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Assignor Estoppel: Minerva Surgical v. Hologic

Assignor Estoppel is a patent law doctrine dating back to the 1870 Patent Act and first recognized by the Supreme Court in in the 1924 decision of Westinghouse Elec. & Mfg. Co. v. Formica Insulation. This doctrine prevents an inventor from assigning a patent to another party, presumably for some value in return, and subsequently challenging the validity of the patent in litigation.

The doctrine of assignor estoppel has faced some criticism over its several years of application by federal courts, not so much for its underlying purpose, but mostly for its inconsistent application. For example, in recent cases, the Federal Circuit has held that the assignor estoppel does not apply to patent validity challenges made under the U.S. Patent & Trademark Office’s Inter Partes Review (IPR) system. In effect, this allowed some parties to circumvent assignor estoppel by challenging validity through IPRs, while other parties were barred from challenging validity in federal court, for example, if the validity challenge was based on an issue that is not reviewable through IPR.

In Minerva Surgical v. Hologic, the Supreme Court was asked to overturn the entire doctrine of assignor estoppel. The case involved an inventor that assigned his patent rights to his employer, which was acquired by Hologic. The technology was directed to moisture-permeable applicator heads used for treating uterine bleeding. The inventor then left and founded his own company, Minerva Surgical. After the inventor left, Hologic filed a continuation application seeking broader patent scope, directed to applicator heads generally. The broader patent issued in 2015, and Hologic sued Minerva for patent infringement. Since Minerva only sought to challenge the 2015 patent for being overbroad, this challenge was limited to federal court and not reviewable through an IPR.

In the 5-4 majority decision, authored by Justice Kagan, the Supreme Court upheld the doctrine assignor estoppel as being well grounded in fairness principles. However, the Court limited its application, explaining that assignor estoppel only applies when the assignor’s claim of invalidity contradicts representations made by the assignor when assigning the patent rights. The dissent authored by Justice Barrett contends that the Patent Act of 1952 did not incorporate the doctrine of assignor estoppel and thus the doctrine should no longer be applied. Justice Alito also authored a dissent, asserting that both the majority and the other dissenting justices failed to address the question presented as to whether Westinghouse should be overturned, and therefore the petition to the Supreme Court should be dismissed as being improvidently granted.

The Minerva case will now be reconsidered by the Federal Circuit, which will need to decide whether the inventor made any explicit or implicit representations in the assignment of his patent rights that contradict his challenge that the subsequently granted continuation patent is overbroad. The decision also means that federal courts will now need to consider this same question before summarily dismissing invalidity challenges based on the assignor estoppel doctrine.

Hovey Williams LLP will continue to monitor how federal courts apply these new limits on assignor estoppel. If you have any questions about the assignor estoppel doctrine or any other intellectual property issues, please contact one of our qualified attorneys.