Assignor Estoppel at the Supreme Court

by Dennis Crouch

The U.S. Supreme Court heard oral arguments on April 21, 2021 in the pending assignor estoppel case of Minerva Surgical Inc. v. Hologic Inc.   The basic idea is that an inventor who signs the oath-of-inventorship and assign rights to a third party is estopped from later challenging the patent’s validity in court.   The inventor here (Truckai) filed for patent protection and assigned rights in his inventions to the company he started. That company then sold rights to Cytyc Corp who then sold to Hologic.  Truckai made bank on the sale, but “could not stop innovating.” He then turned around and started his own new company Minerva operating in a similar space.   Some of the claims that eventually issued for Hologic had been substantially amended during prosecution and seemingly broadened to particularly cover Minerva’s new focus.  Hologic then sued Minerva for infringement. Minerva attempted to raise a defense of invalidity based upon lack of written description / enablement based upon the expanded claim scope. However, the courts refused to allow the challenge based upon the doctrine of assignor estoppel.  Note here that the parties appear to disagree about the scope of changes and Truckai’s involvement.

Assignor estoppel has a bit of a winding history. The statute provides no guidance, but the doctrine seems to have its origin in the property law doctrine of estoppel-by-deed that normally accompanies a warranty deed (although sometimes a quitclaim deed).

The following are what I see as the seven key historic points for the doctrine:

  • Westinghouse Elec. & Mfg. Co. v. Formica Insulation Co., 266 U.S. 342 (1924). “The rule supported by [prior lower court decisions] is that an assignor of a patent right is estopped to attack the utility, novelty or validity of a patented invention which he has assigned or granted as against any one claiming the right under his assignment or grant. . . [T]his court will not now lightly disturb a rule well settled by 45 years of judicial consideration and conclusion in those courts.”
  • Scott Paper Co. v. Marcalus Mfg. Co., 326 U.S. 249 (1945). This case limited the scope of estoppel, but did not pass any judgment on whether assignor estoppel should be eliminated wholesale.
  • Patent Act of 1952. The Patent Act says nothing about assignor estoppel.  This looks like Congressional acquiescence and adoption.
  • Lear Siegler, Inc. v. Adkins, 330 F.2d 595 (9th Cir. 1964).  In this case, the court eliminated a somewhat similar doctrine of licensee estoppel.  Some also understood Lear as likely eliminating assignor estoppel.
  • Diamond Sci. Co. v. Ambico, Inc., 848 F.2d 1220 (Fed. Cir. 1988). The Federal Circuit in this case rejected an expansion of Lear and instead held that assignor doctrine generally applies in patent cases.
  • America Invents Act of 2011. The major revision says nothing about assignor estoppel and so appears suggest acquiescence. The question is, acquiescence of what?
  • Lemley, Rethinking Assignor Estoppel (2016). This article almost certainly helped the Supreme Court to believe this is an important and open question.

In the background, we also know that the PTAB has determined that assignor estoppel does not apply to Inter Partes Review (IPR) proceedings.

The briefing and oral arguments focus on three potential outcomes:

  • Keep it: Keep the doctrine as-is and bar the defendant from challenging the patent validity.
  • Limit it: Cabin-in the doctrine so that we look at what was actually assigned via document and only apply estoppel based upon that assignment.  This case would probably need to be remanded to determine whether it applies here.
  • End it: Eliminate the doctrine and give effect to the statutory statement that written description and enablement “shall be defenses in any action involving the validity or infringement of a patent.” 35 USC 282.

One open question will likely be whether the outcome will be merely a default rule that can be changed via contract.  If so, employers may be able to add language to the employment contracts and assignment documents to include waiver of the right to challenge future validity.

= =

One of the key sub-debates seemed to be the correct pronunciation of ASSIGNOR:

23 thoughts on “Assignor Estoppel at the Supreme Court

  1. 6

    OT, but this explains why information is physical. The CAFC judges should read this and maybe resign.

    link to quantamagazine.org

    1. 6.1

      It is ridiculous and shameful that we have CAFC judges that are supposed to be on the court that is science literate still talking about “thinking” and “mind” where things occur not by a physical process but by some spirit world process.

      And it is equally ridiculous that we have CAFC judges that still talk about information processing as if someone is trying to claim what a human does. It is just ridiculous.

      1. 6.1.1

        Are you saying that humans don’t process information?

        1. 6.1.1.1

          Such a tro ll response NS II.

          And just so the tro ll doesn’t mislead anyone, the claims are to a machine that processes information and not a human.

          Just like in Deener, which claims a method of processing grain, the method could be performed by a human body but clearly the method was meant for a machine.

          1. 6.1.1.1.1

            It feels like your post has been so iled when one of these tro lls posts intentionally misleading responses.

            Yuck.

            1. 6.1.1.1.1.1

              I agree — and it is typically the same ones, with the same lame muddying attempts.

              This too falls into the Br’er Rabbit syndrome, as counters to these detractors are put on the table for discussion, but the detractors never bother seeing those discussions through, and instead come back (perpetually) and seek a repeat of past points.

              It’s just not that NEW people unaware with the point that you are presenting are seeking enlightenment. It is someone that refuses enlightenment only seeks to disrupt.

          2. 6.1.1.1.2

            Just like in Deener, which claims a method of processing grain, the method could be performed by a human body but clearly the method was meant for a machine.

            Why do intentions matter? In any case, a method for processing grain would not have to exclude human activity in order to be patentable subject matter. It doesn’t matter how the method is performed.

            Why should information processing by humans be any different? It takes time, energy, and space for humans to process information.

            1. 6.1.1.1.2.1

              Total tr oll response NS II.

