Welcome

Justices Reluctant to Ditch Doctrine Shielding Patent Buyers (2)

April 21, 2021, 5:10 PM; Updated: April 21, 2021, 8:58 PM

The U.S. Supreme Court wrestled with whether to alter a legal doctrine barring an inventor from challenging a patent on an invention assigned to another party, during oral argument in its review of a Federal Circuit decision.

The high court is reviewing a U.S. Court of Appeals for the Federal Circuit holding that the inventor of a surgical device and his current company, Minerva Surgical Inc., 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.

A proposal by the U.S. solicitor general that the justices narrow the doctrine to avoid overbroad and reflexive application got a lot of play during the hearing. But some of the justices were reluctant to disturb the doctrine at all.

“Why should we interfere when this type of defense has been approved for such a long period of time?” Justice Sonia Sotomayor asked.

Justice Brett Kavanaugh signaled a reluctance to revisit a long-established doctrine.

“Why get involved in overturning something that was well settled as of 1924?” Kavanaugh asked.

Counsel for Minerva, which wants the court to abolish the doctrine of assignor estoppel, disagreed that it is well-established. “This court has deeply undermined assignor estoppel,” Robert N. Hochman of Sidley Austin LLP in Chicago said.

Assignor estoppel is intended to block an inventor from selling his patent and later saying in court that what he sold was worthless. Minerva is asking the Supreme Court to abolish or severely limit the doctrine to protect inventors’ rights. But abolishing the doctrine could create uncertainty for companies acquiring intellectual property, attorneys say.

Abolish, Retain, Or?

Much of the argument revolved around whether stare decisis, the legal principle that the court is bound by its earlier cases, requires the court to uphold the doctrine. Congress has had several opportunities over the last one hundred years to override the case law but hasn’t addressed it, said Matthew M. Wolf of Arnold & Porter LLP in Washington, arguing for Hologic.

“My fundamental question is why is this a question for us and not a question for Congress,” Justice Samuel A. Alito Jr. said. “It’s a question of statutory interpretation ultimately.”

The court could let the doctrine stand but create exceptions for when it is applied. The government suggested it should only apply when both parties enter the assignment in their own self-interest, and the scope of the patent matches what the inventor assigned.

Several justices asked questions about that middle ground, suggesting they are interested in finding a way to limit the doctrine rather than abolish it.

Justice Neil Gorsuch seemed most willing to adopt Minerva’s suggestion to abolish it altogether, suggesting the precedent isn’t very strong.

“The world has changed greatly” in the 100 years since the court approved the doctrine “in terms of employee/employer relations and how these contracts of adhesion are often used against employees,” Gorsuch said. He also pointed out that the patent office doesn’t bar inventors from challenging their own patents.

“So the only place left that this doctrine seems to apply is in court,” he said. “Isn’t that a strange state of affairs to rest on stare decisis?”

Gorsuch also seemed skeptical of the government’s middle path, saying it has the same stare decisis problems as abolishing the doctrine because no court has ever used the proposed test.

The case is Minerva Surgical, Inc. v. Hologic, Inc., U.S., No. 20-440, argued 4/21/21.

(Updated with additional reporting throughout.)

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

To contact the editors responsible for this story: Renee Schoof at rschoof@bloombergindustry.com; Keith Perine at kperine@bloomberglaw.com

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