Inventors Can Challenge their Own Patents – But Only at the PTAB

by Dennis Crouch

The traditional rule of assignor estoppel prevents prior owners of a patent from later challenging the validity of the patent.  The doctrine stems from old property law cases and is based upon the idea is that the assignor “should not be permitted to sell something and later to assert that what was sold is worthless, all to the detriment of the assignee.” Diamond Scientific Co. v. Ambico, Inc., 848 F.2d 1220 (Fed. Cir. 1988); see Westinghouse Elec. & Mfg. Co. v. Formica Ins. Co., 266 U.S. 342 (1924). Of course, most ‘assignors’ are inventor-employees who assign away rights well before even conceiving of their inventions.  In his 2016 article, Mark Lemley argued that:

[T]he doctrine is out of touch with the realities of both modern inventing and modern patent law, and that it interferes with both the invalidation of bad patents and the goal of employee mobility.

Mark A. Lemley, Rethinking Assignor Estoppel, 54 Hous. L. Rev. 513 (2016).

In Arista Networks, Inc. v. Cisco Sys., Inc., 2017-1525, 2018 WL 5851331 (Fed. Cir. Nov. 9, 2018), the Federal Circuit was faced with the question of whether assignor estoppel applies to prevent an assignor from later challenging a patent in an inter partes review proceeding. In that framework, the court sided with Lemley and agreed to rethink the doctrine — holding that an inventor is not estopped from challenging his assigned patent in an IPR proceeding.

In this case, the inventor-professor-billionaire David Cheriton was formerly employed as Cisco’s chief product architect.  After inventing an improved “logging module,” Cheriton assigned rights to Cisco who patented the invention. The assignment included several promises , including a promise to “do everything possible to aid said assignee, their successors, assigns and nominees, at their request and expense, in obtaining and enforcing patents for said invention in all countries.”  Cheriton later left Cisco and founded Arista.  At that point, Cisco turned around and sued Arista for infringement.  Arista responded with the IPR challenge.

On appeal, the Federal Circuit began with a consideration of the common law approach — “that assignor estoppel is a well-established common-law doctrine that should be presumed to apply absent a statutory indication to the contrary.”  Although the AIA obviously did not mention the doctrine, the appellate court found that the law had an “evident” statutory purpose that is contrary to the doctrine. In particular, the court focuses on Section 311(a) that states:

(a) In General.— Subject to the provisions of this chapter, a person who is not the owner of a patent may file with the Office a petition to institute an inter partes review of the patent.

In reading the statute, the court decided that “plain language of this statutory provision is unambiguous. . . The plain language of § 311(a) demonstrates that an assignor, who is no longer the owner of a patent, may file an IPR petition as to that patent. . . . In sum, we conclude that § 311(a), by allowing “a person who is not the owner of a patent” to file an IPR, unambiguously dictates that assignor estoppel has no place in IPR proceedings.”

The legal analysis by the court could fairly be called low quality because it does not content with the many other areas of patent law (and other areas of law) that allow for departures from the statute in order to allow for traditional common law doctrines.  Take for instance, Section 282(b) that provides invalidity as a defense in “any” infringement lawsuit — of course as discussed above the court has held that 282(b) does not eliminate assignor estoppel.

I will note that the appellate panel questioned the ongoing viability of assignor estoppel as it applies in any patent case, but decided to narrowly focus its decision here on IPR proceedings rather than patent law cases as a whole.

21 thoughts on “Inventors Can Challenge their Own Patents – But Only at the PTAB

  1. 5

    Include anti-aggression clauses in employment contracts, service contracts, and assignments

    1. 5.1

      ? Are you referring to clauses in employment contracts restricting non-compete agreements or to the normal agreement to cooperate in obtaining and enforcing one’s patents?

      1. 5.1.1

        Clauses that prohibit an assignor from claiming a patent they assigned is later invalid or otherwise demeaning the invention.

        1. 5.1.1.1

          Thanks. But even assuming that would be an enforceable employment contract term in all states [?] how would such a contractual promise by the employee to his employer be binding on the employer subsequently assigning the patent to a PAE or another company? An employer is not going to restrict its own future assignment activities in an employment agreement.

          1. 5.1.1.1.1

            Many companies already include such covenants in their employment agreements, proprietary invention agreements, and assignment documents. As long as the promise meets the standard for a “clear and unambiguous waiver,” such covenants have been enforceable in license agreements. I can’t imagine why they would not be enforceable in an assignment or employment agreement.

