Ever since Microsoft acquired Rare in 2002, fans have been wondering when a new Battletoads would surface. Even before the acquisition, players were anticipating the return of Zitz, Pimple, and Rash with unbounded zeal. (There actually was a Battletoads game in development for Game Boy Advance, but obviously it never saw the light of day.) And considering how Microsoft brought back Killer Instinct recently, there's no reason to think it wouldn't try something similar for other dormant Rare properties.
On November 5, 2014, Microsoft filed a trademark for "Battletoads." This doesn't necessarily mean that a new game is in the works, but it does mean that Microsoft must be seriously considering it. If there is a new Battletoads in our future, I predict that, as with Killer Instinct, Rare won't be the one on chief production duties. Who would get the honor, I wonder? I'd personally love to see WayForward take a crack at it — the Valencia studio has more than proven itself quite proficient at honoring classic game properties like Contra and Double Dragon.
We'll keep you posted if we learn any new details.