Welcome

Justices Narrow Bar on Inventors Attacking Their Own Patents (2)

June 29, 2021, 2:07 PMUpdated: June 29, 2021, 8:27 PM

The U.S. Supreme Court limited a legal doctrine barring an inventor from challenging a patent on an invention assigned to another party.

Minerva Surgical Inc. asked the high court to abolish the doctrine of assignor estoppel, which blocks an inventor from selling his patent and later saying in court that what he sold was worthless. The court said it continues to see value in the century-old form of estoppel, but clarified its reach in a 5-4 decision.

“The doctrine applies when, but only when, the assignor’s claim of invalidity contradicts explicit or implicit representations he made in assigning the patent,” Justice Elena Kagan wrote for the majority.

The court made clear the doctrine is all about fairness and that it has to be fair as applied to both parties, Kramer Levin Naftalis & Frankel partner Irena Royzman said. Royzman filed an amicus brief for the New York Intellectual Property Law Association advocating the kind of middle-ground approach the court adopted.

The decision requires that courts take a flexible approach to applying the doctrine and “look at the facts to decide whether the assignor is somehow changing positions or not,” she said.

Inventors who want to start their own companies with a competing product will benefit from the decision, Paul Hastings LLP partner Elizabeth L. Brann said. “It will give potential entrepreneurs more tools at their disposal to say that assignor estoppel does not apply,” she said.

No Bright Line


The decision is another example of the Supreme Court striking down bright-line patent rules adopted by the U.S. Court of Appeals for the Federal Circuit, Alejandro Menchaca, a McAndrews, Held & Malloy Ltd. shareholder, said. He pointed to the court’s 2016 decision rejecting the Federal Circuit’s test for enhanced damages and willful infringement.

Menchaca said the court created a workable test for lower courts.

“I do believe that the courts will be able to apply this pretty handily,” he said. “It is just another equitable doctrine, and the courts are pros at dealing with equitable doctrines.”

The Federal Circuit held that the inventor of a surgical device and his current company, Minerva, can’t argue two patents on the device are invalid to defeat infringement claims by his former employer, Hologic Inc., which now owns the rights to the inventions.

The Federal Circuit applied assignor estoppel, saying it was bound by Supreme Court precedent.

Minerva sought high court review, asking the court to abolish or severely limit the doctrine. Hologic warned that could create uncertainty for companies acquiring intellectual property.

The Supreme Court said the Federal Circuit “applied the doctrine too expansively.” The court’s past decisions may have maintained assignor estoppel, but suggested “that the doctrine needed to stay attached to its equitable moorings,” the majority said.

‘Representation Estoppel’

The court found the doctrine “should apply only when its underlying principle of fair dealing comes into play,” providing specific examples of when that may be the case.

The patents Hologic asserted were broader in scope than what the inventor thought he had assigned, the court said. “Because there is no inconsistency in his positions, there is no estoppel,” it said.

The Federal Circuit came to the wrong conclusion in the case by declining to consider whether the patent being challenged was “materially broader” than what the inventor assigned, the Supreme Court said. It sent the case back to the appeals court “to now address what it thought was irrelevant.”

Based on how the court framed the doctrine, it may be more appropriate now to call it “representation estoppel” than assignor estoppel, Polsinelli PC principal Darren E. Donnelly said. The decision focuses on what the inventor represented that he was transferring to the buyer, he said.

The decision may lead companies to seek subsequent confirmation in writing from an inventor that the current state of the patent represents what the inventor considers within the scope of the assigned invention, Donnelly said.

Chief Justice John G. Roberts Jr. and Justices Stephen G. Breyer, Sonia Sotomayor, and Brett M. Kavanaugh joined the majority opinion.

Justice Samuel A. Alito Jr. dissented, arguing the court shouldn’t have ruled on the doctrine without deciding whether an earlier case should be overruled.

Justice Amy Coney Barrett also dissented, joined by Justices Clarence Thomas and Neil M. Gorsuch, arguing the doctrine doesn’t have an “impeccable historical pedigree” that makes it worth saving.

Robert N. Hochman of Sidley Austin LLP in Chicago argued for Minerva. Morgan L. Ratner, assistant to the U.S. solicitor general, argued for the government as amicus curiae in support of neither party. Matthew M. Wolf of Arnold & Porter Kaye Scholer LLP in Washington argued for Hologic.

The case is Minerva Surgical, Inc. v. Hologic, Inc., U.S., No. 20-440, 6/29/21.

(Updated with additional reporting.)

To contact the reporter on this story: Perry Cooper in Washington at pcooper@bloomberglaw.com

To contact the editor responsible for this story: Keith Perine at kperine@bloomberglaw.com

To read more articles log in. To learn more about a subscription click here.