            I don’t follow your concern with successors or maybe I just don’t appreciate it.

            Party A assigns to Party B, promises not to try and invalidate the patent and agrees that it’s for the benefit of Party B and Party B’s successors and assigns. In other words, that promise runs with the patent.

            Party B assigns to Party C and makes the same promise. Party A tries to invalidate the patent. Party C relies on Party A’s promise in the assignment to Party B.

  2. 4

    Here’s another way for an inventor to challenge assigned patents, at least by putting a public-record-cloud over them: 35 U.S.C. 301 “Citation of prior art”
    “(a) In General- Any person at any time may cite to the Office in writing–
    (1) prior art consisting of patents or printed publications which that person believes to have a bearing on the patentability of any claim of a particular patent, or ..”
    [This can even be done anonymously]

    Also, anyone can cite prior art against a pending application under current rules.

  3. 3

    Of course, most ‘assignors’ are inventor-employees who assign away rights well before even conceiving of their inventions.

    Was someone inhaling when they wrote this: Uh, I didn’t conceive of the invention I invented.

    1. 3.1

      Zvi,

      Not seeing why you think that someone was inhaling with the statement.

      There is a timing aspect that is the focus of the statement – NOT (as you appear to take it) an identity aspect of just who may have made the invention.

      Notwithstanding the ease made in the AIA for juristic persons to prosecute patent applications, the Roche v. Stanford case still stands as reflecting that a real person must still be the first inventor.

      What the statement means is merely that THAT first inventor has long agreed to assign whatever later inventions are conceived (in the course of employment) TO the juristic person (and most have done so in a ‘proper’ manner – in contrast to how the situation in the Roche v. Stanford case unfolded.

      1. 3.1.1

        The statement: Signing away right BEFORE conceiving of them, is quite misleading. Perhaps the auther meant that upon becoming employed, a new employee signed a document that all of his/her inventions would be the property of the company.

        1. 3.1.1.1

          Signing away right BEFORE conceiving of them, is quite misleading.

          Not seeing anything misleading about the statement.

          The timing of the statement is clear: prior to any actual inventing, there is a (properly worded — compare and contrast with the Stanford v Roche case) an assignment of what may come (and typically within the scope of the employment).

          The phrasing is pretty clear, and has been used to describe the situation many times in the past without any type of “misleading” that you seem to be reading into the statement.

    2. 3.2

      That does not always mean the inventor agreed with the scope of the issued claims [versus prior art then or later known to the inventor] which the attorney for the employer may have added or changed during prosecution. Patents are not “concepts.”

  4. 2

    Wouldn’t an intervening change in law automatically change the relations between an assignor and assignee, even if the change was not statutory?

  5. 1

    >>Mark A. Lemley, Rethinking Assignor Estoppel, 54 Hous. L. Rev. 513 (2016).

    The man doesn’t miss a trick. He is certainly more responsible for the destruction of the patent system than any other person.

    1. 1.1

      The proper form of address should be: Large Corporate Advocate Lemley and Corporate Appointee to Stanford Law School.

      1. 1.1.1

        NW, re “Large Corporate Advocate” note the inconsistency with the position of “it interferes with .. the goal of employee mobility.”

        1. 1.1.1.1

          I did note that, but haven’t yet dig through the Lemley paper to see if that was “eye candy” or otherwise a spin on the theme.

        2. 1.1.1.2

          An argument that, of course, would be made. But overall the effect is a general weakening of the patent system.

        3. 1.1.1.3

          I wonder too if a large corporation could require that the inventor not challenge the validity of the patent in an employment contract. I know there is probably some case law that may be problematical.

          But if they could, then this position of Lemley would be consistent with all his other positions.

      2. 1.1.2

        You forgot the following title:

        Heavily Financially Conflicted (via pre-IPO issued Google shares) Husband of Rose Hagen, Former Google Chief Trademark Counsel from 2004-2010 (who was responsible for Android avoiding $B in infringement issues and anti-trust before Google fully ruled the world…in part by using her husband’s self-serving research regarding efficient infringement).

        Absolutely no surprise that THIS decision came from Prost and Chen (and Schall???…talk about scrapping the barrel to get a third…I can’t remember that last important patent decision he was on.) The only way the panel could have been worse is if Dyk was included.

        1. 1.1.2.1

          Yup valuationguy. That is about the size of it. I’d bet that Google selected Chen too.

          1. 1.1.2.1.1

            The opinions are coming from INSIDE THE COURTROOM OMG

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