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In a 5–4 decision issued on June 29, the U.S. Supreme Court held that while it would be unfair to permit inventors to challenge the validity of patents they have assigned under the doctrine of assignor estoppel, it is not a blanket rule and there are situations where such a prohibition does not apply. In Minerva Surgical, Inc. v. Hologic, Inc., No. 20-440, 2021 U.S. LEXIS 3563 (June 29, 2021), Justice Kagan stated that “when a person sells his patent rights, he makes an (at least) implicit representation to the buyer that the patent at issue is valid” and it would be unfair to allow that person to later profit from attacking the patent’s validity. However, when that person has not made such implicit or explicit representations, there is no unfairness in the person’s asserting invalidity of the assigned patent.

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Csaba Truckai was an inventor of a device for endometrial ablation that uses a moisture-permeable applicator head to destroy targeted cells in the uterine lining. Truckai filed a patent application for the device and later assigned the application, along with any future continuation applications, to his company, Novacept, Inc., which was later acquired by Hologic, along with the patent.

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Truckai left Hologic and co-founded Minerva Surgical, where he developed a new product related to endometrial ablation that uses a moisture-impermeable applicator head to remove cells in the uterine lining. Hologic filed a subsequent “continuation” patent application that was broadened to cover the Minerva device and sued Minerva for infringement of the patent that issued from it. Minerva countered the infringement claim by asserting that the patent was invalid because it did not support the broader claim asserted against Minerva.

Hologic responded by invoking the doctrine of assignor estoppel, arguing that because Truckai had assigned the original patent application, neither he nor Minerva could impeach the validity of the patent. The District Court and Federal Circuit agreed that Minerva’s invalidity defense was barred by the doctrine of assignor estoppel and affirmed on this point. Minerva appealed to the Supreme Court, asking it to abandon or narrow the doctrine of assignor estoppel. The court vacated and remanded the Federal Circuit’s holding on this issue.

The Supreme Court held that assignor estoppel is well grounded in centuries-old fairness principles and the Federal Circuit was right to uphold it.

However, the court noted that assignor estoppel applies only when the assignor’s claim of invalidity contradicts explicit or implicit representations he made in assigning the patent and that the Federal Circuit failed to recognize certain boundaries to the doctrine. It therefore vacated and remanded the case to address whether the patent claim asserted against Minerva is materially broader than the ones Truckai assigned to Novacept.

Assignor estoppel is a doctrine of U.S. patent law barring a patent’s seller (assignor) from attacking the patent’s validity in subsequent patent infringement litigation.

There are several related legal estoppel doctrines, which include estoppel by deed and licensee estoppel. Licensee estoppel in the patent context was ended by Lear v. Adkins, 395 U.S. 653 (1969). Prior to the Federal Circuit, some courts expanded Lear to also eliminate assignor estoppel.

However, the Federal Circuit has applied assignor estoppel over the decades without limitation to bar validity challenges by inventors and prior owners who are later sued for infringement. While licensee estoppel is contract-focused, its property law parallel is estoppel by deed, which bars a prior owner from “denying the truth of the deed.”

Estoppel by deed serves as the doctrinal foundation for assignor estoppel in patent law. Assignor estoppel is seemingly strengthened because the patent applicant publicly assures the USPTO of the patent’s validity by claiming patent rights.

The Supreme Court gave several examples of where assignor estoppel would not apply, including one in which an inventor signs an invention assignment as part of their employment agreement that pertains to all inventions developed during their employment. In another example, a later legal development, such as a new rule of claim interpretation, renders irrelevant the warranty given at the time of assignment. In a third example, which occurred in Minerva, the scope of the asserted patent is broadened beyond the scope of the assigned prior patent. A fourth example occurs when the inventor assigns a patent application and the assignee later enlarges the coverage of the patent’s claims. In each case, the express or implied warranty of validity made by the assignee/inventor at the time of the assignment cannot be applied to the ultimate patent because it is changed in coverage from what was assigned at a time that is beyond the knowledge or control of the inventor.

This decision retains the doctrine of assignor estoppel for patent invalidity assertions against patent claims that existed at the time of the assignment of the patent or patent application. But when the assignor has made neither explicit nor implicit representations in conflict with an invalidity defense, there is no unfairness in its assertion – and so there is no ground for applying assignor estoppel.

In Minerva, the Supreme Court did not apply the doctrine of assignor estoppel because the patent being asserted was broader in scope than the patent application assigned by the inventor. Accordingly, the inventor should remain involved in the patent procurement process as long as possible, preferably until the patent issues. If the inventor leaves the employ of the assignee, the inventor should continue to participate, for example as a paid consultant.

Unfortunately, these limitations on assignor estoppel cannot be obviated by adding language in either the inventor’s employment agreement or their patent application assignment document because at that time the inventor is not aware of the scope of a patent that might issue from the patent application.

Ted D. Lienesch 937.443.6958 <a href="mailto:Ted.Lienesch@ThompsonHine.com">Ted.Lienesch@ThompsonHine.com</a>

Clint King 404.407.3690 <a href="mailto:Clint.King@ThompsonHine.com">Clint.King@ThompsonHine.com</a>

This advisory bulletin may be reproduced, in whole or in part, with the prior permission of Thompson Hine LLP and acknowledgment of its source and copyright. This publication is intended to inform clients about legal matters of current interest. It is not intended as legal advice. Readers should not act upon the information contained in it without professional counsel.

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Supreme Court Allows Inventors to Challenge Their Own Patents

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