Federal Circuit Affirms District Court on Finding of Assignor Estoppel

Chief Judge Prost, Federal Circuit.

Chief Judge Prost, Federal Circuit.

Mag Aero. Indus. v. B/E Aero., Inc. (Fed. Cir. Mar. 23, 2016) (Before Mayer, Reyna, and Prost, CJ.) (Opinion for the court, Prost, CJ.). Click Here for a copy of the opinion.

MAG sued B/E for infringement of three patents which relate to the quick repair of vacuum toilets, like those used in commercial aircrafts, using components called “line replaceable units” (“LRUs”). MAG sued for direct and indirect infringement, B/E counterclaimed for non-infringement and invalidity, and also asserted a defense of assignor estoppel. The district court construed the claim term “toollessly” to mean that a toilet bowl was installed and removed “without the use of any tools.” The term “line replaceable unit” was construed to mean “a single module targeted for easy replacement in the field.” Using this claim construction, the court held that B/E’s toilets could not be “toollessly” replaced and its toilet valve set was not an LRU. The court granted B/E’s motion for summary judgment of non-infringement and MAG’s motion for summary judgment of no invalidity due to assigner estoppel. Both parties appealed.

The Court held that B/E’s toilet indisputably was attached to the frame with two screw fasteners, and the release of these screws required a tool. Every fact witness testified that a tool, such as a coin or screwdriver, was needed to release the screws. MAG argued that the district court never resolved whether a coin qualified as a tool. The Court disagreed, holding that this question was resolved during claim construction. The Court also held that the discharge valve and flush control unit on B/E’s toilet did not comprise an LRU because they were removed separately and not as a single module. B/E’s toilets also did not have the claimed “outturned flange.” Thus, the Federal Circuit affirmed that B/E’s accused product did not infringe any asserted claim of MAG’s patents.

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The Court also affirmed that B/E could not challenge the validity of MAG’s patents, because of assignor estoppel. In this case, MAG acquired the patents by assignment from a third party, who in turn acquired the patents from the inventors. After this assignment, one of the inventors went to work for B/E. The district court held that this inventor was as assignor of MAC’s patents and was barred from challenging the validity of the patents under the doctrine of assignor estoppel. Further, B/E was held to be in privity with its current employee (and past inventor/assignor of the patents). The assignor estoppel therefore attached to B/E, which was barred from attacking the validity of the patents. The Court affirmed the district court’s finding of privity based on the factors outlined in Shamrock Techs., Inc. v. Med. Sterilization, Inc., 903 F.2d 789, 793 (Fed. Cir. 1990). These factors include the assignor’s leadership role as an employee of the defendant company, his ownership stake in the defendant company, his role in infringing activities, and whether the defendant commenced its allegedly infringing activities shortly after hiring the assignor. Here, the district court concluded that B/E hired this co-inventor of the disputed patents specifically for his relevant technical knowledge, in order to produce the accused toilets. The Federal Circuit agreed that the district court properly applied assignor estoppel to B/E because of privity between B/E and the inventor. For these reasons, the Court affirmed the district court’s ruling.

NOTE: Also contributing to this summary were Parker Hancock and Puja Dave.

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