary rights, to all un-“designated”
products, as well as unfinished medical products.4
Recor also argues that Medtronic Ireland lacks any ex-
clusionary right because it granted to Galway the “exclu-
sive right to exclude others” from practicing the invention.
Appellee. Br. 30 (citing J.A. 3643 §§ 2.1, 2.2, 2.4), 37. This
language, however, is limited to the scope of designated
“Products,” see J.A. 3642–43 §§ 1.9, 2.1, 2.2, and even for
rights to “Products,” Medtronic Ireland retains the second-
ary right to sue, see id. at 3644–45 § 3.6. Medtronic Ire-
land’s right to join in infringement suits, as well as to
initiate suits if Medtronic Galway declines to act, ensures
Ireland to withhold consent in such a circumstance to pro-
tect its patent rights.
4 Recor argues that Medtronic Ireland does not re-
tain rights through Article 1.9 because “Product” “in-
clude[s] the products for catheter-based therapies to treat
hypertension and related conditions,” which are co-exten-
sive with the Asserted Patents. Oral Arg. 21:08–23:49.
But we read the “including” clause as delimiting the cate-
gory of products eligible for designation under the provi-
sion, not as dispensing with the requirement that a
“finished medical device” must be “specifically designated”
by Medtronic Ireland. See J.A. 3642 § 1.9 (emphasis
added).
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that it retains meaningful enforcement authority. See
J.A. 3644–45 § 3.6.
Accordingly, on these facts, we hold that Medtronic Ire-
land retained an exclusionary right sufficient for the “irre-
ducible constitutional minimum of standing,” Lujan,
504 U.S. at 560, namely the non-illusory right to sue that
its licensee, Medtronic Galway, could not nullify through
unilateral, royalty-free sublicensing.
C. Joinder of Necessary Party
Medtronic Ireland next argues that because its coun-
terclaims at most suffered from a curable defect in statu-
tory standing, the district court should have allowed
Medtronic Galway to be joined as a counterclaim plaintiff.
Appellant Br. 46–48. Recor does not dispute that joinder
may be appropriate if this court determines that Medtronic
Ireland had constitutional standing. Appellee Br. 58.
The district court did not reach the merits of the par-
ties’ arguments on joinder under Rule 19. Decision,
2025 WL 2272414, at *9. Thus, we remand for the district
court to determine, for the purposes of satisfying statutory
standing, whether all necessary parties to this action were
joined, or could be joined. See Lone Star Silicon Innova-
tions LLC v. Nanya Tech. Corp., 925 F.3d 1225, 1238–39
(Fed. Cir. 2019).
CONCLUSION
Medtronic Ireland retained at least an exclusionary
right after its transfer of rights to Medtronic Galway under
the ELA. Because Medtronic Ireland has constitutional
standing, we reverse and remand.
REVERSED AND REMANDED
COSTS
Costs to Appellant.
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