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: