Posts Tagged: "assignor estoppel"

Yesterday, the U.S. Supreme Court ruled 5-4 in Minerva Surgical, Inc. v. Hologic, Inc., Cytyc Surgical Products, LLC that the doctrine of assignor estoppel”—which bars the assignor of a patent from later attacking the patent’s validity—“is well grounded in centuries-old fairness principles…[but] applies only when the assignor’s claim of invalidity contradicts explicit or implicit representations he made in assigning the patent.” Most expected the Court to rule along those lines following oral argument earlier this year, but the split decision, which included two separate dissents, could signal this Court’s future interest in patent cases. Commenters below also said that the ruling will result in the doctrine of assignor estoppel being applied much less frequently and in much narrower circumstances, and that it will almost certainly never be applied in employee agreement situations going forward. Here is what some stakeholders had to say.

On Wednesday, April 21, the U.S. Supreme Court heard oral arguments in Minerva Surgical, Inc. v. Hologic, Inc., which concerns the doctrine of assignor estoppel. Generally speaking, assignor estoppel prohibits the assignor of a patent from later attacking the patent’s validity in court. Minerva argues that assignor estoppel is an ill-conceived relic of a bygone era that the Court should discard or at least substantially limit. Hologic argues that the doctrine is a bedrock part of the common law—a background against which Congress has been legislating for over a century—that the Court should preserve in full.

The U.S. Supreme Court heard oral arguments today in Minerva Surgical, Inc. v. Hologic, Inc., Cytyc Surgical Products, LLC, which essentially asks the Court to decide whether the doctrine of “assignor estoppel”—which bars the assignor of a patent from later attacking the patent’s validity—should be scrapped, retained or limited. The Court’s questioning indicated that it seems uncomfortable with discarding the doctrine entirely, as Minerva would like.

Minerva Surgical, Inc. petitioned the Supreme Court of the United States (SCOTUS) in September 2020 to consider the question “whether a defendant in a patent infringement action who assigned the patent, or is [next in line] with an assignor of the patent, may have a defense of invalidity heard on the merits.” The petition was granted in January and additional amici have recently weighed in, including the New York Intellectual Property Law Association (NYIPLA).

On Friday, the U.S. Supreme Court granted a petition for certiorari filed by Minerva Surgical, Inc. asking the Court to clarify questions around the doctrine of assignor estoppel. Specifically, the petition presents the question “whether a defendant in a patent infringement action who assigned the patent, or is in privity with an assignor of the patent, may have a defense of invalidity heard on the merits.”

The CAFC explained that the doctrine of assignor estoppel does not bar an assignor from filing a petition for IPR to challenge the validity of the assigned claims, even though such a challenge would have been estopped in a district court… Stoll suggests that “it is time for this court to consider en banc the doctrine of assignor estoppel as it applies both in district court and in the Patent Office” in order to clarify this “odd and seemingly illogical regime in which an assignor cannot present any invalidity defenses in district court but can present a limited set of invalidity grounds in an IPR proceeding.”

The doctrine of assignor estoppel has been around for over a century and most often applied in the U.S. International Trade Commission (ITC) and U.S. district courts to prevent a first party assigning a patent to a second party from then challenging the validity of the patent they had just assigned. In a November 9, 2018 decision, the U.S. Court of Appeals for the Federal Circuit ruled that the doctrine of assignor estoppel does not apply in the inter partes review (IPR) context (see Arista Networks, Inc. v. Cisco Systems, Inc., (Fed. Cir. 2018). This raises intriguing possibilities regarding how companies might be able to protect themselves. One possibility might be to revise their employment agreements for signing by new employees.

The Federal Circuit recently found that assignor estoppel has “no place in IPR proceedings,” affirming a holding of the Patent Trials and Appeal Board (“Board”) that assignor estoppel did not bar Arista Networks (“Arista”) from attempting to invalidate a patent belonging to Cisco Systems (“Cisco”).  Arista’s founder, Dr. David Cheriton, was the inventor on the patent Arista wanted to invalidate and had previously assigned the patent to Cisco while employed by Cisco. See Arista Networks, Inc. v. Cisco Sys., Nos. 2017-1525, 2017-1577, 2018  (Fed. Cir. Nov. 9, 2018) (Before Prost, Schall, and Chen, J.) (Opinion for the court, Prost, J.).

On July 27th, a jury verdict entered in the District of Delaware awarded $4.8 million in lost profit and reasonable royalty damages to Marlboro, MA-based medical technology company Hologic Inc. after the jury determined that two of its patents were infringed by Redwood City, CA-based medical device company Minerva Surgical. At issue in the case was a technology marketed by Minerva to treat women dealing with abnormal uterine bleeding (AUB).

Various Synopsys parties and EVE-USA, Inc. (collectively “Synopsys”) sued Mentor Graphics, seeking a declaration that Mentor’s ’376, ’531, and ’176 patents were invalid and not infringed. Mentor counterclaimed for willful infringement of those three patents, and also asserted infringement of two more (the ’526 and ’109 patents). The court consolidated the case with another involving a fourth patent owned by Mentor (the ’882 patent)… A jury does not have to further apportion lost profits to patented features of a larger product after applying the Panduit factors, which implicitly incorporate apportionment into the lost profit award. Claim preclusion applies when a claim was asserted, or could have been asserted, in a prior action. It does not bar allegations that did not exist at the time of the earlier action.

The Court 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.