Supreme Court Upholds, But Limits, Assignor Estoppel Doctrine

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On June 29, 2021, the Supreme Court limited the doctrine of assignor estoppel that has long prevented inventors from challenging the validity of patents they have assigned to a third party.  The judicially-created doctrine is grounded in fairness and prevents a patent assignor from warranting (at least implicitly) to the buyer that the patent is valid, but then later challenging the validity of the patent.

In Minerva Surgical, Inc. v. Hologic, Inc.[1], the patent claims a device to treat abnormal uterine bleeding that used a moisture-permeable applicator.  The inventor assigned the patent application for the device to his company, Novacept, Inc., which was later acquired by Hologic, Inc.  The inventor subsequently founded Minerva Surgical, Inc., where he developed and patented a similar device for treating uterine bleeding, but that used a moisture-impermeable applicator.  In the meantime, Hologic filed a continuation patent claiming applicators generally, regardless of whether they were moisture-permeable or impermeable.  When Hologic sued Minerva for infringement of this broader patent, Minerva argued that Hologic’s patent was invalid.  However, the District Court agreed with Hologic that Minerva was barred from attacking the patent’s validity because the inventor had assigned the original patent application to Hologic (via Novacept).  The Court of Appeals for the Federal Circuit affirmed the District Court’s application of assignor estoppel.

The Supreme Court rejected Minerva’s argument that assignor estoppel has been eliminated by legislation and prior Supreme Court precedent.  The high court, however, agreed that the lower courts had applied the doctrine too broadly in this case.  The majority opinion, written by Justice Kagan, reiterates that the doctrine only applies where the assignor’s explicit or implicit representations conflict with an invalidity defense.  For example, when an employee assigns to its employer rights to any future inventions the employee may develop during the employment, the employee could not have made any representations about the validity of a patent for an invention that has not yet been invented.  Similarly, when an inventor assigns a patent application, any implied representation applies only to the claims at that time.  If the assignee obtains broader claims during prosecution of the application, the assignor is not estopped from challenging the validity of the broader claims because the assignor’s representation only applied to the previous narrower claims.  Because the Federal Circuit disregarded this limitation on assignor estoppel, the Court remanded the case back to the Federal Circuit to determine whether Hologic’s new claims are materially broader than the claims assigned by the inventor.

The Supreme Court’s opinion raises a number of questions about when assignor estoppel applies, such as the degree of similarity between an assigned patent application and the issued patent claims that are required to trigger assignor estoppel.  Moreover, employers may or may not be able to rely solely on assignment provisions in employment agreements to prevent validity challenges by former employees.  Employers may want to consider reviewing the assignment provisions in their employment agreements in light of the Supreme Court’s opinion.

[1] Minerva Surgical, Inc. v. Hologic, Inc., No. 20-440, 2021 WL 2653265 (U.S. June 29, 2021).

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