              1. 6.1.1.1.2.1.1

                Dismissing dissent as trolling takes time, energy, and space.

                1. Certainly – and certainly besides the point.

                  A Tr011 is going to do what a Tr011 is going to do.

  2. 5

    Each application is filed with an inventor’s Oath and Declaration. It has been some time since I read the requirements of the Oath. So, I re-read the CFR, reproduced below for convenience. The only thing required by the inventor’s oath is that the inventor believes they are an inventor in the claimed subject matter. An inventor is not required to state that they believe the claimed invention is worthy of a granted patent.

    So what about the duty of Candor and Good Faith, CFR 1.55 an 56? The text of the CFR says nothing about Good Faith outside the scope of our disclosure requirements. BUT, the MPEP says: “The language of 37 CFR 1.56 (and 37 CFR 1.555) emphasizes that there is a duty of candor and good faith which is broader than the duty to disclose material information. 37 CFR 1.56 further states that “no patent will be granted on an application in connection with which fraud on the Office was practiced or attempted or the duty of disclosure was violated through bad faith or intentional misconduct.”

    So, if the inventor is challenging the validity of a granted patent on which they are listed as an inventor, then did the inventor commit fraud on the patent office? (I am assuming for this argument that the claim in the granted patent are of the same scope or more narrow than what was in the original application as filed)

    Of course this thought process doesn’t do anything to make the Asignee whole as part of the assignment transaction.

    Thoughts?

    37 C.F.R. 1.63 INVENTOR’S OATH OR DECLARATION.
    (a) The inventor, or each individual who is a joint inventor of a claimed invention, in an application for patent must execute an oath or declaration directed to the application, except as provided for in § 1.64. An oath or declaration under this section must:
    (1) Identify the inventor or joint inventor executing the oath or declaration by his or her legal name;
    (2) Identify the application to which it is directed;
    (3) Include a statement that the person executing the oath or declaration believes the named inventor or joint inventor to be the original inventor or an original joint inventor of a claimed invention in the application for which the oath or declaration is being submitted; and
    (4) State that the application was made or was authorized to be made by the person executing the oath or declaration.

    1. 5.1

      An argument, but note that inventors lack of knowledge of prior art, etc., as of their filing declarations is not likely to be the same as it is later on in patent litigation where a much more thorough prior art and other validity issues examination and evidence may have been provided sufficient for a valid change in position?

      1. 5.1.1

        That’s a solid point Paul – at(and during) prosecution, there is NO affirmative duty to go out and seek anything that might be a detriment to the obtaining of a patent.

        Mind you – some, like myself, have always noted that this is a client’s choice.

        Sure there are “Best Practices” that by and large dictate that you want to have a ‘most robust’ patent at the end of the day.

        This needs to be balanced with the reality though that some filers (I am looking at you, IBM), want numbers over quality, and thus may WELL have a passive (and in some cases NOT passive) driver of not wanting a rigorous prior art search.

        At the end of the day, this is the client’s choice, and THEY may well have a multitude of reasons for their choices.

    2. 5.2

      Inventor of the claimed invention. That is saying you under oath you ‘invented’ something. Just FYI, I thought assignor estoppel was a personal defense, not generic. Example, inventor (A) works at HP, invents and assigns (invention B), A gets new job at IBM, IBM launches new infringing product B’, HP enforces patent B against IBM. Nothing prevents an invalidity defense by IBM against the patent, only that the inventor A can’t himself (personal) get in front of a jury and claim his invention B is invalid. In other words, the inventors assignor estoppel is not being transferred to IBM like some offensive estoppel stripping IBM of a validity defense.

  3. 4

    >Truckai made bank on the sale,

    That makes his(?) equitable argument a bit harder.

    An interesting distinction would be between an employee who is directly/specifically paid for that particular invention, and the more general case where the employee just signed a mandatory IP agreement on the day they are hired.

    1. 4.1

      I think that is right. In the property law estoppel-by-deed situation, we require a specific statement of exactly what property rights are being transferred. There are many ways in the patent context that the exact scope is (1) unknown and (2) otherwise flexible.

  4. 3

    Well summarized on the merits, Dennis. But much more importantly, I have been inundated with online examples of the pronunciation of “assignor” since your post. Seems to be running about 60/40 in favor of Minerva’s/AG’s version. Is that close enough to say we were both right?

    1. 3.1

      Thanks Matt! Yes. I think that some of the Justices were fairly hesitant about saying the word. They wanted more research before weighing in. Hopefully the court will read the opinion aloud — pronouncing the results.

      1. 3.1.1

        I asked my teenager for her response: She says its like Uranus.

  5. 2

    “If so, employers may be able to add language to the employment contracts and assignment documents to include waiver of the right to challenge future validity.”

    This would seem to run right into Lear, which didnt just overturn licensee estoppel but also essentially found unenforceable (as against public policy) any terms in a licensing agreement that limit ability to bring validity challenges.

    On the other hand, company’s could potentially bind assignor’s to some type of arbitration clause with a venue selection term that would inhibit them from bringing validity challenges in front of PTAB, and would seemingly complicate their ability to raise validity challenges in litigation.

    1. 2.1

      I agree that Lear suggests such a result, but only if its holding is entirely extended to eliminate assignor estoppel.

    2. 2.2

      Agree with ksksks paragraph 2 and note that several [many?] major companies have employee-signed assignment agreements for each application in which the assignee employee agrees to assist the assignor in obtaining and enforcing the resultant patents, which seems more acceptable than a validity challenge prohibition, as noted. I wonder if there is case law on that contractual provision being successfully enforced?

  6. 1

    Nice article – thanks!

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