Assignors Can Challenge Validity so Long as They Do Not Contradict Assignment Representations

| Hans L. Mayer


Supreme Court of the United States. Opinion of the Court written by Justice Kagan. Justice Alito filed a dissenting opinion. Justice Barrett filed a dissenting opinion, joined by Justices Thomas and Gorsuch.

Summary: Assignor estoppel applies when and only when the assignor’s invalidity assertions contradict explicit or implicit representations made when assigning the patent.

Csaba Truckai invented a device to treat uterine bleeding that used a moisture-permeable applicator head. Truckai filed a patent application for his invention and assigned it and future continuations to Novacept, which was later acquired by Hologic. Truckai left Novacept and founded Minerva Surgical, where he developed a supposedly improved device with an applicator head that, unlike his earlier invention, was moisture-impermeable. Hologic filed a continuation application with claims that encompassed applicator heads regardless of permeability and sued Minerva after that patent issued. Minerva argued that the continuation patent was invalid because impermeable applicator heads were not disclosed in the written description. Hologic responded that Truckai (and by extension Minerva), as the assignor, could not challenge the validity of the assigned patents under the doctrine of assignor estoppel. The district court and the Federal Circuit agreed that assignor estoppel prevented Minerva from arguing the continuation was invalid. The Supreme Court granted certiorari.

At the Supreme Court, Minerva argued assignor estoppel should be eliminated or alternatively constrained. First, Minerva argued that the 1952 Patent Act abrogated assignor estoppel by providing that invalidity of the patent “shall be” a defense in any action involving infringement. The Court rejected that argument, holding assignor estoppel was a background principle of patent adjudication undisturbed by Congress and noting that Minerva’s statutory interpretation would foreclose many other well-established preclusion doctrines in patent cases. Second, Minerva argued that earlier Supreme Court decisions “eliminated” assignor estoppel. Disagreeing, the Court noted those cases policed the boundaries of the doctrine but did not eliminate it. Third, Minerva argued assignor estoppel should be eliminated on policy grounds because it prevented the invalidation of “bad patents.” The Court rejected this argument as outweighed by the “unfair dealing” resulting from an assignor challenging the validity of a patent he or she had, at least implicitly, represented was valid. The Court therefore upheld assignor estoppel.

The Court also addressed the limits of assignor estoppel. The doctrine applies only when the assignor’s invalidity assertions contradict her explicit or implicit representations of validity. The Court offered three examples where contradiction would be absent. First, if an employee prospectively assigns all inventions in an employment contract before any inventions have been created, the employee has made no representation via the assignment, and the assignment therefore does not give rise to estoppel. Second, the Court stated that a subsequent change in law can render an assignor’s warranty of validity irrelevant. If the change in law makes a difference, the assignor is not precluded from relying on the change to argue invalidity. Third, the Court clarified that when the asserted claims are materially broader than the claims of the assigned patent, the assignor has not warranted the asserted claims’ validity and thus does not contradict himself by challenging their validity. This might occur, for example, if the assignor assigned a patent application, rather than an issued patent, and the issued patent’s claims were materially broader than those in the assigned application. Noting the parties disputed whether this last example applied, the Court vacated the judgment and remanded to the Federal Circuit to address whether the asserted continuation claims were materially broader than those originally assigned.

In a dissent joined by Justices Thomas and Gorsuch, Justice Barrett stated the question for the Court was whether the Patent Act of 1952 incorporated assignor estoppel. In her view, the Patent Act did not incorporate this doctrine because (1) assignor estoppel was not “so well settled” that the Court could presume Congress “knew of and endorsed” the doctrine, and in any event, Congress materially changed the assignment statute by specifying patents have the attributes of personal property; and (2), contrary to the majority opinion, assignor estoppel lacked the pedigree necessary to be treated as a “background principle” that Congress is presumed to have legislated in light of.

Justice Alito also dissented, stating the Court could not decide whether assignor estoppel applied without first deciding whether Westinghouse, the primary Supreme Court decision recognizing assignor estoppel, should be overruled. Neither the majority nor the principal dissent addressed this issue. In Justice Alito’s view, the patent statute does not expressly provide for assignor estoppel and the majority opinion failed to cite precedent supporting its holding. Justice Alito also disagreed with the principal dissent’s analysis of Congressional abrogation; in his view, Justice Barrett relied on too lax a standard for Congressional abrogation of Supreme Court precedent. According to Justice Alito, since the Court would not decide whether Westinghouse should be overruled, the Court should have dismissed the petition as improvidently granted.

Editor: Paul Stewart